/raid1/www/Hosts/bankrupt/TCR_Public/100604.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, June 4, 2010, Vol. 14, No. 153
Headlines
2665 GENEVA: Files Schedules of Assets and Liabilities
2665 GENEVA: Has Until June 18 to Propose Chapter 11 Plan
ACCESS PHARMACEUTICAL: Reports Results of 2010 Annual Meeting
ADVOCATE FINANCIAL: Section 341(a) Meeting Scheduled for July 9
AGY HOLDING: Inks Employment Pact with CFO Steven Smooth
ALERIS INTERNATIONAL: S&P Withdraws 'D' Corporate Credit Rating
ALL AMERICAN GROUP: GAMCO Investors Hold 10.48% of Common Stock
ALMATIS BV: Has Final Nod to Tap Gibson Dunn as Banrk. Counsel
ALMATIS BV: Has Final OK for Linklaters as U.K. & Germany Counsel
AMERICAN CAPITAL: Short of Votes for Prepackaged Plan
AMERICAN COMMERCE: Peter Messineo Raises Going Concern Doubt
AMR CORP: Compensation Committee OKs Awards for Exec. Officers
ASARCO LLC: Baker Botts Battles over $142 Million Fees
ATLANTIC BANCGROUP: Posts $547,000 Net Loss in Q1 2010
AVIS BUDGET: Reports Results of May 26 Annual Meeting
BAY NATIONAL: Posts $2.8 Million Net Loss in Q1 2010
BIGLER LP: Sets June 16 Auction to Sell All Assets
BLACK CROW: Has Final Approval for $1.2 Million Loan
BLACK GAMING: To Demolish Part of Oasis facility to Cut Costs
BLOCKBUSTER INC: Urges Stockholders to Vote the 'WHITE' Proxy Card
CABLEVISION SYSTEMS: Inks New Employment Deal with Michael Huseby
CATHOLIC CHURCH: Portland Sued for $2.8 Mil over Abuse Claims
CC MEDIA: Reports Results of May 26 Stockholders' Meeting
CELL THERAPEUTICS: Files April 2010 Monthly Update
CELL THERAPEUTICS: Sells $21 Mil. of Preferreds and Warrants
CHEMTURA CORP: Receives Nod for 2010 Management Incentive Plan
CHEMTURA CORP: Reports on Plan Status, To File Plan by June 17
CHEMTURA CORP: Wants Plan Exclusivity until September 18
CIRCUIT CITY: No Class Claims in Circuit City Liquidation
CITIGROUP INC: To Dissolve Citigroup Capital XXX Trust
CONTINENTAL AIRLINES: Execs to Appear Before House Panel
CONTINENTAL AIRLINES: Reports May 2010 Operational Performance
CORBIN PARK: BofA, et al., Want Reorganization Case Dismissed
DBSI INC: Bondholders' Security Interest Was Never Perfected
DECODE GENETICS: Court Confirms Plan of Liquidation
DELTA AIR: Ballots Cast to Determine Union Representation
DELTA AIR: Permitted to End Arrangements with Mesa Air
DELTA AIR: Steps Up Recruitment with "Better Gauge" of Demand
DELTA PETROLEUM: Has More Time to Sign Definitive Deal with Opon
DELTA PETROLEUM: Reports Results of May 25 Stockholders Meeting
DELTA PETROLEUM: Registers 93,797,701 Shares for Resale
DELTA URANIUM: Discloses Filing of Audited Financial Statements
DOT VN: Reports Increased Site Traffic for Vietnamese Info Portal
EL POLLO: Moody's Downgrades Corporate Family Rating to 'Caa2'
ELEPHANT TALK: Posts $12.3 Million Net Loss in Q1 2010
ELITE LANDINGS: Plan Confirmation Hearing Scheduled for June 30
EMISPHERE TECHNOLOGIES: Novartis Extends Promissory Note Maturity
EMMIS COMMUNICATIONS: Board Elects Heath Freeman as Director
EMMIS COMMUNICATIONS: Buyer Offers to Acquire All Class A Shares
EMMIS COMMUNICATIONS: LKCM Funds Hold 8.3% of Class A Shares
ENTERGY GULF: Moody's Upgrades Preferred Stock Rating to 'Ba1'
EXIDE TECHNOLOGIES: EnerSys Wins Back Trademark in Circuit Court
FLYING J: Plan Promises to Satisfy All Creditors in Full
FRANKLIN PACIFIC: Section 341(a) Meeting Scheduled for July 12
GEMCRAFT HOMES: Plan Outline Hearing Scheduled for July 14
GENERAL GROWTH: Equity Panel Taps Weitzman as Appraiser
GENERAL GROWTH: Proposes Heeling Sports Settlement
GENERAL GROWTH: Three Executives Named to Sr. Management Roles
GENERAL GROWTH: West Kendall Sues KTC for Breach
GEORGIA-PACIFIC LLC: Fitch Rates Issuer Default Rating at 'BB'
GUIDED THERAPEUTICS: Reports Results of May 27 Annual Meeting
HACIENDA GARDENS: Section 341(a) Meeting Scheduled for June 30
HARTMARX CORP: Settles with Lenders for $750,000 Cash
HARVARD GRAND: Doubletree Hotel Operator Files for Chapter 11
HEALTHMARKETS INC: S&P Cuts Counterparty Credit Rating to 'B+'
HOLDINGS GAMING: S&P Downgrades Corporate Credit Rating to 'SD'
IMAGEWARE SYSTEMS: Files Form 10-Q Report for June 2009 Qtr
INFOLOGIX INC: Files Prospectus for Hercules' Resale of Shares
INFOLOGIX INC: Forms Independent Panel to Review Options
INTERPUBLIC GROUP: Fitch Affirms Issuer Default Rating at 'BB+'
ITRON INC: Moody's Upgrades Corporate Family Rating to 'Ba3'
JAMES EDWARD: Files Schedules of Assets and Liabilities
J & J CONSTRUCTION: Voluntary Chapter 11 Case Summary
KAUPTHING BANK: Settles Dispute with Bank of Tokyo-Mitsubishi
LANGUAGE LINE: S&P Gives Negative Outlook; Keeps 'B+' Rating
LEAP WIRELESS: Cricket Wins Trademark Suit vs. GSM Cellular
LEAP WIRELESS: Reports Results of May 20 Stockholders Meeting
LEAP WIRELESS: SAC Capital Advisors Holds 5.1% of Shares
LEHIGH COAL: Allowed to Sell Assets in Debt Exchange
LEHMAN BROTHERS: Examiner Asks for Release From Claims on Report
LEHMAN BROTHERS: Fifth Third Stuck with Filing Date for Closeout
LEHMAN BROTHERS: Investors Sue Officers for Unloading Properties
LEHMAN BROTHERS: Barclays Sues Private Equity Funds
LEHMAN BROTHERS: Probe Blocked by U.S.-EU Regulator Dispute
LEVI STRAUSS: Complete $446 Million 9-3/4% Senior Notes Offering
LEXARIA CORP: Posts $162,523 Net Loss in Q2 Ended April 30
LINCOLN HOLDINGS: Moody's Gives Stable Outlook; Keeps 'B2' Rating
MCCLATCHY COMPANY: Shareholders Select 12 Directors
MERCER INTERNATIONAL: Moody's Upgrades Corp. Family Rating to 'B3'
MESA AIR: Assumes Willis & West Engine Leases
MESA AIR: July 12 Trial Set for Delta Code-Share Pact Dispute
MESA AIR: Proposes to Assume Wells Fargo Aircraft Leases
METROMEDIA INT'L: Plan Exclusivity Extended until August 16
MOODY NATIONAL: Files Amended Plan of Reorganization
MOUNT VERNON: Organizational Meeting to Form Panel on June 11
MXENERGY INC: Unit Inks Letter of Agreement with RBS Sempra
NATIONAL COAL: Posts $5.8 Million Net Loss in Q1 2010
NEFF CORP: Decides to Disclose Lenders' $5.475 Million Fees
NEFF CORP: Taps AlixPartners as Restructuring Advisor
NEFF CORP: Taps as Kirkland & Ellis Bankruptcy Counsel
NEFF CORP: Wants to Hire Togut Segal as Conflicts Counsel
NEFF CORP: Wants to Hire Miller Buckfire as Investment Banker
NEXTMEDIA OPERATING: S&P Raises Corporate Credit Rating to 'B'
NORTHLAND INVESTMENTS: Taps Spencer Fane as Bankruptcy Counsel
ORLEANS HOMEBUILDERS: Has Plan Exclusivity Extended to Sept. 27
ORLEANS HOMEBUILDERS: NVR Inc. Sues for $170-Mil. Contract Breach
PAUL TRANSPORTATION: Wants to Hire Kline as General Bankr. Counsel
PAUL WALLACE: Taps DiConza Law as Bankruptcy Counsel
PENN OCTANE: May File for Bankruptcy If Rio Vista Sale Fails
PETTERS COMPANY: Ch. 11 Trustee Has Access to Cash Until Sept. 30
PLY GEM: Offers to Swap $150 Mil. Unregistered Sr. Sub Notes
PRIME GROUP: Closes Sale for LaSalle Property at $72.25 Million
PRM REALTY: Amends Schedules of Assets and Liabilities
PROTOSTAR LTD: Wants Exclusivity Moved to Resolve Certain Issues
QB2 HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
QUICK-MED TECHNOLOGIES: Posts $1.4MM Net Loss in Q3 Ended March 31
R&G FINANCIAL: Taps Pietrantoni Mendez as Co-Counsel
REGAL ENTERTAINMENT: Has Deal to Acquire 9 AMC Theatres
RISKMETRICS GROUP: Moody's Withdraws Ratings on MSCI Inc. Merger
SAINT VINCENTS: Proposes Key Employee Incentive Program
SAINT VINCENTS: Proposes Sale Protocol for Medical Clinics
SAINT VINCENTS: Proposes to Enter Into O'Toole Agreements
SAND HILL: Section 341(a) Meeting Scheduled for July 9
SBARRO INC: Hikes CFO Carolyn Spatafora's Annual Base Salary
SEDGWICK CMS: Moody's Withdraws 'B1' Corporate Family Rating
SEQUENOM INC: Registers 12,435,000 Shares for Resale
SEQUENOM INC: Visium Funds Hold 8.86% of Common Stock
SOUTH BAY: Plan Tied Up in Lien-Priority Dispute
SOUTHWESTERN ELECTRIC: Fitch Cuts Preferred Stock Rating to 'BB+'
SPECIALTY PRODUCTS: Case Summary & 9 Largest Unsecured Creditors
STRATOS GLOBAL: Moody's Withdraws B1 Probability of Default Rating
SUNRISE SENIOR: Enters Into Purchase and Sale Deal with GHS
TARAZ KOOH: Wants to Use Sale Proceeds to Complete Fitness Center
TAYLOR BEAN: Selling Reverse Mortgages for 41% or More
TAYLOR CAPITAL: Fitch Affirms 'B-' Issuer Default Rating
TEFRON LTD: Posts $3.3 Million Net Loss in Q1 2010
TELKONET INC: Delays Subscription Rights Offering
TELKONET INC: Files Initial Notice of Annual Stockholders Meeting
TEXAS HILL: Affiliate Files List of Largest Unsecured Creditor
TEXAS RANGERS: Lenders Say They Have Competing Bidder
THELEN LLP: Wins Approval to Settle Loewen Bond Offering Suit
TIERRA VERDE: Ch. 11 Case Dismissed for No Possible Rehabilitation
TOUSA INC: Ending 401(k); Cash Almost $490 Million in April
TRUVO INTERMEDIATE: S&P Downgrades Corporate Credit Rating to 'SD'
UAL CORP: Execs to Appear Before House Panel on June 16
WALTER ENERGY: $210 Mil. Deal Won't Affect Moody's 'B1' Rating
WASHINGTON MUTUAL: FDIC, Others Object to Shareholders Exam Bid
WEBNOTIONS INC: Organizational Meeting to Form Panel on June 8
WESTCLIFF MEDICAL: Taps Levene Neale as Bankruptcy Counsel
WESTCLIFF MEDICAL: Taps Garvey Schubert as Healthcare Counsel
WESTCLIFF MEDICAL: Wants Kirkland & Ellis as Special Counsel
WESTCLIFF MEDICAL: Wants to Hire Matthew Pakkala as CRO
WINDSTREAM CORPORATION: Fitch Affirms 'BB+' Issuer Default Rating
* Casual Restaurants & Smaller Chains Face Challenges
* Bryan Cave Partner Moves to Bankruptcy Bench
* BOOK REVIEW: Corporate Turnaround - How Managers Turn Losers
Into Winners!
*********
2665 GENEVA: Files Schedules of Assets and Liabilities
------------------------------------------------------
2665 GENEVA, LLC, filed with the U.S. Bankruptcy Court for the
Northern District of California amended schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $15,000,000
B. Personal Property $9,760
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $37,161,000
E. Creditors Holding
Unsecured Priority
Claims $133,617
F. Creditors Holding
Unsecured Non-priority
Claims $1,161,505
----------- -----------
TOTAL $15,976,000 $38,456,122
San Francisco, California-based 2665 GENEVA, LLC, filed for
Chapter 11 bankruptcy protection on March 18, 2010 (Bankr. N.D.
Calif. Case No. 10-30951). Jay T. Jambeck, Esq., at The Schinner
Law Group, assists the Company in its restructuring effort. The
Company estimated its assets and debts at $10,000,001 to
$50,000,000 as of the Chapter 11 filing.
2665 GENEVA: Has Until June 18 to Propose Chapter 11 Plan
---------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
directed 2665 GENEVA, LLC, to file a Chapter 11 Plan and
explanatory Disclosure Statement by June 18, 2010.
The Court also said that if Plan is filed, disclosure hearing will
be heard on July 16 and any objections are due July 9.
San Francisco, California-based 2665 GENEVA, LLC, filed for
Chapter 11 bankruptcy protection on March 18, 2010 (Bankr. N.D.
Calif. Case No. 10-30951). Jay T. Jambeck, Esq., at The Schinner
Law Group, assists the Company in its restructuring effort. The
Company estimated its assets and debts at $10,000,001 to
$50,000,000 as of the Chapter 11 filing.
ACCESS PHARMACEUTICAL: Reports Results of 2010 Annual Meeting
-------------------------------------------------------------
The annual meeting of stockholders of Access Pharmaceutical, Inc.,
was held on May 26, 2010. Mark J. Ahn, Ph.D and Mark J. Alvino
were both elected to serve as directors of the Company until their
successors are duly elected and qualified. A proposal to amend
the Company's 2005 Equity Incentive Plan was also approved. In
addition, ratification of the appointment of Whitley Penn LLP as
the independent registered public accounting firm of the Company
was approved.
About Access Pharmaceuticals
Access Pharmaceuticals, Inc., is an emerging biopharmaceutical
company focused on developing a range of pharmaceutical products
primarily based upon the Company's nanopolymer chemistry
technologies and other drug delivery technologies. The Company
currently has one approved product, one product candidate at Phase
3 of clinical development, three product candidates in Phase 2 of
clinical development and other product candidates in pre-clinical
development.
At March 31, 2010, the Company's balance sheet revealed $5,195,000
in total assets and $25,524,000 in total liabilities, for a
stockholder's deficit of $20,329,000. Accumulated deficit has
reached $241,160,000.
Whitely Penn LP of Dallas, Texas, expressed substantial doubt
against Access Pharmaceuticals' ability as a going concern. The
firm reported that the Company has had recurring losses from
operations, negative cash flows from operating activities and has
an accumulated deficit.
ADVOCATE FINANCIAL: Section 341(a) Meeting Scheduled for July 9
---------------------------------------------------------------
The U.S. Trustee for Region 5 will convene a meeting of Advocate
Financial, L.L.C.'s creditors on July 9, 2010, at 1:30 p.m. The
meeting will be held at Middle District of Louisiana, 707 Florida
Street, Room 324, Baton Rouge, LA 70801.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
New Orleans, Louisiana-based Advocate Financial, L.L.C., filed for
Chapter 11 bankruptcy protection on May 25, 2010 (Bankr. M.D. La.
Case No. 10-10767). Dennis M. LaBorde, Esq., who has an office in
New Orleans, Louisiana, assists the Company in its restructuring
effort. The Company estimated its assets and debts at $10,000,001
to $50,000,000.
AGY HOLDING: Inks Employment Pact with CFO Steven Smooth
--------------------------------------------------------
AGY Holding Corp. and C. Steven Smoot entered into an employment
letter, wherein Mr. Smoot will serve as Chief Financial Officer of
the Company, commencing on June 1, 2010. Under the terms of the
Letter, Mr. Smoot will be compensated as follows:
1) $225,000 annual salary;
2) target annual bonus of 40% of annual salary, with a range of
0% to 80% of base salary, subject to performance targets and
provisions of a management incentive plan; and
3) an option to acquire 70,000 shares of common stock of the
Company's parent, KAGY Holding Company, Inc., with a three-
year vesting schedule.
Mr. Smoot will also be eligible for general salaried benefits
provided to employees of the Company and participation in a
severance plan, which provides for severance under certain
circumstances. Mr. Smoot will also receive reimbursement for his
reasonable relocation expenses and a monthly car allowance. Mr.
Smoot will be an at will employee.
Prior to joining the Company, Mr. Smoot, who is 57 years old,
served as Executive Vice President and Chief Financial Officer of
Family Health International, a non-profit research and public
health services organization, from 2005 to 2009. From 2001 to
2004, he served in various positions at Reichhold Chemicals,
Incorporated, a global resins manufacturing company and subsidiary
of DaiNippon Ink and Chemical, including as its Senior Vice
President, Chief Financial Officer and Chief Information Officer.
About AGY Holding
Aiken, South Carolina-based AGY Holding Corp. manufactures
advanced glass fibers that are used as reinforcing materials in
numerous diverse, high-value applications, including aircraft
laminates, ballistic armor, pressure vessels, roofing membranes,
insect screening, architectural fabrics, and specialty
electronics. AGY is focused on serving end-markets that require
glass fibers for applications with demanding performance criteria,
such as the aerospace, defense, construction, electronics,
automotive, and industrial end-markets.
* * *
As reported by the Troubled Company Reporter on December 28, 2009,
Standard & Poor's Ratings Services lowered its ratings on AGY
Holding Corp., including its corporate credit rating, to 'CCC+'
from 'B'. "The downgrade follows S&P's ongoing concern on
operating performance, including S&P's expectation for very weak
credit metrics for 2009, weak liquidity relative to interest
payments and operating requirements in 2010, and integration
concerns related to the large $72 million acquisition -- with a
$20 million cash component -- of AGY Hong Kong Ltd.," said
Standard & Poor's credit analyst Paul Kurias.
ALERIS INTERNATIONAL: S&P Withdraws 'D' Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it withdrew its
ratings on Beachwood, Ohio-based Aleris International Inc.,
including its 'D' corporate credit rating.
The ratings withdrawal follows Aleris' June 1 emergence from
bankruptcy. The company had previously filed for Chapter 11
bankruptcy protection with the U.S. Bankruptcy Court in the
District of Delaware on Feb. 12, 2009. In conjunction with the
company's recently completed financial restructuring and
bankruptcy emergence, Aleris eliminated most of its previously
rated debt through repayment, partial repayment, or conversion of
debt into equity. Specifically, Aleris closed on its rights
offering for $609 million, which is comprised of $45 million in
10-year unsecured notes and up to $564 million in new equity. In
addition, Aleris' post-emergence capital structure includes a new,
fully committed, $500 million asset-based revolving credit
facility.
Aleris is involved in the production of rolled and extruded
aluminum products as well as the recycling of aluminum and
production of specification alloys.
ALL AMERICAN GROUP: GAMCO Investors Hold 10.48% of Common Stock
---------------------------------------------------------------
Mario J. Gabelli's GAMCO Investors, Inc., and various affiliated
funds disclosed that as of May 28, 2010, they held 1,697,719
shares of common stock of All American Group, Inc., formerly known
as Coachmen Industries, Inc., representing 10.48% of the
16,192,016 shares outstanding.
Last month, All American Group reported net loss, including
discontinued operations, of ($7.7) million, or ($0.48) per share
in the first quarter ended March 31, 2010, versus net income of
$8.3 million, or $0.53 per share in the first quarter of 2009.
Included in the discontinued operations results in 2009 was a
$14.7 million legal settlement.
At March 31, 2010, the Company had total assets of $86.574 million
against total liabilities of $45.832 million, resulting in
shareholders' equity of $40.742 million.
About All American Group
Elkhart, Indiana-based All American Group, Inc., formerly Coachmen
Industries, Inc., (OTC:COHM.PK) is one of America's premier
systems-built construction companies under the ALL AMERICAN
BUILDING SYSTEMS(R), ALL AMERICAN HOMES(R), and MOD-U-KRAF(R)
brands, as well as a manufacturer of specialty vehicles.
* * *
McGladrey & Pullen LLP in Elkhart, Indiana, said in its March 29,
2010 report that Coachmen Industries has suffered recurring losses
from operations and continues to operate in an industry where
economic recovery has been very slow. This raises substantial
doubt about the Company's ability to continue as a going concern.
ALMATIS BV: Has Final Nod to Tap Gibson Dunn as Banrk. Counsel
--------------------------------------------------------------
Almatis B.V. and its affiliated debtors obtained authority from
the U.S. Bankruptcy Court for the Southern District of New York to
employ Gibson Dunn & Crutcher LLP as their general bankruptcy and
restructuring counsel effective as of April 30, 2010.
Gibson Dunn is an international law firm with about 1,000
attorneys. Aside from its U.S.-based offices, the firm also
holds offices in various other countries, including France and the
United Kingdom.
As the Debtors' legal counsel, Gibson Dunn is tasked to:
(1) advise the Debtors of their rights, powers, and duties
under Chapter 11 of the Bankruptcy Code;
(2) prepare court documents and review all financial and other
reports that will be filed;
(3) advise the Debtors and assist them in negotiating and
documenting financing agreements and related transactions;
(4) review the nature and validity of liens asserted against
the Debtors' property and advise them concerning the
enforceability of those liens;
(5) advise the Debtors regarding their ability to initiate
actions to collect and recover property for the benefit of
their estates;
(6) advise the Debtors in connection with the formulation,
negotiation, and promulgation of a plan of reorganization
and related documents;
(7) advise and assist the Debtors in connection with any
potential property dispositions;
(8) advise the Debtors concerning the assumption, assignment
or rejection of their executory contract and unexpired
lease;
(9) commence and conduct litigation to protect the Debtors'
assets or further the goal of completing their
reorganization; and
(10) provide corporate, employee benefit, environmental,
litigation, tax, and other general non-bankruptcy services
if requested by the Debtors.
Gibson Dunn will be paid for its services on an hourly basis and
will be reimbursed for its expenses. The firm's professionals who
are expected to provide legal services for the Debtors' benefit
and their hourly rates are:
Current Hourly Rates
Professionals Hourly Rates Starting 05/26/10
------------- ------------- -----------------
Michael Rosenthal GBP580 GBP650
Greg Campbell Partner GBP480 GBP550
Janet Weiss Partner GBP545 GBP650
Matthew Kelsey GBP405 GBP475
Solmaz Kraus GBP315 GBP430
Jeremy Graves GBP180 GBP335
Brian Kim GBP300 GBP300
Peter Bach-y-Rita GBP245 GBP245
In a declaration submitted to the Court, Mr. Rosenthal, Esq., a
partner at Gibson Dunn, assures the Court that his firm does not
hold interest adverse to the Debtors, and is a "disinterested
person" under Section 101(14) of the Bankruptcy Code.
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. 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.
Bankruptcy Creditors' Service, Inc., publishes Almatis Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding and
ancillary foreign proceedings undertaken by Almatis B.V., and its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
ALMATIS BV: Has Final OK for Linklaters as U.K. & Germany Counsel
-----------------------------------------------------------------
Almatis B.V. and its debtor-affiliates received final approval
from the U.S. Bankruptcy Court for the Southern District of New
York to employ Linklaters LLP as their special corporate counsel
effective as of April 30, 2010.
The Debtors selected Linklaters because of its extensive expertise
in corporate matters and because of its prior representation of
the Debtors, Almatis Chief Executive Remco de Jong says.
Prior to their bankruptcy filing, the Debtors were assisted by the
firm in connection with their proposed financial restructuring as
well as in the negotiation of possible out-of-court restructuring
alternatives.
As special corporate counsel to the Debtors, Linklaters will:
(1) advise the Debtors and assist their general bankruptcy
counsel in connection with their prepetition credit,
security and intercreditor agreements, exit financing,
security and capital structure, among other things;
(2) advise the Debtors and assist their bankruptcy counsel in
formulating and drafting disclosure statement for their
restructuring plan;
(3) advise the Debtors and assist their bankruptcy counsel
with respect to cross-border issues implicating laws of
foreign jurisdictions particularly the laws of the
United Kingdom and Germany; and
(4) attend meetings, participate in negotiations and appear
before the U.S. Bankruptcy Court or any other courts.
The Debtors will pay Linklaters for its services on an hourly
basis and will reimburse the firm for its necessary expenses.
The Linklaters professionals expected to provide the contemplated
services to the Debtors and their hourly rates are:
Professionals Resident Office Hourly Rates
------------- --------------- ------------
Robert Elliott London GBP625
Bruce Bell London GBP625
Michal Hlasek London/Frankfurt GBP625
Kolja von Bismarck Frankfurt GBP625
Paul Kuipers Amsterdam GBP625
Verena Etzel Frankfurt GBP460
Jacqueline Ingram London GBP280
Birgit Weckler Frankfurt GBP280
Mr. Elliot, Esq., a partner at Linklaters, assures the Court that
his firm does not hold or represent interest adverse to the
Debtors and their estates.
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. 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.
Bankruptcy Creditors' Service, Inc., publishes Almatis Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding and
ancillary foreign proceedings undertaken by Almatis B.V., and its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
AMERICAN CAPITAL: Short of Votes for Prepackaged Plan
-----------------------------------------------------
American Capital, Ltd., announced June 2 that it has extended (i)
the expiration time of its private offers to exchange its
outstanding unsecured public and private notes for cash payments
and new secured notes, and consent solicitation of its outstanding
public notes; and (ii) the voting deadline of its solicitation of
votes to accept a standby plan of reorganization.
The Exchange Offers, the Consent Solicitation and the Standby Plan
Solicitation were previously scheduled to expire at 5.00 p.m. New
York City time, on June 1, 2010. The Exchange Offers, the Consent
Solicitation and the Standby Plan Solicitation have each been
extended until 5:00 p.m., New York City time, on June 8, 2010,
unless further extended or earlier terminated. All other terms of
the Exchange Offers, the Consent Solicitation and the Standby Plan
Solicitation remain unchanged. There will continue to be no right
to withdraw public and private notes once tendered and no right to
revoke votes to accept the standby plan of reorganization once
submitted.
The Company has been advised of the following information by, as
applicable, the exchange agent for the Exchange Offers and the
voting agent for the Standby Plan, as of 5:00 p.m. New York City
time on June 1, 2010:
* With regard to lenders under the Company's existing credit
agreement, whose approximately $1.4 billion of claims
constitute Class 3, Existing Credit Agreement Claims, under
the standby plan, all of the lenders by outstanding principal
amount participated in the solicitation of votes for the
standby plan, with 100% in principal amount and 100% in number
of votes cast supporting the standby plan. Although the
lenders under the existing credit agreement do not participate
in the Exchange Offers, as previously announced, they are
parties to a lock-up agreement pursuant to which they are
obligated to undertake a restructuring of the credit agreement
on terms equivalent to those offered to the holders of the
Company's unsecured public and private notes in the Exchange
Offers.
* With regard to the holders of the Company's unsecured private
notes, whose approximately $406 million in claims constitute
Class 4, Private Notes Claims, under the standby plan,
approximately 60% of holders by outstanding principal amount
participated in the solicitation of votes for the standby
plan, of which 100% in principal amount and 100% in number of
votes cast supported the standby plan. With regard to the
Exchange Offers, the following unsecured private notes have
been tendered:
-- $73.5 million in aggregate principal amount (approximately
87.8%) of outstanding 5.92% Senior Notes, Series A due
September 1, 2009.
-- $89.2 million in aggregate principal amount (approximately
94.0%) of outstanding 6.46% Senior Notes, Series B due
September 1, 2011.
-- $121.5 million in aggregate principal amount
(approximately 90.5%) of outstanding 6.14% Senior Notes,
Series 2005-A due August 1, 2010.
-- None of the outstanding Floating Rate Senior Notes, Series
2005-B due October 30, 2020.
-- EUR14.8 million in aggregate principal amount (100%) of
outstanding 5.177% Senior Notes, Series 2006-A due
February 9, 2011.
-- GBP3.3 million in aggregate principal amount (100%) of
outstanding 6.565% Senior Notes, Series 2006-B due
February 9, 2011.
* With regard to the holders of the Company's unsecured public
6.85% Senior Notes due August 1, 2012, whose approximately
$550 million in claims constitute Class 6, Public Notes
Claims, under the standby plan, approximately 76.5% of holders
by outstanding principal amount participated in the
solicitation of votes for the standby plan, of which
approximately 6.01% in principal amount and 27.66% in number
of votes cast supported the standby plan. With regard to the
Exchange Offers, $37.4 million in aggregate principal amount
(approximately 6.8%) of outstanding unsecured public notes
have been tendered and the same percentage has voted in favor
of the Consent Solicitation.
* With regard to the holders of the Company's outstanding swap
agreements, whose claims constitute Class 7, Swap Claims,
under the standby plan, all of the holders by notional amount
participated in the solicitation of votes for the standby
plan, with 100% in notional amount and 100% in number of votes
cast supporting the standby plan.
Based in Bethesda, Maryland, American Capital, Ltd. (Nasdaq: ACAS)
-- http://www.AmericanCapital.com/-- is a publicly traded private
equity firm and global asset manager. American Capital, both
directly and through its asset management business, originates,
underwrites and manages investments in middle market private
equity, leveraged finance, real estate and structured products.
Founded in 1986, American Capital currently has $13.9 billion in
capital resources under management and eight offices in the U.S.,
Europe and Asia.
The Company's balance sheet as of March 31, 2010, showed
$6.757 billion in assets, $4.231 billion in liabilities, and
$2.526 billion of shareholders' equity.
AMERICAN COMMERCE: Peter Messineo Raises Going Concern Doubt
------------------------------------------------------------
American Commerce Solutions, Inc., filed its annual report on Form
10-K for the fiscal year ended February 28, 2010.
Peter Messineo, CPA, of Palm Harbor, Florida, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditor noted that the Company has
incurred recurring losses from continuing operations, has negative
working capital and has used significant cash in support of its
operating activities. Additionally, as of February 28, 2010, the
Company is in default of several notes payable.
The Company reported net loss of $711,531 on $2,349,285 of revenue
for the year ended February 28, 2010, compared to a net loss of
$1,151,785 on $2,307,666 of revenue for the year ended
February 28, 2009.
The Company's balance sheet as of February 28, 2010, showed
$5,141,217 in assets, $4,359,115 of liabilities, and $782,102 of
stockholders' equity.
A full-text copy of the annual report is available for free at:
http://researcharchives.com/t/s?6402
Based in Bartow, Florida, American Commerce Solutions, Inc., is a
multi-industry holding company for its operating subsidiaries. As
of the close of its most recently completed fiscal year end, the
Company had one wholly owned subsidiary operating in the
manufacturing segment. The operating subsidiary is International
Machine and Welding, Inc. located in Bartow, Florida.
International Machine and Welding, Inc., provides specialized
machining services for heavy industry.
AMR CORP: Compensation Committee OKs Awards for Exec. Officers
--------------------------------------------------------------
The Compensation Committee of the Board of Directors of AMR
Corporation conducted its annual review of compensation for its
principal executive officer, principal financial officer and other
named executive officers with its compensation consultant, and on
May 19, 2010, the committee approved these compensation awards for
the named executive officers for 2010:
* Grants of stock appreciation rights pursuant to the terms and
conditions of the form Stock Appreciation Right Agreement.
SARs are contractual rights to receive shares of our common
stock upon their exercise. The SARs are exerciseable for ten
years from the date of grant and generally vest in 20%
increments over five years. An attachment to the form SAR
Agreement notes the stock appreciation rights granted to the
named executive officers, effective May 19, 2010.
* Grants of deferred shares pursuant to the terms and
conditions of the form Deferred Share Award Agreement for
2010. These are contractual rights to receive shares of our
common stock, which vest on the third anniversary of the
grant date.
* Grants of performance shares pursuant to the form of
Performance Share Agreement under the 2010 - 2012 Performance
Share Plan for Officers and Key Employees. These are
contractual rights to receive shares of our common stock that
vest depending upon achievement of performance measures
described in the Performance Share Plan.
A full-text copy of the Form of Stock Appreciation Right Agreement
is available for free at:
http://ResearchArchives.com/t/s?63f9
A full-text copy of the Form of 2010 Deferred Share Award
Agreement is available for free at:
http://ResearchArchives.com/t/s?63fa
A full-text copy of the Form of Performance Share Agreement under
the 2010 - 2012 Performance Share Plan is available for free at:
http://ResearchArchives.com/t/s?63fb
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
* * *
AMR carries a 'CCC' issuer default rating from Fitch Ratings. It
has 'Caa1' corporate family and probability of default ratings
from Moody's. It has 'B-' corporate credit rating, on watch
negative, from Standard & Poor's.
ASARCO LLC: Baker Botts Battles over $142 Million Fees
------------------------------------------------------
Bankruptcy Law360 reports that a dispute over the meaning of a
1998 ruling that set the course for bankruptcy fee awards has
taken center stage in the days-long hearing over Baker Botts LLP's
request for $142 million in fees for representing Asarco LLC in
its bankruptcy. In a brief filed Tuesday in the U.S. Bankruptcy
Court for the Southern District of Texas, Asarco staunchly
objected to paying out the full requested amount, according to
Law360.
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 BANCGROUP: Posts $547,000 Net Loss in Q1 2010
------------------------------------------------------
Atlantic BancGroup, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $547,000 on net interest income (before
provision for loan losses) of $2,055,000 for the three months
ended March 31, 2010, compared with a net loss of $68,000 on net
interest income (before provision for loan losses) of $1,764,000
for the same period ended March 31, 2009.
"While we posted a year-to-year increase in net interest income
before provision for loan losses of $291,000, or 16.5%, our first
quarter 2010 results were depressed by continued loan losses that
contributed to an increase in our provision for loan losses of
$638,000, higher FDIC deposit insurance assessments, which rose
$207,000, and a reduction in income tax benefits of $150,000. The
loss per basic and diluted share for the quarter ended March 31,
2010, was $0.44 compared with the loss per basic and diluted share
of $0.05 for the same period in 2009.
"Severe declines in real estate values, high unemployment,
business failures and residential foreclosures in our market areas
and throughout Florida and the U.S. have continued to adversely
affect our operating results and our loan portfolio. This has
also resulted in many of our customers being unable to make
payments on their loans and we are required by banking regulations
to downgrade these loans and reserve against future potential
losses in our loan portfolio. Additionally we are also required
to increase our reserves for those customers whom we have assisted
by proactively altering their payment plans to allow them
flexibility in continuing to make payments. As a result, we have
adopted an aggressive strategy of significantly increasing our
loan loss reserves for these potential future losses. As we
progress through 2010, we will continue to aggressively, but
prudently, manage our non-performing assets and explore strategic
alternatives to improve our capital position.
"The cornerstone of our strategic plan to rebuild our capital was
announced last week. On May 10, 2010, Jacksonville Bancorp, Inc.
("JAXB"), the bank holding company for The Jacksonville Bank, and
Atlantic announced the signing of a definitive merger agreement
providing for the merger of Atlantic into JAXB. The merger
agreement also contemplates the consolidation of Oceanside into
The Jacksonville Bank. Additionally, JAXB announced the signing
of a stock purchase agreement with four private investors led by
CapGen Capital Group IV LP providing for $30 million in new
capital through the sale of newly issued shares of JAXB common
stock subject to completion of the mergers. The transactions have
been approved by the Boards of Directors of each company and are
subject to regulatory approval, shareholders' approvals, and other
customary conditions. JAXB and Atlantic expect to close the
transaction in late-third quarter or early-fourth quarter of
2010."
The Company's balance sheet as of March 31, 2010, showed
$285,880,000 in assets, $276,607,000 of liabilities, and
$9,273,000 of stockholders' equity. At March 31, 2010, total
deposits were $258,463,000 ($269,984,000 at December 31, 2009) and
net loans were $189,593,000 ($194,187,000 at December 31, 2009).
As reported in the Troubled Company Reporter on April 21, 2010,
Mauldin & Jenkins, CPA's, LLC, in Albany, Ga., 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 has suffered significant losses from
operations and capital has been significantly depleted due to the
economic downturn.
"Although the contemplated merger with Jacksonville Bancorp, Inc.
is expected to result in our continued operation as a part of
Jacksonville Bancorp, Inc. and The Jacksonville Bank, such
transaction may prove to be insufficient due to the possible
continued decline of the loan portfolio or other losses. If we
are, or the surviving entity in the merger is, unable to return to
profitability and if we are unable to identify and execute a
viable strategic alternative, we may be unable to continue as a
going concern."
A full-text copy of the quarterly report is available for free at:
http://researcharchives.com/t/s?63e5
A full-text copy of the press release is available for free at:
http://researcharchives.com/t/s?63e6
Jacksonville Beach, Fla.-based Atlantic BancGroup, Inc. (NasdaqCM:
ATBC) is a publicly traded bank holding company. The Company is
the parent company of Oceanside Bank, with four locations in the
Jacksonville Beaches and East Jacksonville, Florida.
AVIS BUDGET: Reports Results of May 26 Annual Meeting
-----------------------------------------------------
Avis Budget Group, Inc., held its Annual Meeting of Stockholders
on May 26, 2010, in Wilmington, Delaware. The nine nominees named
in the Company's proxy statement were elected for a one-year term
expiring in 2011 and until their successors are duly elected and
qualified:
* Ronald L. Nelson;
* Mary C. Choksi;
* Leonard S. Coleman;
* Martin L. Edelman;
* John D. Hardy, Jr.;
* Lynn Krominga;
* Eduardo G. Mestre;
* F. Robert Salerno; and
* Stender E. Sweeney
The appointment of Deloitte & Touche LLP as the auditors of the
Company's financial statements for fiscal year 2010 was ratified.
About Avis Budget Group
Avis Budget Group -- http://www.avisbudgetgroup.com/-- provides
vehicle rental services, with operations in more than 70
countries. Through its Avis and Budget brands, the Company is a
leading vehicle rental company in each of North America,
Australia, New Zealand and certain other regions based on
published airport statistics. Avis Budget Group is headquartered
in Parsippany, N.J. and has more than 22,000 employees.
At March 31, 2010, the Company had total assets of $10.257 billion
against total current liabilities of $1.328 billion, total
liabilities exclusive of liabilities under vehicle programs of
$4.044 billion and liabilities under vehicle programs of $5.987
billion, resulting in stockholders' equity of $226 million.
* * *
Avis Budget Car Rental LLC continues to carry Moody's Investors
Service's B2 corporate family rating. Avis Budget Group Inc.
carries Standard & Poor's Ratings Services' B+ corporate credit
rating.
BAY NATIONAL: Posts $2.8 Million Net Loss in Q1 2010
----------------------------------------------------
Bay National Corporation filed its quarterly report on Form 10-Q,
reporting a net loss of $2.77 million on net interest income
(before provision for credit losses) of $1.46 million for the
three months ended March 31, 2010, compared with a net loss of
$884,131 on net interest income (before provision for credit
losses) of $1.51 million for the same period ended March 31, 2009.
The Company's balance sheet as of March 31, 2010, showed
$282.20 million in assets and of $285.80 million in liabilities,
for a stockholders' deficit of $3.60 million.
As reported in the Troubled Company Reporter on April 7, 2010,
Stegman & Company, in Baltimore, 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 has experienced recurring losses from operations.
Further, the bank subsidiary is operating under a Consent Order
issued by the Office of Comptroller of the Currency, which
requires management to take a number of actions, including, among
other things, restoring and maintaining its capital levels at
amounts that are in excess of the Company's current capital
levels. Without a waiver by the OCC or amendment or modification
of the Consent Order, the Bank could be subject to further
regulatory enforcement action.
A full-text copy of the quarterly report is available for free at:
http://researcharchives.com/t/s?63e9
Lutherville, Md.-based Bay National Corporation was formed on
June 3, 1999, to be the bank holding company of Bay National Bank,
a federally chartered commercial bank. Bay National Bank serves
the Baltimore metropolitan area from its headquarters and
Baltimore branch office located in Lutherville, Maryland. Bay
National Bank's Salisbury, Maryland branch office serves
Maryland's lower Eastern Shore. Bay National Bank also has two
residential real estate loan production offices, which are
located in its Lutherville headquarters and in its Salisbury
branch office.
BIGLER LP: Sets June 16 Auction to Sell All Assets
--------------------------------------------------
Bill Rochelle at Bloomberg News reports that Bigler LP will sell
substantially all of its assets at auction on June 16 in Houston.
Under sale procedures adopted last week by the bankruptcy judge,
bids are initially due June 11. The hearing for approval of the
sale will take place June 23. Secured creditors may bid their
claims rather than cash. No buyer is yet under contract.
About Bigler LP
Houston-based Bigler LP is a diversified petrochemical producer.
Bigler has production and storage facilities on 271 acres on the
Houston Ship Channel.
Bigler filed for Chapter 11 reorganization on Oct. 30 in Houston
(Bankr S.D. Tex. Case No. 09-38188). The petition listed assets
of $233 million against debt totaling $151 million. Liabilities
include $67 million owed to secured lender Amegy Bank NA, which
has a lien on all assets.
Secured lender Amegy Bank is represented by Porter & Hedges LLP.
BLACK CROW: Has Final Approval for $1.2 Million Loan
----------------------------------------------------
Bill Rochelle at Bloomberg News reports that Black Crow Media
Group LLC obtained final bankruptcy court-approval on May 28 to
take down a $1.5 million loan.
According to the report, the DIP financing was approved over the
objection from General Electric Capital Corp., the secured lender
owed $38.9 million. The judge required Black Crow to pay GECC
$1.88 million from cash representing collateral for the loan.
About Black Crow Media
Daytona Beach, Florida-based Black Crow Media Group, LLC, owns and
operates 17 FM and 5 AM radio stations in Daytona Beach, Live Oak,
Valdosta, Huntsville, Alabama, and Jackson, Tennessee.
The Company filed for Chapter 11 bankruptcy protection on
January 11, 2010 (Bankr. M.D. Fla. Case No. 10-00172). The
Company's affiliates -- Black Crow Media, LLC, et al. -- also
filed separate Chapter 11 petitions.
Mariane L. Dorris, Esq., and R. Scott Shuker, Esq., at Latham
Shuker Eden & Beaudine LLP, assist the Company in its
restructuring effort. The Company listed $10,000,001 to
$50,000,000 in assets and $50,000,001 to $100,000,000 in
liabilities.
BLACK GAMING: To Demolish Part of Oasis facility to Cut Costs
-------------------------------------------------------------
In a company prepared statement, Black Gaming, LLC Chief Executive
Officer Robert R. "Randy" Black, Sr. said, "In the past two years
the Company and I have had to make some difficult decisions to
stay afloat, including facility closures, layoffs and bankruptcy,
and today is no exception. Faced with the prospect of a down
economy, entering our seasonally slow summer months and working
through our bankruptcy commitments to cut expenses as outlined in
our lockup agreement, we must further reduce overhead.
"The economy is not rebounding, forcing my senior staff and I to
explore opportunities to cut expenses to keep pace with the
economy, with layoffs being the last resort. Unfortunately it is
necessary to implement a combination of realignment of duties,
through collapsing of departmental structures and drastic overhead
reduction efforts, intent on minimizing the otherwise further
required human impact.
"Cost savings will be achieved, most significantly, through the
demolition of parts of the Oasis facility that are non-
operational, including the casino and part of the hotel.
Timeshare buildings will not be impacted by these efforts.
Savings associated with this project will allow the Company to
better align its revenue with its operational overhead and reduce
the need for more drastic headcount reductions.
"The Oasis will be missed but, in light of market trends, it is
the best option for the Company, community and our 1,700
employees. We are optimistic about the long-term prospects of
Mesquite and look forward to more stable times ahead."
About Black Gaming
Headquartered in Las Vegas, Nev., Black Gaming, LLC, is a holding
company and is an owner and operator of three gaming entertainment
properties located in Mesquite, Nevada.
The Company filed for Chapter 11 bankruptcy protection on March 1,
2010 (Bankr. D. Nev. Case No. 10-13301). Gregory E. Garman, Esq.,
and Talitha B. Gray, Esq., at Gordon & Silver, Ltd., assist the
Company in its restructuring effort. Kurtzman Carson Consultants
is the Company's claims and notice agent. In its petition, the
Company listed $10,000,001 to $50,000,000 in assets and
$100,000,001 to $500,000,000 in liabilities.
The Company's affiliates -- B&BB, Inc.; R. Black, Inc.; Casablanca
Resorts, LLC; Casablanca Resorts, LLC; Oasis Interval Ownership,
LLC; Oasis Interval Management, LLC; Oasis Recreational
Properties, Inc.; RBG, LLC; and Virgin River Casino Corporation --
filed separate Chapter 11 petitions.
BLOCKBUSTER INC: Urges Stockholders to Vote the 'WHITE' Proxy Card
------------------------------------------------------------------
Blockbuster Inc. has sent a letter to its stockholders urging them
to vote the "WHITE" proxy card "FOR" the Company's nominees for
election to the board. The letter says:
To Our Fellow Blockbuster Stockholders:
As you know, Gregory Meyer, a dissident stockholder, is seeking
election to the Blockbuster Board through a hostile proxy
contest. In his latest attack -- this time against incumbent
director Gary Fernandes -- Meyer further demonstrates the
behavior that contributed to our decision not to nominate him to
your Board in the first place. We continue to firmly believe
that Meyer is not qualified to serve on your Board and that, if
elected, he would pose a significant risk to the future of our
Company. In casting your vote, please consider the following:
We believe Meyer has misrepresented himself and demonstrated
questionable judgment.
Meyer has stated that he sold his DVD rental kiosk company,
DVDXpress, to Coinstar in 2007 and was responsible for the
DVDXpress division at Coinstar from 2007 to 2009 when it was
merged with Redbox. He then appears to take personal credit for
the success of Coinstar's combined DVD kiosk division and a
"majority of Coinstar's revenue and EBITDA." These assertions
are misleading.
If Meyer is such an expert in the home entertainment industry,
or even in the vending segment alone, why then is he not at
Coinstar today running the Redbox business? The facts are that
DVDXpress was deeply in debt to Coinstar when Coinstar acquired
the business, Redbox and DVDXpress were completely separate
entities during Meyer's tenure at Coinstar, and Meyer was not
integral to the growth of the DVD kiosk business over the last
several years.
Meyer also represents that he is a well-regarded industry
consultant, yet when given the opportunity to do so, he refused
to consult for Blockbuster in his area of "expertise." In
addition, we know of no major companies that have used Meyer's
consulting services.
Additionally, in his solicitation materials, Meyer has referred
to his suggestion regarding "a potential time sensitive
financial transaction which [he] believed could save the Company
hundreds of millions of dollars over the subsequent few years
while conserving liquidity in the near term, without any
dilution to Blockbuster stockholders." He has also indicated
that he "is particularly concerned that Blockbuster selects the
optimal restructuring option, if one is indeed required, that
results in the lowest possible dilution, if any, of
shareholders." Yet, he fails to mention that implementing his
suggestion would result in a third party controlling the Company
with the power to cause significant dilution to the Company's
equity holders. Meyer's suggestion of this alternative while at
the same time stressing the importance of preserving stockholder
value is contradictory and further evidence that Meyer does not
possess the skills or experience necessary to guide a large
public company through complex refinancing transactions.
Meyer's blatant mischaracterizations of Mr. Fernandes'
experience and expertise are desperate attempts to smear Mr.
Fernandes' reputation and record.
We urge you to consider the truth when reviewing Meyer's
misleading and inaccurate statements about Mr. Fernandes. We
want to set the record straight regarding Mr. Fernandes and his
contributions as a member of your Board.
Truth Regarding Home Entertainment Industry Experience: Meyer
has attacked Mr. Fernandes' industry expertise. In fact, Mr.
Fernandes is uniquely qualified to contribute to the leadership
of a company pursuing both digital and store-based delivery of
home entertainment. The Board specifically recruited Mr.
Fernandes to the Blockbuster Board in 2004 because of his
extensive technology background and expertise, including his
tenure as Vice Chairman of EDS, at a time when Blockbuster was
beginning to expand its footprint beyond stores. He has been
actively involved in the Company's expansion into by-mail, kiosk
and digital delivery. In addition, Mr. Fernandes brings
valuable real estate expertise with respect to the store side of
our business through his service as Chairman of FLF Investments,
a privately-held entity involved with the acquisition and
management of commercial real estate properties and other
assets, for more than a decade.
Meyer's criticism of Mr. Fernandes for holding an interest in
two real estate limited partnerships that each leased one retail
space to Blockbuster for store locations is absurd and ill-
informed. Meyer insinuates that Mr. Fernandes has somehow
influenced Blockbuster to keep open the stores to serve his own
interests. You should know that Mr. Fernandes' interest in
these leases is not material in nature. Further, we have
actually closed one of the retail locations recently, and the
other store remains open because it is consistently profitable.
Truth Regarding Financial Expertise And Board Experience: Meyer
has trumpeted his CFA designation as an imprimatur for financial
expertise and suggested that this somehow makes him more
qualified in this area than Mr. Fernandes. In fact, Mr.
Fernandes has substantial expertise in financial matters. In
addition to serving on Blockbuster's Audit Committee for the
past two years, Mr. Fernandes served on the Audit Committee of
7-Eleven for twelve years, the Audit Committee of webMethods for
two years (including as Chairman) and the Finance Committee of
EDS for seven years. He has also served in senior executive
positions with financial management authority. More broadly,
Mr. Fernandes has served as a director of both public and
private companies as well as charitable institutions for nearly
three decades. Currently, he serves as a director of CA
Technologies and BancTec, in addition to serving on the board of
governors of the Boys & Girls Clubs of America and as a trustee
for the O'Hara Trust and the Hall-Voyer Foundation. This
extensive background is far more relevant and valuable than
Meyer's. Meyer may have passed a CFA test but he has absolutely
no public company management or board experience.
Truth Regarding Stock Ownership And Alignment With Fellow
Stockholders: Contrary to Meyer's claims, Mr. Fernandes has
purchased Blockbuster stock in the open market out of his own
pocket during his tenure as a director. Additionally, Mr.
Fernandes currently receives no cash compensation from the
Company; since first given the opportunity to do so in mid-2007,
he has elected to receive all of his director compensation in
equity. He also has not disposed of a single share of
Blockbuster stock. Mr. Fernandes has firmly aligned his
personal interests with those of our stockholders. Meyer's
assertions otherwise are simply wrong.
Truth Regarding Mr. Fernandes' Relationship With Mr. Keyes:
Meyer has suggested that Mr. Fernandes is not adequately
independent of Jim Keyes, our Chairman and CEO. On the
contrary, Mr. Fernandes is wholly independent of Mr. Keyes.
Meyer alleges that Mr. Fernandes was a member of the Nominating
Committee that appointed Mr. Keyes as our Chairman and CEO.
Again, this statement is simply wrong. Mr. Fernandes did not
serve on Blockbuster's Nominating/Corporate Governance Committee
at that time. To suggest that Mr. Fernandes is beholden to
anyone in his service on the Board other than our stockholders
is completely unfounded.
Truth Regarding 7-Eleven Stockholder Litigation: Meyer's
references to unproven allegations in prior lawsuits where Mr.
Fernandes and Mr. Keyes were named defendants are wholly
irrelevant and further demonstrate Meyer's outlandish attempts
to smear Mr. Fernandes. The suits were settled by 7-Eleven's
current owners with absolutely no finding of wrongdoing on the
part of Mr. Fernandes or Mr. Keyes and, in fact, all claims
against both were ultimately dismissed.
The bottom line: Electing Meyer to your Board is a high-risk
proposition.
Meyer is not qualified to serve on your Board, and we have yet
to determine what value he can bring to our Company. Even
worse, he has been less than forthcoming about himself and has
baselessly targeted Mr. Fernandes ? a Board leader who
consistently enjoys strong stockholder support for re-election
to the Board each year, and who has proven, relevant industry,
financial and governance expertise, significant public company
director and senior management experience and interests directly
aligned with your own.
As we have stated before, Blockbuster faces a number of
challenges without quick fixes or easy solutions. Your Board
and management are focused on addressing these challenges and
positioning our Company for the future. Meyer is a distraction
with no workable ideas, and we urge you not to subscribe to his
inflammatory rhetoric.
We strongly encourage you to support Blockbuster by voting your
WHITE proxy card today, regardless of how many shares you own.
Even if you have already voted on a Gold proxy card, it is not
too late to change your vote. Only the latest dated proxy card
will be counted.
Thank you for your continued support,
The Blockbuster Board of Directors
About Blockbuster Inc.
Blockbuster Inc. is a leading global provider of rental and retail
movie and game entertainment. The company provides customers with
convenient access to media entertainment anywhere, any way they
want it - whether in-store, by-mail, through vending kiosks or
digitally to their homes and mobile devices. 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. The company may be
accessed worldwide at http://www.blockbuster.com/
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.
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.
PricewaterhouseCoopers LLP, in Dallas, expressed substantial doubt
about the Company's ability to continue as a going concern
following Blockbuster's 2009 results.
CABLEVISION SYSTEMS: Inks New Employment Deal with Michael Huseby
-----------------------------------------------------------------
Cablevision Systems Corporation entered into a new employment
agreement with Michael P. Huseby, its Executive Vice President and
Chief Financial Officer. The Employment Agreement replaces Mr.
Huseby's prior employment agreement that was set to expire on
October 16, 2010 and will terminate on October 16, 2012.
The Employment Agreement provides for a minimum annual base salary
of $1,020,000, subject to review and potential increase by
Cablevision in its sole discretion. Mr. Huseby is also eligible
to participate in Cablevision's discretionary annual bonus program
with an annual target bonus opportunity equal to 90% of salary.
The decision of whether or not to pay a bonus, and the amount of
that bonus, if any, is made by Cablevision in its sole discretion.
Mr. Huseby is also eligible to participate in such equity and
other long-term incentive programs that are made available to
similarly situated executives at Cablevision. Any such awards
would be subject to actual grant to Mr. Huseby by the Compensation
Committee of the Board of Directors of Cablevision in its sole
discretion, would be pursuant to the applicable plan document and
would be subject to terms and conditions established by the
Compensation Committee in its sole discretion. Mr. Huseby remains
eligible for Cablevision's standard benefits programs at the
levels that are made available to similarly situated executives at
Cablevision.
If Mr. Huseby's employment with Cablevision is terminated prior to
October 16, 2012 (i) by Cablevision or (ii) by Mr. Huseby for Good
Reason then, subject to Mr. Huseby's execution of a severance
agreement satisfactory to Cablevision, Cablevision has agreed to
provide Mr. Huseby with the following:
* severance in an amount no less than two times the sum of Mr.
Huseby's annual base salary and annual target bonus as in
effect at the time of termination of employment;
* a prorated bonus based on the amount of Mr. Huseby's base
salary actually earned during the calendar year through the
termination date;
* any restricted shares granted to Mr. Huseby by Cablevision
prior to October 16, 2008, will fully vest and all
restrictions related thereto shall be eliminated; and
* a prorated target award amount of the performance awards
granted to Mr. Huseby prior to October 16, 2008 shall vest
based on the number of full months of the three-calendar year
performance period of the relevant award that Mr. Huseby was
employed by Cablevision, with any payment remaining subject
to the relevant performance objectives.
Mr. Huseby's employment is at will and may be terminated by Mr.
Huseby or Cablevision at any time, with or without notice or
reason.
About Cablevision Systems
Headquartered in Bethpage, New York, Cablevision Systems Corp. is
predominantly a domestic cable TV multiple system operator serving
approximately 3.1 million subscribers in and around the New York
metropolitan area. Among other entertainment-and media-related
business ventures, the company also owns and distributes
programming to cable television and direct broadcast satellite
providers throughout the United States through its Rainbow
National Services subsidiary.
Cablevision Systems reported net earnings of $285.3 million on
revenue of $7.77 billion for the year ended December 31, 2009,
compared with a net loss of $236.17 million on revenue of
$7.23 billion for 2008. Cablevision reported $9.32 billion in
total assets and $14.47 billion in total liabilities, resulting in
a $5.16 billion stockholders' deficit as of December 31, 2009.
* * *
Cablevision carries Standard & Poor's 'BB' corporate credit rating
and Moody's "Ba2" Corporate Family and Probability of Default
Ratings.
CATHOLIC CHURCH: Portland Sued for $2.8 Mil over Abuse Claims
-------------------------------------------------------------
An unidentified man has filed a $2.8 million lawsuit at the United
States District Court for the District of Oregon against the
Archdiocese of Portland, The Associated Press reports.
The man alleged that he was raped by Father Leonard Plocinski when
he was a child in the late 1970s. The man said that he was an
altar boy at St. Phillip's Catholic Church in Dallas, Oregon.
According to AP, the complaint accuses the Archdiocese, its
Archbishop and St. Phillip's of sexual battery of a child,
intentional infliction of emotional distress and negligence.
The allegation against Father Plocinski was the first ever made
against him, AP quoted a spokesman for the Archdiocese as saying.
Father Plocinski died in 1995.
About Archdiocese of Portland
The Archdiocese of Portland in Oregon filed for Chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers. David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case. In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities.
The Court approved the Debtor's disclosure statement explaining
its Second Amended Joint Plan of Reorganization on February 27,
2007. (Catholic Church Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CC MEDIA: Reports Results of May 26 Stockholders' Meeting
---------------------------------------------------------
CC Media Holdings, Inc., held its Annual Meeting of Stockholders
on May 26, 2010. Stockholders have elected these directors:
* David C. Abrams;
* Steven W. Barnes;
* Richard J. Bressler;
* Charles A. Brizius;
* John P. Connaughton;
* Blair E. Hendrix;
* Jonathon S. Jacobson;
* Ian K. Loring;
* Mark P. Mays;
* Randall T. Mays;
* Scott M. Sperling; and
* Kent R. Weldon
Stockholders also ratified Ernst & Young LLP as the independent
registered public accounting firm for the year ending December 31,
2010.
Last month, CC Media Holdings reported revenues of $1.26 billion
in the first quarter of 2010, an increase of 5% from the $1.21
billion reported for the first quarter of 2009, and revenues would
have increased 2% excluding the effects of movements in foreign
exchange rates. The Company's consolidated net loss in the first
quarter of 2010 decreased to $179.6 million compared to a
consolidated net loss of $428.0 million for the same period in
2009.
In the fourth quarter of 2008, the Company initiated a company-
wide strategic review of its costs and organizational structure to
identify opportunities to maximize efficiency and realign expenses
with its current and long-term business outlook. As of March 31,
2010, the Company had incurred a total of $279.6 million of costs
in conjunction with this restructuring program. The results of
this program were a contributing factor to the overall decline in
the Company's operating expenses which decreased 5% for the first
quarter of 2010 compared to 2009 or 7% when excluding the effects
of movements in foreign exchange rates.
At March 31, 2010, the Company had $17.399 billion in total assets
against total current liabilities of $1.889 billion; long-term
debt of $19.576 billion; deferred income taxes of $2.141 billion;
and other long-term liabilities of $847.565 million; resulting in
shareholders' deficit of $7.054 billion.
A full-text copy of the Company's Form 10-Q report is available at
no charge at http://ResearchArchives.com/t/s?63e1
A full-text copy of the Company's earnings release is available at
no charge at http://ResearchArchives.com/t/s?63e2
CC Media Holdings, Inc., is a diversified media company with three
reportable business segments: Radio Broadcasting, Americas Outdoor
Advertising (consisting primarily of operations in the United
States, Canada and Latin America) and International Outdoor
Advertising.
CELL THERAPEUTICS: Files April 2010 Monthly Update
--------------------------------------------------
Cell Therapeutics, Inc., filed with the U.S. Securities and
Exchange Commission a monthly update of information relating to
the Company's management and financial situation. The report is
required by the Italian securities regulatory authority, CONSOB,
pursuant to Article 114, Section 5 of the Unified Financial Act.
For the month of April 2010, CTI reported net loss attributable to
common shareholders of $7,149,000 from net loss attributable to
common shareholders for March of $27,355,000. Net revenue for
April was $7,000, the same as in March.
The total estimated and unaudited net financial position of the
Company as of April 30, 2010, was approximately negative
$11,043,000.
The Company's 4% Convertible Senior Subordinated Notes with a
redemption date of July 1, 2010 and the 7.5% Convertible Senior
Notes with a redemption date of April 30, 2011 come due within the
next 12 months.
The Company had no debt that matured during the month of April
2010.
A full-text copy of the Company's monthly report is available at
no charge at http://ResearchArchives.com/t/s?63dc
CTI entered into privately negotiated exchange agreements with
certain holders of some of the Company's outstanding 4%
Convertible Senior Subordinated Notes due 2010 on May 16, 2010.
Pursuant to the terms of the Exchange Agreements, the Company may
exchange up to approximately 60 million shares of its common
stock, no par value, for approximately $30 million aggregate
outstanding principal amount of Notes in one or a series of
exchanges, which may be effected over several days. The term of
the Exchange Agreements is 10 days, subject to extension, unless
earlier terminated by any party to the Exchange Agreements. The
final number of shares of common stock and the final principal
amount of Notes to be exchanged will be determined based on a
number of factors, including, among others, the trading price and
volume of the common stock during the term of the Exchange
Agreements, the volume weighted average price of the common stock
on the securities exchanges where the common stock is listed for
trading and the setting of minimum share prices with respect to
the maximum number of shares that may be exchanged on a particular
trading day. The Company will pay accrued and unpaid interest to
the applicable settlement date on the Notes in cash.
On May 20, 2010 and May 21, 2010, pursuant to one of the Exchange
Agreements, the Company agreed to exchange an aggregate of
1,863,564 shares of its common stock for $779,000 aggregate
outstanding principal amount of Notes, for an aggregate of
4,303,157 shares of common stock exchanged for $1,848,000
aggregate outstanding principal amount of Notes pursuant to such
Exchange Agreement during the week ending May 21, 2010.
The shares of common stock issued under the Exchange Agreements
are being issued pursuant to the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as
amended, and/or Regulation D thereunder.
On May 23, 2010, the Company delivered a notice of termination of
the Exchange Agreements to each of the holders party to the
Exchange Agreements.
About Cell Therapeutics
Headquartered in Seattle, Cell Therapeutics, Inc. (NASDAQ and MTA:
CTIC) -- http://www.CellTherapeutics.com/-- is a
biopharmaceutical company that develops an integrated portfolio of
oncology products aimed at making cancer more treatable.
Subsequent to the closure of its Bresso, Italy operations in
September 2009, CTI's operations are conducted solely in the
United States.
The Company reported $69.59 million in total assets and
$87.73 million in total liabilities, resulting in $18.76 million
in stockholders' deficit at Dec. 31, 2009.
Going Concern Doubt
San Francisco-based Stonefield Josephson, Inc., has included an
explanatory paragraph in their report on Cell Therapeutics, Inc.'s
December 31, 2009, 2008 and 2007 consolidated financial statements
regarding their substantial doubt as to the Company's ability to
continue as a going concern. The independent auditors reported
that the Company has sustained loss from operations over the audit
periods, incurred an accumulated deficit, and has substantial
monetary liabilities in excess of monetary assets as of
December 31, 2009.
Bankruptcy Warning
In its Form 10-Q report for the period ended September 30, 2009,
filed with the Securities and Exchange Commission, the Company
warned it does not expect it will have sufficient cash to fund
planned operations through the second quarter of 2010, which
raises substantial doubt about its ability to continue as a going
concern. The Company said if it fails to obtain capital when
required, the Company said it may be required to delay, scale
back, or eliminate some or all of its research and development
programs and may be forced to cease operations, liquidate its
assets and possibly seek bankruptcy protection.
CELL THERAPEUTICS: Sells $21 Mil. of Preferreds and Warrants
------------------------------------------------------------
A Special Meeting of Shareholders of Cell Therapeutics, Inc., is
scheduled to be held at 10 a.m. (Seattle time) on June 4, 2010, at
the Company's headquarters at 501 Elliott Avenue West, Suite 400,
Seattle, Washington, to discuss and resolve upon these matters:
(i) approval of an amendment to the Company's Amended and
Restated Articles of Incorporation to increase the number
of authorized shares of the Company from 810,000,000 to
1,210,000,000 and to increase the number of authorized
shares of common stock, no par value per share of the
Company from 800,000,000 to 1,200,000,000; and
(ii) approval of an amendment to the Company's 2007 Equity
Incentive Plan, as amended, to increase the number of
shares of common stock available for issuance under the
Plan by 40,000,000 shares.
On May 23, 2010, the Company entered into a Securities Purchase
Agreement, with certain institutional investors. Pursuant to the
Purchase Agreement, the Company agreed to issue (i) 21,000 shares
of Series 5 Preferred Stock, no par value per share, initially
convertible into 52,500,000 shares of Common Stock and (ii)
warrants to purchase up to 26,250,000 shares of Common Stock for
an aggregate offering price of $21 million.
The Purchasers have elected to convert all 21,000 of the preferred
shares and to receive the 52,500,000 shares of Common Stock
issuable upon such conversion at the closing. The Company closed
the offering on May 27, 2010.
CTI has filed with the SEC a prospectus supplement regarding the
issuance of Series 5 Preferred Stock. A full-text copy of the
prospectus supplement is available at no charge at
http://ResearchArchives.com/t/s?63dd
Each Warrant has an exercise price of $0.50 per share of Common
Stock. The Warrants are exercisable six months and one day after
the date of issuance and terminate four years, six months and one
day after the date of issuance, provided that the exercisability
of the Warrants is conditioned upon the Company's receipt of
shareholder approval of Proposal 1 at the Special Meeting to
approve the amendment to the Company's amended and restated
articles of incorporation to increase the authorized shares of
Common Stock available for issuance thereunder by 400,000,000
shares or the Company's notification to holders of the Warrants
that shares of Common Stock have become available and are reserved
for issuance upon exercise of the Warrants.
All Warrants exercisable to purchase shares of Common Stock (and
the shares of Common Stock issuable upon exercise of the Warrants)
were offered and sold by the Company in a private placement
pursuant to an exemption from the registration requirements of the
Securities Act of 1933, as amended, set forth in Section 4(2)
thereof and/or Regulation D thereunder.
In addition, on May 27, 2010, the Company issued warrants to
purchase 1,050,000 shares of Common Stock to the Rodman & Renshaw,
LLC as partial compensation for its services as placement agent in
connection with the Offering. The Placement Agent Warrants have
an exercise price of $0.50 per share of Common Stock. The
Placement Agent Warrants are exercisable six months and one day
after the date of issuance and terminate five years after the date
of issuance, provided that the exercisability of the Placement
Agent Warrants is conditioned upon the Company's receipt of the
shareholder approval or the notification.
Shareholder approval of Proposal 1 would provide the Company with
some of the resources necessary to raise additional funds for the
Company to continue its operations and research to assist its
development of cancer drugs through equity raising activities,
such as the issuance of additional shares and the issuance of
shares upon exercise of warrants, and pursuing capital saving
activities such as pursuing additional exchanges of its
outstanding convertible notes for shares. Substantially all of the
Company's currently authorized Common Stock has been issued or is
already reserved for issuance.
Debt Restructuring Program
On May 17, 2010, the Company announced that it entered into
exchange agreements with certain holders of some of the Company's
outstanding 4% Convertible Senior Subordinated Notes due 2010.
Pursuant to one of the Exchange Agreements, the Company agreed to
exchange an aggregate of 4,303,157 shares of the Company's common
stock for $1,848,000 aggregate outstanding principal amount of the
Notes during the week ending May 21, 2010. The Company has since
delivered a notice of termination of the Exchange Agreements to
each of the holders party to the Exchange Agreements. The shares
of common stock issued under the Exchange Agreements were issued
pursuant to the exemption from registration provided by Section
4(2) of the Securities Act of 1933, as amended, and/or Regulation
D thereunder.
About Cell Therapeutics
Headquartered in Seattle, Cell Therapeutics, Inc. (NASDAQ and MTA:
CTIC) -- http://www.CellTherapeutics.com/-- is a
biopharmaceutical company that develops an integrated portfolio of
oncology products aimed at making cancer more treatable.
Subsequent to the closure of its Bresso, Italy operations in
September 2009, CTI's operations are conducted solely in the
United States.
The Company reported $69.59 million in total assets and
$87.73 million in total liabilities, resulting in $18.76 million
in stockholders' deficit at Dec. 31, 2009.
Going Concern Doubt
San Francisco-based Stonefield Josephson, Inc., has included an
explanatory paragraph in their report on Cell Therapeutics, Inc.'s
December 31, 2009, 2008 and 2007 consolidated financial statements
regarding their substantial doubt as to the Company's ability to
continue as a going concern. The independent auditors reported
that the Company has sustained loss from operations over the audit
periods, incurred an accumulated deficit, and has substantial
monetary liabilities in excess of monetary assets as of
December 31, 2009.
Bankruptcy Warning
In its Form 10-Q report for the period ended September 30, 2009,
filed with the Securities and Exchange Commission, the Company
warned it does not expect it will have sufficient cash to fund
planned operations through the second quarter of 2010, which
raises substantial doubt about its ability to continue as a going
concern. The Company said if it fails to obtain capital when
required, the Company said it may be required to delay, scale
back, or eliminate some or all of its research and development
programs and may be forced to cease operations, liquidate its
assets and possibly seek bankruptcy protection.
CHEMTURA CORP: Receives Nod for 2010 Management Incentive Plan
--------------------------------------------------------------
Chemtura Corporation and its debtor affiliates received permission
from the U.S. Bankruptcy Court for the Southern District of New
York to implement their Management Incentive Plan and Emergence
Incentive Plan for the year 2010.
The 2010 MIP and the 2010 EIP are collectively referred to as the
2010 Key Employee Incentive Plan. The 2010 KEIP will govern the
compensation available to certain of the Debtors' management-
level employees for the 2010 calendar year and upon the Debtors'
emergence from Chapter 11, Richard M. Cieri, Esq., at Kirkland &
Ellis LLP, in New York, relates.
In the ordinary course of business, the Debtors established a
compensation plan for management-level employees, which include
three components: a base salary, an annual incentive plan
providing compensation for meeting or exceeding performance
targets during a particular compensation year, and a longer term
incentive plan designed to reward the senior management team for
long-term improvements in equity value. However, the specific
design of the Prepetition Incentive Program suffered from several
limitations and failed to deliver the intended results.
Specifically, unexpected and unprecedented challenges in the
credit markets and the global economy meant that yearly bonus
targets were difficult for many managers to achieve, leading to
limited payouts at the end of the bonus cycle.
After the Petition Date, the Debtors' management developed a
better incentive program for 2009, which consisted of two parts:
a management incentive plan and an emergence incentive plan,
which applies to the 12-month period preceding emergence from
bankruptcy. The 2009 MIP was structured based on an assumption
of a Chapter 11 emergence in the first quarter of 2010.
The 2009 KEIP proved to be highly successful in attracting
talented professionals to the Debtors' business and motivating
them to achieve measurable success in their positions, Mr. Cieri
points out. However, he notes, it was not a "lay-up" based on
targets that were easily achievable.
The Debtors tell the Court that they wish to build on their
success in 2009 and encourage the business units that did not
meet their plan targets in 2009 to redouble their efforts in
2010, by implementing a new incentive plan to cover the 2010
period.
Accordingly, the Debtors formulated the 2010 KEIP with the
assistance of their advisors and attorneys, including Alvarez &
Marsal North America LLC, Lazard Freres & Co. LLC and Kirkland &
Ellis LLP, and also worked with an outside compensation
specialist consultant, Matthew Turner of Pearl Meyer & Partners.
The Debtors seek to follow the basic structure of the 2009 KEIP
for the 2010 KEIP. The 2010 MIP will be structured to
incentivize management employees toward optimal performance
during the 2010 compensation period. The 2010 EIP will
constitute a longer range program designed to fill an "incentive
gap" that would otherwise result if the Debtors did not provide
industry-standard long-term incentives during the remaining term
of the Chapter 11 cases.
2010 Management Incentive Plan
The proposed 2010 MIP would be available to 310 of the Debtors'
management-level employees. The metrics used for the 2010 MIP
are the same as those used for the 2009 MIP, but the targets are
higher, according to Mr. Cieri.
The 2010 MIP emphasizes as a performance target a metric based on
earnings before interest, taxes, depreciation and amortization on
a consolidated or business unit basis for the 2010 calendar year,
while also maintaining focus on other working capital variables.
The "target" level for the 2010 MIP is set at a consolidated
EBITDA level of $300 million, or, put differently, 25% greater
than the EBITDA covenant required by the terms of the Debtors'
DIP Facility.
The specific metrics of the underlying performance targets under
the 2010 MIP are different for the four divisional groupings
among the MIP participants:
(a) Seven eligible executives, including the chief executive
officer, the chief financial officer, the senior vice
president and general counsel, the senior vice president
of human resources, and three vice presidents;
(b) The Executive Vice President of the Engineered Products
division and the Executive Vice President of the
Performance Products division;
(c) Managers at each of the Debtors' separate business units,
including a total of 172 eligible participants; and
(d) Managers responsible for the Debtors' business operations
at the functional level, including a total of 129 eligible
participants.
The applicable minimum threshold of Consolidated EBITDA or
Business Unit EBITDA must be achieved in order for any bonus to
be payable to eligible participants under the proposed 2010 MIP.
Grants under the 2010 MIP will not be paid until early 2011,
after 2010 financials are available and the Debtors' management
is able to analyze 2010 performance. Moreover, the grants will
only be payable to persons who continue to be employed by the
Debtors at that time.
The total targeted payout pool for the 2010 MIP is $12.5 million
but, because the payment amounts are based on actual achievements
that will create value for the Debtors, the payout amount can be
said to be effectively self-funded, Mr. Cieri says.
2010 Employee Incentive Plan
The 2010 EIP will apply to certain of the Debtors' management-
level employees as well as qualifying new employees. The number
of employees included in the EIP and the size of the grant pool
will be dependent on the achievement of specific EBITDA goals,
but will be approximately 150 employees.
Like the 2009 EIP, the 2010 EIP provides that EIP grants will be
made only upon successful emergence from Chapter 11 and awards
made available to eligible mangers will be subject to time-based
vesting requirements and, therefore, will be made in restricted
stock, stock options or cash at the sole discretion of the board
of directors of the Reorganized Debtors.
The value of the incentive pool that will be made available to
managers at the time of emergence from Chapter 11 as a result of
the 2010 EIP is linked to specific EBITDA levels for the company,
with a maximum 2010 EIP Grant Pool, totaling $19 million, at an
EBITDA level of $345 million.
A summary of the EBITDA levels associated with each 2010 EIP
Grant Pool is:
Overview of Emergence Incentive Plan Metrics
(in millions)
---------------------------------------------------------
2010 EBITDA $260 $280 $300 $320 $345
2010 EIP $7 $9 $11.7 $15.4 $19
Grant Pool
2010 % of 2.7 3.2 3.9 4.8 5.5
EBITDA Shared
Additionally, the 2010 EIP includes an equity grant pool of
$750,000 that the Debtors can use in their discretion to allow
for the participation of new hires. Mr. Cieri says that to date,
the Debtors have utilized only $285,000 of the $750,000 allocated
as part of the 2009 EIP and will carry forward the unused balance
to 2010.
The EBITDA levels established for the 2010 EIP Grant Pool
significantly exceed those set in 2009, demonstrating the
Debtors' focus on providing managers with increased challenge and
incentive, Mr. Cieri tells the Court. He further adds that the
grant pool available pursuant to the 2010 EIP is keyed to
achieving EBITDA levels that are significantly higher than the
$245 million of consolidated EBITDA required through the end of
February 2011 by the terms of the DIP Facility.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Reports on Plan Status, To File Plan by June 17
--------------------------------------------------------------
Chemtura Corporation, debtor-in-possession, announced that it is
in active and ongoing discussions with its Official Unsecured
Creditors Committee and Official Equity Committee in an effort to
reach a consensual Chapter 11 plan of reorganization.
Additionally, Chemtura said it is finalizing an agreement with an
existing ad hoc committee of bondholders on confidentiality terms
that will allow Chemtura's largest bondholders to engage in direct
negotiations with the Company regarding the terms of a Chapter 11
plan. Chemtura is hopeful that it will successfully bring
together the interests of all its stakeholders in a consensual
plan of reorganization, which will permit an exit from Chapter 11
in the near term, thereby maximizing value for all of them.
As currently contemplated, the plan of reorganization will provide
for emergence of Chemtura from Chapter 11 and continuation of all
worldwide operations of Chemtura and its subsidiaries. The plan
as currently contemplated will specify treatment for funded debt
obligations, trade claims and litigation claims, including
providing treatment for diacetyl litigation claims in an agreed or
judicially estimated amount. Chemtura also expects that the plan
will provide for payment of creditors in the form of cash or
common stock in a reorganized, publicly traded company. While
there can be no guarantee regarding the value or type of recovery
available to any class of creditors or interest holders under the
plan, it is anticipated that creditors will be paid at or near the
full value of their claims and there may well be recovery
available for holders of Chemtura's common stock. Chemtura
continues to discuss the specifics of the plan with its
stakeholders, including the valuation of reorganized Chemtura, the
specific form of consideration that will be available to various
types of constituencies and the funding of such consideration.
Chemtura's Chief Executive Officer, Craig Rogerson, commented,
"Our intent is to emerge from Chapter 11 as quickly and
efficiently as possible. We believe that filing a plan of
reorganization with the support of all of our major constituencies
is the best way to accomplish this goal. Chemtura intends to file
a plan of reorganization by June 17, and accordingly intends to
file a motion to extend its exclusive rights to file a Chapter 11
plan, and solicit votes thereon, in order to facilitate the
Chapter 11 process."
For Chemtura to emerge from its Chapter 11 proceedings, a plan of
reorganization will have to be confirmed by the bankruptcy court
after solicitation of votes thereon. The plan of reorganization
is expected to include closing conditions that will need to be
satisfied before emergence.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Wants Plan Exclusivity until September 18
--------------------------------------------------------
Chemtura Corporation and its debtor affiliates seek a further
extension of their Exclusive Plan Filing Period through and
including September 18, 2010, and their Exclusive Solicitation
Period through and including November 17, 2010.
The Court previously set the deadline of the Debtors' exclusive
period to file a Chapter 11 plan through June 11, 2010,
and their exclusive period to solicit acceptances for that plan
through August 10, 2010.
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,
contends that the size and complexity of the Debtors' cases
alone warrants extension of the Exclusive Periods. He notes
that the Debtors' Chapter 11 cases involve 27 debtors with assets
and operations located in 12 states around the United States, and
the Debtors have more than $1 billion in prepetition funded debt
on a consolidated basis.
The Debtors have made substantial progress towards developing a
Chapter 11 plan since February 2010, Mr. Cieri avers. He notes
that the Debtors intend to file a plan in the near term. He says
that the Debtors are actively negotiating with three primary
constituencies: the Official Committee of Unsecured Creditors,
the Official Committee of Equity Holders and an ad hoc committee
of bondholders representing holdings in all three classes of the
Debtors' bonds as well as some holdings of unsecured prepetition
bank debt, in an effort to reach a consensual Chapter 11 plan
that will maximize the value of their business and therefore,
stakeholder recoveries.
The Debtors have also been engaged in constructive discussions
with numerous holders of disputed and unliquidated claims in
their Chapter 11 cases, including parties alleging claims based
on exposure to diacetyl, environmental obligations and US and UK
pension obligations; and the Debtors are cautiously optimistic
about consensually resolving substantial portions of their
claims-related litigation, Mr. Cieri tells Judge Gerber.
The issues involved are complicated and interrelated, and the
Debtors are keenly aware of the substantial time and effort that
have been and will continue to be required to resolve them and
provide the framework for a consensual plan, according to Mr.
Cieri.
For these reasons, the Debtors ask the Court to grant their
exclusivity extension request.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC.
As of December 31, 2008, the Debtors had total assets of
$3.06 billion and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings undertaken by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CIRCUIT CITY: No Class Claims in Circuit City Liquidation
---------------------------------------------------------
Bill Rochelle at Bloomberg News reports that U.S. Bankruptcy Judge
Kevin R. Huennekens wrote a 17-page opinion on May 28 saying
Circuit City Stores Inc., which has liquidated its stores, won't
have to face $150 million in class-action claims on behalf of
former workers. Judge Huennekens refused to allow four class
claims. The motions for permission to file class claims were not
filed until after the last day for filing claims. Thus, the judge
ruled that class claims were barred on that basis alone. He also
concluded that any timely filed claims could be handled
individually, without class status.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for reorganization relief under Chapter 11 of the
Bankruptcy Code on November 10 (Bankr. E.D. Va. Lead Case No. 08-
35653). InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases.
In May 2009, Systemax Inc., a multi-channel retailer of computers,
electronics, and industrial products, acquired certain assets,
including the name Circuit City, from the Debtors through a Court-
approved auction.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Circuit City Stores Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
CITIGROUP INC: To Dissolve Citigroup Capital XXX Trust
------------------------------------------------------
Citigroup Inc. filed with the Securities and Exchange Commission
copies of:
-- the Second Supplemental Indenture, dated as of December 3,
2007, between Citigroup Inc. and The Bank of New York
Mellon, as Trustee
See http://ResearchArchives.com/t/s?63f1
-- Eighth Supplemental Indenture, dated as of May 3, 2010,
between Citigroup Inc. and The Bank of New York Mellon, as
Trustee
See http://ResearchArchives.com/t/s?63f2
Citigroup and the Trustee entered into the Indenture to establish
the terms of the 6.455% Junior Subordinated Deferrable Interest
Debentures due September 15, 2041. In accordance with the Second
Supplemental Indenture, as of May 1, 2010, the Stated Maturity of
the Debentures is December 13, 2013. As of May 1, 2010, the
subordination provisions in Article XIV of the Indenture become
inapplicable to the Debentures and, as a consequence, the
Debentures became Senior Indebtedness. The Indenture may be
amended without the consent of any Holder in accordance with the
Base Indenture.
Citigroup has sent notice of the exercise of its right under the
Declaration of Citigroup Capital XXX, a Delaware statutory trust,
to dissolve the Trust and distribute all of the Debentures to the
holders of the Trust Securities on May 24, 2010. The Company has
delivered to the Trustee an Opinion of Counsel and an Officers'
Certificate to the effect that all conditions precedent provided
for in the Indenture to the Trustee's execution and delivery of
the Eighth Supplemental Indenture have been complied with and that
the execution and delivery of the Eighth Supplemental Indenture is
authorized and permitted under the Indenture. The Company has
requested that the Trustee execute and deliver the Eighth
Supplemental Indenture.
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) -- is a global
diversified financial services holding company whose businesses
provide a broad range of financial services to consumer and
corporate customers. Citigroup has roughly 200 million customer
accounts and does business in more than 140 countries.
Citigroup's businesses are aligned in three reporting segments:
(i) Citicorp, which consists of Regional Consumer Banking (in
North America, EMEA, Asia, and Latin America) and the
Institutional Clients Group (Securities and Banking, including the
Private Bank, and Transaction Services); (ii) Citi Holdings, which
consists of Brokerage and Asset Management, Local Consumer
Lending, and a Special Asset Pool; and (iii) Corporate/Other.
As reported in the Troubled Company Reporter on November 25, 2008,
the U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
The U.S. Treasury and the Federal Deposit Insurance Corporation
agreed to provide protection against the possibility of unusually
large losses on an asset pool of roughly $306 billion of loans and
securities backed by residential and commercial real estate and
other such assets, which will remain on Citigroup's balance sheet.
As a fee for this arrangement, Citigroup issued preferred shares
to the Treasury and FDIC. The Federal Reserve agreed to backstop
residual risk in the asset pool through a non-recourse loan.
Citigroup, the third-biggest U.S. bank, received $45 billion in
bailout aid. Other bailed-out banks, including Bank of America
Corp., Wells Fargo & Co., have pledged to repay TARP money.
JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley,
repaid TARP funds in June. Citigroup is selling assets to repay
the bailout funds.
Citigroup is one of the banks that, according to results of the
government's stress test, need more capital.
CONTINENTAL AIRLINES: Execs to Appear Before House Panel
--------------------------------------------------------
United Air Lines CEO Glenn Tilton and Continental Airlines CEO
Jeff Smisek will testify before the U.S. House Transportation and
Infrastructure Committee and House Judiciary Committee on June 16
in Washington, D.C.
On May 27, 2010, Messrs. Tilton and Jeff Smisek appeared before a
U.S. Senate panel with oversight of antitrust matters to discuss
the airlines' proposed merger and answer questions from senators.
Others testifying included a professor of economics and an analyst
representing a consumer group who suggested that the merger would
reduce competition and drive fares higher.
At the May 27 hearing, Mr. Tilton told the United States Senate
Committee on the Judiciary, Subcommittee on Antitrust, Competition
Policy and Consumer Rights the merger company would have a
significant presence in Houston, Continental's hometown.
"We'll have a significant presence in Houston. A significant,
head-office, headquarter presence. I would hypothesize just that,
that the technological functions of the new company such as
information technology would be very, very logically headquartered
in Houston. Simply because of the tremendous resource that the
Houston technological economy provides for recruitment in that
segment of the business. So we will continue to keep a commitment
to Houston. We will be a significant employer in Houston. And
that hub is going to continue to grow. From a Bush perspective,
the new company will continue to be a significant employer," Mr.
Tilton said.
Keith Halbert, United's Senior Vice President and Chief
Information Officer, told certain employees in a May 28 e-mail, "I
realize that this proposed merger creates uncertainty for both
United and Continental employees. As we have discussed any
decisions about where workgroups will be located will be made
after thoughtful consideration and analysis through the
integration planning process. As you know, we established our
Integration Management Office (IMO) last week and we expect the
planning process to begin before the end of June. It is critical
that we allow the planning process to follow the course to ensure
we develop the best possible integration solutions."
About Continental Airlines
Houston, Texas-based Continental Airlines (NYSE: CAL) --
http://www.continental.com/-- is the world's fifth largest
airline. Continental, together with Continental Express and
Continental Connection, has more than 2,700 daily departures
throughout the Americas, Europe and Asia, serving 132 domestic and
137 international destinations. Continental is a member of Star
Alliance, which overall offers more than 21,050 daily flights to
1,167 airports in 181 countries through its 27 member airlines.
With more than 40,000 employees, Continental has hubs serving New
York, Houston, Cleveland and Guam, and together with its regional
partners, carries approximately 63 million passengers per year.
At December 31, 2009, Continental had total assets of
$12.781 billion against total current liabilities of
$4.389 billion; long-term debt and capital leases of
$5.291 billion; deferred income taxes of $203 million; accrued
pension liability of $1.248 billion; accrued retiree medical
benefits of $216 million; and other liabilities of $844 million.
At December 31, 2009, the Company had accumulated deficit of
$442 million, accumulated other comprehensive loss of
$1.185 billion and stockholders' equity of $590 million. The
December 31 balance sheet showed strained liquidity: Continental
had total current assets of $4.373 billion against total current
liabilities of $4.389 billion.
* * *
As reported by the Troubled Company Reporter on May 5, 2010, Fitch
Ratings has affirmed the Issuer Default Rating for Continental
Airlines, Inc., at 'B-' and the senior unsecured rating at
'CC/RR6' following the announcement of the planned merger between
CAL and UAL Corp. The Rating Outlook for CAL is Stable.
The TCR on May 5, 2010, also said Standard & Poor's Ratings
Services placed its 'B' corporate credit rating on Continental
Airlines, and S&P's ratings on its secured and unsecured debt, on
CreditWatch with negative implications. S&P also placed its
ratings on Continental's enhanced equipment trust certificates on
CreditWatch with developing implications. Although S&P's recovery
ratings on selected Continental unsecured debt are unaffected by
the rating action, S&P will review them as well.
About UAL Corporation
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The company filed for Chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors. Judge Eugene R. Wedoff
confirmed a reorganization plan for United on Jan. 20, 2006. The
Company emerged from bankruptcy on Feb. 1, 2006.
Reorganized UAL Corp. carries a 'Caa1' probability of default
rating from Moody's, 'B-' long term foreign issuer credit rating
from Standard & Poor's, and 'CCC' long term issuer default rating
from Fitch.
CONTINENTAL AIRLINES: Reports May 2010 Operational Performance
--------------------------------------------------------------
Continental Airlines on Tuesday reported a May consolidated
(mainline plus regional) load factor of 83.8%, 2.9 points above
the May 2009 consolidated load factor, and a mainline load factor
of 84.1%, 2.8 points above the May 2009 mainline load factor. The
carrier reported a domestic mainline May load factor of 85.4%, 0.7
points above the May 2009 domestic mainline load factor, and an
international mainline load factor of 82.9%, 4.9 points above May
2009. All four May load factors were records for the month.
During May, Continental recorded a U.S. Department of
Transportation on-time arrival rate of 82.5% and a mainline
segment completion factor of 99.4%.
In May 2010, Continental flew 7.8 billion consolidated revenue
passenger miles (RPMs) and 9.3 billion consolidated available seat
miles (ASMs), resulting in a consolidated traffic increase of 3.7%
and a consolidated capacity increase of 0.2% as compared to May
2009. In May 2010, Continental flew 7.0 billion mainline RPMs and
8.3 billion mainline ASMs, resulting in a mainline traffic
increase of 3.2% and a mainline capacity decrease of 0.3% as
compared to May 2009. Domestic mainline traffic was 3.4 billion
RPMs in May 2010, down 1.4% from May 2009, and domestic mainline
capacity was 4.0 billion ASMs, down 2.2% from May 2009.
For May 2010, consolidated passenger revenue per available seat
mile (RASM) is estimated to have increased between 23.0% and 24.0%
compared to May 2009, while mainline RASM is estimated to have
increased between 22.5 and 23.5%. For April 2010, consolidated
passenger RASM increased 14.8% compared to April 2009, while
mainline passenger RASM increased 12.6% compared to April 2009.
Continental's regional operations had a May load factor of 81.0%,
3.0 points above the May 2009 regional load factor. Regional RPMs
were 834.2 million and regional ASMs were 1,030.3 million in May
2010, resulting in a traffic increase of 8.2% and a capacity
increase of 4.2% versus May 2009.
A full-text copy of the report is available at no charge
at http://ResearchArchives.com/t/s?63f3
UAL Merger
As reported by the Troubled Company Reporter on May 4, 2010,
Continental Airlines and UAL Corporation's United Airlines
announced a definitive merger agreement, creating the world's
biggest airline. The deal is an all-stock merger of equals.
Continental shareholders are to receive 1.05 shares of United
common stock for each Continental common share they own. The
acquisition is valued at $3.17 billion, based on the April 30,
2010 closing price, according to The New York Times. The merger
is expected to be completed before the end of the year.
About Continental Airlines
Houston, Texas-based Continental Airlines (NYSE: CAL) --
http://www.continental.com/-- is the world's fifth largest
airline. Continental, together with Continental Express and
Continental Connection, has more than 2,700 daily departures
throughout the Americas, Europe and Asia, serving 132 domestic and
137 international destinations. Continental is a member of Star
Alliance, which overall offers more than 21,050 daily flights to
1,167 airports in 181 countries through its 27 member airlines.
With more than 40,000 employees, Continental has hubs serving New
York, Houston, Cleveland and Guam, and together with its regional
partners, carries approximately 63 million passengers per year.
At December 31, 2009, Continental had total assets of
$12.781 billion against total current liabilities of
$4.389 billion; long-term debt and capital leases of
$5.291 billion; deferred income taxes of $203 million; accrued
pension liability of $1.248 billion; accrued retiree medical
benefits of $216 million; and other liabilities of $844 million.
At December 31, 2009, the Company had accumulated deficit of
$442 million, accumulated other comprehensive loss of
$1.185 billion and stockholders' equity of $590 million. The
December 31 balance sheet showed strained liquidity: Continental
had total current assets of $4.373 billion against total current
liabilities of $4.389 billion.
* * *
As reported by the Troubled Company Reporter on May 5, 2010, Fitch
Ratings has affirmed the Issuer Default Rating for Continental
Airlines, Inc., at 'B-' and the senior unsecured rating at
'CC/RR6' following the announcement of the planned merger between
CAL and UAL Corp. The Rating Outlook for CAL is Stable.
The TCR on May 5, 2010, also said Standard & Poor's Ratings
Services placed its 'B' corporate credit rating on Continental
Airlines, and S&P's ratings on its secured and unsecured debt, on
CreditWatch with negative implications. S&P also placed its
ratings on Continental's enhanced equipment trust certificates on
CreditWatch with developing implications. Although S&P's recovery
ratings on selected Continental unsecured debt are unaffected by
the rating action, S&P will review them as well.
CORBIN PARK: BofA, et al., Want Reorganization Case Dismissed
-------------------------------------------------------------
Bank of America, N.A., as administrative agent for Bank of
America, N.A., U.S. Bank N.A., TierOne Bank, and Compass Bank, ask
the U.S. Bankruptcy Court for the District of Kansas to appoint a
trustee, or in the alternative, dismiss the Chapter 11 case of
Corbin Park, L.P.
The lenders explain that to date, the Debtor has done no
significant work to secure or protect the 97 acre real estate
project located at 135th Street and Metcalf Avenue in Overland
Park, Kansas known as Corbin Park, thus, deterioration of
buildings and value of property subject to further diminution.
The lenders also said that the Debtor's gross mismanagement is
cause to appoint a trustee or dismiss the Debtor's case.
Omaha, Nebraska-based Corbin Park, L.P., filed for Chapter 11
bankruptcy protection on January 5, 2010 (Bankr. D. Kan. Case No.
10-20014). Carl R. Clark, Esq., and Jeffrey A. Deines, Esq., at
Lentz Clark Deines PA, assist the Company in its restructuring
effort. The Company listed $50,000,001 to $100,000,000 in assets
and $10,000,001 to $50,000,000 in liabilities.
DBSI INC: Bondholders' Security Interest Was Never Perfected
------------------------------------------------------------
WestLaw reports that a bank whose security interest in Chapter 11
debtors' master leases was not mentioned in any document recorded
in the real property records of the county where the leased
property was located did not have a perfected security interest in
the leases, though the leases themselves were recorded. Thus, the
bank was not entitled to relief from the automatic stay for
purposes of exercising its alleged rights in the property. As
part of a prima facie showing of its right to relief from the stay
to foreclose on its security interest in the master leases, the
bank had to show that it had a perfected security interest in the
master leases. In re DBSI, Inc., --- B.R. ----, 2010 WL 1923767
(Bankr. D. Del.) (Walsh, J.).
The bank is Bank of the Cascades, which serves as the Indenture
Trustee for the holders of bonds issued by DBSI 2001A Funding
Corporation, DBSI 2001B Funding Corporation, and DBSI 2001C
Funding Corporation. Farmers & Merchant State Bank served as the
initial Indenture Trustee when the bonds were issued in 2001.
Approximately $23,521,000 of bond debt is outstanding.
Headquartered in Meridian, Idaho, DBSI Inc. and its affiliates
were engaged in numerous commercial real estate and non-real
estate projects and businesses. On November 10, 2008, and other
subsequent dates, DBSI and 180 of its affiliates filed for Chapter
11 protection (Bankr. D. Del. Case No. 08-12687). Lawyers at
Young Conaway Stargatt & Taylor LLP represent the Debtors as
counsel. The Official Committee of Unsecured Creditors tapped
Greenberg Traurig, LLP, as its bankruptcy counsel. Kurtzman
Carson Consultants LLC is the Debtors' notice claims and balloting
agent. When the Debtors sought protection from their creditors,
they estimated assets and debts between $100 million and $500
million. Joshua Hochberg, a former head of the Justice Department
fraud unit, served as an Examiner and called the seller and
servicer of fractional interests in commercial real estate an
"elaborate shell game" that "consistently operated at a loss" in
his report released in Oct. 2009. On Sept. 11, 2009, the
Honorable Peter J. Walsh entered an Order (Doc. 4375) appointing
James R. Zazzali as Chapter 11 trustee for the Debtors' estates.
DECODE GENETICS: Court Confirms Plan of Liquidation
---------------------------------------------------
The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware confirmed the Plan of Liquidation proposed by
deCODE Genetics Inc. nka DGI Resolution, Inc.
As reported in the Troubled Company Reporter on April 22, 2010,
according to the Disclosure Statement, the Plan provides for the
liquidation of the Debtor's estate and the distribution of the
Debtor's assets to holders of allowed claims. The Plan also
contemplates the transfer of the Debtor's assets and liabilities
into the DGI liquidating trust.
Treatment of Claims
Type of Claim Treatment Estimated Recovery
------------- --------- ------------------
Class 1 Priority Claims Paid full in cash 100%
Class 2 Secured Claims Paid full in cash 100%
Class 3 General
Unsecured Claims Pro Rata Share 2.5% - 3.5%
Class 4 Interest No Distribution 0%
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/DeCodeGenetics_AmendedDS.pdf
The Debtor is represented by:
Richards, Layton & Finger, P.A.
Attn: Mark D. Collins, Esq.
Christopher M. Samis, Esq.
One Rodney Square
920 North Ling Street
Wilmington, DE 19801
About deCODE Genetics
deCODE Genetics Inc. is a global leader in analyzing and
understanding the human genome. deCODE has identified key
variations in the sequence of the genome conferring increased risk
of major public health challenges from cardiovascular disease to
cancer, and employs its gene discovery engine to develop DNA-based
tests to assess individual risk of common diseases; to license its
tests and intellectual property to partners; and to provide
comprehensive, leading- edge contract services to companies and
research institutions around the globe. The Company was founded
in 1996 and is headquartered in Reykjavik, Iceland.
The Company filed for Chapter 11 on November 16, 2009 (Bankr. D.
Del. Case No. 09-14063). The petition listed assets of
$69.9 million against debt of $314 million. Liabilities include
$230 million on 3.5% senior convertible notes.
DELTA AIR: Ballots Cast to Determine Union Representation
---------------------------------------------------------
The National Mediation Board ruled on May 11, 2010, that unions
can be formed if a majority of unionization votes are cast in
their favor.
"As part of its ongoing efforts to further the statutory goals of
the Railway Labor Act, the National Mediation Board (NMB or
Board) is amending its Railway Labor Act rules to provide that,
in representation disputes, a majority of valid ballots cast will
determine the craft or class representative. This change to its
election procedures will provide a more reliable
measure/indicator of employee sentiment in representation
disputes and provide employees with clear choices in
representation matters," NMB said in an official ruling.
The Final Rule is effective June 10, 2010.
A full-text copy of the NMB Representation Ruling is available
for free at http://edocket.access.gpo.gov/2010/pdf/2010-11026.pdf
The NMB's ruling reverses a seven-decade industry practice of
counting non-votes as no votes. Delta is mounting an aggressive
legal challenge to the rule change, according to The Wall Street
Journal.
In this light, Delta is facing a stepped-up recruitment campaign
by labor organizers, the Journal reported, citing unions putting
up information desks at airline-staff lounges and visiting
employees at their homes to prepare for representation elections.
Patricia Friend, president of the Association of Flight
Attendants cited "an initial clash of cultures, and the sense on
the Delta side that 'these Yankees' were coming to take over."
The AFA represents 6,500 former Northwest attendants.
Despite the Delta-Northwest merger in October 2009, non-unionized
Delta workers and unionized Northwest workers are working under
separate contracts. All of Delta's about 12,000 pilots already
are unionized. Delta hasn't had a strike since 1947. In
contrast, Northwest has been haunted with labor-management
relations issues, including 11 work stoppages.
Union organizers who now target more than half of Delta's
employees "are trying to destroy a healthy working relationship,
the Journal noted. "It's a campaign based on 'Don't trust the
management, don't believe in the culture,' of pitting one group
against another group," Michael Campbell, Delta's head of labor
relations, told the Journal.
About Delta Air Lines
Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) --
http://www.delta.com/or http://www.nwa.com/-- serves more than
160 million customers each year. Delta and the Delta Connection
carriers offer service to 367 destinations in 66 countries on six
continents. Delta employs more than 70,000 employees worldwide
and operates a mainline fleet of nearly 800 aircraft. A founding
member of the SkyTeam global alliance, Delta participates in the
industry's trans-Atlantic joint venture with Air France KLM.
Including its worldwide alliance partners, Delta offers customers
more than 16,000 daily flights, with hubs in Amsterdam, Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK,
Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The
airline's service includes the SkyMiles frequent flier program,
the world's largest airline loyalty program; the BusinessElite
service; and more than 50 Delta Sky Clubs in airports worldwide.
Delta became the world's largest airline following merger with
Northwest Airlines in 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
At December 31, 2009, Delta had total assets of $43,539,000,000
against total current liabilities of $9,797,000,000 and total
noncurrent liabilities of $33,497,000,000, resulting in
stockholders' equity of $245,000,000. At end-2008, Delta had
stockholders' equity of $874,000,000. The December 31, 2009
balance sheet showed strained liquidity: Delta had total current
assets of $7,741,000,000 against total current liabilities of
$9,797,000,000.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's and "B-" LT
Issuer Default rating from Fitch.
DELTA AIR: Permitted to End Arrangements with Mesa Air
------------------------------------------------------
Judge Clarence Cooper of the U.S. District Court for the District
of Georgia permitted Air Lines, Inc., to end its arrangements with
Mesa Air Group, Inc.
As previously reported, Delta intended to reject its 50-seat
Delta Connection contract with Freedom Airlines Inc., a Mesa Air
Group, Inc. subsidiary, as of May 3, 2008, due to operational
performance that has fallen below minimum levels. Subsequently,
Mesa won in its lawsuit filed to block Delta from terminating the
Contract. Mesa reasoned out that Delta's alleged "below
performance thresholds" is attributed to Delta's flight
cancellations at New York's John F. Kennedy International
Airport. Delta presented its case in the District Court.
"We are pleased that after a full review of all of the evidence,
the court agreed with us and has affirmed our right to terminate
the Freedom agreement," Delta spokeswoman Kristin Baur said in a
statement, according to Peg Brickley of Dow Jones Newswires.
Delta operates its own "mainline" flights, and also operates the
Delta Connection program, in which it contracts with other
carriers to provide regional flight services that connect Delta's
main hubs with smaller cities and airports. Freedom Airlines, a
wholly-owned subsidiary of Mesa Air Group, Inc., is one of those
regional carriers operating a 50-seat regional aircraft in the
Delta Connection program.
The Delta Connection accounts for 18% of its revenue and is
essential to its bid to reorganize its $869 million debt load.
Mesa services 33 cities for Delta under the Delta Connection
brand, Dow Jones said, citing District Court documents.
Mesa Chief Executive Jonathon Ornstein said in a statement that
the Company is "extremely disappointed" in the ruling, which
"jeopardizes" some 500 jobs at Mesa's Freedom Airlines unit.
Mesa said the District Court ruling will leave 22 of its jets
without work, The Associated Press reported.
"We have at all times sought to act as a good partner and work
with Delta as a member of Delta Connection. Unfortunately
Freedom's willingness to proactively cancel flights in JFK at
Delta's request for the benefit of Delta was held against Freedom
and was used as the sole basis to terminate our contract," Mr.
Ornstein added.
About Delta Air Lines
Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) --
http://www.delta.com/or http://www.nwa.com/-- serves more than
160 million customers each year. Delta and the Delta Connection
carriers offer service to 367 destinations in 66 countries on six
continents. Delta employs more than 70,000 employees worldwide
and operates a mainline fleet of nearly 800 aircraft. A founding
member of the SkyTeam global alliance, Delta participates in the
industry's trans-Atlantic joint venture with Air France KLM.
Including its worldwide alliance partners, Delta offers customers
more than 16,000 daily flights, with hubs in Amsterdam, Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK,
Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The
airline's service includes the SkyMiles frequent flier program,
the world's largest airline loyalty program; the BusinessElite
service; and more than 50 Delta Sky Clubs in airports worldwide.
Delta became the world's largest airline following merger with
Northwest Airlines in 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
At December 31, 2009, Delta had total assets of $43,539,000,000
against total current liabilities of $9,797,000,000 and total
noncurrent liabilities of $33,497,000,000, resulting in
stockholders' equity of $245,000,000. At end-2008, Delta had
stockholders' equity of $874,000,000. The December 31, 2009
balance sheet showed strained liquidity: Delta had total current
assets of $7,741,000,000 against total current liabilities of
$9,797,000,000.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's and "B-" LT
Issuer Default rating from Fitch.
DELTA AIR: Steps Up Recruitment with "Better Gauge" of Demand
-------------------------------------------------------------
Getting "a better gauge on future demand needs," Delta Air Lines,
Inc., is stepping up its plan to hire new pilots later this year
-- from about 240 as previously announced, to 300, reports the
Atlanta Business Chronicle, citing a statement from Delta
spokeswoman Gina Laughlin.
Delta is also planning, in 2011, to bring back as many as two
dozen aircraft that were parked in Mojave Desert in California
due to recession-driven capacity cuts. The carrier would also
return to service next year no more than 25 jets it had been
storing in the desert.
"We continue to manage capacity and take advantage of one of the
great benefits of our merger -- a diverse and flexible fleet that
allows us to use the right aircraft in the right market, whether
that's by day of week, time of day or time of year," Ms. Laughlin
told the newspaper, referring to Delta-Northwest Airlines Corp.
merger in October 2008.
In a memo to pilots dated May 4, 2010, Delta Senior Vice
President Steve Dickson said the airline is hiring new aviators
and replacing pilots expected to retire in 2011. "With this
announcement of hiring comes the opportunity for furlough bypass
pilots to return to Delta and for other pilots who desire
employment with us, the opportunity to join our ranks," Mr.
Dickson said, according to the Atlanta Business Chronicle.
The new pilots will come aboard sometime in the fall, and ensure
Delta will be fully staffed come summer 2011.
About Delta Air Lines
Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) --
http://www.delta.com/or http://www.nwa.com/-- serves more than
160 million customers each year. Delta and the Delta Connection
carriers offer service to 367 destinations in 66 countries on six
continents. Delta employs more than 70,000 employees worldwide
and operates a mainline fleet of nearly 800 aircraft. A founding
member of the SkyTeam global alliance, Delta participates in the
industry's trans-Atlantic joint venture with Air France KLM.
Including its worldwide alliance partners, Delta offers customers
more than 16,000 daily flights, with hubs in Amsterdam, Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK,
Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The
airline's service includes the SkyMiles frequent flier program,
the world's largest airline loyalty program; the BusinessElite
service; and more than 50 Delta Sky Clubs in airports worldwide.
Delta became the world's largest airline following merger with
Northwest Airlines in 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
At December 31, 2009, Delta had total assets of $43,539,000,000
against total current liabilities of $9,797,000,000 and total
noncurrent liabilities of $33,497,000,000, resulting in
stockholders' equity of $245,000,000. At end-2008, Delta had
stockholders' equity of $874,000,000. The December 31, 2009
balance sheet showed strained liquidity: Delta had total current
assets of $7,741,000,000 against total current liabilities of
$9,797,000,000.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's and "B-" LT
Issuer Default rating from Fitch.
DELTA PETROLEUM: Has More Time to Sign Definitive Deal with Opon
----------------------------------------------------------------
Delta Petroleum Corporation obtained an extension of the expected
time frame to sign a definitive Purchase and Sale Agreement with
Opon International LLC. Delta continues to work with Opon in its
financing efforts and both parties are working towards signing a
definitive Purchase and Sale Agreement. Delta does not intend to
make further public comment with respect to the status of the
transaction until such time as it believes disclosure is warranted
and will not speculate as to the timing of any such communication.
Delta's financial advisors on this transaction are Morgan Stanley
and Evercore Partners. Opon's financial advisor is Deutsche Bank
Securities Inc.
On March 18, 2010, Delta has entered into a non-binding letter of
intent with Opon to sell a 37.5% non-operated working interest in
its Vega Area assets located in the Piceance Basin for total
consideration of $400 million. The letter of intent also
contemplates that Delta would issue to Opon, at closing, warrants
to purchase 13.3 million shares of Delta common stock at $1.50 per
share and 5.7 million shares at $3.50 per share. Delta will
provide further details of the transaction upon the execution by
Delta and Opon of definitive agreements. The letter of intent is
subject to customary due diligence, negotiation and execution of
definitive binding agreements as well as Opon's ability to arrange
financing.
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ Global Market: DPTR)
-- http://www.deltapetro.com/-- is an oil and gas exploration and
development company based in Denver, Colorado. The Company's core
areas of operations are the Rocky Mountain and Gulf Coast Regions,
which comprise the majority of its proved reserves, production and
long-term growth prospects.
The Company's balance sheet as of March 31, 2010, showed
$1.384 billion in assets, $699.3 million of liabilities, and
$684.5 million of stockholders' equity. At March 31, 2010, the
Company had $10 million in cash and $52.0 million available under
its credit facility.
As reported in the Troubled Company Reporter on March 15, 2010,
KPMG LLP, in Denver, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors reported that due to continued losses the Company is
evaluating strategic alternatives including, but not limited to
the sale of some or all of its assets. "There can be no
assurances that actions undertaken will be sufficient to repay
obligations under the credit facility when due, which raises
substantial doubt about the Company's ability to continue as a
going concern."
In its Form 10-Q for the current quarter, the Company said that it
does not currently have the capital on hand necessary to repay its
credit facility borrowings due on January 15, 2011, or develop its
properties at the pace desired based on current commodity prices.
Further, in conjunction with the April 2010 borrowing base
redetermination of Delta's credit facility, the Company is limited
to capital expenditures of $20.0 million in the quarter ending
June 30, 2010, and $15.0 million for the quarter ending
September 30, 2010.
DELTA PETROLEUM: Reports Results of May 25 Stockholders Meeting
---------------------------------------------------------------
Delta Petroleum Corporation held its 2010 Annual Meeting of
Stockholders on May 25, 2010, at the Company's offices in Denver,
Colorado. Of the 282,821,518 shares of common stock issued and
outstanding as of the record date, 201,459,657 shares of common
stock (approximately 71.23%) were present or represented by proxy
at the Meeting. The Company's stockholders:
-- elected John R. Wallace, Hank Brown, Kevin R. Collins,
Jerrie F. Eckelberger, Jean-Michel Fonck, Aleron H.
Larson, Jr., Russell S. Lewis, Anthony Mandekic, James J.
Murren, Jordan R. Smith, and Daniel J. Taylor, to one-year
terms on the Board of Directors or until their successors
have been duly elected; and
-- ratified the appointment of KPMG LLP as the Company's
independent registered public accounting firm for the
fiscal year ending December 31, 2010.
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ Global Market: DPTR)
-- http://www.deltapetro.com/-- is an oil and gas exploration and
development company based in Denver, Colorado. The Company's core
areas of operations are the Rocky Mountain and Gulf Coast Regions,
which comprise the majority of its proved reserves, production and
long-term growth prospects.
The Company's balance sheet as of March 31, 2010, showed
$1.384 billion in assets, $699.3 million of liabilities, and
$684.5 million of stockholders' equity. At March 31, 2010, the
Company had $10 million in cash and $52.0 million available under
its credit facility.
As reported in the Troubled Company Reporter on March 15, 2010,
KPMG LLP, in Denver, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors reported that due to continued losses the Company is
evaluating strategic alternatives including, but not limited to
the sale of some or all of its assets. "There can be no
assurances that actions undertaken will be sufficient to repay
obligations under the credit facility when due, which raises
substantial doubt about the Company's ability to continue as a
going concern."
In its Form 10-Q for the current quarter, the Company said that it
does not currently have the capital on hand necessary to repay its
credit facility borrowings due on January 15, 2011, or develop its
properties at the pace desired based on current commodity prices.
Further, in conjunction with the April 2010 borrowing base
redetermination of Delta's credit facility, the Company is limited
to capital expenditures of $20.0 million in the quarter ending
June 30, 2010, and $15.0 million for the quarter ending
September 30, 2010.
DELTA PETROLEUM: Registers 93,797,701 Shares for Resale
-------------------------------------------------------
Delta Petroleum Corporation filed with the Securities and Exchange
Commission a prospectus that Tracinda Corporation may use in
connection with sales of up to 93,797,701 shares of the Company's
common stock.
On February 20, 2008, Delta Petroleum sold to Tracinda, in a
private placement, 36 million shares of common stock at a purchase
price of $19.00 per share. In accordance with the Company Stock
Purchase Agreement, dated as of December 29, 2007, between Delta
Petroleum and Tracinda, the Company agreed to register for resale
the 36 million shares issued to Tracinda and any other Delta
shares acquired by Tracinda before or after the closing of the
Tracinda transaction. As of April 28, 2010, Tracinda held an
additional 57,797,701 shares of common stock included in the
prospectus, 53,333,333 of which were purchased in Delta
Petroleum's May 2009 underwritten registered public offering.
Delta Petroleum said it does not know when or whether, or at what
price, any or all of the shares may be sold. Delta Petroleum said
Tracinda may sell the common stock at prices and on terms
determined by the market, in negotiated transactions or through
underwriters. Delta Petroleum will not receive any proceeds from
the sale of shares by the selling stockholder.
A full-text copy of the prospectus is available at no charge
at http://ResearchArchives.com/t/s?6406
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ Global Market: DPTR)
-- http://www.deltapetro.com/-- is an oil and gas exploration and
development company based in Denver, Colorado. The Company's core
areas of operations are the Rocky Mountain and Gulf Coast Regions,
which comprise the majority of its proved reserves, production and
long-term growth prospects.
The Company's balance sheet as of March 31, 2010, showed
$1.384 billion in assets, $699.3 million of liabilities, and
$684.5 million of stockholders' equity. At March 31, 2010, the
Company had $10 million in cash and $52.0 million available under
its credit facility.
As reported in the Troubled Company Reporter on March 15, 2010,
KPMG LLP, in Denver, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors reported that due to continued losses the Company is
evaluating strategic alternatives including, but not limited to
the sale of some or all of its assets. "There can be no
assurances that actions undertaken will be sufficient to repay
obligations under the credit facility when due, which raises
substantial doubt about the Company's ability to continue as a
going concern."
In its Form 10-Q for the current quarter, the Company said that it
does not currently have the capital on hand necessary to repay its
credit facility borrowings due on January 15, 2011, or develop its
properties at the pace desired based on current commodity prices.
Further, in conjunction with the April 2010 borrowing base
redetermination of Delta's credit facility, the Company is limited
to capital expenditures of $20.0 million in the quarter ending
June 30, 2010, and $15.0 million for the quarter ending
September 30, 2010.
DELTA URANIUM: Discloses Filing of Audited Financial Statements
---------------------------------------------------------------
Delta Uranium Inc. disclosed that as a result of its recent
voluntary delisting from the TSX and subsequent listing on the TSX
Venture, it did not file its audited financial statements for its
fiscal year ended February 28, 2010 (the "Annual Financial
Statements"), its annual information form and its management's
discussion and analysis relating thereto (collectively, the
"Required Filings") before the prescribed deadline of May 31,
2010. Management was made aware of this error on June 1, 2010 and
have immediately begun the process to bring its filing obligations
current.
The delay in filing the Required Filings is principally related to
the Corporation's recent voluntary delisting from the Toronto
Stock Exchange and listing on the TSX Venture Exchange (effective
April 1, 2010) and Management's resultant and inadvertent
misunderstanding of the applicable deadline for the filing of the
Required Filings. Management of the Corporation believed the
prescribed deadline for the filing of the Required Filings to be
June 28, 2010 based on the fact that the Corporation became listed
on the TSX Venture Exchange (applicable securities laws provide
120 days to file annual financial statements and related materials
for companies listed on the TSX Venture Exchange); as a result,
the audit process and timeline for the Annual Financial Statements
was based on a filing deadline of June 28, 2010. However, as the
Corporation was still listed on the Toronto Stock Exchange at the
time of its fiscal year end (being February 28, 2010), the
prescribed deadline under applicable securities laws is in fact
May 31, 2010.
Management has made an immediate readjustment to the audit
timeline and is making every effort to file the Required Filings
in a timely fashion. The Corporation expects to file the Required
Filings by June 21, 2010.
The Corporation is in the process of making an application with
the Ontario Securities Commission and other applicable securities
regulators under National Policy 12-203 - Cease Trade Orders for
Continuous Disclosure Defaults requesting that a management cease
trade order be imposed in respect of this late filing. There is
no guarantee that an MCTO will be granted. If an MCTO is granted,
an MCTO will prohibit the chief executive officer, the chief
financial officer, and possibly the directors, other officers and
other insiders of the Corporation from trading in securities of
the Corporation for so long as the Required Filings are not filed.
The issuance of an MCTO does not generally affect the ability of
persons who are not directors, officers or other insiders of the
Corporation to trade in the Corporation's securities.
The Corporation confirms that it will satisfy the provisions of
the alternative information guidelines under National Policy 12-
203 by issuing bi-weekly default status reports in the form of
news releases so long as it remains in default of the filing
requirements set out above.
About Delta Uranium
Delta Uranium is a TSX-V listed Canadian exploration company
actively engaged in the acquisition, evaluation and exploration of
uranium mineral properties in northeastern and northwestern
Ontario, Athabasca Basin and Western Newfoundland, Canada.
DOT VN: Reports Increased Site Traffic for Vietnamese Info Portal
-----------------------------------------------------------------
Dot VN, Inc., on May 27, 2010, said its Vietnamese Information
Super Portal -- http://www.INFO.VN-- has experienced substantial
increases in site traffic since the Web site's official launch
earlier this month.
Designed to be the ultimate Internet portal that aggregates and
organizes everything the Vietnamese Internet has to offer, INFO.VN
received nearly 1.75 million page views since April 30 with an
average visit length of 3 minutes, 30 seconds. The site is now
ranked as the 798th most popular sites in Vietnam, according to
Alexa.com, an Internet tracking firm with an unparalleled database
of information about site statistics. To serve the increased
traffic on the Web site, Dot VN has significantly upgraded its
server infrastructure ahead of schedule.
"With over half a million absolute unique visitors after launching
our site, we are extremely pleased with the steady growth of
INFO.VN. A majority of the site's visitors are in the key 18 to
24-year old demographic. Moreover, with nearly 90% of the traffic
originating in Vietnam and over 78% of its traffic representing
new users, INFO.VN is achieving wide acceptance throughout the
country and is rapidly building a solid and loyal user base.
These significant milestones better position us in negotiations to
secure online advertising contracts as we work to monetize
INFO.VN," said Dot VN CEO Thomas Johnson.
INFO.VN is built for individual and business users both in Vietnam
and around the world as a main hub for news, entertainment and
information available in one central and easy to navigate Web
site. The Web site is available in both Vietnamese and English,
making access easier for non-Vietnamese speaking users.
"Statistics on Vietnam's Internet growth underline the importance
of the commercialization of INFO.VN. The number of Internet users
in Vietnam has grown exponentially," continued Mr. Johnson. "As
of April 2010, there were over 24,000,000 users, almost doubling
in the last three years, with a penetration rate of 27.3%.
According to Saigon GP Daily, revenues from online advertisements
are expected to rise to U.S. $60 million by 2011, or a third
higher than this year."
About Dot VN
Dot VN, Inc. -- http://www.DotVN.com/-- provides innovative
Internet and telecommunication services for Vietnam. The Company
was awarded an "exclusive long term contract" by the Vietnamese
government to register ".vn" (Vietnam) domains and commercialize
Parking Page Marketing/Online Advertising worldwide via the
Internet. Also, Dot VN has exclusive rights to distribute and
commercialize Micro-Modular Data CentersTM solutions and Gigabit
Ethernet Wireless applications to Vietnam and Southeast Asia
region.
At January 31, 2010, the Company's balance sheet showed
$2.5 million in total assets and $10.0 million in total
liabilities for a $7.5 million stockholders' deficit.
Chang G. Park, CPA, in its March 17, 2010 report, said the
Company's losses from operations raise substantial doubt about its
ability to continue as a going concern.
EL POLLO: Moody's Downgrades Corporate Family Rating to 'Caa2'
--------------------------------------------------------------
Moody's Investors Service downgraded El Pollo Loco, Inc.'s
Corporate Family Rating and Probability of Default Rating to Caa2
from Caa1, the rating on the senior secured notes due 2012 to B3
from B2 and the rating of the unsecured notes due 2013 to Caa3
from Caa2. The rating outlook remains negative. Concurrently,
Moody's lowered the speculative grade liquidity rating to SGL-4
from SGL-3.
"The rating action reflects El Pollo's weakening liquidity and
increased default probability," commented Moody's analyst John
Zhao. "Our concern is that the company's capital structure may
not be sustainable in its current form absent a restructuring."
The Caa2 CFR and negative outlook incorporate El Pollo's eroded
liquidity and continued weak operating performance. The company
has significant cash interest and principal payment requirements
in the coming twelve months, which would not likely be
sufficiently covered by its internally generated cash flow, cash
balance and other liquidity sources per Moody's estimate.
Particularly, the company would likely face significant challenges
in satisfying the mandatory principal redemption and cash interest
payment both due in May 2011 for the unrated 2014 unsecured notes
at its holding company. Additionally, the rating reflects El
Pollo's struggle with the negative same store sales trend that
worsened in 2009. The weak performance was further exacerbated by
its unit concentration in California where the economic conditions
and employment situation remain depressed. The increased
competition especially from KFC which is owned by much larger and
financially stronger Yum Brands (rated Baa3 by Moody's) also
magnified the topline pressure. Moody's expects El Pollo's
operating performance to remain weak in the near-to-medium term.
The current Caa2 rating could be further downgraded should an
event of default occur or capital structure change that would
result in significant losses for debt holders. Positive rating
pressure will not develop until the company has fully addressed
the debt service issue with its unsecured notes and proved its
capital structure to be sustainable longer term.
The rating action is:
Ratings downgraded:
-- Corporate family rating to Caa2 from Caa1
-- Probability of default rating to Caa2 from Caa1
-- $132.5 million 2nd lien senior secured notes due 2012, to B3
(LGD2, 24%) from B2 (LGD2, 25%)
-- $125 million ($106.5 million outstanding) senior unsecured
notes due 2013, to Caa3 (LGD5, 75%) from Caa2 (LGD5, 70%)
-- Speculative Grade Liquidity Rating, to SGL-4 from SGL-3
Rating unchanged:
-- $12.5 million 1st lien senior secured revolving credit
facility due 2012 at (B1, LGD1, 1%)
-- Rating outlook: negative
Moody's last rating action on El Pollo occurred on June 3, 2010
when the SGL was raised to SGL-3 from SGL-4.
El Pollo Loco Inc, headquartered in Costa Mesa, California, is a
quick-service restaurant chain specializing in flame-grilled
chicken and other Mexican-inspired entrees. The company operates
or franchises approximately 412 restaurants primarily around Los
Angeles and throughout Southwestern US, and generated total
revenues of approximately $275 million in the last twelve months
ended March 31, 2010.
ELEPHANT TALK: Posts $12.3 Million Net Loss in Q1 2010
------------------------------------------------------
Elephant Talk Communications, Inc., filed its quarterly report on
Form 10-Q, reporting a net loss of $12.3 million on $9.9 million
of revenue for the three months ended March 31, 2010, compared
with a net loss of $2.1 million on $9.4 million of revenue for the
same period ended March 31, 2009.
The Company's balance sheet as of March 31, 2010, showed
$45.4 million in assets and $47.7 million of liabilities, for a
stockholders' deficit of $2.3 million.
As reported in the Troubled Company Reporter on April 7, 2010,
BDO Seidman, LLP 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 incurred a
net loss of $17.4 million, used cash in operations of $5.4 million
and had an accumulated deficit of $62.3 million.
The Company has an accumulated deficit of $74.7 million as of
March 31, 2010.
"If we are unable to secure additional capital, as circumstances
require, we may not be able to continue operations. As of
March 31, 2010, these conditions raised substantial doubt from our
auditors 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?63e4
Based in Schiphol, The Netherlands, Elephant Talk Communications,
Inc. is an international provider of business software and
services to the telecommunications and financial services
industry. Elephant Talk installs its operating software at the
network operating centers of mobile carrier and receives a fee per
month per cell phone subscriber on the network. Currently the
subscribers are wholesale customers of Vizzavi (a subsidiary of
the Vodafone group) in Spain and T-Mobile in the Netherlands. The
Company also operates landline telephony services in nine European
countries and Bahrain.
ELITE LANDINGS: Plan Confirmation Hearing Scheduled for June 30
---------------------------------------------------------------
The Hon. Robert J. Kressel of the U.S. Bankruptcy Court for the
District of Minnesota will consider at a hearing on June 30, 2010,
at 2:30 p.m., the confirmation of Elite Landings, LLC, and Petters
Aviation LLC's proposed Plan of Liquidation. The hearing will be
held at Courtroom 8 West at U.S. Courthouse, 300 South Fourth
Street, Minneapolis, Minnesota. Objections, if any, are due seven
days prior to the hearing date.
The Court approved the Disclosure Statement dated May 20, 2010.
Five days prior to the hearing is fixed as the last day to timely
file the ballots to accept or reject the Plan.
As reported in the Troubled Company Reporter on April 28, 2010,
according to the Disclosure Statement, the Plan proposes to deal
with the assets, liabilities and ownership interests of each
Debtor separately. The assets of each Debtor to be liquidated are
claims against MN Airlines, LLC, dba Sun Country Airlines, which
is also a debtor-in-possession under Chapter 11 of the U.S.
Bankruptcy Code, its parent, MN Airline Holdings, Inc., which is a
debtor-in-possession under Chapter 11 of the Bankruptcy Code, and
claims against various other entities, which are either in
bankruptcy or in receivership that were at one time within the
business ambit of Thomas Petters.
It is expected that many of these claims will be contested. The
plan provides for interim distributions where appropriate.
Unsecured creditors holding allowed claims will receive
distributions based on the resolution and the liquidation of the
assets of each Debtor.
The source of payments will be proceeds of liquidation of the
assets of the Debtors.
A full-text copy of the amended Disclosure Statement is available
for free at http://bankrupt.com/misc/EliteLandings_AmendedDS.pdf
About Elite Landings
Based in Minnetonka, Minnesota, Elite Landings, LLC was, prior to
filing for bankruptcy, engaged in the business of purchasing
Airbus Corporate Jet Aircraft from Airbus S.A.S. and reselling
them. The company filed for Chapter 11 relief on Oct. 9, 2008
(Bankr. D. Minn. Case No. 08-45210). Cass Weil, Esq., and James
A. Rubenstien, Esq., at Moss & Barnett, represent Elite Landings,
LLC as counsel. In its petition, the Company listed between
$10 million and $50 million each in assets and debts.
The company is a wholly owned subsidiary of Petters Aviation, LLC.
Petters Aviation is the owner of 84.4% of the issued and
outstanding stock in MN Airline Holdings, Inc., which, in turn,
owns 100% o the stock in MN Airlines, LLC dba Sun Country
Airlines. Petters Aviation filed its Chapter 11 case on
October 6, 2008.
Both MN Airline Holdings, and MN Airlines, LLC are debtors-in-
possession in Chapter 11 cases pending in the district.
Petters Aviation is a wholly owned subsidiary of Thomas Petters,
Inc., which is in turn owned 100% by Thomas J. Petters,
individually. Thomas Petters, the founder and former CEO of
Petters Group, has been indicted and a criminal proceeding against
him is proceeding in the U.S. District Court for the District of
Minnesota.
About Petters Group Worldwide
Based in Minnetonka, Minn., Petters Group Worldwide LLC is named
for founder and chairman Tom Petters. The group is a collection
of some 20 companies, most of which make and market consumer
products. It also works with existing brands through licensing
agreements to further extend those brands into new product lines
and markets. Holdings include Fingerhut (consumer products via
its catalog and Web site), SoniqCast (maker of portable, WiFi MP3
devices), leading instant film and camera company Polaroid
(purchased for $426 million in 2005), Sun Country Airlines
(acquired in 2006), and Enable Holdings (online marketplace and
auction for consumers and manufacturers' overstock inventory).
Petters formed the company in 1988.
Petters Company, Inc. is the financing and capital-raising unit of
Petters Group Worldwide, LLC. Petters Company, Inc. and Petters
Group Worldwide, LLC, filed separate petitions for Chapter 11
relief on Oct. 11, 2008 (Bankr. D. Minn. Case No. 08-45257 and 08-
45258, respectively). James A. Lodoen, Esq., at Lindquist &
Vennum P.L.L.P., represents the Debtors as counsel. In its
petition, Petters Company, Inc. listed debts of between
$500 million and $1 billion, while its parent, Petters Group
Worldwide, LLC listed debts of not more than $50,000.
As reported in the Troubled Company Reporter on Oct. 7, 2008,
Petters Aviation, LLC,, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed for Chapter 11 bankruptcy protection with the U.S.
Bankruptcy Court for the District of Minnesota on Oct. 6, 2008
(Lead Case No. 08-45136). Petters Aviation, LLC is a wholly owned
unit of Thomas Petters Inc. and owner of MN Airline Holdings,
Inc., Sun Country's parent company.
Polaroid Corp., which was owned by Petters since 2005, filed its
second voluntary petition for Chapter 11 on Dec. 18, 2008 (Bankr.
D. Minn., Lead Case No. 08-46617).
EMISPHERE TECHNOLOGIES: Novartis Extends Promissory Note Maturity
-----------------------------------------------------------------
Novartis Pharma AG has agreed to further extend the maturity date
of Emisphere Technologies, Inc.'s Convertible Promissory Note to
June 4, 2010. On November 27, 2009, the maturity date was
extended to February 26, 2010. On February 24, 2010, the maturity
date was further extended to May 26, 2010. The $10 million
original principal amount Note, plus interest accrued to date, was
originally issued to Novartis on December 1, 2004, in connection
with the Research Collaboration and Option License Agreement
between the Company and Novartis of that date and was originally
due on December 1, 2009.
About Emisphere Technologies
Based in Cedar Knolls, New Jersey, Emisphere Technologies, Inc.
(OTC BB: EMIS) -- http://www.emisphere.com/-- is a
biopharmaceutical company that focuses on a unique and improved
delivery of pharmaceutical compounds and nutritional supplements
using its Eligen(R) Technology. The Eligen(R) Technology can be
applied to the oral route of administration as well other delivery
pathways, such as buccal, rectal, inhalation, intra-vaginal or
transdermal.
The Company's balance sheet at March 31, 2010, revealed
$5,100,000 in total assets and $71,000,000 in total current
liabilities, for a total stockholders' deficit of $65,900,000.
The Company has implemented aggressive cost controls to conserve
its cash and better position the Company to realize the commercial
promise of its Eligen Technology. With its lower cash burn rate,
the Company anticipates that its existing capital resources,
without implementing cost reductions, raising additional capital,
or obtaining substantial cash inflows, will enable the Company to
continue operations through approximately June 2010 or earlier if
unforeseen events arise that negatively affect the company's
liquidity.
The Company's management said it believes there are reasonable
financing alternatives potentially available to the Company that
will enable it to meet its near term operating cash requirements.
EMMIS COMMUNICATIONS: Board Elects Heath Freeman as Director
------------------------------------------------------------
Effective May 25, 2010, the Board of Directors of Emmis
Communications Corporation elected Heath Freeman as a director of
Emmis, pursuant to the terms of a letter, dated April 28, 2010,
that it received from JS Acquisition Inc., relating to a proposed
going private transaction involving Emmis and to be financed by
Alden Global Capital, a private asset management company with more
than $3 billion under management, and its affiliates and related
parties.
On May 25, 2010, Emmis, JS Acquisition, LLC, an Indiana limited
liability company that is wholly owned by Jeffrey H. Smulyan, the
Chairman, Chief Executive Officer and President of Emmis and JS
Acquisition, Inc., an Indiana corporation and subsidiary of JS
Parent and Mr. Smulyan, entered into an Agreement and Plan of
Merger.
Mr. Freeman's election to the Board was a pre-condition to Alden's
willingness to provide financing for the Transaction. Mr. Freeman
will hold office until the earliest of (i) the 2010 meeting of
shareholders of Emmis, (ii) his successor being duly elected and
qualified or (iii) his resignation upon the termination of the
Securities Purchase Agreement, dated as of May 24, 2010, by and
among Alden Global Distressed Opportunities Master Fund, L.P.,
Alden Global Value Recovery Master Fund, L.P., Alden Media
Holdings, LLC, JS Parent and Mr. Smulyan.
Mr. Freeman is a Managing Director of Alden Global Capital. He
joined Smith Management LLC, an affiliate of Alden, in 2006 and
was instrumental in the creation of Alden in 2007. At Smith
Management, Mr. Freeman has been investing in distressed
securities, value equities and the emerging markets. Prior to
joining Smith Management, he was at Peter J. Solomon Company, a
boutique investment bank, working on mergers and acquisitions,
restructurings and refinancing assignments. Mr. Freeman graduated
from Duke University in 2002.
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation owns and operates radio stations and magazine
publications in the U.S. and in Europe.
At February 28, 2010, the Company had $498,168,000 in total
assets; $487,246,000 in total liabilities and $140,459,000 in
Series A Cumulative Convertible Preferred Stock; and shareholders'
deficit of $178,959,000. At February 28, 2010, the Company had
non-controlling interests of $49,422,000 and total deficit of
$129,537,000.
As of April 15, 2010, the Company had not paid the Preferred Stock
dividend for six consecutive quarterly periods.
* * *
In April 2009, Moody's cut its corporate family rating on the
Company to 'Caa2'.
In May 2009, S&P raised its corporate credit rating on the Company
to 'CCC+'. In June, S&P withdrew the 'CCC+' Corp. Credit Rating
at the Company's request.
EMMIS COMMUNICATIONS: Buyer Offers to Acquire All Class A Shares
----------------------------------------------------------------
Emmis Communications Corporation on May 25, 2010, entered into an
Agreement and Plan of Merger with JS Acquisition, LLC, and JS
Acquisition, Inc. JS Parent is a newly formed Indiana limited
liability company and wholly owned by Mr. Jeffrey H. Smulyan,
Chairman, Chief Executive Officer and President of Emmis. JS
Acquisition is an Indiana corporation owned by Mr. Smulyan and JS
Parent.
On June 2, 2010, the Purchaser Group commenced a cash tender offer
to purchase all of the shares of Class A Common Stock, par value
$0.01 per share, of Emmis, other than the Shares beneficially
owned by the Purchaser Group, Alden Global Distressed
Opportunities Master Fund, L.P., and certain friends, family and
other associates of Mr. Smulyan, including certain officers and
employees of Emmis that have agreed to contribute certain of their
Shares for common equity interests in JS Parent -- the Rolling
Shareholders -- at a price per share of $2.40, without interest
and less any applicable withholding taxes. Unless subsequently
extended, the Offer is currently scheduled to expire at 5:00 p.m.
New York City time, on June 29, 2010 unless the Offer is extended
pursuant to the terms of the Offer to Purchase.
In addition, on May 27, 2010, Emmis commenced an offer to exchange
any and all of its outstanding 6.25% Series A Cumulative
Convertible Preferred Stock, par value $0.01 per share, for
$84,275,100 principal amount of newly issued 12% PIK Senior
Subordinated Notes due 2017, at a rate of $30.00 principal amount
of New Notes for each $50.00 of liquidation preference (excluding
accrued and unpaid dividends) of Existing Preferred Stock.
If successful, the Offer will be followed by the merger of JS
Acquisition with and into Emmis, with Emmis being the surviving
corporation and a subsidiary owned by Mr. Smulyan and JS Parent.
In the Merger, each outstanding Share that is not tendered in the
Offer, including the Shares held by the Alden Fund, the 8,441
Shares held by Mr. Smulyan in Emmis' 401(K) plan, 9,755 Shares
held by Mr. Smulyan, up to 200,000 Shares held by Mr. Smulyan
(including as a result of the conversion of any Class B Shares
held by him) and 30,625 Shares held by the Smulyan Family
Foundation, will be converted into the right to receive from Emmis
the Offer Price, and each share of Existing Preferred Stock (other
than the Existing Preferred Stock owned by the Alden Fund) will be
converted into the right to receive from Emmis $5.856 in cash
(without interest and less any applicable withholding taxes),
which is equal to the conversion rate of the Existing Preferred
Stock of 2.44 Shares per share times the Offer Price.
A Committee of Disinterested Directors of Emmis, which does not
include Mr. Smulyan or any non-independent members of the board of
directors of Emmis, was formed on April 29, 2010. The Committee
has unanimously determined that the Merger Agreement, including
the Offer and the Merger, is advisable and fair to, and in the
best interest of, Emmis and the holders of Shares, other than Mr.
Smulyan, JS Acquisition, JS Parent, the Alden Fund and the Rolling
Shareholders. Emmis' board of directors recommends that holders
accept the offer and tender their shares to JS Acquisition.
A full-text copy of the Offer to Purchase for Cash All Outstanding
Shares of Class A Common Stock of Emmis Communications Corporation
at $2.40 Per Share by JS Acquisition, Inc., is available at no
charge at http://ResearchArchives.com/t/s?63f5
A full-text copy of the Tender Offer Statement is available at no
charge at http://ResearchArchives.com/t/s?63f6
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation owns and operates radio stations and magazine
publications in the U.S. and in Europe.
At February 28, 2010, the Company had $498,168,000 in total
assets; $487,246,000 in total liabilities and $140,459,000 in
Series A Cumulative Convertible Preferred Stock; and shareholders'
deficit of $178,959,000. At February 28, 2010, the Company had
non-controlling interests of $49,422,000 and total deficit of
$129,537,000.
As of April 15, 2010, the Company had not paid the Preferred Stock
dividend for six consecutive quarterly periods.
* * *
In April 2009, Moody's cut its corporate family rating on the
Company to 'Caa2'.
In May 2009, S&P raised its corporate credit rating on the Company
to 'CCC+'. In June, S&P withdrew the 'CCC+' Corp. Credit Rating
at the Company's request.
EMMIS COMMUNICATIONS: LKCM Funds Hold 8.3% of Class A Shares
------------------------------------------------------------
LKCM Private Discipline Master Fund SPC, LKCM Private Discipline
Management, L.P., LKCM Alternative Management, LLC, Luther King
Capital Management Corporation, J. Luther King, Jr. and J. Bryan
King disclosed that as of June 1, 2010, they may be deemed to hold
2,763,429 shares or roughly 8.3% of the Class A Common Stock, par
value $0.01 per share, of Emmis Communications Corporation.
Of the 2,763,429 shares of Common Stock held, (i) 2,519,468 shares
are held directly by Master Fund and (ii) 243,961 shares of Common
Stock may be acquired by Master Fund within 60 days of June 1,
2010 upon conversion of shares of Preferred Stock.
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation owns and operates radio stations and magazine
publications in the U.S. and in Europe.
At February 28, 2010, the Company had $498,168,000 in total
assets; $487,246,000 in total liabilities and $140,459,000 in
Series A Cumulative Convertible Preferred Stock; and shareholders'
deficit of $178,959,000. At February 28, 2010, the Company had
non-controlling interests of $49,422,000 and total deficit of
$129,537,000.
As of April 15, 2010, the Company had not paid the Preferred Stock
dividend for six consecutive quarterly periods.
* * *
In April 2009, Moody's cut its corporate family rating on the
Company to 'Caa2'.
In May 2009, S&P raised its corporate credit rating on the Company
to 'CCC+'. In June, S&P withdrew the 'CCC+' Corp. Credit Rating
at the Company's request.
ENTERGY GULF: Moody's Upgrades Preferred Stock Rating to 'Ba1'
--------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Entergy Gulf
States Louisiana, L.L.C., including its senior secured debt to A3
from Baa1, senior unsecured debt and Issuer Rating to Baa2 from
Baa3, and preferred stock to Ba1 from Ba2. The rating outlook is
stable.
The upgrade is prompted by the imminent repayment of the remaining
EGSL debt ($159 million at March 31, 2010) that had been assumed
by affiliate utility Entergy Texas, Inc. (Entergy Texas) following
the jurisdictional separation of Entergy Texas from EGSL,
effective January 1, 2008. As part of the agreement to divide the
former Entergy Gulf States into two separate utilities, the newly
spun off Entergy Texas assumed and became obligated for a prorated
share (originally $1.1 billion or 46%) of Entergy Gulf States'
debt securities under a debt assumption agreement with EGSL.
Since the separation, Entergy Texas has successfully accessed the
capital markets on several occasions, issuing $850 million of
Mortgage Bonds, including $200 million last month. Part of the
proceeds of the most recent issue will be used to repay the
remaining assumed EGSL debt, which Moody's expects will occur by
June 30, 2010, at which time the debt assumption agreement will be
terminated.
The upgrade and stable rating outlook also reflects Moody's
expectation that EGSL will exhibit a financial profile more in
line with the mid-Baa rating range and generate metrics closer to
Entergy's other major utility subsidiary in the state, Entergy
Louisiana, also rated Baa2 senior unsecured with a stable outlook.
These metrics include CFO pre-working capital to debt in the 17%
to 18% range and CFO pre-working capital plus interest to interest
in the 4.0 times range for EGSL going forward. Over the two plus
years since the jurisdictional separation, EGSL's financial
performance has been stronger than both that of the former Entergy
Gulf States utility and the newly spun-off Entergy Texas
subsidiary, which is rated two notches lower at Ba1 senior
unsecured, stable outlook. The upgrade considers the relatively
supportive regulatory framework in Louisiana which, unlike Texas,
remains a fully regulated environment. EGSL operates under a
formula rate plan with a 10.65% ROE, which was recently extended
for an additional three years in an uncontested settlement
completed in October 2009. The utility also benefits from
supportive storm cost recovery provisions and is expected to issue
up to $249 million of securitized bonds over the next several
months to recover costs related to hurricanes Gustav and Ike in
2008 and to replenish its storm reserve in the amount of
$90 million.
Ratings upgraded and assigned a stable outlook include:
-- EGSL's senior secured debt to A3 from Baa1; senior unsecured
debt and Issuer Rating to Baa2 from Baa3; and preferred stock
to Ba1 from Ba2.
Entergy Gulf States Louisiana, L.L.C., is a public utility
headquartered in Baton Rouge, Louisiana and a subsidiary of
Entergy Corporation, an integrated energy company headquartered in
New Orleans, Louisiana.
EXIDE TECHNOLOGIES: EnerSys Wins Back Trademark in Circuit Court
----------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that EnerSys won back the
right to use the Exide trademark on industrial batteries as the
result of a June 1 victory in the 3rd U.S. Circuit Court of
Appeals in Philadelphia. EnerSys, a Reading, Pennsylvania-based
maker and distributor of industrial batteries, bought the business
from Exide Technologies in 1991 for $135 million. As part of the
arrangement, Exide granted EnerSys a perpetual, exclusive license
for use of the trademark on industrial batteries. The agreement
required payment of no royalties.
Exide, after filing for Chapter 11, filed a motion with the
bankruptcy court to reject the license agreement as an executory
contract. The bankruptcy judge granted the motion, and a district
judge affirmed on appeal. EnerSys appealed again, and the 3rd
Circuit recently reversed, finding that the license agreement
wasn't an executory contract and therefore couldn't be rejected, a
bankruptcy term that basically means terminated.
About Exide Technologies
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products.
The Company filed for Chapter 11 protection on April 14, 2002
(Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and
Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill,
Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors
in their successful restructuring. The Court confirmed Exide's
Amended Joint Chapter 11 Plan on April 20, 2004. The plan took
effect on May 5, 2004. While it has emerged from Bankruptcy,
reorganized Exide is still resolving claims filed against it in
the Bankruptcy Court.
* * *
As reported by the Troubled Company Reporter on July 9, 2008,
Moody's Investors Service upgraded the Corporate Family and
Probability of Default Ratings of reorganized Exide Technologies,
Inc. to 'B3' from 'Caa1'. Exide carries 'B' issuer credit ratings
from Standard & Poor's.
FLYING J: Plan Promises to Satisfy All Creditors in Full
--------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware will consider at a hearing on July 6, 2010,
at 2:00 p.m. (prevailing Eastern Time), the approval of the
Disclosure Statement and the confirmation of Flying J, Inc., et
al.'s proposed Plan of Reorganization. The hearing will be held
at the 5th Floor, 824 North Market Street, Wilmington, Delaware.
Objections are due on June 28, 2010, at 4:00 p.m. (EDT.)
According to the Disclosure Statement, the Plan contemplates the
reorganization of the Debtors through the distribution and
allocation of value received by the Debtors through (i) the
contribution of certain of Flying J's assets to Pilot in exchange
for $515 million in cash and equity interests of Pilot and upon
terms and conditions acceptable to Flying J in the Pilot
Transaction; (ii) the sale of certain assets held by BWOC in the
Refinery Sale in exchange for approximately $51.7 million of cash
representing the base purchase price and 90% of the value of
certain of BWOC's hydrocarbon inventories (less amounts to be
placed in escrow and amounts reserved for certain disputed or
unpaid amounts), the assumption of certain liabilities, including
environmental liabilities,and upon terms and conditions acceptable
to the Debtors; (iii) the exit facilities; (iv) the sale of
certain assets pursuant to that certain Asset Purchase Agreement
by and among Magellan and Longhorn Pipeline Holdings, LLC dated as
of June 18, 2009; (v) the sale of substantially all of the assets
of the FJOG Sellers in the FJOG Sale; (vi) the sale of certain of
Flying J's assets not included in the Pilot Transaction and (vii)
except as otherwise provided in the Plan and Confirmation Order,
the discharge of all Claims and Equity Interests.
Under Plan, it is expected that: (a) all allowed Claims at each of
the Debtors' Estates will be fully satisfied; and (b) reorganized
Flying J will own, inter alia, all of the equity interests
received in the Pilot Transaction and all of the equity in
reorganized BWO.
The Plan constitutes a separate chapter 11 plan of reorganization
for each Debtor.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/FlyingJ_DS.pdf
The Debtors are represented by:
Young Conaway Stargatt & Taylor LLP
Pauline K. Morgan, Esq.
Edmon L. Morton, Esq.
Donald J. Bowman, Jr., Esq.
The Brandywine Building
1000 West Street, 17th Floor
Wilmington, DE 19801
Tel: (302) 571-6637
Fax: (302) 576-3320
Kirkland & Ellis LLP
David L. Eaton, Esq.
Adam C. Paul, Esq.
Jeffrey W. Gettleman, Esq.
300 North LaSalle Street
Chicago, IL 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
About Flying J Inc.
Based in Ogden, Utah, Flying J Inc. -- http://www.flyingj.com/--
is among the 20 largest private companies in America, with 2007
sales exceeding $16 billion. The fully integrated oil company
employs approximately 14,700 people in the U.S. and Canada through
its interstate operations, transportation, refining and supply,
exploration and production, as well as its financial services and
communications, divisions.
Flying J and six of its affiliates filed for bankruptcy on
December 22, 2008 (Bankr. D. Del. Lead Case No. 08-13384). Flying
J sought Chapter 11 protections after a precipitous drop in oil
prices and disruption in the credit markets brought to bear
significant short-term pressure on the company's liquidity
position.
Blackstone Advisory Services L.P. is the Debtors' investment
banker and financial advisor. Epiq Bankruptcy Solutions LLC is
the Debtors' notice, claims and balloting agent. In its formal
schedules submitted to the Bankruptcy Court, Flying J listed
assets of $1,433,724,226 and debts of $640,958,656.
An official committee of unsecured creditors has been appointed in
the case. Pachulski Stang Ziehl & Jones LLP has been tapped as
counsel for the creditors' panel.
FRANKLIN PACIFIC: Section 341(a) Meeting Scheduled for July 12
--------------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of Franklin
Pacific Finance, LLP's creditors on July 12, 2010, at 1:15 p.m.
The meeting will be held at RM 2610, 725 S Figueroa Street, Los
Angeles, CA 90017.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Santa Monica, California-based Franklin Pacific Finance, LLP,
filed for Chapter 11 bankruptcy protection on May 24, 2010 (Bankr.
C.D. Calif. Case No. 10-30727). Stephen R. Wade, Esq., at The Law
Offices of Stephen R. Wade, assists the Company in its
restructuring effort. The Company estimated its assets and debts
at $10,000,001 to $50,000,000.
GEMCRAFT HOMES: Plan Outline Hearing Scheduled for July 14
----------------------------------------------------------
The Hon. Nancy V. Alquist of the U.S. Bankruptcy Court for the
District of Maryland will consider at a hearing July 14, 2010, at
11:00 a.m., approval of a Disclosure Statement explaining Gemcraft
Homes, Inc., et al.'s proposed Plan of Reorganization. The
hearing will be held at Courtroom 2A of the U.S. Bankruptcy Court,
U.S. Courthouse, 101 West Lombard Street, Baltimore, Maryland.
Objections were due May 24, 2010.
According to the Disclosure Statement, the Reorganized Debtors
will continue their respective legal existence and will be re-
vested with title to all property and property rights of their
respective estates (including causes of action.)
On the effective date the equity interests in the Debtors will be
deemed cancelled and extinguished, except that Gemcraft Homes
Forest Hill, LLC, will retain its equity interest in Harkins
Property, LLC. On the effective date, Gemcraft Capital, LLC will
pay the new equity purchase price, to the Debtors and will
purchase all of the equity and ownership interests of each of the
Debtors. Gemcraft Capital, LLC, thus will be, as of the effective
date, the sole holder of equity or ownership interests -- limited
liability company interests and common stock.
The Plan will be funded by the Debtors' cash on hand as of the
effective date, by advances from Gemcraft Capital, LLC, and by
payment of the new equity purchase price, and by the Debtors'
future revenues from the operation of their businesses. In
addition, distributions to holders of Class 8 Allowed Claims will
share pro rata in net recoveries from Avoidance Actions.
Under the Plan, holders of convenience claims will receive, in
full satisfaction of the claim, cash in an amount equal to 10% of
the amount of its claim.
Holders of general unsecured claims will receive its pro rata
share of the distributable cash.
Intercompany claims will be discharged and released as of the
effective date. Class 9 claims will receive no distributions
under the Plan.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/GemcraftHomes_DS.pdf
The Debtor is represented by:
Irving Edward Walker, Esq.
Cole Schotz Meisel Forman & Leonard, PA
300 E. Lombard Street, Suite 2000
Baltimore, MD 21202-3171
About Gemcraft Homes
Gemcraft Homes, Inc., is a corporation formed under the laws of
the State of Maryland with its principal place of business located
in Harford County, Maryland. Gemcraft was founded in 1993 with a
single sales trailer in Abingdon, Maryland, from which six
residential homes were sold. Since that time, Gemcraft has grown
to become one of the largest independent homebuilders in the Mid-
Atlantic region, and one of the fastest growing builders in the
entire country. Gemcraft is a production builder which targets
first-time homebuyers and first-time "move up" buyers. It also
targets retired, and soon to retire, buyers for its retirement
communities.
The Company filed for Chapter 11 bankruptcy protection on
November 9, 2009 (Bankr. D. Md. Case No. 09-31696). The Company's
affiliates -- DLM, LLC, et al. -- filed separate Chapter 11
bankruptcy petitions. G. David Dean II, Esq., Gary H. Leibowitz,
Esq., and Irving Edward Walker, Esq., at Cole Schotz Meisel Forman
& Leonard, PA, assist Gemcraft Homes 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.
GENERAL GROWTH: Equity Panel Taps Weitzman as Appraiser
-------------------------------------------------------
The Official Committee of Equity Security Holders for General
Growth Properties Inc. sought and obtained the Court's authority
to retain The Weitzman Group, Inc., as its real estate consultant
and appraiser, nunc pro tunc to May 4, 2010.
As the appraiser of the Equity Committee, Weitzman Group will:
(a) provide the Equity Committee, upon the request of the
Equity Committee, these services in connection with the
Debtors' Chapter 11 cases;
(b) provide consultation with and analyses to the Equity
Committee and its professionals, on request, on real
estate valuations prepared by Cushman & Wakefield, Inc.,
General Growth Properties, Inc.'s appraiser, or others
concerning the fair market value of various properties in
the GGP portfolio;
(c) be available at the Equity Committee's request to meet
with the Equity Committee and its professionals, GGP
management or board of directors, creditor groups, equity
holders any official committees appointed in a bankruptcy
case, or other parties to discuss matters concerning
valuation of the properties in the GGP portfolio; and
(d) If requested by the Equity Committee, participate in
hearings before the Court and provide relevant testimony
connected with its engagement.
Weitzman Group will be paid according to its professionals'
customary hourly rates:
Appraisal/Valuation Services Rate per Hour
---------------------------- -------------
Marilyn Kramer Weitzman $475
Executive Vice President $375
Senior Vice President $350
Vice President $275
Assistant Vice President $225
Senior Associate $175
Associate $155
Litigation Related Services Rate per Hour
--------------------------- -------------
Marilyn Kramer Weitzman $575
Executive Vice President $475
Senior Vice President $450
Vice President $375
Assistant Vice President $325
Senior Associate $275
Associate $255
All fees and expenses payable under Weitzman Group's engagement
are capped at $125,000
Weitzman Group will seek reimbursement for expenses incurred.
Marilyn Kramer Weitzman, president at Weitzman Group, discloses
that her firm has performed hundreds of assignments unrelated to
the Debtors' Chapter 11 cases for UBS Realty Investors, LLC, an
affiliate of UBS Securities LLC, GGP's capital markets and M&A
advisor. Weitzman Group also provided marketing and feasibility
studies, before the filing of the Debtors' Chapter 11 cases, for
two Debtors -- South Street Seaport Limited Partnership and GGP
Limited Partnership, for both of which GGP acted as agent.
Weitzman Group has not provided any services to GGP or any GGP
affiliate since the Petition Date, she assures the Court. She
further discloses that Weitzman Group had or currently has
business connections with Grubb & Ellis, Barclay's Capital,
Credit Suisse, JP Morgan Chase Bank, Lehman Brothers and Costco
in matters unrelated to the Debtors' Chapter 11 cases.
Despite those disclosures, Ms. Weitzman maintains that Weitzman
Group is a "disinterested person" as the term is defined under
Section 101(14) of the Bankruptcy Code.
GENERAL GROWTH: Proposes Heeling Sports Settlement
--------------------------------------------------
General Growth Properties, Inc., seeks the U.S. Bankruptcy Court
for the Southern District of New York's authority to enter into a
settlement agreement and release with General Growth Properties
Management, Inc., Stonebriar Mall, LLC, and Heeling Sports
Limited, resolving a prepetition patent infringement litigation.
GGMI and Stonebriar Mall, LLC, are non-debtor affiliates of the
Debtors.
Heeling Sports designs, manufactures and distributes wheeled
footwear, and owns several patents related to the Heelys brand
wheeled footwear. Heeling Sports has alleged that certain of
GGP's kiosk tenants have previously sold infringing knock-offs of
Heelys Skates. In November 2008, Heeling Sports initiated a
civil action against GGP, GGMI, Stonebriar Mall LLC and
Stonebriar Mall Limited Partnership before the U.S. District
Court for the Northern District of Texas based on that patent
infringement allegation. In November 2009, Heeling Sports filed
Claim No. 6291 against GGP for $22,500,000, for damages arising
from the alleged willful infringement of certain Heeling patents
which form the basis for the District Court Action.
Against this backdrop, GGP, Stonebriar Mall, LLC, GGMI and
Heeling Sports entered into the Settlement Agreement to resolve
all claims and causes of action arising out of the District Court
Action. The Debtors however note that the Settlement Agreement
is confidential and cannot be disclosed except to the extent
necessary to obtain Bankruptcy Court approval.
The salient terms of the Settlement Agreement are:
(a) GGMI agrees to pay Heeling Sports a certain specified
amount as consideration for the settlement.
(b) The Parties agree to jointly seek dismissal of the
District Court Action.
(c) The Parties agree to release all claims, whether known or
unknown, arising out of the facts, events and claims in
the District Court Action. In addition, GGP waives its
rights to challenge validity or enforceability of the
Heeling patents through the term of the Settlement
Agreement.
(d) The Parties agree to implement certain ongoing
obligations and procedures:
-- GGP and its affiliates agree not to approve the sale of
certain wheeled footwear that may infringe on Heeling
Sports' patented products in kiosks at any shopping
malls or retail locations under its ownership or
management during the term of the Settlement Agreement.
-- At certain intervals following the effective date of
the Settlement Agreement, GGP agrees to deliver notice
to all individuals responsible for licensing kiosks and
mall general managers informing them of the agreement
not to authorize or permit the sale of the Identified
Products.
-- In the event that a GGP representative becomes aware or
is notified of the existence of Identified Products at
a kiosk, GGP agrees to notify Heeling Sports and
provide the kiosk operator with notice of the violation
and demand that he or she immediately cease all sales
of the merchandise. If the kiosk operator fails to
cooperate, GGP agrees to terminate any lease/licensing
agreements and prevent further sales of the products.
GGP has no obligation to initiate any investigation of
or monitor the goods sold by its kiosk tenants.
-- Upon request from Heeling Sports, GGP agrees to make
every reasonable effort to cooperate with Heeling
Sports in the enforcement of the Heeling patents.
Heeling Sports agrees to reimburse GGP for expenses
incurred in connection with any actions sought by
Heeling Sports.
(e) In the event GGP, after notice of kiosk/cart infringement,
neglects to cure any failure to perform its obligations on
three or more occasions after notice by Heeling Sports,
the Parties agree that Heeling Sports will be entitled to
recover a specified liquidated, non-punitive amount plus
attorneys' fees that will escalate for each subsequent
failure to cure.
(f) In the event that GGP takes action based on notice from
Heeling Sports, Heeling Sports agrees to indemnify and
hold GGP harmless against any claims for improper kiosk or
cart lease or license termination done at Heeling Sports'
direction.
(g) GGP agrees that the rights and obligations arising under
the Settlement Agreement will be assumed by any GGP
affiliate arising out of or purchasing the assets of
GGP after the conclusion of its bankruptcy.
The Debtors believe that resolving the Heeling Claim under the
Settlement Agreement provides an opportunity for their estates to
eliminate the $22,500,000 claim against GGP and realize a more
favorable resolution than waiting until later in the
reorganization process.
About General Growth Properties
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: Three Executives Named to Sr. Management Roles
--------------------------------------------------------------
General Growth Properties, Inc. (NYSE: GGP) announced it has named
three new executives to assume senior management roles within the
Company. These changes are part of an ongoing operational
reorganization designed to better position the Company to meet the
demands of today's competitive environment.
The senior management changes announced include:
* Michael McNaughton, currently senior vice president of
leasing -- Big Box, has been named Head of Asset
Management;
* Robert Michaels, GGP's vice chairman, has been named Head
of Leasing; and
* Mark Pfeifer, currently vice president of strategic
communications, has been named Head of Marketing and
Corporate Communications.
Messrs. McNaughton, Michaels and Pfeifer replace Sharon Polonia,
Robert Wyant and Wally Brewster, respectively.
"As we have been successfully restructuring GGP's financial
foundation, we have simultaneously been developing an operational
strategy that will enable the Company to improve our performance,"
said Adam Metz, GGP's chief executive officer. "We believe these
management changes are consistent with our new strategic
direction, which we expect will be a catalyst to maximize the
intrinsic value of our properties. I welcome Mike, Bob and Mark
into their new positions. Each has deep experience and a proven
track record of strategic thinking and operational excellence. I
want to thank Sharon, Robert and Wally for their valuable
contributions to GGP and wish them well in their new endeavors."
Mr. McNaughton, who joined GGP in 2001, serves as senior vice
president with oversight of department stores, Big Box retailing,
land, hotel and restaurant functions for the GGP portfolio.
Previously, he served as senior vice president of asset
management, with responsibility for 17 properties totaling
20 million square feet. Prior to GGP, Mr. McNaughton was a
founding partner and senior vice president of CORO Realty
Advisors, an Atlanta-based investment advisory brokerage and
redevelopment firm. He served as a founding member of the NAIOP
Mixed-Use Development national forum and is an active member of
the Urban Land Institute. Mr. McNaughton received a BA in
management from Framingham State College.
Mr. Michaels began his career at GGP in 1972 and has served in a
number of senior management roles at the Company, including
general counsel and executive vice president and director of
corporate leasing. Mr. Michaels serves on the executive committee
of the board of trustees for the International Council of Shopping
Centers (ICSC), as well as on the board of directors for the
Center for Urban Land Economics Research (CULER) at the School of
Business for the University of Wisconsin-Madison. Mr. Michaels
received both his Bachelor of Science degree in Business
Administration and his juris doctor from the University of South
Dakota.
Mr. Pfeifer joined GGP in 2002 as vice president of corporate
advertising and branding, later becoming vice president of
strategic communications. Prior to joining GGP, Mr. Pfeifer had
extensive experience working at advertising agencies including
BBDO Worldwide, Euro RSCG and Foote Cone & Belding. Mr. Pfeifer
received a BS in Marketing from Butler University and an MBA in
Marketing from Loyola University.
GENERAL GROWTH: West Kendall Sues KTC for Breach
------------------------------------------------
Debtor West Kendall Holdings, LLC, filed an adversary complaint
for declaratory judgment against KTC Housing LLC and KTC Hotel,
LLC formerly known as Cardel-Masvidal, LLC.
Masvidal Partners, Inc. and West Kendall Center, L.P. entered into
an agreement of sale for certain property in the Debtor's Kendall
Town Center property in Miami-Dade County, Florida identified as
"Parcel A." The closing under the Parcel A Sales Contract was to
occur on December 31, 2004. Masvidal Partners, Inc. assigned its
rights under the Parcel A Sales Contract to Cardel-Masvidal, LLC.
The Debtor and Cardel-Masvidal agreed to extend the closing date
to December 31, 2006. Cardel-Masvidal changed its name to KTC
Hotel, LLC. The Debtor and KTC Hotel agreed to further extend the
closing date of the Parcel A Sales Contract to December 31, 2009.
Royal Group Investments, Inc. and the Debtor entered into an
agreement of sale for certain real property located in the
Debtor's Kendall Town Center property in Miami-Dade County
Florida identified as "Parcel C." The closing under the Parcel C
Sales Contract was to occur on December 31, 2004. Royal Group
assigned its rights under the Parcel C Sales Contract to KTC
Housing, Inc. KTC Housing, Inc. and the Debtor agreed to extend
the closing date from December 31, 2004 to December 31, 2006.
KTC Housing, Inc. assigned its rights under the Parcel C Sales
Contract to KTC Housing, LLC. KTC Housing and the Debtor agreed
to further extend the closing date to December 31, 2009.
The KTC Entities made deposits under the Sales Contracts in the
amounts of $94,500 and $30,000. Pursuant to the De Minimis Sales
Order, the Debtors were authorized to perform under existing
asset conveyance agreements, including the Sales Contracts, and
provides those conveyances will be free and clear of all liens,
claims and encumbrances pursuant to Section 363(f) of the
Bankruptcy Code. The KTC Entities previously asserted that
certain exceptions to title existed on the parcels at issue under
the Sales Contracts and raised an objection seeking to require
the Debtor to cure the alleged exceptions to title.
Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York --
melanie.gra@weil.com -- asserts that the Debtor was ready,
willing and able to deliver title to Parcels A and C pursuant to
the Sale Contracts and close by the Final Closing Date. However,
the KTC Entities refused to close on the Sales Contracts on or
before the Final Closing Date, she points out. Despite their
failure to close on the Sales Contracts on the agreed Final
Closing Date, the KTC Entities each filed a complaint in the
Circuit Court of the 11th Judicial District in and for Miami-Dade
County, Florida, alleging that the Debtor failed to perform
certain obligations under the Sales Contracts and seeking to
compel the Debtor's specific performance of the Sales Contracts,
she says.
Ms. Gray stresses that the KTC Entities refused to honor their
obligation to make full payment on the Sales Contracts on or
before the Final Closing Date. She insists that the KTC
Entities' failure to satisfy their obligations under the Sales
Contracts on or before the Final Closing Date constituted a
default by the KTC Entities under the Sales Contracts. Under the
Sales Contracts, on account of the KTC Entities' default, the
Debtor is entitled to terminate all of the KTC Entities' rights
under the Sales Contracts, she argues. Similarly, West Kendall
is entitled to retain the contract deposits as liquidated damages
for the KTC Entities' default under the Sales Contracts, she
contends.
The Debtor thus asks the U.S. Bankruptcy Court for the Southern
District of New York to:
(a) declare that the KTC Entities' breached their obligations
under the Sales Contracts;
(b) declare that the Sales Contracts terminated upon the Final
Closing Date and the Debtor owes no obligations under the
Sales Contracts;
(c) declare that the Debtor is entitled to retain the Contract
Deposits as liquidated damages under the Sales Contracts;
(d) declare that the KTC Entities are required to turn over
all reports, studies, and drawings produced in conjunction
with the development of Parcels A and C;
(e) declare that the KTC Entities' commencement and
continuation of the State Court Actions are in violation
of the automatic stay under Section 362(a) of the
Bankruptcy Code; and
(f) award the Debtor interest, costs and attorneys' fees as
allowed by law.
GEORGIA-PACIFIC LLC: Fitch Rates Issuer Default Rating at 'BB'
--------------------------------------------------------------
Georgia-Pacific LLC's recent acquisition of assets for its
business lines will not affect the company's debt ratings,
according to Fitch Ratings. GP has announced the acquisition of
two pulp mills in Alabama plus related assets from Parsons &
Whittemore for an undisclosed price which follows the recent
purchase of four oriented strand board mills from Grant Forest
Products for $400 million.
Both acquisitions were made to increase GP's share of the market
while lowering its competitive cost position. The two pulp mills
being purchased have a reported combined capacity of just under
1 million tonnes per year with production skewed to bleached
softwood kraft and complement GP's other mills in Brunswick,
Georgia and New Augusta, Mississippi. A significant portion of
the purchase price will be partially funded by an equity
contribution from Koch Industries, Inc., GP's parent.
GP has continued to reduce its balance sheet debt with cash
generated from its operations since its acquisition by Koch in
2005. At the close of the first quarter, total debt/EBITDA (as
calculated by Fitch) stood at 3.2 times, down from 4.7x at the
close of 2008. Fitch expects that GP's leverage metrics will
continue to show improvement by the close of 2010 due to improving
conditions in building products, packaging and pulp and at minimum
fairly stable conditions in domestic tissue products. Fitch rates
GP's debt:
-- Issuer Default Rating 'BB';
-- Senior secured revolver 'BB+';
-- First lien term loans 'BB+';
-- Guaranteed senior unsecured notes 'BB';
-- Senior unsecured bonds/notes 'BB-'.
The Rating Outlook is Stable.
GUIDED THERAPEUTICS: Reports Results of May 27 Annual Meeting
-------------------------------------------------------------
Guided Therapeutics, Inc., on May 27, 2010, held its annual
meeting of stockholders in Norcross, Georgia. As of the record
date, March 31, 2010, there were 38,160,388 shares of Common Stock
entitled to vote at the annual meeting. Represented at the
meeting in person or by proxy were 30,306,067 shares representing
79.42% of the total shares of Common Stock entitled to vote at the
meeting.
The purpose of the meeting was to elect seven directors to a one-
year term expiring in 2011; to approve and adopt an amendment to
the Company's 1995 Stock Plan, as amended, increasing the number
of shares available for grant by 1.8 million shares; and, to
ratify the appointment of UHY LLP as the Company's independent
registered public accounting firm for the 2010 fiscal year. The
shareholders have voted for the proposals.
About Guided Therapeutics
Norcross, Georgia-based Guided Therapeutics, Inc. (Pink Sheets:
GTHP) is a medical technology company focused on developing
innovative medical devices that have the potential to improve
health care. The Company is currently focused on completing the
development of cervical cancer detection device.
* * *
As reported by the Troubled Company Reporter on March 29, 2010,
UHY LLP of Atlanta, Georgia, expressed substantial doubt about
Guided Therapeutics Inc.'s ability to continue as a going concern
in its audit report on the Company's 2009 annual report. UHY
noted that the Company has recurring losses from operations,
accumulated deficit and working capital deficit.
At March 31, 2010, the Company's balance sheet revealed $625,000
in total assets and $2,633,000 in total liabilities for a
$2,112,000 in stockholders' deficit.
HACIENDA GARDENS: Section 341(a) Meeting Scheduled for June 30
--------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of Hacienda
Gardens, LLC's creditors on June 30, 2010, at 11:30 a.m. The
meeting will be held at U.S. Federal Bldg., 280 S 1st St. #130,
San Jose, CA 95113.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Cupertino, California-based Hacienda Gardens, LLC, filed for
Chapter 11 bankruptcy protection on May 24, 2010 (Bankr. N.D.
Calif. Case No. 10-55423). Robert G. Harris, Esq., and Roya
Shakoori, Esq., at the Law Offices of Binder and Malter, assist
the Company in its restructuring effort. The Company estimated
its assets and debts at $10,000,001 to $50,000,000.
HARTMARX CORP: Settles with Lenders for $750,000 Cash
-----------------------------------------------------
Bill Rochelle at Bloomberg News reports that XMH Corp., the
bankruptcy estate of Hartmarx Corp., negotiated a settlement with
secured lenders that will bring in $750,000 cash while releasing
$2.25 million being held aside for professional fees.
The Official Committee of Unsecured Creditors, Bloomberg recounts,
sued Wachovia Capital Finance Corp. as agent for the lenders,
alleging that the banks' lien didn't extend to $12 million
generated from ending a lease in New York. There were also claims
against Moelis & Co. LLC, the financial advisers for Hartmarx.
According to the report, under the settlement, Moelis will pay
$150,000 of the $750,000 cash payment. There will also be a
waiver of $2 million in claims against the Hartmarx bankrupt
estate. A hearing to approve the settlement is scheduled for
June 7.
Hartmarx will lose its exclusive period to propose a plan after
July 23, when Hartmarx will have been in Chapter 11 for 18 months.
The Creditors Committee already has the right to file its own plan
for the Debtor.
About Hartmarx Corp
Based in Chicago, Illinois, Hartmarx Corporation --
http://www.hartmarx.com/-- produced and marketed business,
casual, and golf apparel under its own brands, which included Hart
Schaffner Marx, Hickey-Freeman, Palm Beach and Coppley, among
others. A drop off in demand for tailored clothing led to poor
sales. The company and 51 affiliates sought Chapter 11 bankruptcy
protection on January 23, 2009 (Bankr. N.D. Ill. Lead Case No.
09-02046). George N. Panagakis, Esq., Felicia Gerber Perlman,
Esq., and Eric J. Howe, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, represent the Debtors in their restructuring efforts.
When the Debtors filed for bankruptcy, they listed $483,108,000 in
total assets and $261,220,000 in total debts as of August 31,
2008.
In June 2009, Hartmark received permission to sell it business to
Emerisque Brands U.K. Ltd. and SKNL North America Ltd. for
$119 million, including $70.5 million cash, the assumption of
$33.5 million in debt, and a junior secured note for $15 million.
HARVARD GRAND: Doubletree Hotel Operator Files for Chapter 11
-------------------------------------------------------------
Harvard Grand Investment, Inc., filed for Chapter 11 on May 28,
2010 (Bankr. C.D. Calif. Case No. 10-31833).
Harvard Grand is the operator of the Doubletree Hotel Carson Civic
Center in Carson, California. Assets were on the books for $28.7
million on March 31, with liabilities totaling $30.7 million.
According to Bloomberg News, Harvard Grand sought bankruptcy
protection to halt foreclosure scheduled for June 1. The hotel
was unable to remain current on $22 million owing to Shinhan Bank
America, the secured lender, a court filing says.
The financial decline was due to the "slowdown in the general
economy," the company said in a court paper, according to
Bloomberg.
David B. Golubchik, Esq., at Levene Neale Bender Rankin & Brill
LLP, represents the Debtor in its Chapter 11 effort.
HEALTHMARKETS INC: S&P Cuts Counterparty Credit Rating to 'B+'
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
counterparty credit rating on HealthMarkets Inc. to 'B+' from 'BB-
' and its counterparty credit and financial strength ratings on
HealthMarkets' core subsidiaries -- MEGA Life & Health Insurance
Co. and Mid-West National Life Insurance Co. of TN -- to 'BB+'
from 'BBB-'. Standard & Poor's also said that it lowered its
counterparty credit and financial strength ratings on Chesapeake
Life Insurance Co., a strategically important subsidiary of the
HealthMarkets group, to 'BB' from 'BB+'. At the same time,
Standard & Poor's assigned a negative outlook to all these
companies.
At the holding company's request, Standard & Poor's subsequently
withdrew all of these ratings.
"With the advent of health care reform, there is a heightened
level of uncertainty regarding whether insurers will be able to
continue offering the limited-benefit types of policies
HealthMarkets has traditionally sold," noted Standard & Poor's
credit analyst Jon Reichert. "Although HealthMarkets has also
sold supplemental health insurance policies and expects to
continue to sell them, the limited-benefit policies have been the
driving force behind the company's profitability."
To address this issue, management plans to increase the company's
emphasis on selling supplemental types of policies and is
transforming HealthMarkets into more of a distribution company.
Under the new distribution subsidiary, Insphere Insurance
Solutions, formed in mid-2009, HealthMarkets agents sell
HealthMarkets products and provide various life, health, and long-
term care insurance products, as well as annuities, through
marketing agreements with other national insurance carriers. With
the additional start-up expenses associated with Insphere, as well
as the impact of shifting the company's product portfolio away
from the higher-premium limited-benefit policies toward lower-
premium supplemental health policies, Standard & Poor's expects
that HealthMarkets' adjusted EBITDA will decline by more than 50%
over the next three years from approximately $130 million in 2009.
In addition, S&P expects that the company's fixed-charge coverage
will decline by a commensurate percentage but remain at more than
2x.
S&P considers HealthMarkets' statutory capitalization to be weak.
Management's practice to allow its primary operating companies to
be strongly capitalized on a regulatory basis does not fully
capture S&P's view of capital requirements for the consolidated
organization. S&P's criteria incorporate adjustments for holding-
company debt in excess of 20% of total capitalization into the
capital adequacy calculation. At year-end 2009, HealthMarkets'
pro forma consolidated statutory capitalization -- as calculated
by Standard & Poor's capital model, after adjusting for the
effects of double leverage -- was deficient at the 'BBB' level.
(Excluding the double leverage adjustment, capitalization is
redundant at the 'AAA' level.) The group's capital did increase to
$317 million at year-end 2009 from $289 million at year-end 2008,
with the NAIC risk-based capital ratio increasing to more than
500% (on a company action level basis) from 331% at year-end 2008.
The company estimates it has about $200 million of excess capital
above the 250% company action level.
HOLDINGS GAMING: S&P Downgrades Corporate Credit Rating to 'SD'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Pittsburgh, Pa.-based Holdings Gaming Borrower L.P. to
'SD' (selective default) from 'CCC'. A final determination of the
company's corporate credit rating will be made upon the review of
all final terms and conditions of the pro forma capital structure,
and will also incorporate S&P's updated expectations for operating
performance. At the current time, S&P expects to raise the
corporate credit rating back to 'CCC' with a negative outlook.
At the same time, S&P lowered its issue-level rating on HGB's
$100 million first-loss term loan to 'D' from 'CC' and withdrew
S&P's 'CCC+' issue-level and '2' recovery ratings on the company's
$10 million revolving credit facility. These actions follow the
recent repurchase of the first-loss term loan at a discount to par
and the termination of the revolving credit commitment under the
terms of an amendment to HGB's first-lien credit facility.
Finally, S&P revised its recovery rating on the company's
$305 million first-lien first-out term loan to '3', indicating its
expectation of meaningful (50% to 70%) recovery for lenders in the
event of a payment default, from '2'. S&P lowered its issue-level
rating on this debt to 'CCC' -- at the same level as its expected
'CCC' corporate credit rating on the company following its review
of its pro forma capital structure -- from 'CCC+', in accordance
with S&P's notching criteria for a '3' recovery rating. The
revision of the recovery rating is based on S&P's expectation for
a more significant decline in cash flow in its simulated default
scenario than in its previous analysis, based on S&P's preliminary
understanding of the pro forma capital structure.
"The rating downgrade actions reflect S&P's assessment that HGB's
recent repayment of its first-loss term loan at a discount to par
is tantamount to a default given the distressed financial
condition of the company and S&P's previously stated concerns
around HGB's ability to service its capital structure," explained
Standard & Poor's credit analyst Michael Listner.
Additionally, as part of this transaction, HGB's $150 million
second-lien term loan (not rated), which was supported by a
collateral pledge from two Detroit-based pension funds, was
assumed by those funds and converted to an unsecured note. While
S&P does not rate the second-lien term loan, S&P also view this
conversion of the second-lien debt as a restructuring of those
obligations that is tantamount to a default. The loss of a
collateral pledge, as well as a noncash accrual of interest, which
will be substituted for the prior cash payment of interest,
reduces the value of this capital, in S&P's view. Funding for the
debt repayment was achieved through an equity contribution from
the company's majority owner, as well as additional equity from
the aforementioned pension funds. Funds in addition to those
required for the debt repayment were used to fund the
$16.5 million licensing payment for table games and provide the
company with additional liquidity.
In November 2009, S&P lowered its corporate credit rating on HGB
to 'CCC', signaling its expectation that the company would be
challenged to service its capital structure and would likely need
to restructure its debt obligations given trends in operating
performance. This recapitalization will reduce HGB's consolidated
debt balance and reduce cash interest expense. S&P remain
concerned, however, about the company's ability to generate
sufficient levels of cash flow to support the pro forma capital
structure and potential future claims on cash, given the
substantial level of noncash interest that will accrue on equity
and junior debt positions. Therefore, following S&P's review of
the final terms of HGB's pro forma capital structure, S&P expects
to raise the corporate credit rating only to 'CCC' with a negative
outlook. S&P's review will incorporate its revised operating
assumptions, which will also consider the impact of table games at
the property.
IMAGEWARE SYSTEMS: Files Form 10-Q Report for June 2009 Qtr
-----------------------------------------------------------
ImageWare Systems, Inc., has filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q for the
quarterly period ended June 30, 2009. The Company said net loss
available to common shareholders was $1,559,000 for the 2009
second quarter from $1,371,000 for the 2008 second quarter.
Revenues were $1,645,000 for the 2009 second quarter from
$1,667,000 for the 2008 second quarter.
The Company said net loss available to common shareholders was
$2,708,000 for the six months ended June 2009 from $5,153,000 for
the 2008 first half. Revenues were $2,959,000 for the 2009 first
half from $3,050,000 for the 2008 first half.
At June 30, 2009, the Company had total assets of $5,400,000
against total liabilities of $8,149,000, resulting in
shareholders' deficit of $2,749,000.
According to the Company's Form 10-Q, there is substantial doubt
about the Company's ability to continue as a going concern. The
Company cited continuing losses, negative working capital and
negative cash flows from operations.
In May 2008, the AMEX removed the Company's common stock from
being listed on their exchange as we failed to comply with AMEX's
continued listing standards. In December 2008, the Company's
common stock was removed from being quoted on the Over-the-Counter
Bulletin Board as it failed to make the required filings with the
SEC in the required timeframe. As of the end of the third quarter
of 2008, the Company was faced with limited funds for operations
and were compelled to suspend SEC filings and the associated costs
until such time as the Company had sufficient resources to cover
ongoing operations and the expenses of maintaining compliance with
SEC filing requirements.
"There is no assurance that we will be able to attain compliance
with SEC filing requirements in the future, and if we are able to
attain compliance, there is no assurance we will be able to
maintain compliance. If we are not able to attain and maintain
compliance for minimum required periods, we will not be eligible
for re-listing on the Over-the-Counter Bulletin Board or other
exchanges," the Company said.
Despite securing financing arrangements in 2008 and 2009, the
Company said additional new financing will be required to fund
working capital and operations should the Company be unable to
generate positive cash flow from operations in the near future.
The Company is exploring the possible sale of equity securities or
debt financing. However, there can be no assurance that
additional financing will be available.
Insufficient funds will require the Company to sell certain of the
Company's assets or license the Company's technologies to others.
A full-text copy of the Company's June 2009 Form 10-Q report is
available at no charge at http://ResearchArchives.com/t/s?63fe
About ImageWare Systems
Headquartered in San Diego, California, ImageWare Systems, Inc. is
a leader in the emerging market for software-based identity
management solutions, providing biometric, secure credential, law
enforcement and enterprise authorization. Its ?flagship? product
is the IWS Biometric Engine. Scalable for small city business or
worldwide deployment, the Company's biometric engine is a multi-
biometric platform that is hardware and algorithm independent,
enabling the enrollment and management of unlimited population
sizes. The Company's identification products are used to manage
and issue secure credentials, including national IDs, passports,
driver licenses, smart cards and access control credentials. Its
law enforcement products provide law enforcement with integrated
mug shot, fingerprint LiveScan and investigative capabilities.
The Company also provides comprehensive authentication security
software.
INFOLOGIX INC: Files Prospectus for Hercules' Resale of Shares
--------------------------------------------------------------
InfoLogix, Inc., filed with the Securities and Exchange Commission
on May 20 a prospectus relating to the sale from time to time by
Hercules Technology I, LLC, as selling stockholder, for its own
account, of up to a total of 3,364,738 shares of InfoLogix common
stock, including up to an aggregate of 672,948 shares of InfoLogix
common stock issuable upon the exercise of a warrant.
InfoLogix will not receive any of the proceeds from the sale of
the shares of InfoLogix common stock by the selling stockholder.
However, InfoLogix will receive the proceeds from the exercise of
the warrant by the selling stockholder, if any, to the extent the
warrant is not exercised on a cashless basis.
The selling stockholder may sell all or a portion of the shares of
common stock it beneficially owns and offered hereby from time to
time directly or through one or more underwriters, broker-dealers
or agents. The sales may be conducted in the open market or in
privately negotiated transactions and at prevailing market prices,
fixed prices or negotiated prices. The selling stockholder will
bear all discounts, concessions, commissions and similar expenses,
if any, attributable to the sale of shares. InfoLogix will bear
the other costs, expenses, and fees in connection with the
registration of the shares.
InfoLogix will not control or determine the price at which the
selling stockholder sells its shares and InfoLogix does not know
when or in what amount the selling stockholder may offer the
shares for sale.
A full-text copy of the prospectus is available at no charge
at http://ResearchArchives.com/t/s?6401
About InfoLogix Inc.
Based in Hatboro, Pennsylvania, InfoLogix, Inc. (NASDAQ: IFLG) --
http://www.infologix.com/-- provides end-to-end solutions for
electronic medical record and supply chain implementation and
mobilization, with experience in over 2,200 hospitals and
businesses nationwide. InfoLogix assists its healthcare and
commercial customers by implementing and optimizing EMR and SCM
systems, offers mobility to caregivers and workforces by making
data accessible directly at the point of care or point of
activity, and manages operations with services to improve clinical
and financial performance and supply chain with services to drive
greater efficiency.
The Company's balance sheet at March 31, 2010, showed $34.0
million in total assets and $39.0 million in total liabilities,
for a total stockholders' deficit of $4.9 million.
McGladrey & Pullen, LLP, in Blue Bell, Pa., 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 from operations, has negative working capital and
an accumulated deficit as of December 31, 2009.
INFOLOGIX INC: Forms Independent Panel to Review Options
--------------------------------------------------------
InfoLogix, Inc.'s board of directors has initiated a review of
strategic alternatives to address various financial and
operational challenges facing the Company and to identify the most
effective means for optimizing value for stockholders, including
reviewing proposals for additional financing, further
restructuring its debt and effecting one or more strategic
transactions. In response to such proposals and to explore a
broad range of strategic alternatives, the Board has met and
formed a special committee of independent directors, comprised of
Mel Keating, Thomas Miller and Thomas Lynch. The Committee is
working with financial advisors to assist in its review of
strategic alternatives and, upon completion of its review, will
make its recommendation to the Board.
There is no assurance that a review of strategic alternatives will
result in the proposal or completion of any transaction with
acceptable terms. The Company does not expect to update the
market with any further information on the process unless and
until disclosure is deemed appropriate.
About InfoLogix Inc.
Based in Hatboro, Pennsylvania, InfoLogix, Inc. (NASDAQ: IFLG) --
http://www.infologix.com/-- provides end-to-end solutions for
electronic medical record and supply chain implementation and
mobilization, with experience in over 2,200 hospitals and
businesses nationwide. InfoLogix assists its healthcare and
commercial customers by implementing and optimizing EMR and SCM
systems, offers mobility to caregivers and workforces by making
data accessible directly at the point of care or point of
activity, and manages operations with services to improve clinical
and financial performance and supply chain with services to drive
greater efficiency.
The Company's balance sheet at March 31, 2010, showed $34.0
million in total assets and $39.0 million in total liabilities,
for a total stockholders' deficit of $4.9 million.
McGladrey & Pullen, LLP, in Blue Bell, Pa., 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 from operations, has negative working capital and
an accumulated deficit as of December 31, 2009.
INTERPUBLIC GROUP: Fitch Affirms Issuer Default Rating at 'BB+'
---------------------------------------------------------------
Fitch Ratings has affirmed Interpublic Group of Companies' Issuer
Default Rating and debt ratings:
-- IDR at 'BB+';
-- Senior unsecured notes (including convertibles) at 'BB+';
-- Bank credit facility at 'BB+';
-- Cumulative convertible perpetual preferred stock at 'BB-'.
The Rating Outlook is Positive.
The ratings continue to reflect these:
-- IPG's rating and Positive Rating Outlook reflect its position
in the industry as one of the largest global advertising
holding companies, its diverse client base and the company's
ample liquidity.
-- It is Fitch's view that IPG's business risk profile and
credit metrics could begin to reflect investment-grade
characteristics within the upcoming quarters. Fitch believes
management has the willingness, ability and incentive to
achieve investment-grade ratings. Fitch notes that the
company's major peers have investment-grade ratings.
-- Credit metrics have improved significantly from 2005 levels,
as leverage is down from 12.5 times to 3.2x. While 2009
was challenging for IPG and all global advertising agency
holding companies, Fitch has always incorporated a
potential downturn into IPG's ratings.
-- While advertising is a cyclical industry, Fitch recognizes
that IPG and its advertising holding-company peers have
reduced exposure to U.S. advertising cycles, as they have
diversified into international markets and marketing services
businesses. In addition, the risk of revenue cyclicality is
balanced by the company's, and the other GHC's, scalable cost
structure.
Several quarters of improving organic revenue performance could
lead to an upgrade of IPG's IDR to investment grade. Conversely,
organic revenue declines of 10% or more, resulting in leverage
weakening to 4x could lead to a negative rating action.
As of the last twelve months ended March 31, 2010, IPG generated
$450 million in free cash flow, converting a meaningful percentage
(70%) of EBITDA to FCF, a higher percentage than Fitch would
expect over the long term (40%-60%). Under Fitch's base case
model FCF is expected to be positive at approximately $300 million
to $450 million. Fitch's FCF expectations assume a neutral
working capital inflow in 2010 versus 2009 ($46 million).
The company's $65 million in capital expenditures (excluding
equipment rents) as a percentage of revenue was 1.1%, reflecting
the low capital intensity of the advertising agency business.
Furthermore, Fitch believes the March 2010 LTM spend is at or near
maintenance levels, reflecting Fitch's belief that expenditures
are largely discretionary on the part of management and could be
reduced during periods of operating pressure. Fitch has modeled
2010 capital expenditures of approximately $100 million.
The company publicly disclosed that pension contributions for 2010
would be approximately $33 million (with approximately
$23.5 million contributed towards foreign pension plans). Fitch
believes these cash contributions are manageable and are
incorporated into Fitch's FCF forecast. Fitch does not expect the
company to institute a dividend in 2010.
As of March 31, 2010 (1Q10), IPG's liquidity position is supported
by $1.9 billion in cash. The company's new bank credit facility
due 2013 provides $650 million in capacity and has $631 million in
availability (reduced by $19 million in letters of credit). In
order to preserve liquidity under the revolver, IPG established a
separate uncommitted credit facility to facilitate the issuance of
LOCs; total facility sized at approximately $68 million
(GBP45 million) with $63 million in LOCs issued. This LOC
facility may only be used for LOC issuances and is not available
for liquidity purposes. While the company maintains approximately
$415 million in non-U.S. uncommitted credit facilities
($86.3 million was outstanding), the available capacity under
these uncommitted facilities are not factored into Fitch's
liquidity considerations.
As of March 31, 2010, IPG had approximately $1.2 billion in senior
unsecured notes. In the near term, $191 million is due on
Nov. 15, 2010; and $36 million is due Aug. 15, 2011. Cash
balances, supplemented by FCF generation during this period,
should provide ample flexibility to fund these maturities. The
company publicly indicated its intention to use cash to fund the
2010 maturity.
IPG's $600 million in convertible notes become puttable in 2012
($400 million) and 2013 ($200 million). The rating incorporates
Fitch's belief that IPG should have the liquidity to satisfy any
notes put to the company for redemption.
Fitch expects liquidity to be sufficient to cover earn-outs and a
limited amount in acquisitions (Fitch has modeled approximately
$100 million in new acquisitions) as well as its maturing debt
obligations.
The $650 million bank credit facility contains three key covenants
(minimum EBITDA, leverage ratio and interest coverage). Fitch
expects that IPG will not have issues in meeting its financial
covenants, as EBITDA is expected to improve from its cyclical
lows. In the event that EBITDA were to decline ('double dip'
recession), Fitch believes the company could potentially obtain a
waiver or an amendment to resolve this issue. Such a negotiation
could involve amendment fees or potentially revised pricing.
Also, IPG could cancel the bank facility and cash collateralize
its existing LOCs ($19 million). The company does not utilize the
revolver for operations, and the company's significant cash
balance should provide sufficient liquidity.
Unadjusted gross leverage at the 1Q10 was 3.2x, an increase from
2.6x in 1Q09 but a dramatic improvement when compared to 12.4x in
2005. The decline from 1Q09 was driven by the cyclical declines
in EBITDA, and offset some what by net reductions in debt balances
of approximately $200 million. Fitch expects leverage to
strengthen and be in the range of 2.75x to 3.0x.
Given Fitch's view that the advertising agency industry structure
will remain healthy over the long term, Fitch believes IPG should
be in a solid position to grow and maintain an improving and
ultimately stable credit profile. Fitch expects IPG to return to
positive organic revenue growth by the second half of the year.
Fitch expects revenues to be up in the low single digits, driven
by flat to low single digit organic revenue growth.
ITRON INC: Moody's Upgrades Corporate Family Rating to 'Ba3'
------------------------------------------------------------
Moody's Investors Service upgraded Itron Inc.'s corporate family
rating to Ba3 from B1, its probability of default rating to Ba3
from B1, and its senior secured ratings to Ba2 from Ba3. The
ratings upgrade reflects the substantial debt reduction Itron has
achieved together with Moody's belief that Itron's operating
results are likely to improve faster than previously expected
driven by the deployment of Advanced Metering Infrastructure
contracts in North America. Consequently, previous concerns over
tightness to bank financial covenants have been extinguished while
the company's recent initiative to expand its revolver enhances
its flexibility to fund the potential put of its convertible
senior subordinated notes next year. The ratings outlook remains
positive.
Rating Upgrades:
-- Corporate Family Rating, Upgraded to Ba3 from B1
-- Probability of Default Rating, Upgraded to Ba3 from B1
-- Senior Secured Bank Credit Facility, Upgraded to Ba2, LGD3,
31% from Ba3, LGD3, 32%
Key strengths within Itron's Ba3 rating include the company's
strong market position as one of the top three global metering
companies as well as its competitive positioning with respect to
AMI. The rating also benefits from a certain level of operating
stability provided by Itron's strong backlog level, good degree of
recurring replacement revenues and its favorable geographic and
customer diversification characteristics. The rating is
constrained by the company's singular industry focus and resulting
exposure to the spending cycles of various utilities, which can be
influenced by both the level of general economic activity and the
pace at which technological change is adopted. Some uncertainty
as to the sustainability of near term operating momentum which is
partially influenced by Government stimulus spending is also
considered within the rating. Additionally, industry competition
remains intense and may intensify further over time as the smart-
grid evolves and non-traditional players potentially enter the
market.
The positive ratings outlook signals that Itron's rating could
head higher should near term momentum be sustained leading to
adjusted Debt/ EBITDA remaining below 3.5x and Funds from
Operations to Debt above 20%.
Moody's last rating action was on March 18, 2010, when Moody's
affirmed all Itron's ratings and revised the ratings outlook to
positive from stable.
Headquartered in Liberty Lake, Washington, Itron is a leading
provider of metering and related communication systems to
electric, gas and water utilities globally. Revenues for the
trailing twelve months ended March 31, 2010 totaled approximately
$1.8 billion.
JAMES EDWARD: Files Schedules of Assets and Liabilities
-------------------------------------------------------
James Edward and Joette Elizabeth Gilbert ask the U.S. Bankruptcy
Court for the District of Colorado a summary of schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $7,500,000
B. Personal Property $243,548
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $6,685,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $104,921
----------- -----------
TOTAL $7,743,548 $6,789,921
Edwards, Colorado-based James Edward Gilbert and Joette Elizabeth
Gilbert filed for Chapter 11 bankruptcy protection on February 16,
2010 (Bankr. D. Colo. Case No. 10-12806). Robert Padjen, Esq.,
who has an office in Englewood, Colorado, assists the Debtors in
their restructuring efforts. The Debtors estimated their assets
at $10,000,001 to $50,000,000, and debts at $1,000,001 to
$10,000,000.
J & J CONSTRUCTION: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: J & J Construction Group, Inc.
560 Stonemoor Circle
Roswell, GA 30075
Bankruptcy Case No.: 10-76169
Chapter 11 Petition Date: May 31, 2010
Court: U.S. Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: Rodney L. Eason, Esq.
The Eason Law Firm
6150 Old National Highway, Suite 200
College Park, GA 30349-4367
Tel: (770) 909-7200
Fax: (770) 909-0644
E-mail: reason@easonlawfirm.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Finia Jahangard, president.
KAUPTHING BANK: Settles Dispute with Bank of Tokyo-Mitsubishi
-------------------------------------------------------------
Kaupthing Bank HF has won approval in U.S. proceedings to settle a
dispute with Bank of Tokyo-Mitsubishi UFJ Ltd. over claims to
$50 million transferred in connection with a foreign currency
exchange agreement, Bankruptcy Law360 reports.
Law360 relates Judge Martin Glenn issued an order Wednesday in the
U.S. Bankruptcy Court for the Southern District of New York
approving the settlement, allowing Kaupthing to pay $1.9 million.
About Kaupthing Bank
Headquartered in Reykjavik, Kaupthing Bank --
http://www.kaupthing.com/-- is Iceland's largest bank and among
the Nordic region's 10 largest banking groups. With operations in
more than a dozen countries, the bank offers a range of services
including retail banking, corporate finance, asset management,
brokerage, private banking, treasury, and private wealth
management. Kaupthing was created by the 2003 merger of
Bunadarbanki and Kaupthing Bank. In October 2008 the Icelandic
government assumed control of Kaupthing Bank after taking similar
measures with rivals Landsbanki and Glitnir.
As reported by the Troubled Company Reporter on Nov. 30, 2008,
Olafur Gardasson, assistant for Kaupthing Bank hf., in a
proceeding under Act No. 21/1991, pending before the Reykjavik
District Court, and foreign representative of the Debtor, filed a
petition under chapter 15 of title 11 of the United States Code in
the United States Bankruptcy Court for the Southern District of
New York commencing the Debtor's chapter 15 case ancillary to the
Icelandic Proceeding and seeking recognition for the Icelandic
Proceeding as a "foreign main proceeding" under the Bankruptcy
Code and relief in aid of the Icelandic Proceeding.
LANGUAGE LINE: S&P Gives Negative Outlook; Keeps 'B+' Rating
------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Monterey, Calif.-based Language Line Holdings LLC to negative from
stable. Ratings on the company, including the 'B+' corporate
credit rating, were affirmed.
"The 'B+' corporate credit rating reflects S&P's belief that
leverage at Language Line will remain high or even rise further,
and that covenant compliance could remain thin for several
quarters," said Standard & Poor's credit analyst Tulip Lim.
It also reflects the company's vulnerability to clients moving
their translation services in-house (especially Spanish-English
translation) and continued pricing pressure in the over-the-phone
interpretation market. Language Line's strong position in the OPI
market and its good EBITDA margin are positives that minimally
offset these risks.
Language Line is the leading outsourced OPI provider. Less than
25% of the OPI market is outsourced. Clients typically use
Language Line to supplement in-house multilingual capabilities.
Spanish-language OPI accounts for slightly more than 70% of total
billed minutes, leaving the company vulnerable to clients moving
Spanish-English translation services in-house as the volume for
Spanish-English translation demand grows, Spanish-language ability
becomes more prevalent, and it becomes economical to reduce
outsourcing.
Four industries -- insurance, financial services, health care, and
government -- accounted for more than 70% of revenue.
Consolidation or weakness in these industries could affect
Language Line's operating performance. The company's customer
base is more diversified, with its largest customer accounting for
less than 5% of its sales.
Adjusted leverage, which includes capitalized operating leases and
the mandatorily redeemable preferred stock as debt, was 5.9x for
the 12 months ended March 31, 2010, up from 5.7x at Dec. 31, 2009.
Adjusted interest coverage was 1.6x, unchanged from the year ended
Dec. 31, 2009. S&P expects discretionary cash flow (after
distributions to the parent holding company) to be sufficient over
the near-to-intermediate term to cover operating needs and
maturities. Capital spending requirements are relatively small.
LEAP WIRELESS: Cricket Wins Trademark Suit vs. GSM Cellular
-----------------------------------------------------------
Cricket Communications, Inc., a wholly owned subsidiary of Leap
Wireless International, Inc., has been awarded summary judgment, a
permanent injunction and nearly $78,000 in attorneys' fees in a
trademark infringement case, putting an end to a lawsuit filed by
Cricket against Arizona-based GSM Cellular in 2008.
In its statement, Cricket said GSM Cellular took numerous actions
to mislead consumers that its retail cellular stores were
affiliated with Cricket, including naming its business Kricket,
and prominently displaying the Cricket trademark and logo on
signs, banners, posters, retail displays and store vehicles.
Additionally, GSM Cellular engaged in the illicit sale and
distribution of Cricket wireless products, initiated unauthorized
activation of phones on the Cricket wireless network and
fraudulently accepted payments intended to compensate Cricket for
providing wireless communications services.
Prior to filing the lawsuit, Cricket repeatedly placed GSM
Cellular on notice that its actions violated Cricket's
intellectual property rights. Cricket's legal counsel issued
multiple letters to GSM Cellular attempting to resolve the
dispute, all to no avail.
Cricket's legal counsel was Lisa Martens and Andrew Abrams of Fish
& Richardson in San Diego, California and Shane Olafson with
Phoenix-based Lewis and Roca LLP.
About Cricket
San Diego, California-based Cricket Communications, Inc. --
http://www.mycricket.com/-- is the pioneer of simple and
affordable unlimited wireless services with no long-term
commitments or credit checks required, serving more than 5.4
million customers in 35 states and the District of Columbia.
About Leap Wireless
Headquartered in San Diego, California, Leap Wireless
International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/
-- and its joint ventures provide wireless services in 34 states
and the District of Columbia and hold licenses in 35 of the top 50
U.S. markets. Through its affordable, flat-rate service plans,
Cricket offers customers a choice of unlimited voice, text, high-
speed data and mobile Web services.
Leap spun out from Qualcomm Inc. in 1998 and expanded primarily
into rural markets. It has customers in 34 states and annual
sales around $2.3 billion, making it the seventh-largest wireless
carrier in the U.S., according to The Wall Street Journal.
At March 31, 2010, the Company had total assets of $5,259,706,000
from total liabilities of $3,578,532,000 and redeemable non-
controlling interests of $51,768,000, resulting in stockholders'
equity of $1,629,406,000.
The Troubled Company Reporter on February 2, 2010, citing The Wall
Street Journal's Jeffrey McCracken and Niraj Sheth, said Leap
Wireless has hired Goldman Sachs Group and formed a special board
committee to look into selling the company or merging with rivals.
* * *
According to the Troubled Company Reporter on April 29, 2009,
Standard & Poor's Ratings Services revised its outlook on Leap
Wireless International Inc. to positive from stable. At the same
time, S&P affirmed its ratings on the San Diego-based wireless
carrier, including the "B-" long-term corporate credit rating and
"B+" secured bank loan rating on subsidiary Cricket Communications
Inc.
LEAP WIRELESS: Reports Results of May 20 Stockholders Meeting
-------------------------------------------------------------
The Annual Meeting of Stockholders of Leap Wireless International,
Inc., was held on May 20, 2010. At the meeting, the Stockholders
voted to elect eight directors to hold office until the next
Annual Meeting or until their successors have been elected and
have qualified:
* John H. Chapple;
* John D. Harkey, Jr.;
* S. Douglas Hutcheson;
* Ronald J. Kramer;
* Robert V. LaPenta;
* Mark H. Rachesky, M.D.;
* William A. Roper, Jr.; and
* Michael B. Targoff
The selection of PricewaterhouseCoopers LLP as the Company's
independent registered public accounting firm for the fiscal year
ending December 31, 2010, was also ratified.
About Leap Wireless
Headquartered in San Diego, California, Leap Wireless
International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/
-- and its joint ventures provide wireless services in 34 states
and the District of Columbia and hold licenses in 35 of the top 50
U.S. markets. Through its affordable, flat-rate service plans,
Cricket offers customers a choice of unlimited voice, text, high-
speed data and mobile Web services.
Leap spun out from Qualcomm Inc. in 1998 and expanded primarily
into rural markets. It has customers in 34 states and annual
sales around $2.3 billion, making it the seventh-largest wireless
carrier in the U.S., according to The Wall Street Journal.
At March 31, 2010, the Company had total assets of $5,259,706,000
from total liabilities of $3,578,532,000 and redeemable non-
controlling interests of $51,768,000, resulting in stockholders'
equity of $1,629,406,000.
The Troubled Company Reporter on February 2, 2010, citing The Wall
Street Journal's Jeffrey McCracken and Niraj Sheth, said Leap
Wireless has hired Goldman Sachs Group and formed a special board
committee to look into selling the company or merging with rivals.
* * *
According to the Troubled Company Reporter on April 29, 2009,
Standard & Poor's Ratings Services revised its outlook on Leap
Wireless International Inc. to positive from stable. At the same
time, S&P affirmed its ratings on the San Diego-based wireless
carrier, including the "B-" long-term corporate credit rating and
"B+" secured bank loan rating on subsidiary Cricket Communications
Inc.
LEAP WIRELESS: SAC Capital Advisors Holds 5.1% of Shares
--------------------------------------------------------
SAC Capital Advisors LP, SAC Capital Advisors Inc., and Steven A.
Cohen disclosed that as of May 18, 2010, they may be deemed to
beneficially own 3,963,717 shares or roughly 5.1% of the common
stock of Leap Wireless International, Inc.
As of May 6, 2010, the funds held 3,897,452 shares or roughly 4.9%
of Leap common stock.
About Leap Wireless
Headquartered in San Diego, California, Leap Wireless
International, Inc. (NASDAQ: LEAP) -- http://www.leapwireless.com/
-- and its joint ventures provide wireless services in 34 states
and the District of Columbia and hold licenses in 35 of the top 50
U.S. markets. Through its affordable, flat-rate service plans,
Cricket offers customers a choice of unlimited voice, text, high-
speed data and mobile Web services.
Leap spun out from Qualcomm Inc. in 1998 and expanded primarily
into rural markets. It has customers in 34 states and annual
sales around $2.3 billion, making it the seventh-largest wireless
carrier in the U.S., according to The Wall Street Journal.
At March 31, 2010, the Company had total assets of $5,259,706,000
from total liabilities of $3,578,532,000 and redeemable non-
controlling interests of $51,768,000, resulting in stockholders'
equity of $1,629,406,000.
The Troubled Company Reporter on February 2, 2010, citing The Wall
Street Journal's Jeffrey McCracken and Niraj Sheth, said Leap
Wireless has hired Goldman Sachs Group and formed a special board
committee to look into selling the company or merging with rivals.
* * *
According to the Troubled Company Reporter on April 29, 2009,
Standard & Poor's Ratings Services revised its outlook on Leap
Wireless International Inc. to positive from stable. At the same
time, S&P affirmed its ratings on the San Diego-based wireless
carrier, including the "B-" long-term corporate credit rating and
"B+" secured bank loan rating on subsidiary Cricket Communications
Inc.
LEHIGH COAL: Allowed to Sell Assets in Debt Exchange
----------------------------------------------------
Bill Rochelle at Bloomberg News reports that Lehigh Coal &
Navigation Co. was authorized by the bankruptcy judge on May 28 to
sell the assets to a secured creditor in exchange for $14.8
million in debt. There were no competing bids at auction.
Bloomberg recounts that the $5.5 million in financing for the
Chapter 11 case matured in January. The lenders would permit use
of cash only if an auction was scheduled promptly.
At a hearing on June 22, the judge will revisit the question of
whether the reorganization should be converted to a liquidation in
Chapter 7 or a trustee appointed in Chapter 11.
Lehigh Coal & Navigation Co. -- http://www.lcncoal.com/-- has
been mining anthracite coal since the late 1700s, with 8,000 acres
of coal-producing properties. Creditors filed an involuntary
Chapter 11 petition against the Company on July 15, 2008 (Bankr.
M.D. Penn. Case No. 08-51957). The involuntary filing was the
third filed against the Company in less than four years. Jeffrey
Kurtzman, Esq., at Klehr, Harrison, Harvey, Branzburg and Ellers,
LLP, represents the petitioners. The Debtor consented to being in
Chapter 11 in August 2008.
LEHMAN BROTHERS: Examiner Asks for Release From Claims on Report
----------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Anton Valukas, the
examiner who wrote a 2,209-page report about the downfall of
Lehman Brothers Holdings Inc., is asking the Bankruptcy Court to
give him a release, prevent anyone from suing him and his lawyers,
and prohibit anyone from calling him as a witness. At the June 17
hearing, Mr. Valukas also wants to work out arrangements where he
can provide assistance when requested.
In his report filed in February, which was later unsealed in
March, Mr. Valukas concluded there were what he called colorable
claims against senior executives, auditor Ernst & Young LLP, and
some banks.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Fifth Third Stuck with Filing Date for Closeout
----------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Fifth Third
Structured Large Cap Plus Fund lost a dispute with the trustee for
the brokerage subsidiary of Lehman Brothers Holdings Inc. and as a
result will recover $18.2 million less than were it successful.
The Fifth Third fund, an affiliate of the Cincinnati-based bank,
used the Lehman brokerage as its prime broker for short selling.
The Lehman trustee took the position that the account should be
valued as of the bankruptcy date in September 2008. Fifth Third
wanted to use a date in March 2009 when the account was finally
closed as the result of an interim settlement agreement. U.S.
Bankruptcy Judge James M. Peck wrote a 14-page opinion on June 1
saying that the bankruptcy filing date is the "immutable element"
of every liquidation under the Securities Investor Protection Act.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Investors Sue Officers for Unloading Properties
----------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that investors who were
sold real estate investments by Lehman Brothers Holdings Inc. sued
company officers and non-bankrupt Lehman investment funds,
contending Lehman unloaded properties at the top of the market
when the value was already less than they invested.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Barclays Sues Private Equity Funds
---------------------------------------------------
On March 16, 2010, Barclays Capital, Inc., filed separate
complaints against PCCP Mezzanine Recovery Partners II, L.P., and
its affiliates and Trilantic Capital Partners III, L.P., and
Trilantic Capital Partners IV, L.P., in the Supreme Court of the
State of New York for the County of New York, alleging five state
law causes of action:
(1) quantum meruit/breach of implied contract,
(2) quantum meruit/promissory estoppel,
(3) unjust enrichment,
(4) constructive trust, and
(5) breach of fiduciary duty.
The defendants in each of the Companion Cases are private equity
funds that failed to comply with their legal obligations to pay
millions of dollars of fees to a Barclays business unit in
connection with the placement of investments with defendants'
funds. The business unit, known as Private Investment Management
or "PIM," was one that Barclays purchased from Lehman Brothers
Inc. pursuant to the September 2008 Asset Purchase Agreement.
No dispute exists as to whether Barclays purchased the PIM
business. The only dispute is whether defendants, each of which
are non-debtor private equity funds, have legal obligations to
pay placement fees to the PIM business based upon agreements
reached prior to the Lehman Bankruptcy.
On April 15, 2010, the defendants in each of the Companion Cases
filed notices of removal pursuant to Section 1452(a) of Title 28
of the U.S. Bankruptcy Code asserting that federal jurisdiction
exists under Section 1134(b) of Title 28 because each case is
purportedly one "arising in or related to" the Lehman bankruptcy
case. Upon removal, the Companion Cases were assigned to the
Judge Naomi Reice Buchwald of the U.S. District Court for the
Southern District of New York. After a teleconference with the
parties, Judge Buchwald entered orders referring each of the
Companion Cases to the U.S. Bankruptcy Court for the Southern
District of New York in order to hear Barclays' anticipated
motion to remand or abstain.
Barclays now files the instant motion to remand the Companion
Cases for lack of jurisdiction under Section 1334(b) of Title 28,
or in the alternative to abstain and remand the cases under
Section 1334(c) of Title 28, or to remand on equitable grounds
under Section 1452(b) of Title 28.
Christopher E. Duffy, Esq., at Boies, Schiller & Flexner LLP, in
New York -- CDuffy@BSFLLP.com -- asserts that the Bankruptcy
Court should remand the Companion Cases for these alternative
reasons:
(1) The defendants' notices of removal fail to offer any
factual support for their assertion the Companion Cases
are ones "arising in" or "related to" the Lehman
Bankruptcy. To support this assertion, defendants thus
far have offered only vague references to (i) potential
claims they might have against the Lehman Bankruptcy
estate for indemnification or contribution in the event of
a judgment in favor of Barclays, and (ii) an unquantified
ownership relationship between the Lehman Estate and some
unidentified subset of the defendants in the Barclays v.
PCCP action (Adv. Pro. No. 10-3239). Subsequent to the
filing of the removal notices, Barclays has repeatedly
asked defendants' attorneys to provide written backup for
these assertions but the Defendants have failed to do so.
(2) Even if defendants come forward with response papers that
are sufficient to demonstrate "related to" jurisdiction
under Section 1334(b) of Title 28, the mandatory
abstention doctrine of Section 1334(c)(2) would
nevertheless require the Bankruptcy Court to abstain from
hearing the adversary proceedings. All of the mandatory
abstention factors are satisfied in Barclays' Motion to
Remand because:
-- Barclays' motion is timely;
-- its claims are based on state law claim;
-- its claims against defendants are not ones "arising
in" a bankruptcy case or "arising under" the
Bankruptcy Code;
-- there is no additional basis for federal
jurisdiction;
-- an action has already been commenced in state court;
and
-- the state court could timely adjudicate Barclays'
claims.
(3) Even if "related to" jurisdiction exists, and even if
mandatory abstention were somehow inapposite, the
Companion Cases should nevertheless be remanded pursuant
to the permissive abstention provision of Section 1334(c)
of Title 28 or the equitable remand provision of
Section 1452(b) of Title 28.
The Companion Cases raise issues of state law, not bankruptcy
law, Mr. Duffy asserts. The parties are all non-debtors, he
adds. Barclays submits that the proper route is to remand the
Companion Cases to New York County Supreme Court, which is fully
able to adjudicate them.
Mr. Duffy submitted a separate declaration in support of
Barclays' Motion to Remand.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Probe Blocked by U.S.-EU Regulator Dispute
-----------------------------------------------------------
A dispute between the U.S. audit regulator, Public Company
Accounting Oversight Board, and its European counterparts over
information sharing threatens to curb an investigation into
Lehman Brothers International Europe, according to a report by
AccountancyAge.
LBIE, a London-based subsidiary of Lehman Brothers Holdings Inc.,
played a key role in approving so-called repo transactions, an
artificial sale and buy-back deal that enabled LBHI to hide
billions of debts from regulators. LBHI transferred funds to
LBIE to conduct the repo transaction.
Under European law, information can only be shared with foreign
regulators if there are working arrangements on the basis of
reciprocity agreed between competent authorities.
The European Union, however, argues that reciprocity is non-
existent because Washington does not permit access to the
confidential working papers relating to U.S. auditors.
Consequently, the EU does not allow access by U.S. regulators to
European auditors, AccountancyAge reported.
A PCAOB spokeswoman said that for the years 2009 and 2010, the
U.S. regulator has been denied access to information necessary to
conduct inspections of firms in the United Kingdom and other
European Union countries.
Joseph Carcello, a member of the PCAOB's Investor Advisory Group,
said Lehman's case might be one inspection that is held up.
"Some of the more problematic accounting issues did happen in
Lehman's UK-based subsidiary," AccountancyAge quoted Mr. Carcello
as saying.
The Financial Reporting Council, U.K.'s audit watchdog, is also
inspecting Ernst & Young LLP's treatment of repo transactions in
the Lehman audit. Both the FRC and the PCAOB, however, are not
able to share information due to the stand-off between the two
regulators, AccountancyAge reported.
The FRC earlier demanded Ernst & Young to hand over documents
detailing its role in the collapse of LBHI. The move came after
the firm, which has served as LBHI's auditor, was accused of
professional malpractice in a report published by a bankruptcy
court-appointed examiner who made an investigation into LBHI's
bankruptcy filing.
The report showed that LBHI used the artificial sale and buy-
back deals, and was able to hide $50 billion or GBP32 billion of
debts despite checks by Ernst & Young.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also
bought Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEVI STRAUSS: Complete $446 Million 9-3/4% Senior Notes Offering
----------------------------------------------------------------
Levi Strauss & Co. completed its tender offer for any and all of
its outstanding $446.2 million aggregate principal amount of
9-3/4% Senior Notes due 2015 and EUR250.0 million aggregate
principal amount of 85/8% Senior Notes due 2013.
A total of approximately $415.5 million of the $446.2 million
aggregate principal amount of 93/4% Senior Notes due 2015 and
approximately EUR199.8 million of the EUR250.0 million aggregate
principal amount of 85/8% Senior Notes due 2013 were validly
tendered in the tender offer which expired at midnight, New York
City time, on May 19, 2010. These amounts include approximately
$411.4 million of U.S. Notes and EUR198.9 million of Euro Notes
which were previously tendered by the early tender deadline and
which were accepted and paid for by the company. The anticipated
payment date for accepted Notes tendered after the early tender
deadline but prior to the expiration of the tender offer is
Friday, May 21.
Banc of America Securities LLC acted as the Dealer Manager and
Solicitation Agent for the tender offer. DF King and Co., Inc.
served as the Information Agent.
On May 20, 2010, the trustee for the Notes, at the direction of
the company, issued notices stating that all of the Notes that
remain outstanding after the completion of the tender offer will
be redeemed on May 25, 2010.
About Levi Strauss & Co.
Headquartered in San Francisco, California, Levi Strauss & Co. --
http://www.levistrauss.com/-- is one of the world's leading
branded apparel companies. The Company designs and markets jeans,
casual and dress pants, tops, jackets and related accessories, for
men, women and children under the Levi's(R), Dockers(R) and
Signature by Levi Strauss & Co.(TM). The Company markets its
products in three geographic regions: Americas, Europe, and Asia
Pacific.
As of February 28, 2010, the Company's balance sheet showed total
assets of $2.9 billion and total liabilities of $3.1 billion,
resulting in a stockholders' deficit of $265,455,000.
* * *
The Troubled Company Reporter reported on April 26, 2010, that
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on San Francisco, Calif.-based Levi Strauss & Co.
The outlook is stable.
The TCR also reported that Moody's Investors Service assigned a B2
rating to Levi Strauss & Co proposed senior unsecured notes. All
other ratings including its B1 Corporate Family Rating were
affirmed. The rating outlook remains stable.
The TCR reported on April 7, 2010, that Fitch Ratings affirmed
Levi Strauss & Co.'s ratings: Issuer Default Rating at 'BB-';
$750 million Bank Credit Facility at 'BB+'; Senior unsecured notes
at 'BB-'; Senior unsecured term loan 'BB-'.
LEXARIA CORP: Posts $162,523 Net Loss in Q2 Ended April 30
----------------------------------------------------------
Lexaria Corporation filed its quarterly report on Form 10-Q,
reporting a net loss of $162,523 on $40,327 of revenue for the
three months ended April 30, 2010, compared with a net loss of
$213,257 on $67,167 of revenue for the same period ended April 30,
2009.
The Company's balance sheet as of April 30, 2010, showed
$3,339,441 in assets, $1,164,758 of liabilities, and $2,174,683 of
stockholders' equity.
Chang Lee LLP, in Vancouver, Canada, 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
October 31, 2009, The independent auditors noted that the Company
had recurring losses and requires additional funds to maintain its
planned operations.
A full-text copy of the quarterly report is available for free at:
http://researcharchives.com/t/s?6400
Based in Vancouver, British Columbia, Lexaria Corporation is an
independent natural gas and oil company engaged in the
exploration, development and acquisition of oil and gas properties
in the United States and Canada. The Company's entry into the oil
and gas business began on February 3, 2005. The Company has
offices in Vancouver and Kelowna, B.C., Canada.
LINCOLN HOLDINGS: Moody's Gives Stable Outlook; Keeps 'B2' Rating
-----------------------------------------------------------------
Moody's Investors Service has changed the outlook for LN
Acquisition Corp, a wholly-owned subsidiary of Lincoln Holdings
Enterprises Inc., to stable from negative. At the same time,
Moody's affirmed all ratings, including the corporate family
rating and the probability of default rating at B2.
The stable outlook reflects the positive trends in Lincoln's
operating performance which have developed in 2010 and the
reduction in leverage which began in late 2009. The stable
outlook is also supported by the improvement in Lincoln's overall
liquidity profile. In December 2009, the company obtained an
amendment to its credit facility that improved the headroom under
its financial covenants and as a result alleviated a key concern
raised by Moody's in 2009. The outlook incorporates Lincoln's
steady cash flow generation which has allowed the company to
voluntarily reduce debt levels in 2009 and is expected to provide
additional operating flexibility for the company in 2010.
Further, Moody's anticipates that strengthening order rates seen
in the first half of 2010 will continue over the near term and
support improving earnings trends in the latter half of the year
and into 2011.
The affirmation of the B2 corporate family rating reflects
Lincoln's relatively high leverage, small scale and exposure to
cyclical end markets. Conversely, the rating is supported by
Lincoln's strong margins, stable cash generation and a good
liquidity profile. The rating incorporates Lincoln's leading
market position in the lubrication equipment sector, its robust
product portfolio, as well as its geographic and end-market
diversification which helps offset the cyclicality of certain end
markets served by the company.
These ratings/assessments were affirmed:
-- B2 Corporate family rating;
-- B2 Probability-of-default rating;
-- B1 (LGD3, point estimate changed to 32% from 34%) on the
$25 million first lien revolving credit facility;
-- B1 (LGD3, point estimate changed to 32% from 34%) on the
$318 million first lien term loan; and
-- Caa1 (LGD5, point estimate changed to 84% from 85%) on the
$140 million second lien term loan.
The last rating action on Lincoln was on June 10, 2009, when the
outlook was changed to negative from stable.
Lincoln, headquartered in St. Louis, Missouri, is a global leader
in the design and manufacture of highly engineered automated
lubrication systems and tools for heavy grease. Lincoln's product
offering includes centralized, automated lubrication systems and
related lubrication tools and equipment which extend the useful
life and reduce repair and maintenance costs of application
critical equipment.
MCCLATCHY COMPANY: Shareholders Select 12 Directors
---------------------------------------------------
The McClatchy Company's shareholders elected directors and
approved the ratification of Deloitte & Touche LLP as the
Company's independent auditors by voting as follows:
Class A Common Stock
--------------------
Elizabeth Ballantine
Kathleen Foley Feldstein
S. Donley Ritchey
Class B Common Stock
--------------------
Leroy Barnes, Jr.
Molly Maloney Evangelisti
Larry Jinks
Brown McClatchy Maloney
William B. McClatchy
Kevin S. McClatchy
Theodore R. Mitchell
Gary B. Pruitt
Frederick R. Ruiz
About McClatchy
The McClatchy Company is the third largest newspaper company in
the United States, publishing 30 daily newspapers, 43 non-dailies,
and direct marketing and direct mail operations. McClatchy also
operates leading local websites in each of its markets which
extend its audience reach. The websites offer users comprehensive
news and information, advertising, e-commerce and other services.
Together with its newspapers and direct marketing products, these
interactive operations make McClatchy the leading local media
company in each of its premium high growth markets. McClatchy-
owned newspapers include The Miami Herald, The Sacramento Bee, the
Fort Worth Star-Telegram, The Kansas City Star, The Charlotte
Observer, and The News & Observer (Raleigh).
* * *
The Troubled Company Reporter said on Feb. 15, 2010, Moody's
Investors Service upgraded The McClatchy Company's Corporate
Family Rating to Caa1 from Caa2, Probability of Default Rating to
Caa1 from Caa2, and senior unsecured and unguaranteed note ratings
to Caa2 from Caa3, concluding the review for upgrade initiated on
January 27, 2010. The upgrades reflect McClatchy's improved
liquidity position and reduced near-term default risk following
completion of the company's refinancing, and its ability to
stabilize EBITDA performance through significant cost reductions.
The rating outlook is stable.
As reported by the TCR on January 14, 2010, Fitch Ratings placed
McClatchy's Issuer Default Rating of 'C' on Watch Positive.
Approximately $2 billion of debt is affected by Fitch's action.
The TCR on July 2, 2009, said Standard & Poor's Ratings Services
raised its corporate credit rating on McClatchy to 'CC' from 'SD'
(selective default). The rating outlook is negative. At the same
time, S&P raised its issue-level rating on each of McClatchy's
senior unsecured notes originally issued by Knight Ridder Inc. to
'C' from 'D'. All other outstanding ratings on the company were
affirmed.
MERCER INTERNATIONAL: Moody's Upgrades Corp. Family Rating to 'B3'
------------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating and
Probability of Default Rating of the Restricted Group of Mercer
International Inc to B3 from Caa1 to reflect the expected impact
on liquidity and operating results arising from the recent surge
in market pulp prices. Concurrently, the rating on Mercer's 9.25%
senior unsecured notes was upgraded to Caa1 from Caa2 and the
ratings outlook was changed to positive from stable. The
speculative grade liquidity rating was raised to SGL-2 from SGL-3.
The upgrade in Mercer's CFR to B3 reflects the longer-term
benefits that current market conditions are expected to have on
Mercer's liquidity profile and capital structure. The US
benchmark price for Northern Bleached Softwood Pulp has risen
approximately 55% since May 2009 to $1000 / metric tonne,
considerably higher than previously expected. At the same time,
Mercer's operating results are benefiting from the strength of the
US$ versus the Euro, its reporting currency. Although pulp prices
and exchange rates are cyclical and can turn quickly, Moody's
anticipates that current market conditions will allow Mercer to
build a sizable cash balance and reduce outstanding debt so as to
better withstand the next down cycle. Furthermore, material
improvements made to Celgar's cost structure are expected to
soften the impact of future market downturns. In particular, the
biomass co-generation project is expected to provide at least
C$20 million of incremental EBITDA per year, beginning in the
fourth quarter of 2010.
The ratings continue to be constrained by the vulnerability of
Mercer's revenues and operating results to highly cyclical
commodity pulp prices and exchange rates and the considerable
amount of debt in Mercer's capital structure. Approximately
US$66 million of convertible subordinated notes are due in January
2012. These notes could be called and converted to equity as
early as mid- 2011 if the consolidated group's stock price remains
above $3.30 (ticker: MERC). The positive outlook reflects the
possibility of an upgrade should Mercer permanently reduce debt
while maintaining a meaningful cash position. The outlook could
be stabilized or lowered if Mercer is unable to materially reduce
debt to a more tenable capital structure for such a highly
cyclical business.
The upgrade in the speculative grade liquidity rating to SGL-2
from SGL-3 also reflects Moody's expectations that Mercer will
maintain a good liquidity profile over the next twelve months.
Cash flow from operations is projected to be robust over the next
four quarters and comfortably cover Mercer's capital requirements,
repay the outstanding balance on Celgar's revolver and build an
ample cash balance. Nonetheless, the SGL rating could be
downgraded if pulp prices or exchange rates change rapidly such
that accumulated cash may not be sufficient to meet the company's
upcoming debt maturities, including the US$66 million of
convertible notes due in January 2012.
Moody's upgraded these ratings:
-- Corporate Family Rating, to B3 from Caa1
-- Probability of Default Rating, to B3 from Caa1
-- US$310 million 9.25% senior unsecured notes due February
2013, to Caa1 (LGD4, 58%) from Caa2 (LGD4, 58%)
-- Speculative Grade Liquidity Rating, to SGL-2 from SGL-3
Moody's last rating action on Mercer occurred on December 22,
2009, when the Caa1 CFR was confirmed and the PDR was temporarily
designated with /LD following the completion of a distressed
exchange.
Mercer International Inc., a Washington-based corporation with
corporate offices in Vancouver, British Columbia, is one of the
largest producers of NBSK in the world. Operations are located
primarily in eastern Germany and western Canada with consolidated
annual production capacity of approximately 1.4 million air-dried
metric tonnes.
MESA AIR: Assumes Willis & West Engine Leases
---------------------------------------------
Pursuant to Sections 363 and 365 of the Bankruptcy Code, and
Rules 6004 and 6006 of the Federal Rules of Bankruptcy Procedure,
Mesa Air Group Inc. and its units sought and obtained the Court's
authority to assume four aircraft engine leases, as amended, with
Willis Lease Finance Corporation and West Engine Funding LLC.
Before the Petition Date, Mesa Air Group, Inc., and Mesa Airlines,
Inc., leased six spare engines, in which Willis or WEST was the
interest holder. Two of the Leases have been rejected -- the
Lease governing engine serial number 194223 and the Lease
governing ESN CAE311498. Each of the remaining four engines is
governed by an assumed lease and is critical to the Debtors'
continuing operations while they seek to reorganize, Debra
Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, in New
York, relates.
The Assumed Leases govern engines with serial numbers (i) PCE-
123005, (ii) PCE-AG0074, (iii) CAE312234, and (iv) 194264.
A full-text copy of the Assumed Leases, some portions redacted,
is available at no charge at:
http://bankrupt.com/misc/Mesa_AssLeaseWillis041210.pdf
According to Ms. Grassgreen, the Debtors seek to assume the
Assumed Leases on these terms and conditions:
(a) Upon assumption of Assumed Leases ESN CAE312234 and ESN
194264 only, the costs of heavy maintenance on the
Remaining Engines will be apportioned as follows -- Willis
and WEST will bear the costs of all prepetition heavy
maintenance, and the Debtors will bear the costs of all
postpetition heavy maintenance on the Remaining Engines as
may be required under the applicable Assumed Leases.
(b) Any claim for unpaid prepetition Use Fees, if any, will be
a general unsecured claim. Willis and WEST will each be
entitled to file a proof of claim asserting a general
unsecured claim for those amounts, and the Debtors' rights
to object to the amount of the claims are reserved.
(c) In the event of a conversion of the bankruptcy cases to
Chapter 7, the Debtors, in their sole discretion, will
have the right to terminate any of the Assumed Leases upon
10 days' written notice, upon which termination the
Debtors and the estates will have no further liability or
obligations under the terminated Assumed Leases except
with respect to the continuing provision of insurance,
security, storage and proper return of the Remaining
Engines.
(d) Payments will be due under the Assumed Leases -- (1) basic
rent will be due and payable on the 5th of the month for
that month's possession and use of the Remaining Engines,
and (2) reserves will be due and payable on the 15th of
the month in arrears for actual use during the prior
month.
(e) These terms will not apply to the Rejected Leases, and all
of the parties' rights under the Rejection Procedures
Order and Sections 365 and 502 of the Bankruptcy Code with
respect to the Rejected Leases are reserved.
(f) The Debtors will provide to Willis one serviceable
substitute starter for ESN 194223, and work in good faith
to return equipment or records related to the Rejected
Engines as soon as practicable.
The assumption of the Assumed Leases will not increase the
administrative burdens on the state in the event of a liquidation
of the Debtors because there will be no prepetition amounts owed
by the Debtors to Willis and West under the proposed terms and
conditions of assumption, Ms. Grassgreen says.
To the extent that the agreements and transactions contemplated
by the Assumed Leases constitutes the use of property of the
estate other than in the ordinary course of business, the Debtors
seek authority to enter into and perform the agreements and
transactions under Section 363 of the Bankruptcy Code. Section
363(b)(1) provides, in relevant part, that a debtor "after notice
and a hearing, may use, sell, or lease, other than in the
ordinary course of business, property of the estate."
About Mesa Air Group
Mesa currently operates 130 aircraft with approximately 700 daily
system departures to 127 cities, 41 states, Canada, and Mexico.
Mesa operates as Delta Connection, US Airways Express and United
Express under contractual agreements with Delta Air Lines, US
Airways and United Airlines, respectively, and independently as
Mesa Airlines and go! Mokulele. This operation links Honolulu to
the neighbor island airports of Hilo, Kahului, Kona and Lihue. The
Company, founded by Larry and Janie Risley in New Mexico in 1982,
has approximately 3,500 employees.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing
assets of $976 million against debt totaling $869 million as of
Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel.
Imperial Capital LLC is the investment banker. Epiq Bankruptcy
Solutions is claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MESA AIR: July 12 Trial Set for Delta Code-Share Pact Dispute
-------------------------------------------------------------
Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern
District of New York has approved the stipulation among Mesa Air
Group, Inc., and certain of its direct and indirect subsidiaries
in these Chapter 11 cases, and Delta Air Lines, Inc., resolving
certain issues relating to the Debtors' Motion to assume the
code-share agreement -- Delta Connection Agreement -- between the
parties.
The Bankruptcy Court signed a Case Management and Scheduling
Order on February 23, 2010, with respect to the Assumption
Motion. Among other things, the Case Management and Scheduling
Order:
(a) Noted the parties' agreement to transfer the MFN
Litigation from the United States District Court for the
Northern District of Georgia to the Bankruptcy Court;
(b) Noted the parties' agreement to litigate the ERJ
Litigation in the Georgia Court;
(c) Established a discovery schedule; and
(d) Set July 12, 2010, as the commencement date for trial on
all issues relevant to the Assumption Motion other than
those addressed in the ERJ Litigation.
The MFN Litigation has been transferred to the Bankruptcy Court
as Adversary Proceeding No. 10-03064. The ERJ Litigation has
been completed.
In addition, the parties have engaged in written discovery and
exchanged documents. Various disputes have arisen with respect
to discovery concerning certain "Bankruptcy Issues" -- (i)
whether Mesa can cure any of the alleged breaches of the Delta
Connection Agreement and provide adequate assurances of future
performance, and (ii) whether the decision to assume the Delta
Connection Agreement is a proper exercise of Mesa's business
judgment.
The parties believe that this Stipulation will avoid the need for
the Bankruptcy Court's intervention regarding the parties'
discovery disputes at this time. The salient terms of the
Stipulation include:
* The Delta Connection Agreement is an executory contract
for purposes of Section 365 of the Bankruptcy Code;
* The Bankruptcy Issues will be severed from the July 12,
2010 trial and litigated, to the extent necessary, as part
of the hearing for the confirmation of the Debtors'
proposed plan of reorganization;
* The parties will complete discovery on certain "Contract
Issues" and proceed to trial on July 12, 2010, on these
issues. The Contract Issues are (i) whether Mesa breached
the Delta Connection Agreement, and if so, the amount of
damages suffered by Delta, as well as the merit and impact
on damages of Mesa's counterclaims, and (ii) other relief
as the parties have requested in the Complaint and
counterclaims that were filed in the MFN Litigation,
including Mesa's allowed future rates; and
* Discovery regarding the Bankruptcy Issues will be stayed
until resumed.
Except for the agreements set forth in the Stipulation, each of
the parties reserves its rights on any matter relevant to the
Assumption Motion.
District Court Rules against Mesa; Mesa Comments
Mesa Air announced May 17 that the United States District Court
for the Northern District of Georgia ruled against the Company's
subsidiary Freedom Airlines in its litigation with Delta Air Lines
regarding Delta's efforts to terminate an agreement covering 22
regional jet aircraft. The litigation stemmed from Delta's
asserted termination of the Freedom Airlines agreement based upon
flights canceled at Delta's request, during periods of operational
irregularity (bad weather and ATC delays) at JFK in order to make
way for Delta's larger jets, which were then retroactively held
against Freedom for purposes of calculating its minimum flight
completion factor. Based upon this retroactive calculation, the
Court had issued a preliminary injunction in June 2008
prohibiting Delta from terminating the agreement. In reaching
its decision today, the Court reversed its prior preliminary
injunction preventing Delta from terminating the agreement. The
Company is in the process of reviewing the Order and evaluating
options going forward. Mesa has not yet reviewed its options for
appeal.
"We are extremely disappointed by the District Court's decision.
We have at all times sought to act as a good partner and work with
Delta as a member of Delta Connection. Unfortunately Freedom's
willingness to proactively cancel flights in JFK at Delta's
request for the benefit of Delta was held against Freedom and was
used as the sole basis to terminate our contract. It is
disheartening that our Company and people will be punished
retroactively for taking actions in good faith at Delta's
direction," said Jonathan Ornstein, Chairman and Chief Executive
of Mesa Air Group.
"We are greatly concerned for our approximately 500 employees who
will be significantly impacted as a result of this decision,
despite their hard work and commitment which has placed Freedom's
operation at or near the top of the Delta Connection portfolio
over the last year. The loss of these jobs, particularly under
these circumstances is extremely disappointing. I would like to
thank all of the employees at Freedom for the outstanding job they
have done over the last two years under extremely difficult
circumstances," continued Mr. Ornstein.
Mesa currently operates 99 aircraft with approximately 580 daily
system departures to 104 cities, 39 states, the District of
Columbia, Canada, and Mexico. Mesa operates as Delta Connection,
US Airways Express and United Express under contractual agreements
with Delta Air Lines, US Airways and United Airlines,
respectively, and independently as Mesa Airlines and go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and
Janie Risley in New Mexico in 1982, has approximately 3,500
employees.
According to various news reports, Mesa has also been ordered to
repay $3,000,000 that it overbilled Delta.
Debtors' Motion to Enter into
Temporary Agreement with Delta
The Debtors sought and obtained approval and authority from the
Bankruptcy Court to enter into a temporary agreement with Delta
Air Lines, Inc., on substantially the same terms as the Delta
Connection Agreement, effective May 17, 2010. The Temporary
Agreement would allow the Debtors to continue providing services
to Delta.
To recall, Mesa Air Group, Inc. and Freedom Airlines, Inc., and
Delta were parties to the Delta Connection Agreement, dated
May 3, 2005, pursuant to which, among other things, Freedom
agreed to provide certain regional air transportation services
under Delta's flight designator code as a Delta Connection
Carrier under Delta's Connection Program. Delta terminated the
Delta Connection Agreement on March 28, 2008, with respect to
certain ERJ-145 aircraft. Delta alleged that the Debtors failed
to maintain certain fight completion rates during certain prior
time periods.
The two Debtors, in turn, initiated the ERJ Litigation against
Delta on April 7, 2008, in the United States District Court for
the Northern District of Georgia to enjoin the alleged
termination. The Georgia Court issued a preliminary injunction
prohibiting Delta from terminating the Delta Connection
Agreement. The U.S. Court of Appeals for the Eleventh Circuit
affirmed the Georgia Court's decision on July 2, 2009.
On January 19, 2010, the Debtors filed their motion to assume the
Delta Connection Agreement. On February 23, 2010, the Bankruptcy
Court signed a case management and scheduling order with respect
to the Assumption Motion. As contemplated in the Case Management
and Scheduling Order, the ERJ Litigation went to trial in the
Georgia Court on April 20 to 23, 2010, John A. Morris, Esq., at
Pachulski Stang Ziehl & Jones LLP, in New York, related.
On May 17, 2010, the Georgia Court issued its Findings of Fact
and Conclusions of Law in which it ruled in favor of Delta, and
found that Delta had the right to and did terminate the Delta
Connection Agreement before the Petition Date. The Georgia Court
also entered a judgment in favor of Delta. The Debtors reserve
their right to appeal the Georgia Court's Findings and Judgment,
according to Mr. Morris.
The Debtors filed the Temporary Agreement Motion in an abundance
of caution, to the extent the Bankruptcy Court finds that the
Debtors' entry into the Temporary Agreement is not in the
ordinary course of business pursuant to Section 363(b)(1) of the
Bankruptcy Code and Rule 6004 of the Federal Rules of Bankruptcy
Procedure.
According to Mr. Morris, the Temporary Agreement provides, among
other things, that:
(a) Freedom will continue to provide Delta's Connection
Services on the same terms as the Delta Connection
Agreement, except that the Temporary Agreement will (1)
expire at 11:59 p.m., EDT, on August 31, 2010, unless
earlier terminated by the Debtors, and (2) only apply to
certain aircraft.
(b) Delta will make all payments due to the Debtors at the
times, and in the amounts, provided for in the Delta
Connection Agreement without setoff or recoupment of any
amounts that Delta contends are due and were actually or
allegedly incurred before the date of the Temporary
Agreement.
A full-text copy of the Temporary Agreement is available at no
charge at http://bankrupt.com/misc/Mesa_DeltaTempAgreement.pdf
The parties entered into the Temporary Agreement to allow them to
engage in an orderly wind-down of Freedom's Delta Connection
operations, Mr. Morris told the Bankruptcy Court.
To the extent that the Temporary Agreement constitutes the use of
property of the estate other than in the ordinary course of
business, the Debtors also obtained authority from the Bankruptcy
Court to enter into and perform the Temporary Agreement under
Section 363 of the Bankruptcy Code.
About Delta Air Lines
Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) --
http://www.delta.com/or http://www.nwa.com/-- serves more than
160 million customers each year. Delta and the Delta Connection
carriers offer service to 367 destinations in 66 countries on six
continents. Delta employs more than 70,000 employees worldwide
and operates a mainline fleet of nearly 800 aircraft. A founding
member of the SkyTeam global alliance, Delta participates in the
industry's trans-Atlantic joint venture with Air France KLM.
Including its worldwide alliance partners, Delta offers customers
more than 16,000 daily flights, with hubs in Amsterdam, Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK,
Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The
airline's service includes the SkyMiles frequent flier program,
the world's largest airline loyalty program; the BusinessElite
service; and more than 50 Delta Sky Clubs in airports worldwide.
Delta became the world's largest airline following merger with
Northwest Airlines in 2008.
Northwest and 12 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
September 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
At December 31, 2009, Delta had total assets of $43,539,000,000
against total current liabilities of $9,797,000,000 and total
noncurrent liabilities of $33,497,000,000, resulting in
stockholders' equity of $245,000,000. At end-2008, Delta had
stockholders' equity of $874,000,000. The December 31, 2009
balance sheet showed strained liquidity: Delta had total current
assets of $7,741,000,000 against total current liabilities of
$9,797,000,000.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines and Northwest Airlines carry a 'B/Negative/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's and "B-" LT
Issuer Default rating from Fitch.
About Mesa Air Group
Mesa currently operates 130 aircraft with approximately 700 daily
system departures to 127 cities, 41 states, Canada, and Mexico.
Mesa operates as Delta Connection, US Airways Express and United
Express under contractual agreements with Delta Air Lines, US
Airways and United Airlines, respectively, and independently as
Mesa Airlines and go! Mokulele. This operation links Honolulu to
the neighbor island airports of Hilo, Kahului, Kona and Lihue. The
Company, founded by Larry and Janie Risley in New Mexico in 1982,
has approximately 3,500 employees.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing
assets of $976 million against debt totaling $869 million as of
Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel.
Imperial Capital LLC is the investment banker. Epiq Bankruptcy
Solutions is claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MESA AIR: Proposes to Assume Wells Fargo Aircraft Leases
--------------------------------------------------------
Pursuant to Sections 363 and 365 of the Bankruptcy Code, and
Rules 6004 and 6006 of the Federal Rules of Bankruptcy Procedure,
Mesa Air Group Inc. and its units seek an order authorizing and
approving their assumption of certain existing aircraft leases, as
amended, with Wells Fargo Bank Northwest, National Association, on
the terms and conditions set forth in the Assumed Leases.
The Assumed Leases contain commercially sensitive information,
and the Debtors have obtained the Court's authorization to file
these leases under seal.
Before the Petition Date, Mesa Airlines, Inc., leased four DHC-8-
202 aircraft from the lessor, Wells Fargo. Avmax International
Aircraft Leasing Inc. was the interest holder with respect to
three of the Aircraft, and Northstar Avlease Aircraft Trust was
the interest holder with respect to one Aircraft.
Interest U.S. Reg. No.
Lessor Holder Lessee and MSN No.
------ -------- ------ -------------
Wells Fargo Northwest, Avmax Mesa Airlines, N998HA
National Association Inc. 426
Wells Fargo Northwest, Avmax Mesa Airlines, N989HA
National Association Inc. 427
Wells Fargo Northwest, Avmax Mesa Airlines, N991HA
National Association Inc. 431
Wells Fargo Northwest, Northstar Mesa Airlines, Inc. N987HA
National Association 425
Debra Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, in
New York, identifies the key terms of the Assumed Leases:
(a) The term for each of the Assumed Leases will extend
through June 30, 2012.
(b) The Debtors will pay all outstanding amounts under the
Assumed Leases, including the prorated portion of the
basic rent in the amount of $10,645, with respect to each
Avmax-related Assumed Lease. As for the Northstar-related
Assumed Lease, there are no unpaid basic rental payments
or other amounts outstanding.
(c) Payments will be due under the Assumed Leases on the fifth
day of each month for that month's use of the Aircraft.
(d) In the event the Aircraft are phased out of service, the
Debtors, in their sole discretion, have the right to
terminate any one of the Assumed Leases upon six months'
notice.
According to Ms. Grassgreen, the Debtors' entry into and
assumption of the Assumed Leases will permit them to continue to
operate their aircraft fleet during these Chapter 11 cases on
competitive terms while at the same time, minimizing potential
administrative burdens.
About Mesa Air Group
Mesa currently operates 130 aircraft with approximately 700 daily
system departures to 127 cities, 41 states, Canada, and Mexico.
Mesa operates as Delta Connection, US Airways Express and United
Express under contractual agreements with Delta Air Lines, US
Airways and United Airlines, respectively, and independently as
Mesa Airlines and go! Mokulele. This operation links Honolulu to
the neighbor island airports of Hilo, Kahului, Kona and Lihue. The
Company, founded by Larry and Janie Risley in New Mexico in 1982,
has approximately 3,500 employees.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing
assets of $976 million against debt totaling $869 million as of
Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel.
Imperial Capital LLC is the investment banker. Epiq Bankruptcy
Solutions is claims and notice agent.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
METROMEDIA INT'L: Plan Exclusivity Extended until August 16
-----------------------------------------------------------
The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District
of Delaware extended MIG, Inc., fka Metromedia International
Group, Inc.'s exclusive period to file a Chapter 11 Plan until
August 16, 2010; and to solicit acceptances of the proposed Plan
until October 12, 2010.
The Court has continued until August 19,2010, at 10:00 a.m., the
hearing on the approval of the Disclosure Statement explaining the
proposed
Based in Charlotte, North Carolina, MIG Inc. (PINK SHEETS: MTRM,
MTRMP) -- http://www.metromedia-group.com/-- through its wholly
owned subsidiaries, owns interests in several communications
businesses in the country of Georgia. The Company's core
businesses include Magticom Ltd., a mobile telephony operator
located in Tbilisi, Georgia, Telecom Georgia, a long distance
telephony operator, and Telenet, which provides Internet access,
data communications, voice telephony and international access
services.
MIG, Inc., fka Metromedia International Group, Inc., filed for
Chapter 11 bankruptcy protection on June 18, 2009 (Bankr. D. Del.
Case No. 09-12118). Scott D. Cousins, Esq., at Greenberg Traurig
LLP assists the Company in its restructuring efforts. Debevoise &
Plimpton LLP is the Company's special corporate counsel, while
Potter Anderson & Corroon LLP is the Company's special litigation
counsel. The official committee of unsecured creditors of MIG,
Inc., has retained Baker & McKenzie LLP as its bankruptcy
counsel, nunc pro tunc to June 30, 2009.
In its petition, the Company said it had US$100 million to
US$500 million in assets and US$100 million to US$500 million in
debts. In its formal schedules, the Company said it had assets of
$54,820,681 against debts of $210,183,657.
MOODY NATIONAL: Files Amended Plan of Reorganization
----------------------------------------------------
Moody National RI Atlanta H, LLC, filed with the U.S. Bankruptcy
Court for the Southern District of Texas amended Plan of
Reorganization.
As reported in the Troubled Company Reporter on March 16, 2010,
according to the Plan, the Debtor will continue to exist after the
effective date as a separate LLC entity, with all the powers of an
LLC under applicable law in the jurisdiction in which it is
incorporated or otherwise formed.
All remaining property comprising the estate (including causes of
action) will vest in the Reorganized Debtor, free and clear of all
claims, liens, charges, encumbrances, rights and interests of
creditors and equity security holders.
Under the amended Plan, treatment of claims will be:
Class 1 ? RLJ Claims -- on or before 30 days after the Bankruptcy
Court's determination of the RLJ Cure Amount, or on other date
determined by the Bankruptcy Court, the Debtor will pay or cause
to be paid the RLJ Cure Amount. The amount necessary for the
Debtor to cure its default under the loan, reinstate the RLJ
Claims.
Class 2 ? Unsecured Claims will receive, in full, payment of its
claim in full in cash on the effective date.
Class 3 ? Equity Interests will be left unaltered.
A full-text copy of the blacklined Plan of Reorganization is
available for free at:
http://bankrupt.com/misc/MoodyNational_AmendedPlan.pdf
The Debtor is represented by:
King & Spalding LLP
Henry J. Kaim, Esq.
Edward L. Ripley, Esq.
Eric M. English, Esq.
Aaron J. Power, Esq.
1100 Louisiana, Suite 4000
Houston, TX 77002
Tel: (713) 751-3200
Fax: (713) 751-3290
About Moody National RI
Houston, Texas-based Moody National RI Atlanta H, LLC, filed for
Chapter 11 bankruptcy protection on January 29, 2010 (Bankr. S.D.
Tex. Case No. 10-30752). Henry J. Kaim, Esq., at King & Spalding
LLP, assist 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 in its petition.
MOUNT VERNON: Organizational Meeting to Form Panel on June 11
-------------------------------------------------------------
The United States Trustee for Region 2 will hold an organizational
meeting on June 11, 2010, at 1:00 p.m. in the bankruptcy case of
Mount Vernon Monetary Management Corp., et al. The meeting will
be held at the Office of the U.S. Trustee's Meeting Room, 80 Broad
Street, 4th floor, New York, NY 10004.
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.
Mount Vernon, New York-based Mount Vernon Monetary Management
Corp. filed for Chapter 11 bankruptcy protection on May 27, 2010
(Bankr. S.D.N.Y. Case No. 10-23053). Allen G. Kadish, Esq., at
Greenberg Traurig, LLP, assists the Company in its restructuring
effort. The Company estimated its assets and debts at $1,000,001
to $10,000,000.
MXENERGY INC: Unit Inks Letter of Agreement with RBS Sempra
-----------------------------------------------------------
MXenergy Inc., a subsidiary of MXenergy Holdings Inc., on May 25,
2010, executed a letter of agreement, effective as of March 1,
2010, with Sempra Energy Trading LLC. The Letter of Agreement
waives or modifies certain terms of the ISDA Master Agreement
dated as of September 22, 2009, as amended, between the Company
and certain of its subsidiaries, as guarantors, and RBS Sempra.
In April 2010, the Company began delivering natural gas to a local
distribution company in Ohio as part of a new Standard Service
Offer program. As of April 1, 2010, based upon estimates received
directly from the LDC, the Company expects to deliver to the LDC
approximately 11.0 million MMBtus of natural gas annually as a
provider under the SSO Program. The Letter of Agreement amends
certain fees related to natural gas supply and hedging activity
specifically related to the SSO Program. Additionally, the Letter
of Agreement requires that natural gas purchased by the Company
for delivery under the SSO Program be excluded from certain volume
limitations or minimum purchase requirements required under the
terms of the Gas ISDA Master Agreement.
On May 21, 2010, the Company held a conference call to discuss the
financial results of the Company for the quarter ended March 31,
2010, which is the third quarter of its fiscal year. A copy of
the transcript of the Earnings Call is available at no charge
at http://ResearchArchives.com/t/s?6405
The Transcript has been selectively edited to facilitate the
understanding of the information communicated during the
conference call.
About MXenergy
MXenergy Holdings Inc. was founded in 1999 as a retail energy
marketer. The two principal operating subsidiaries of Holdings
are MXenergy Inc. and MXenergy Electric Inc. which are engaged in
the marketing and supply of natural gas and electricity,
respectively. Holdings and its subsidiaries operate in 39 market
areas located in 14 states in the United States and in two
Canadian provinces.
The Company's balance sheet at March 31, 2010, showed
$221.4 million in total assets and $134.1 million in total
liabilities, for a $87.3 million total stockholders' equity.
Mxenergy carries Caa3 long term corporate family and Ca/LD
probability of default ratings from Moody's Investors Service.
NATIONAL COAL: Posts $5.8 Million Net Loss in Q1 2010
-----------------------------------------------------
National Coal Corp. filed its quarterly report on Form 10-Q,
reporting a net loss of $5.8 million on $16.2 million of revenue
for the three months ended March 31, 2010, compared with a net
loss of $7.9 million on $20.0 million revenue for the same period
ended March 31, 2009.
The Company's balance sheet as of March 31, 2010, showed
$51.2 million in assets and $68.7 million of liabilities, for a
stockholders' deficit of $17.5 million.
At March 31, 2010, the Company had cash and cash equivalents of
$977,564, negative working capital of roughly $44.8 million and a
stockholders' deficit of $17.5 million. The Company has incurred
significant net losses from continuing operations in each of the
last three years. During the three months ended March 31, 2010,
and 2009, the Company generated net losses from continuing
operations of $5.8 million and $5.7 million, respectively. Net
cash flow (used in) provided by operating activities from
continuing operations was ($138,282) and $2.4 million during the
three months ended March 31, 2010, and 2009, respectively.
On June 15, 2010, the Company has a $2.2 million interest payment
due on its 10.5% senior secured notes due 2010, and the
$42.0 million in principal amount of that indebtedness is due on
December 15, 2010.
The Company believes its liquidity needs during 2010 and the
December 2010 maturity of $42.0 million of long-term debt raise
substantial doubt about its 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?63e8
Headquartered in Knoxville, Tenn., National Coal Corp. (Nasdaq:
NCOC) http://www.nationalcoal.com/-- through its wholly owned
subsidiary, National Coal Corporation, is engaged in coal mining
in East Tennessee. Currently, National Coal employs about 155
people. National Coal sells steam coal to electric utilities and
industrial companies in the Southeastern United States.
NEFF CORP: Decides to Disclose Lenders' $5.475 Million Fees
-----------------------------------------------------------
Neff Corp. decided to disclose that it's paying $5.475 million in
fees to lenders offering to provide $175 million financing for the
prepackaged reorganization. The lenders decided to allow
disclosure of the fees after the U.S. Trustee objected to the
financing absent the disclosure of the fees. The U.S. Trustee
said that the fee letter contained no provisions justifying
secrecy. A hearing on the financing is scheduled for June 8.
Neff Corp. scheduled a July 12 hearing for approval of the
disclosure statement explaining its reorganization plan that was
filed together with the bankruptcy petition. The plan would
reduce debt by more than $400 million while giving most of the new
equity to first-lien lenders owed $90 million on a term loan.
Privately held Neff Corp., doing business as 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: Taps AlixPartners as Restructuring Advisor
-----------------------------------------------------
Neff Corp., et al., have asked for authorization from the U.S.
Bankruptcy Court for the Southern District of New York to employ
AlixPartners, LLP, as restructuring advisor, nunc pro tunc to the
Petition Date.
AlixPartners will, among other things:
a. assist the Debtors and their management in developing a
short-term cash flow forecasting tool and related
methodologies and assist with planning for alternatives as
requested by the Debtors;
b. assist the Debtors in preparing for filing under Chapter
11 of the Bankruptcy Code and with the requisite "first
Day" papers and coordinating and providing administrative
support for the proceeding;
c. prepare a liquidation analysis and assist the Debtors with
the preparation of schedules of executory contracts and
unexpired leases, statements of financial affairs, monthly
operating reports, and other regular reports as may be
requested by the Debtors; and
d. provide testimony before any court having jurisdiction
over any proceeding undertaken by or against the Debtors
under the U.S. Bankruptcy Code with respect to such
matters or other matters within the scope of AlixPartners'
engagement.
AlixPartners will be paid based on the hourly rates of its
personnel:
Managing Directors $685 - $995
Directors $510 - $685
Vice Presidents $395 - $505
Associates $260 - $365
Analysts $235 - $260
Paraprofessionals $180 - $200
Holly Etlin, managing director at AlixPartners, assures the Court
that the firm is disinterested as that term is defined in Section
101(14) of the Bankruptcy Code.
Privately held Neff Corp., doing business as 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: Taps as Kirkland & Ellis Bankruptcy Counsel
------------------------------------------------------
Neff Corp., et al., have sought permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Kirkland & Ellis LLP as general bankruptcy counsel, nunc pro tunc
to the Petition Date.
K&E will, among other things:
a. attend meetings and negotiating with representatives of
creditors and other parties in interest;
b. take necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the
Debtors' behalf, defending any action negotiations
concerning litigation in which the Debtors are involved,
including objections to claims filed against the Debtors'
estates;
c. prepare pleadings in connection with the Debtors' Chapter
11 cases, including motions, applications, answers,
orders, reports, and papers necessary or otherwise
beneficial to the administration of the Debtors' estates;
and
d. represent the Debtors in connection with obtaining
authority to continue using cash collateral and
postpetition financing.
K&E will be paid based on the hourly rates of its personnel:
Anup Sathy, P.C. $895
Ray C. Schrock $785
Partners $550-$995
Of Counsel $500-$965
Associates $320-$660
Paraprofessionals $155-$280
Ray C. Schrock, a partner at K&E, assures the Court that the firm
is disinterested as that term is defined in Section 101(14) of the
Bankruptcy Code.
Privately held Neff Corp., doing business as 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: Wants to Hire Togut Segal as Conflicts Counsel
---------------------------------------------------------
Neff Corp., et al., have sought permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Togut, Segal & Segal LLP as conflicts counsel.
Togut Segal will, among other things:
a. advise the Debtors, where the Debtors' general bankruptcy
counsel Kirkland & Ellis LLP is or may be conflicted,
regarding their powers and duties as a debtor in
possession in the continued management of their businesses
and properties;
b. attend meetings and negotiate with representatives of
creditors and other parties in interest;
c. take necessary action to protect and preserve the Debtors'
estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against and
representing the Debtors' interests in negotiations
concerning litigation, including, but not limited to,
objections to claims filed against the estate; and
d. prepare on the Debtors' behalf motions, applications,
adversary proceedings, answers, orders, reports and papers
necessary to the administration of these estates.
Togut Segal will be paid based on the hourly rates of its
personnel:
Partners $800-$935
Associates $275-$720
Counsel $275-$720
Paralegals $155-$285
Law clerks $155-$285
Albert Togut, a senior member at Togut Segal, assures the Court
that the firm is disinterested as that term is defined in Section
101(14) of the Bankruptcy Code.
Privately held Neff Corp., doing business as 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: Wants to Hire Miller Buckfire as Investment Banker
-------------------------------------------------------------
Neff Corp., et al., have sought permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Miller Buckfire & Co., LLC, as investment banker, nunc pro tunc to
the Petition Date.
Miller Buckfire will, among other things:
a. review and analyze the Debtors' businesses, operations,
financial condition, and prospects;
b. provide general financial advisory and investment
services, including, if the Debtors determine to undertake
an amendment, sale, restructuring, and/or financing,
advising and assisting the Debtors in structuring and
effecting such a transaction or transactions;
c. provide financial and valuation advice and assistance to
the Debtors in developing and seeking approval of a
restructuring plan under the U.S. Bankruptcy Code; and
d. provide financial advice and assistance to the Debtors in
structuring any new securities to be issued under a
restructuring plan.
Miller Buckfire will be paid based on its engagement letter with
the Debtor. A copy of the letter is available for free at:
http://bankrupt.com/misc/NEFF_CORP_engagementletter.pdf
Ronen Bojmel, a managing director of Miller Buckfire, assures the
Court that the firm is disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code.
Privately held Neff Corp., doing business as 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.
NEXTMEDIA OPERATING: S&P Raises Corporate Credit Rating to 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Greenwood Village, Colo.-based radio broadcaster and
outdoor advertiser NextMedia Operating Inc. to 'B' from 'D',
following the company's emergence from bankruptcy. The rating
outlook is stable.
At the same time, S&P assigned the company's $135 million term
loan B due 2016 an issue-level rating of 'B+' (one notch higher
than the 'B' corporate credit rating) with a recovery rating of
'2', indicating S&P's expectation of substantial (70% to 90%)
recovery for debtholders in the event of a payment default.
S&P expects that NextMedia's liquidity will be adequate to support
near- to intermediate-term needs, barring acquisitions. The 'B'
rating reflects:
* NextMedia's exposure to negative secular trends facing the radio
industry due to competition from alternative media and a
paradigm shift to online advertising;
* A revenue concentration in the greater Chicago area and coastal
Carolinas, which combined accounted for 50% of 2009 net revenue;
* The potential for advertising cyclicality at the radio and
outdoor segments; and
* The potential for debt-financed acquisitions that could limit
financial profile improvement.
In S&P's view, the company's good EBITDA margin, modest diversity
from a portfolio of radio and outdoor assets, and potential for
modest longer-term growth at the outdoor segment following an
economic recovery do not offset these negative factors.
Leverage and coverage improve under the refinanced capital
structure from that of the prepetition capital structure and the
exit capital structure. The company reduced debt to $135 million,
from roughly $250 million under the prepetition capital structure.
Under the plan of reorganization, the $250 million prepetition
capital structure was converted to $135 million of term debt and a
$10 million revolving credit facility. NextMedia used proceeds
from the $135 million term loan, equity proceeds, and cash on the
balance sheet to refinance the existing prepetition and debtor-in-
possession credit agreements.
Pro forma lease-adjusted leverage was 6.2x at March 31, 2010, and
pro forma interest coverage was 2.1x. The company's interest
coverage was fractional, and leverage was 11.4x. Lower interest
expense will also increase discretionary cash flow. S&P expects
the company to generate modestly positive discretionary cash flow
over the near term, after the costs related to the bankruptcy
filing and related restructuring have rolled off.
NORTHLAND INVESTMENTS: Taps Spencer Fane as Bankruptcy Counsel
--------------------------------------------------------------
Northland Investments Co., Inc., has asked for authorization to
employ Spencer Fane Britt & Browne LLP as bankruptcy counsel.
Spencer Fane will, among other things:
a. assist and advise Debtor in its consultations with any
appointed committee relative to the administration of the
captioned case;
b. assist Debtor with investigation of assets, liabilities
and financial condition of Debtor and of the operation of
Debtor's businesses in order to maximize the value of
Debtor's assets for the benefit of all creditors;
c. advise the Debtor in connection with any potential sales
of assets or business; and
d. assist the Debtor in its analysis of and negotiation with
any appointed committee or any third party concerning
matters related to, among other things, the terms of a
plan of reorganization.
Spencer Fane will be paid based on the hourly rates of its
personnel:
Partners $410
Paralegals $135
Lisa Epps, a partner at Spencer Fane, assures the Court that the
firm is disinterested as that term is defined in Section 101(14)
of the Bankruptcy Code.
Blue Springs, Missouri-based Northland Investments Co., Inc.,
filed for Chapter 11 bankruptcy protection on May 19, 2010 (Bankr.
W.D. Mo. Case No. 10-42517). Lisa A. Epps, Esq., at Spencer Fane
Britt & Browne LLP, 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.
ORLEANS HOMEBUILDERS: Has Plan Exclusivity Extended to Sept. 27
---------------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Orleans Homebuilders
Inc. received approval for its request for a September 27
extension of its exclusive right to propose a Chapter 11 plan.
Orleans says it's working on a plan with secured lenders after
dropping an agreement for rival homebuilder NVR Inc.
NVR Inc. has sued Orleans Homebuilders to obtain as much as
$4.4 million in termination fees, saying the company reneged on a
$170 million sale in favor of pursuing a Chapter 11 reorganization
with senior lenders.
About Orleans Homebuilders
Orleans Homebuilders, Inc. -- aka FPA Corporation, OHB, Parker &
Lancaster, Masterpiece Homes, Realen Homes and Orleans --
develops, builds and markets high-quality single-family homes,
townhouses and condominiums. From its headquarters in suburban
Philadelphia, the Company serves a broad customer base including
first-time, move-up, luxury, empty-nester and active adult
homebuyers. The Company currently operates in these 11 distinct
markets: Southeastern Pennsylvania; Central and Southern New
Jersey; Orange County, New York; Charlotte, Raleigh and
Greensboro, North Carolina; Richmond and Tidewater, Virginia;
Chicago, Illinois; and Orlando, Florida. The Company's Charlotte,
North Carolina operations also include adjacent counties in South
Carolina. Orleans Homebuilders employs approximately 300 people.
The Company filed for Chapter 11 bankruptcy protection on March 1,
2010 (Bankr. D. Del. Case No. 10-10684). Cahill Gordon & Reindell
LLP is the Debtor's bankruptcy and restructuring counsel. Curtis
S. Miller, Esq., and Robert J. Dehney, Esq., at Morris, Nichols,
Arsht & Tunnell, are the Debtor's Delaware and restructuring
counsel. Blank Rome LLP is the Debtor's special corporate
counsel. Garden City Group Inc. is the Debtor's claims and notice
agent. The Company estimated assets and debts at $100,000,001 to
$500,000,000.
ORLEANS HOMEBUILDERS: NVR Inc. Sues for $170-Mil. Contract Breach
-----------------------------------------------------------------
NVR Inc., a homebuilding and mortgage banking company based in
Reston, Virginia, sued Orleans Homebuilders Inc. in bankruptcy
court on May 28, contending Orleans breached a contract never to
sell all of the assets to NVR for $170 million.
Orleans Homebuilders announced on April 13, that it executed an
asset purchase agreement with NVR, Inc., for an initial "stalking
horse bid" for substantially all of the assets of the Company.
The Company confirmed that it has received the cash deposit
required under the APA. Under the APA, NVR would acquire
substantially all of the Company's land, work-in-process home
construction and intangible assets for communities in each of the
Company's existing regions for an aggregate purchase price of
$170.0 million, subject to certain working capital and other
adjustments.
Two days before the hearing on the bidding procedures and proposed
payment of a break-up fee to $3.4 million if the deal is
terminated, Orleans said it would instead "pursue negotiations of
a plan of reorganization" with senior lenders.
According to Bill Rochelle at Bloomberg News, in the suit, NVR
alleges that Orleans breached the contract, even though it was
never approved by the bankruptcy judge. NVR says that a provision
in the contract calling for Orleans to use its "reasonable best
efforts" to have the judge approve bidding procedures didn't
require court approval to be binding.
Bill Rochelle relates that it is unclear how much NVR seeks in
damages. At one place in the complaint, NVR says it seeks expenses
it was required to undertake, such as legal costs. Elsewhere, NVR
more vaguely says it wants damages it sustained as a result of
breach, "in an amount to be proved at trial." In a typical breach
of contract suit, the plaintiff will seek lost profits.
NVR also wants the bankruptcy judge to award it the $3.4 million
breakup fee contained in the contract. NVR contends it provided
value to Orleans by creating a "floor" that "stimulated interest
in a stand-alone reorganization plan."
Orleans is yet to file the plan under discussion with secured
lenders.
About Orleans Homebuilders
Orleans Homebuilders, Inc. -- aka FPA Corporation, OHB, Parker &
Lancaster, Masterpiece Homes, Realen Homes and Orleans --
develops, builds and markets high-quality single-family homes,
townhouses and condominiums. From its headquarters in suburban
Philadelphia, the Company serves a broad customer base including
first-time, move-up, luxury, empty-nester and active adult
homebuyers. The Company currently operates in these 11 distinct
markets: Southeastern Pennsylvania; Central and Southern New
Jersey; Orange County, New York; Charlotte, Raleigh and
Greensboro, North Carolina; Richmond and Tidewater, Virginia;
Chicago, Illinois; and Orlando, Florida. The Company's Charlotte,
North Carolina operations also include adjacent counties in South
Carolina. Orleans Homebuilders employs approximately 300 people.
The Company filed for Chapter 11 bankruptcy protection on March 1,
2010 (Bankr. D. Del. Case No. 10-10684). Cahill Gordon & Reindell
LLP is the Debtor's bankruptcy and restructuring counsel. Curtis
S. Miller, Esq., and Robert J. Dehney, Esq., at Morris, Nichols,
Arsht & Tunnell, are the Debtor's Delaware and restructuring
counsel. Blank Rome LLP is the Debtor's special corporate
counsel. Garden City Group Inc. is the Debtor's claims and notice
agent. The Company estimated assets and debts at $100,000,001 to
$500,000,000.
PAUL TRANSPORTATION: Wants to Hire Kline as General Bankr. Counsel
------------------------------------------------------------------
Paul Transportation, Inc., has sought permission from the U.S.
Bankruptcy Court for the Western District of Oklahoma to employ
Kline, Kline, Elliott & Bryant, P.C., as general bankruptcy
counsel.
Kline Kline will perform all legal services necessary on the
Debtor's behalf in connection with the bankruptcy case.
Kline Kline will be paid $40-$290 per hour for its services.
Stephen W. Elliott, an attorney at Kline Kline, assures the Court
that the firm is disinterested as that term is defined in Section
101(14) of the Bankruptcy Code.
Enid, Oklahoma-based Paul Transportation Inc. -- dba PTI;
Trucking; Paul Transportation; Paul Transportation Systems, Inc.;
and Paul's Transportation -- filed for Chapter 11 bankruptcy
protection on May 18, 2010 (Bankr. W.D. Okla. Case No. 10-13022).
The Company estimated its assets and debts at $10,000,001 to
$50,000,000.
PAUL WALLACE: Taps DiConza Law as Bankruptcy Counsel
----------------------------------------------------
Paul F. Wallace, et al., have asked for authorization from the
U.S. Bankruptcy Court for the Southern District of New York to
employ DiConza Law, P.C., as bankruptcy counsel, nunc pro tunc to
the Petition Date.
DiConza will, among other things:
(a) negotiate with representatives of creditors and other
parties in interest;
(b) take necessary action to protect and preserve the
Debtors' estates;
(c) advise the Debtors of their rights, powers, and duties as
Debtors-in-possession under chapter 11 of the U.S.
Bankruptcy Code; and
(d) prepare on behalf of the Debtors, motions, applications,
schedules, answers, orders, reports and papers necessary
to the administration of the estate;
DiConza will be paid based on the hourly rates of its personnel:
Gerard DiConza $425
Other Attorneys $350
Gerard DiConza, the principal of DiConza, assures the Court that
the firm is disinterested as that term is defined in Section
101(14) of the Bankruptcy Code.
Bedford Hills, New York-based Paul F. Wallace filed for Chapter 11
bankruptcy protection on May 20, 2010 (Bankr. S.D.N.Y. Case No.
10-22998). The Company estimated its assets and debts at
$10,000,001 to $50,000,000.
PENN OCTANE: May File for Bankruptcy If Rio Vista Sale Fails
------------------------------------------------------------
Penn Octane Corporation, Rio Vista Energy Partners L.P., and
Central Energy, LLC, on May 25, 2010, entered into a Securities
Purchase and Sale Agreement. Pursuant to the terms of the
Agreement, Penn Octane will sell its 75% interest and will sell or
cause to be sold the remaining 25% interest held by a third party
of the limited liability company interests in Rio Vista GP, LLC,
the general partner of Rio Vista, and Rio Vista has agreed to
issue and sell to Central Energy 12,724,019 newly issued Common
Units of Rio Vista, which Common Units will, when issued,
represent 80% of the Common Units of Rio Vista on a fully diluted
basis. The purchase price for the sale of 100% of the limited
liability company interests in the GP will be $147,709, which
amount will be contributed by Penn Octane to the GP and then by
the GP to Rio Vista simultaneously with the closing under the
Agreement. The purchase price for the sale of the Common Units is
$3,852,291. As a result, Central Energy will obtain control of
Rio Vista by virtue of its ownership of 100% of the GP.
Penn Octane will receive approximately $1.2 million of the
proceeds from the transaction, subject to adjustment, as described
in the Agreement, to settle all amounts owing from the promissory
note issued by Rio Vista to Penn Octane and all other intercompany
advances made between Penn Octane and GP to Rio Vista or its
subsidiaries.
Penn Octane also agreed to sell the GP interests to facilitate the
closing of the transaction and to receive the proceeds. The
proceeds received by Penn Octane will be used to settle
outstanding obligations due to its creditors, including amounts
outstanding for taxes due. The total liabilities of Penn Octane
are currently significantly in excess of the proceeds to be
received.
Currently Penn Octane has negative working capital. Penn Octane
does not have any sources of cash or assets other than its
interests in the GP, certain ownership of common units of Rio
Vista and advances or loans due from Rio Vista. Currently Rio
Vista has negative working capital. Rio Vista does not have any
sources of cash or assets other than its interest in Regional
Enterprises Inc. Because of Rio Vista's financial position, Penn
Octane does not expect that it will receive any cash flows from
the assets associated with Rio Vista unless the transaction as
contemplated in the Agreement is completed. The closing of the
transaction is subject to Rio Vista satisfying all liabilities and
contingent claims outstanding against it, including Rio Vista's
creditors accepting significant discounts and certain other
conditions to closing, and, therefore, there is no assurance that
the sale of the Common Units and the limited liability company
interests in the GP will be consummated. Under the terms of the
Agreement, the Closing shall occur by June 4, 2010, but may be
extended by Central Energy until July 1, 2010 at its sole
discretion.
Because of Penn Octane's financial position (including the
financial position of Rio Vista and Rio Vista's sole operating
subsidiary, Regional), if the closing does not occur, both Penn
Octane and Rio Vista would likely be required to seek protection
under US Bankruptcy laws. In the opinion of management, if such
protection were sought, the amounts realized for Penn Octane's
assets and the resulting amounts recoverable to creditors will be
significantly less than amounts being offered pursuant to the
Agreement.
A full-text copy of the sale agreement is available at no charge
at http://ResearchArchives.com/t/s?63de
About Penn Octane Corporation
Headquartered in Palm Desert, California, Penn Octane Corporation
(NASDAQ:POCC) -- http://www.pennoctane.com/-- formerly known as
International Energy Development Corporation buys, transports and
sells liquefied petroleum gas for distribution in northeast
Mexico, and resells gasoline and diesel fuel. The company has a
long-term lease agreement for approximately 132 miles of pipeline,
which connects ExxonMobil Corporation's King Ranch Gas Plant in
Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim
Wells County, Texas, to the company's Brownsville Terminal
Facility.
PETTERS COMPANY: Ch. 11 Trustee Has Access to Cash Until Sept. 30
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota authorized
Douglas Kelly, the duly appointed Chapter 11 trustee for the
Chapter 11 cases of Petters Company, Inc., et al., to access cash
collateral until September 30, 2010.
The Debtors are authorized to use the cash collateral provided:
a. the use of cash collateral is limited to the uses set forth
in the PBE Chapter 7 Trustee's motion for the use of cash
collateral dated March 16, 2010; and
b. for purposes of adequate protection, all creditors who claim
a lien and security interest in and to certain assets of the
Debtor, will be granted replacement liens in all of the
Debtor's right, title, and interest in and to the
replacement liens to be granted by PBE to the Debtor with
the same nature, character, validity, priority, dignity,
extent and effect as the prepetition liens.
Based in Minnetonka, Minnesota, Petters Group Worldwide LLC is
named for founder and chairman Tom Petters. The group is a
collection of some 20 companies, most of which make and market
consumer products. It also works with existing brands through
licensing agreements to further extend those brands into new
product lines and markets. Holdings include Fingerhut (consumer
products via its catalog and Web site), SoniqCast (maker of
portable, WiFi MP3 devices), leading instant film and camera
company Polaroid (purchased for $426 million in 2005), Sun Country
Airlines (acquired in 2006), and Enable Holdings (online
marketplace and auction for consumers and manufacturers' overstock
inventory). Petters formed the company in 1988.
Petters Company, Inc., is the financing and capital-raising unit
of Petters Group Worldwide, LLC. Petters Company, Inc., Petters
Group Worldwide, LLC, and eight other affiliates filed separate
petitions for Chapter 11 protection (Bankr. D. Minn. Case No.
08-45257) on October 11, 2008. James A. Lodoen, Esq., at
Lindquist & Vennum P.L.L.P., serves as the Debtors' counsel.
In its petition, Petters Company, Inc., listed debts of between
$500 million and $1 billion, while its parent, Petters Group
Worldwide, LLC, listed debts of not more than $50,000.
As reported in the Troubled Company Reporter on October 7, 2008,
Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed separate petitions for Chapter 11 bankruptcy
protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and
08-35198) on October 6, 2008 . Petters Aviation, LLC is a
wholly owned unit of Thomas Petters Inc. and owner of
MN Airline Holdings, Inc., Sun Country's parent company.
PLY GEM: Offers to Swap $150 Mil. Unregistered Sr. Sub Notes
------------------------------------------------------------
Ply Gem Industries, Inc., is offering to exchange $150,000,000 of
its outstanding 13.125% Senior Subordinated Notes due 2014 and
certain related guarantees, which were issued on January 11, 2010,
for a like aggregate amount of registered 13.125% Senior
Subordinated Notes due 2014 and certain related guarantees. The
exchange notes will be issued under an indenture dated as of
January 11, 2010.
The exchange notes will mature on July 15, 2014. The exchange
notes will be unsecured and will be subordinated in right of
payment to all of Ply Gem's existing and future senior debt,
including borrowings under its senior secured asset-based
revolving credit facility and its existing 11.75% senior secured
notes due 2013.
The exchange offer will expire at 5:00 p.m., New York City time,
on June 30, 2010, unless Ply Gem extends it.
A full-text copy of the Company's prospectus is available at no
charge at http://ResearchArchives.com/t/s?63e3
Cary, North Carolina-based Ply Gem Industries, Inc., manufactures
exterior building products, including siding, windows, and doors,
for the residential construction market, which are sold primarily
in the U.S. and Canada. About 50% of Ply Gem's sales are to the
less cyclical repair and remodeling markets, which provides some
stability.
In May 2010, Standard & Poor's Ratings Services raised its
(unsolicited) corporate credit rating on Ply Gem to 'B-' from
'CCC+'. "The ratings upgrade reflects our expectation that the
company's credit measures are likely to improve modestly over the
next several quarters to levels that we would consider more in
line with the 'B-' corporate credit rating," said Standard &
Poor's credit analyst Tobias Crabtree.
In January 2010, Moody's Investors Service upgraded Ply Gem's
Corporate Family Rating to Caa1 from Caa2 and its Probability of
Default Rating to Caa1 from Caa2 and affirmed the senior secured
notes due 2013 at Caa1. The upgrade of Ply Gem's corporate family
rating resulted from the recent announcement that CI Capital
Partners LLC, Ply Gem's indirect principal shareholder, through a
series of transactions is transferring approximately
$257.3 million of 9.0% senior subordinated notes due 2012 that it
owns to Ply Gem for no consideration as a capital contribution.
Moody's also noted Ply Gem is also refinancing the balance of the
9.0% senior subordinated notes due 2012 with new senior
subordinated notes due 2014.
PRIME GROUP: Closes Sale for LaSalle Property at $72.25 Million
---------------------------------------------------------------
Prime Group Realty Trust has closed on the sale of 180 North
LaSalle Street, Chicago, Illinois, from the subsidiary of the
Company that owned the Property to 180 N. LaSalle Realty LLC, an
entity indirectly controlled by Mr. Michael Silberberg of Nanuet,
New York.
The gross purchase price for the Property was $72.25 million,
subject to customary pro-rations, credits and adjustments. After
closing adjustments and costs, the Seller received net proceeds of
approximately $12.4 million. The Seller's estimated GAAP gain on
the sale is approximately $8.5 million.
The Company was represented in this transaction by Jeffrey Bramson
and Jaime Fink of Holliday Fenoglio Fowler, L.P.'s Chicago office.
About Prime Group Realty Trust
Based in Chicago, Illinois, Prime Group Realty Trust (NYSE:
PGEPRB) -- http://www.pgrt.com/-- is a fully-integrated, self-
administered, and self-managed real estate investment trust which
owns, manages, leases, develops, and redevelops office and
industrial real estate, primarily in metropolitan Chicago. The
Company owns 7 office properties containing an aggregate of 3.2
million net rentable square feet and a joint venture interest in
one office property comprised of 101,000 net rentable square feet.
The Company leases and manages 3.3 million square feet comprising
all of its wholly owned properties. In addition, the Company is
the asset and development manager for a 1.1 million square foot
office building located at 1407 Broadway Avenue in New York.
* * *
As reported by the Troubled Company Reporter on December 15, 2009,
Prime Group Realty Trust said the Company's Board of Trustees has
determined not to declare a quarterly distribution on its Series B
Preferred Shares for the fourth quarter of 2009, and that the
Board is unable to determine when the Company might recommence
distributions on the Series B Preferred Shares.
According to the Troubled Company Reporter on March 3, 2010, Two
of Prime Group Realty Trust's subsidiaries, each of which own
separate portions of the Continental Towers Complex in Rolling
Meadows, Illinois, are in default under their first mortgage loans
encumbering the Complex. Continental Towers, L.L.C., a subsidiary
of the Company, is the owner of Tower I, Tower III and the
Commercium at the Continental Towers Complex. The CT Property is
encumbered by a first mortgage loan from CWCapital LLC in the
principal amount of $73.6 million.
PRM REALTY: Amends Schedules of Assets and Liabilities
------------------------------------------------------
PRM Realty Group, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of Texas amended schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $270,000
B. Personal Property $33,784,818
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $278,000
E. Creditors Holding
Unsecured Priority
Claims $327,825
F. Creditors Holding
Unsecured Non-priority
Claims $225,005,775
----------- -----------
TOTAL $34,054,818 $225,611,600
Chicago, Illinois-based PRM Realty Group, LLC, filed for Chapter
11 bankruptcy protection on January 6, 2010 (Bankr. N.D. Tex. Case
No. 10-30241). The Company's affiliates -- Peter R. Morris; Bon
Secour Partners, LLC; PM Transportation, LLC; Rangeline
Properties, LLC; PRS II, LLC; and Morris Radio Enterprises, LLC --
filed separate Chapter 11 bankruptcy petitions. Gerrit M.
Pronske, Esq., at Pronske & Patel, P.C., assists PRM Realty in its
bankruptcy effort. PRM Realty listed $100,000,001 to $500,000,000
in assets and $100,000,001 to $500,000,000 in liabilities.
PROTOSTAR LTD: Wants Exclusivity Moved to Resolve Certain Issues
----------------------------------------------------------------
ProtoStar Ltd., and its debtor-affiliates, ask the U.S. Bankruptcy
Court for the District of Delaware to extend, for the third time,
their exclusive periods to file and solicit acceptances for the
proposed Chapter 11 Plan until August 25, 2010, and October 26,
2010, respectively.
The Debtors need additional time to consensually resolve certain
issues with regard to, and to file one or more Chapter 11 Plans in
the near future with respect to the remaining ProtoStar entities
or all of the ProtoStar entities.
The Debtors propose a hearing on their exclusivity periods
extensions on July 7, 2010. Objections, if any, are due on
June 10, 2010, at 4:00 p.m. (prevailing Eastern Time)
Hamilton, HM EX, Bermuda-based ProtoStar Ltd. is a satellite
operator formed in 2005 to acquire, modify, launch and operate
high-power geostationary communication satellites for direct-to-
home satellite television and broadband internet access across the
Asia-Pacific region.
The Company and its affiliates filed for Chapter 11 on July 29,
2009 (Bankr. D. Del. Lead Case No. 09-12659). The Debtor selected
Pachulski Stang Ziehl & Jones LLP as Delaware counsel; Law Firm of
Appleby as their Bermuda counsel; UBS Securities LLC as financial
advisor & investment banker and Kurtzman Carson Consultants LLC as
claims and noticing agent. The Debtors have tapped UBS Securities
LLC as investment banker and financial advisor.
Also on July 29, 2009, ProtoStar and its affiliates, including
ProtoStar Development Ltd., commenced a coordinated proceeding in
the Supreme Court of Bermuda. John C. McKenna of Finance & Risk
Services Ltd. as liquidator of the Bermuda Group.
In their Chapter 11 petition, the Debtors listed between
US$100 million and US$500 million each in assets and debts. As of
December 31, 2008, ProtoStar's consolidated financial statements,
which include non-debtor affiliates, showed total assets of
US$463,000,000 against debts of US$528,000,000.
QB2 HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: QB2 Holdings, LP
1007 Robert E. Lee Road
Austin, TX 78704
Bankruptcy Case No.: 10-11526
Chapter 11 Petition Date: May 31, 2010
Court: U.S. Bankruptcy Court
Western District of Texas (Austin)
Judge: Craig A. Gargotta
Debtor's Counsel: Stephen W. Sather, Esq.
Barron & Newburger, P.C.
1212 Guadalupe, Suite 104
Austin, TX 78701
Tel: (512) 476-9103 Ext: 220
Fax: (512) 476-9253
E-mail: ssather@bnpclaw.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Richard Mathias, President, Wildflower
Dev., LLC, GP.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Chase Bank Credit Card $59,222
P.O. Box 94014
Palatine, IL 60094
Home Depot Credit Card $20,060
P.O. Box 66925
The Lakes, NV 88901
Citibusiness Visa Credit Card $19,997
P.O. Box 183051
Columbus, OH 43218
American Express Credit Card $19,106
Advanta Bank Credit Card $17,426
BMC Construction Mechanic?s lien $74,977
Value: $58,460
CASA Mechanical Services Construction $19,816
Value: $4,000
FIA Card Services Credit Card $13,082
Internal Revenue Service 940/941 taxes $9,730
HSBC Retail Services Credit Card $8,780
Western States Fire Protection Fire protection $6,920
Champion Window Construction $4,270
Jackson Walker, LLP Attorney Fees $3,732
Trahan, Chuck Wages Owed $3,648
CitiMortgage Credit Card $3,225
Capitol Environmental Environmental $3,060
Guardian Protection Services Protection $2,471
BMC Millwork Construction $2,327
Austin Countertops Countertops $1,850
Internal Revenue Service Tax Penalty $180
QUICK-MED TECHNOLOGIES: Posts $1.4MM Net Loss in Q3 Ended March 31
------------------------------------------------------------------
Quick-Med Technologies, Inc., filed its quarterly report on Form
10-Q, reporting a net loss of $1,399,560 on $364,717 of revenue
for the three months ended March 31, 2010, compared with a net
loss of $527,842 on $127,182 of revenue for the same period ended
March 31, 2009.
The Company's balance sheet as of March 31, 2010, showed
$1,591,607 in assets and $7,849,248 of liabilities, for a
stockholders' deficit of $6,257,641.
"We expect to continue to incur losses in 2010. In addition, we
have a net capital deficiency. These matters raise substantial
doubt about our ability to continue as a going concern."
Daszkal Bolton LLP, in Boca Raton, Florida, 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 June 30, 2009. The independent auditors noted that the
Company has experienced recurring losses and negative cash flows
from operations for the years ended June 30, 2009, and 2008, and
has a net capital deficiency.
A full-text copy of the quarterly report is available for free at:
http://researcharchives.com/t/s?63e7
Gainesville, Fla.-based Quick-Med Technologies, Inc. is a life
sciences company focused on developing proprietary, broad-based
technologies in the consumer and healthcare markets. The
Company's four core technologies are: (1) NIMBUS(R); (2) Stay
Fresh(TM); (3) NimbuDerm(TM); and (4) MultiStat(R).
R&G FINANCIAL: Taps Pietrantoni Mendez as Co-Counsel
----------------------------------------------------
R&G Financial Corporation has asked for authorization from the
U.S. Bankruptcy Court for the District of Puerto Rico to employ
Pietrantoni Mendez & Alvarez LLP as co-counsel.
PMA will, among other things:
a. prepare applications, motions, complaints, answers,
orders, reports, and other legal papers;
b. assist the Debtor in the preparation of documents,
reports, and papers necessary for the administration of
the Debtor's Chapter 11 case;
c. appear in Court to protect the interests of the Debtor
before the Court; and
d. attend meetings as requested by the Debtor.
Jorge I. Peirats, a partner at PMA, says that the firm will be
paid $315 per hour for its services.
Mr. Peirats assures the Court that is disinterested as that term
is defined in Section 101(14) of the Bankruptcy Code.
San Juan, Puerto Rico-based R&G Financial Corporation filed for
Chapter 11 bankruptcy protection on May 14, 2010 (Bankr. D. P.R.
Case No. 10-04124). The Company listed $40,213,356 in assets and
$420,687,694 in debts.
REGAL ENTERTAINMENT: Has Deal to Acquire 9 AMC Theatres
-------------------------------------------------------
Regal Entertainment Group has entered into an agreement to acquire
nine theatres from AMC Entertainment Holdings, Inc. in exchange
for cash and two Regal theatres. The proposed acquisition will
enhance Regal's presence in Illinois, Indiana and Colorado. The
transaction is expected to close during Regal's fiscal second
quarter and is subject to customary closing conditions.
"We expect the acquisition of these theaters to be accretive to
cash flows and earnings," stated Amy Miles, CEO of Regal
Entertainment Group. "Accretive acquisitions are a key component
of our overall business strategy and we look forward to a
successful closing and integration of these assets," Ms. Miles
continued.
On May 20, 2010, Regal Cinemas Corporation, its wholly owned
subsidiary, entered into a sixth amended and restated credit
agreement, which amends, restates and refinances its fifth amended
and restated credit agreement. The Amended Senior Credit Facility
consists of a term loan facility in an aggregate principal amount
of $1.250 billion with a final maturity date in November 2016 and
a revolving credit facility in an aggregate principal amount of
$85.0 million with a final maturity date in May 2015. Proceeds of
the term loan under the Amended Senior Credit Facility were
applied to refinance the term loan under the Prior Senior Credit
Facility, which had an aggregate principal balance of
approximately $1.262 million. No amounts have been drawn on the
revolving credit facility under the Amended Senior Credit
Facility.
Credit Suisse AG, Cayman Islands Branch is the Administrative
Agent under the Amended Senior Credit Facility. Credit Suisse
Securities (USA) LLC and Barclays Capital acted as Joint Lead
Arrangers and Joint Bookrunners, and Banc of America Securities
LLC and Deutsche Bank Securities Inc. also acted as Joint
Bookrunners.
About Regal Entertainment Group
Based in Knoxville, Tennessee, Regal Entertainment Group (NYSE:
RGC) -- http://www.REGmovies.com/-- is the largest motion picture
exhibitor in the world. Regal's theatre circuit, comprising Regal
Cinemas, United Artists Theatres and Edwards Theatres, operates
6,739 screens in 545 locations in 38 states and the District of
Columbia. Regal operates theatres in 43 of the top 50 U.S.
designated market areas.
At April 1, 2010, Regal Entertainment Group had total assets of
$2.588 billion, total liabilities of $2.849 billion, and non-
controlling interest of ($1.1) million, resulting in total deficit
of $260.7 million.
* * *
As reported by the Troubled Company Reporter on April 26, 2010,
Moody's Investors Service downgraded Regal Entertainment Group's
corporate family and probability of default ratings, each to B1
from Ba3. The rating action was prompted by gradually
deteriorating coverage measures and, more importantly,
expectations that Regal will continue to record relatively nominal
levels of free cash flow. Alternatively, should either or both of
top-line or margin expansion cause free cash flow to grow, Moody's
expect Regal to eschew debt reduction and allocate the benefits to
shareholders.
RISKMETRICS GROUP: Moody's Withdraws Ratings on MSCI Inc. Merger
----------------------------------------------------------------
Moody's Investors Service withdrew all of the ratings of
RiskMetrics Group Holdings LLC following the closing of the merger
with MSCI, Inc. All of RiskMetrics' rated debt was repaid upon
the closing of the merger.
These ratings of RiskMetrics were withdrawn:
-- Corporate Family Rating, Ba3
-- Probability of Default rating, B1
-- $25 million first lien revolver, Ba3 (LGD 3, 33%)
-- $300 million first lien term loan, Ba3 (LGD 3, 33%)
The last rating action on RiskMetrics was on March 1, 2010, when
Moody's affirmed the Ba3 Corporate Family Rating and debt
instrument ratings following the announcement of the proposed
merger with MSCI.
RiskMetrics is a leading provider of risk management and corporate
governance products and services to participants in the global
financial markets. Reported revenues for the year ended
December 31, 2009, were approximately $303 million.
SAINT VINCENTS: Proposes Key Employee Incentive Program
-------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its debtor
affiliates seek authority from Judge Cecilia Morris of the U.S.
Bankruptcy Court for the Southern District of New York to
implement a key employee incentive program for 55 non-insider
employees and pay certain sales bonuses to two employees who are
leading their asset sales efforts for certain of their healthcare
services.
The Debtors relate that in connection with the orderly wind down
and closure of the Manhattan Hospital and related services and
their efforts to transfer or sell their remaining healthcare
services, it is essential that they stabilize their employee
morale.
"There have been substantial employee terminations both prior to
and during these Chapter 11 Cases. The combination of the
Hospital closure and employee terminations has also increased the
responsibilities of the Debtors' remaining employees," says Adam
C. Rogoff, Esq., at Kramer Levin Naftalis & Frankel LLP, in New
York. He avers that despite these difficult circumstances, the
Debtors need to rely upon the experience and unique know-how of
their employees.
Accordingly, the Debtors seek to incentivize performance by
approximately 55 non-insider employees who are supporting the
transfer or sale of their assets and the wind down of the estates.
The Debtors assert that the KEIP falls within the range of
reasonable incentive compensation for the Key Employees and has
been negotiated and budgeted for as a part of their DIP Loan.
The Debtors maintain that he KEIP will motivate Key Employees to
maximize value for their estates and creditors, by rewarding those
personnel for meeting targeted performance goals.
In addition, the Debtors seek authorization to pay the Sales
Bonuses to two employees who are overseeing the sale of the
Debtors' Home Health business -- specifically, the Certified Home
Health Agency and the Long Term Home Health Care Program. The
Debtors note that neither of the Sale Bonus Employees will
participate in the KEIP.
The Debtors maintain that under the KEIP, each Key Employee is
eligible to receive a maximum incentive payment in an amount equal
to the amount of salary and wages earned by that employee during
the incentive period multiplied by 40%. The actual incentive
payment may be reduced based upon the Debtors' assessment of the
Key Employee's contributions. According to the Debtors, the
incentive payment amount will not be less than $5,000 but will not
exceed $50,000 for any individual Key Employee.
The Debtors tell the Court that each Sale Bonus Employee is
eligible for Sales Bonuses of up to $100,000, representing a
$50,000 bonus for the CHHA transaction and a $50,000 bonus for the
LTHHCP Transaction. Accordingly, the aggregate Sales Bonuses for
the Sale Bonus Employees for both sales will not exceed $200,000.
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).
SAINT VINCENTS: Proposes Sale Protocol for Medical Clinics
----------------------------------------------------------
The Debtors operate 19 affiliated behavioral health and community
clinics, which provide a variety of services, including HIV
treatment, rape crisis counseling and medical care, homeless
services, long-term health care for the elderly, and immigrant
health services. Additionally, the Debtors have affiliations with
numerous physician practice groups for certain sub-specialties,
like cardiology, gynecology, geriatrics, orthopedics, and others.
Although the Debtors have ceased medical services at their
Manhattan Hospital, they are working to transfer their interests
in the Medical Clinics to third parties. In some instances, the
Debtors operate the Medical Clinics directly. In other instances,
the Medical Clinics are operated by a physician practice
associated with the Debtors. In either case, the
Debtors may have certain interests in assets used by a particular
Medical Clinic.
Moreover, physicians of certain of the practice groups have
already entered into arrangements with a new sponsor, and the
sponsor now seeks to facilitate the transfer of the related assets
and medical records in connection with that physician practice
group. The Debtors relate that their determination to transfer
the Medical Clinics efficiently and with minimal interruption will
be in furtherance of their healthcare mission to provide
continuity of high quality care to the communities they serve.
By this motion, the Debtors ask the Court to approve the Sales
conducted through the Sales Procedures pursuant to Section
363(b)(1) of the Bankruptcy Code. The Debtors assert that
obtaining separate Court approval with respect to each Sale would
be administratively burdensome to the Court and costly to the
Debtors' estates.
The Debtors desire is to effectuate the continuity of medical care
for these outpatient facilities while obtaining a fair value for
any assets associated with those Medical Clinics.
Proposed Sale Procedures
The Debtors ask the Court's authority to conduct the Sales
pursuant to these proposed Sale Procedures:
(a) The Debtors may sell an asset or enter into an agreement
in connection with a Medical Clinic for an amount that is
less than or equal to $35,000 in total cash consideration
received by the Debtors without further Court approval,
and without providing notice of a Non-Noticed Asset Sale
to any party.
(b) If the Debtors propose to sell an asset or enter into an
agreement in connection with a Medical Clinic for an
amount of consideration that is greater than $35,000 but
less than or equal to $1,000,000, these procedures will be
followed:
(i) The Debtors will serve a notice of that proposed
sale by first-class mail, facsimile, overnight
delivery or hand delivery on these parties: (a) the
U.S. Trustee; (b) counsel for the postpetition
secured lenders; (c) counsel to the Official
Committee of Unsecured Creditors; (d) all known
parties holding or asserting liens, claims,
encumbrances, or interests on any of the assets that
are the subject of the proposed Sale; (e) all
counterparties to any executory contracts or
unexpired leases to be assumed and assigned pursuant
to the Sale; (f) counsel to the Consumer Privacy
Ombudsman; and (g) counsel to the Patient Care
Ombudsman.
(ii) Interested Parties will have seven days from service
of the Asset Sale Notice to file and serve any
objections to a proposed Asset Sale. Any
objection to a proposed Noticed Asset Sale must (i)
be in writing, (ii) state with specificity the
grounds for the objection (iii) be filed with the
Court, and (iv) be served upon the counsel to the
Debtors and the Interested Parties, so as to be
received no later than 4:00 p.m. on the final day of
the Objection Period.
(iii) The Asset Sale Notice will include these information
with respect to the proposed Noticed Asset Sale: (i)
a description of the Clinic Assets or De Minimis
Assets proposed to be sold and their location; (ii)
the identity of the purchaser or other parties to
the Noticed Asset Sale, and whether that purchaser
is an insider of any of the Debtors; (iii) the
identities of any known parties holding liens or
other secured interests in the Clinic Assets or De
Minimis Assets and a statement indicating that all
Liens are capable of monetary satisfaction; (iv) the
material economic terms and conditions of the
Noticed Asset Sale and any agreements to be entered
into regarding the transfer of the Medical Clinic;
(v) whether any executory contracts or unexpired
leases are to be assumed and assigned to the
purchaser; (vi) whether medical records will be
transferred to the purchaser; (viii) the amount of
any fees to be paid to third party sales agents or
brokers for that Noticed Asset Sale; and (ix)
instructions regarding the procedures to assert
an objection to the Noticed Asset Sale.
(iv) Contemporaneous with serving an Asset Sale Notice,
the Debtors agree to provide to provide the
Committee with a description of the marketing
efforts undertaken by the Debtors with respect to
the assets being sold pursuant to each Noticed Asset
Sale and the Debtors' basis for believing that the
consideration for the Noticed Asset Sale is fair
and equitable.
(v) If any material economic terms of a Noticed Asset
Sale are amended after transmittal of the Asset Sale
Notice, but prior to the expiration of the Objection
Period, the Debtors will send a revised Asset Sale
Notice to all Interested Parties describing the
proposed Noticed Asset Sale, as amended. If a
revised Asset Sale Notice is required, the Objection
Period will be extended for an additional seven
days.
(vi) The relevant Debtor or Debtors may consummate a
Noticed Asset Sale prior to expiration of the
applicable Objection Period if the Debtor or Debtors
obtain each Interested Party's written consent.
(vii) If no objection to a Noticed Asset Sale is filed and
served consistent with these procedures, the Debtors
may consummate that Noticed Asset Sale and may take
any actions that are reasonable and necessary to
close the sale and obtain the sale proceeds,
including paying all cure amounts listed in the
Asset Sale Notice. No further notice or Court
approval to consummate the Noticed Asset Sale will
be required.
(viii) If an Interested Party files and serves an objection
to a Noticed Asset Sale by the Objection Deadline,
the Debtors and that objecting party will use good
faith efforts to resolve the objection consensually,
provided, however, that if any material economic
terms of the Noticed Asset Sale were modified to
resolve the Objection, the applicable Debtor or
Debtors would be required to send to all Interested
Parties a revised Asset Sale Notice that describes
the proposed Noticed Asset Sale, as amended.
Interested Parties would then have an additional
five calendar days in which to object to the terms
of the amended Asset Sale Notice by transmitting a
written Objection to the Debtors' counsel pursuant
to the procedures. If the Debtors and the objecting
party are unable to resolve the objection
consensually, the Debtors will not consummate the
proposed transaction without first obtaining Court
approval of that Noticed Asset Sale, upon at least
two days written notice and a hearing to be
scheduled by the Debtors.
(c) The Debtors will file motion with the Court requesting
approval of the sale of any asset with a Sale Price
greater than $1,000,000.
(d) Any valid and enforceable Liens on the property to be sold
will attach to the net proceeds of the proposed Non-
Noticed Asset Sale or Noticed Asset Sale in the same
priority as existed prior to that sale and subject to any
claims and defenses that the Debtors may possess.
(e) The Debtors are authorized to assume any executory
contract or unexpired leases related to the Medical Clinic
and assign that Clinic Agreements to the purchaser under
that Sale.
(g) Every 90 days, beginning 90 days after the entry of an
order granting this motion, the Debtors will file with the
Court a report listing all the Sales conducted during the
prior ninety-day period. The Sale Report will set forth a
description of each Clinic Asset and De Minimis Asset
sold, the name of the purchaser, the amount of any fees
paid to third party sale agents in connection with each
Clinic Sale, and the sale price for each Clinic Asset and
De Minimis Asset.
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).
SAINT VINCENTS: Proposes to Enter Into O'Toole Agreements
---------------------------------------------------------
One of the urgent matters commanding the Debtors' attention is the
orderly transition of the Hospital's various outpatient clinics
and programs, Adam C. Rogoff, Esq., at Kramer Levin Naftalis &
Frankel LLP, in New York, relates. He notes that this essential
task not only preserves continuity of patient care but also avoids
the attendant costs to the estates from the disruption and closure
of these healthcare services.
Mr. Rogoff tells the Court that in certain instances, outpatient
clinical programs run by the Debtors are being taken over by other
hospital providers based upon their arrangements with the
physicians and staff at these clinics. As a result of previous
arrangements, the physicians and staff of the Debtors'
Comprehensive HIV Center -- located at 26 West Seventh Avenue, in
New York, in a building commonly called as the O'Toole Building --
have been hired partly by The Mount Sinai Hospital and partly by
The St. Luke's-Roosevelt Hospital Center, which will both be
opening up new clinics serving patients who have previously
visited the HIV Clinic, Mr. Rogoff says.
In order to avoid any disruption in healthcare services provided
to patients, or to the other clinical programs located in the
O'Toole Building, and at the request of the new sponsors of these
new clinics, the Debtors have been negotiating short-term leases
of space in the O'Toole Building while the new sponsors prepare to
relocate these new clinics to different facilities. As a result,
the Debtors seek approval to enter into lease agreements with
qualified new sponsors of the clinics located at the O'Toole
Building.
While the Debtors seek Court authority to enter into new leases
using a form agreement from time to time as needed to facilitate
the operation of clinical programs by new operators, at this time,
the Debtors have fully executed substantially similar lease
agreements with both with Mount Sinai and SLR for space located
within the O'Toole Building, Mr. Rogoff further relates.
Accordingly, the Debtors seek the Court's authority to enter into
these Lease Agreements nunc pro tunc to May 28, 2010.
Mr. Rogoff maintains that the Lease Agreements, which expressly
provide that the Debtors have the right to terminate the leases on
90-days' notice, are intended to be temporary solutions for the
operation of these clinics. The 90-day termination provisions
contained in the Lease Agreements will ensure that the Lease
Agreements will not adversely affect the value of the Debtors'
real estate as part of any future real estate disposition and is
an integral part of the Debtors' agreement to enter into any
short-term leases, he asserts.
Furthermore, Mr. Rogoff notes, there is certain inventory
previously used by the Debtors and located at their clinics, which
has little value to the Debtors' estates but could be used by the
new sponsors of the new clinics. Thus, the Debtors seek Court
permission, (i) as part of their Lease Agreements, to license the
use of certain furniture, fixtures and equipment to the tenant and
(ii) to sell certain de minimis assets to SLR related to the HIV
Clinic's pharmacy free and clear of all liens, claims and
encumbrances.
By leasing or selling these de minimis assets, the Debtors will be
providing these new HIV clinic operators with the tools and
equipment they will need to immediately begin new clinic
operations without any interruption or disruption in service to
patients, Mr. Rogoff says. It also alleviates any burden on the
estates from removing and otherwise disposing of those assets, he
adds.
In order to minimize the administrative expense and burden on the
Debtors' estates associated with maintaining the patient,
research, and prescription records of the HIV Clinic that will be
transferred, the Debtors intend to enter into certain custody
agreements with Mount Sinai and SLR. Pursuant to these
agreements, the new operators would assume custody of, and
responsibility for, the Debtors' applicable patient, research and
prescription records.
A full-text copy of the Lease Agreement is available for free
at http://bankrupt.com/misc/Vincents_O%27TooleLeaseAgmt.pdf
At the Debtors' request, a hearing to consider the Lease Motion is
set for June 10, 2010. Objection deadline is June 4.
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).
SAND HILL: Section 341(a) Meeting Scheduled for July 9
------------------------------------------------------
The U.S. Trustee for Region 6 will convene a meeting of Sand Hill
Foundation, LLC's creditors on July 9, 2010, at 10:00 a.m. The
meeting will be held at Parkway Plaza Shopping Center, 5681 Eastex
Frwy, Beaumont, TX 77706.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Center, Texas-based Sand Hill Foundation, LLC, filed for Chapter
11 bankruptcy protection on 10-90209 (Bankr. E.D. Tex. Case No.
10-90209). Jeffrey Wells Oppel, Esq., at Oppel, Goldberg & Saenz
P.L.L.C., assists the Company in its restructuring effort. The
Company estimated its assets and debts at $10,000,001 to
$50,000,000.
SBARRO INC: Hikes CFO Carolyn Spatafora's Annual Base Salary
------------------------------------------------------------
Effective May 25, 2010, Sbarro, Inc., modified its employment
arrangement with Carolyn M. Spatafora, Chief Financial Officer of
the Company and its parent, MidOcean SBR Holdings, LLC. The
Company increased Ms. Spatafora's annual base salary from $220,000
to $300,000 and granted her additional shares in the equity
sharing plan currently in effect for senior executive officers of
the Company.
About Sbarro Inc.
Melville, N.Y.-based Sbarro, Inc. -- http://www.sbarro.com/-- is
the world's leading Italian quick service restaurant concept and
the largest shopping mall-focused restaurant concept in the world.
The Company has 1,056 restaurants in 41 countries.
The Company's balance sheet at March 28, 2010, showed
$478.2 million in total assets, $31.2 million in total current
liabilities, and $336.1 million in long-term debt, for a
sharerholders' equity of $102.2 million.
* * *
As of March 26, 2010, the Company carries Standard and Poors' CCC+
senior credit facility rating, CCC- Senior Notes rating, and CCC+
corporate rating. In July 2009, Moody's increased Sbarro's credit
ratings to Caa1 from Caa2 on its senior credit facility, affirmed
its C rating on its senior notes and affirmed its Ca corporate
rating, which ratings hold to date.
SEDGWICK CMS: Moody's Withdraws 'B1' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has withdrawn the B1 corporate family
and credit facility ratings on Sedgwick CMS Holdings, Inc.,
following the closing of the sale of Sedgwick to Stone Point
Capital LLC and Hellman & Friedman LLC from Fidelity National
Financial, UnitedHealth Group, Thomas H. Lee Partners, L.P., and
Evercore Capital Partners. The ratings are being withdrawn as the
credit facility was repaid and terminated following the close of
the transaction.
Moody's last rating action on Sedgwick took place on January 27,
2010, when the rating agency affirmed the B1 rating on the senior
secured credit facility of Sedgwick CMS Holdings, Inc., and the B1
corporate family rating.
Sedgwick is one of the largest claims service providers in the
United States. The company processes claims for a wide range of
insurance product lines including workers' compensation, general
liability, and disability insurance. For 2009, the company
generated revenues of $703 million.
SEQUENOM INC: Registers 12,435,000 Shares for Resale
----------------------------------------------------
Sequenom, Inc., has filed with the Securities and Exchange
Commission a prospectus relating to the offer and sale, from time
to time, of up to 12,435,000 shares of Sequenom common stock,
$0.001 par value per share, held by certain stockholders. The
selling stockholders acquired the common stock from Sequenom in a
private placement that closed on May 17, 2010. Pursuant to the
regulatory filing, the proposed maximum aggregate offering price
is $72,123,000.
The selling stockholders may resell or dispose of the shares of
common stock, or interests therein, at fixed prices, at prevailing
market prices at the time of sale or at prices negotiated with
purchasers, to or through underwriters, broker-dealers, agents, or
through any other means. The selling stockholders will bear all
commissions and discounts, if any, attributable to the sale or
disposition of the shares, or interests therein. Sequenom will
bear all costs, expenses and fees in connection with the
registration of the shares. Sequenom will not receive any of the
proceeds from the sale of these shares of common stock by the
selling stockholders.
Sequenom has filed with the SEC a related FORM S-3 REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933. The effective date of
the registration statement has yet to be declared.
The Selling Stockholders are:
* Caduceus Capital II, L.P.;
* Caduceus Capital Master Fund Limited;
* Deerfield Special Situations Fund International LTD;
* Deerfield Special Situations Fund, LP;
* Manning & Napier Fund, Inc. Life Sciences Series;
* Palo Alto Healthcare Master Fund, L.P.;
* Palo Alto Healthcare Master Fund II, L.P.;
* Perceptive Life Sciences Master Fund LTD;
* PW Eucalyptus Fund, Ltd.;
* Ramius Navigation Master Fund Ltd.;
* Redmile Capital Fund, LP;
* Redmile Capital Offshore Fund, Ltd.;
* Redmile Capital Offshore Fund II, Ltd.;
* Redmile Ventures, Ltd.;
* Summer Street Life Sciences Hedge Fund Investors LLC;
* Tang Capital Partners, LP;
* UBS Eucalyptus Fund, L.L.C.; and
* Visium Balanced Master Fund, Ltd.
A full-text copy of the prospectus is available at no charge
at http://ResearchArchives.com/t/s?6403
On May 18, 2010, the U.S. District Court for the Southern District
of California entered an order preliminarily approving a proposed
settlement of the shareholder derivative actions consolidated
under the caption In re Sequenom, Inc. Derivative Litigation, Lead
Case No. 09-CV-1341 LAB (WMC), described in the Company's
Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 7, 2010. The proposed settlement is
subject to final approval of the Court. A full-text copy of the
Actual Notice of Pendency and Settlement of Derivative Actions is
available at no charge at http://ResearchArchives.com/t/s?6404
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
The Company's balance sheet for March 31, 2010, showed
$70.6 million total assets and $15.5 million total current
liabilities, for a $50.0 million stockholders' equity.
Ernst & Young LLP of San Diego, California, has expressed
substantial doubt against Sequenom's ability as a going concern.
The auditor noted that the Company has incurred recurring
operating losses and does not have sufficient working capital to
fund operations through 2010.
SEQUENOM INC: Visium Funds Hold 8.86% of Common Stock
-----------------------------------------------------
Visium Balanced Master Fund, LTD, a Cayman Islands corporation;
Visium Asset Management, LP, a Delaware limited partnership; JG
Asset, LLC, a Delaware limited liability company; and Jacob
Gottlieb disclosed that as of May 26, 2010, they may be deemed to
hold 6,610,626 shares or roughly 8.86% of the common stock of
Sequenom Inc.
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
The Company's balance sheet for March 31, 2010, showed
$70.6 million total assets and $15.5 million total current
liabilities, for a $50.0 million stockholders' equity.
Ernst & Young LLP of San Diego, California, has expressed
substantial doubt against Sequenom's ability as a going concern.
The auditor noted that the Company has incurred recurring
operating losses and does not have sufficient working capital to
fund operations through 2010.
SOUTH BAY: Plan Tied Up in Lien-Priority Dispute
------------------------------------------------
Bill Rochelle at Bloomberg News reports that South Bay Expressway
LP asks the U.S. bankruptcy judge in San Diego to extend by four
months, until Nov. 17, its exclusive period to propose a Chapter
11 plan. South Bay says it can't file a reorganization plan until
there's a decision on whether contractors have mechanics' liens
that come ahead of secured lenders. South Bay claims it already
has begun to explore "various alternatives to restructure the
approximately $530 million in secured debt."
A hearing on the extension is scheduled for July 1.
Contractor Otay River Constructors removed a lawsuit to bankruptcy
court that it filed against South Bay in state court in September
to determine the question of lien priority. Otay is a joint
venture between Washington Group International Inc. and an
affiliate of Fluor Corp.
About South Bay Expressway
South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed
for Chapter 11 on March 22, 2010 (Bankr. S.D. Calif. Case No.
10-04516). Its affiliate, California Transportation Ventures
Inc., also filed for bankruptcy.
The Debtors developed and operate a four lane, nine mile express
toll road in Southern California commonly referred to as the South
Bay Expressway or State Road 125. Both estimated assets and debts
of $500 million to $1 billion in their bankruptcy petitions.
Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the
Debtors in their restructuring effort. PricewaterhouseCoopers LLP
is auditor and tax advisor. Imperial Capital LLC is financial
advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice
agent.
The Debtors say that as of the bankruptcy filing, they have
roughly $640 million in book value of total assets and roughly
$570 million in book value of total liabilities.
Bankruptcy Creditors' Service, Inc., publishes South Bay
Expressway Bankruptcy News. The newsletter tracks the Chapter 11
proceeding undertaken by South Bay Expressway LP and California
Transportation Ventures Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
SOUTHWESTERN ELECTRIC: Fitch Cuts Preferred Stock Rating to 'BB+'
------------------------------------------------------------------
Fitch Ratings has downgraded the outstanding ratings of
Southwestern Electric Power Co.:
-- Issuer Default Rating to 'BBB-' from 'BBB';
-- Senior Unsecured Debt to 'BBB' from 'BBB+';
-- Preferred Stock to 'BB+' from 'BBB-'.
Concurrently, Fitch has revised the Rating Outlook to Stable from
Negative. Approximately $1.9 billion of debt is affected.
The ratings downgrade reflects SWEPCO's current and projected
credit metrics, which have been trending down and comparable to
'BBB-' utility peers. Capital spending will remain elevated as a
result of spending on the new 600 megawatt Turk coal plant, which
is expected to enter commercial operation in mid-2012. High
capital spending may continue after completion of Turk, for
projects such as environmental compliance, which could delay any
improvements in credit ratios. Furthermore, a recent decision by
the Supreme Court of Arkansas has cast uncertainty surrounding
rate recovery for Turk in the state (approximately 88 MW, or 20%
of SWEPCO's capacity).
SWEPCO's credit rating is supported by the tangible support
afforded by affiliation with the parent, American Electric Power
Co. (AEP, IDR 'BBB' with a Stable Outlook), including
participating in the money pool and power pool, as well as
periodic equity infusions to maintain a balanced capital
structure. Fitch expects AEP to continue to provide sufficient
financial support to maintain SWEPCO's current rating. However,
any deterioration in the credit quality of the parent could impair
the ratings of the utility subsidiary.
On May 13, 2010, the Supreme Court of Arkansas reversed and
remanded the decision of the Arkansas Public Service Commission to
grant the Certificate of Environmental Compatibility and Public
Need for the Turk plant. In its decision the Supreme Court held
that Arkansas law requires that the determination of whether the
company has demonstrated the need for additional power supply
sources and whether the conditions to issue the CECPN have been
met must be evaluated in a single proceeding. The Court ruled
that the APSC erred in determining the need for additional power
supply sources in a proceeding separate from its granting of the
CECPN. The company has filed a petition for a rehearing.
Approximately 20% of Turk's output is in Arkansas, with the
balance split between Texas, Louisiana and FERC customers. The
inability to receive full and timely recovery of the costs related
to Turk in Arkansas or to rely on wholesale sales for the Arkansas
portion of capacity, SWEPCO's credit protection measures would be
moderately impacted.
The company's ratios of EBITDA to interest and funds from
operations interest coverage were 3.1 times and 4.6x,
respectively, for the 12-month period ended March 31, 2010. Debt
leverage, as measured by the ratio of Debt to EBITDA, was high at
6.0x. Cash flows will be pressured over the next few years as
SWEPCO continues construction on the Turk plant, scheduled to come
on-line in late 2012. As a result, Fitch forecasts EBITDA to
interest to remain below 4.0x and funds flow coverage to be less
than 3.5x over the ratings horizon. Debt leverage is expected to
remain elevated through 2013 at or above 5.0x. The utility's
liquidity position remains strong, with $350 million of available
capacity under the AEP money pool. Total AEP available liquidity
was approximately $3.3 billion as of March 31, 2010, including
more than $800 million of cash on hand. AEP's credit facilities
are comprised of a $1.5 billion facility that matures in March
2011, a $1.454 billion facility that matures in April 2012 and a
$627 facility that matures in April 2011. SWEPCO's debt
maturities are minimal over the next five years with $42.6 million
maturing in 2011, and $20 million in 2012. Maturing debt will be
funded through a combination of internal cash generation and
external refinancings. Fitch also notes that the service
territories served by the companies in Arkansas, Louisiana and
Texas have been holding up during the economic downturn with
unemployment rates below the national average.
The Stable Outlook reflects Fitch's expectation that SWEPCO will
complete the Turk unit on schedule without significant cost
overruns and receive timely recovery of its investment in
Louisiana and Texas, as well as maintain financial and operational
support from AEP.
SWEPCO is also constructing the Stall Unit, an intermediate load
500 MW natural gas-fired combustion turbine combined cycle
generating unit in Shreveport, LA. The plant is estimated to cost
$431 million and is currently in the testing phase to come on-line
in mid June 2010.
In April 2010, a settlement agreement was approved by the Public
Utilities Commission of Texas to increase SWEPCO's base rates by
approximately $25 million, effective May 2010, including a return
on equity of 10.33%, which consists of $5 million related to
construction of Stall, $10 million in other increases and a
$10 million one-year surcharge rider to recover additional
vegetation management costs. SWEPCO filed a request for a
$75 million base rate increase, including an 11.5% ROE in August
2009.
SPECIALTY PRODUCTS: Case Summary & 9 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Specialty Products Holdings Corp.
aka RPM, Inc.
4515 St. Clair Avenue
Cleveland, OH 66103
Bankruptcy Case No.: 10-11780
Chapter 11 Petition Date: May 31, 2010
Court: U.S. Bankruptcy Court
District of Delaware (Delaware)
Debtor's Counsel: Daniel J. DeFranceschi, Esq.
E-mail: defranceschi@rlf.com
Zachary I. Shapiro, Esq.
E-mail: shapiro@rlf.com
Richards Layton & Finger
One Rodney Square, P.O. Box 551
Wilmington, DE 19899
Tel: (302) 651-7700
Fax: (302) 651-7701
Debtor's
Co-Counsel: Gregory M. Gordon, Esq.
Dan B. Prieto, Esq.
Robert J. Jud, Esq.
Jones Day
2727 North Harwood Street
Dallas, TX 75201-1515
Tel: (214) 220-3939
Fax: (214) 969-5100
Debtor's
Claims and
Notice Agent: Logan and Company
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $100,000,001 to $500,000,000
The petition was signed by Stephen J. Knoop, chairman and chief
executive officer.
Debtor-affiliates filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Bondex International, Inc. 10-11779 5/31/10
Assets: $100,000,001 to $500,000,000
Debts: $100,000,001 to $500,000,000
Specialty Product's List of 9 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
US Environmental Protection Agency Statutory --
1200 Pennsylvania Avenue NW
Washington, D.C. 20460
Akzo Nobel Coatings Inc. Contribution --
120 White Plains Road, SUite 300
Tarrytown , NY 10591-5522
Detrex Corporation Contribution --
24901 Northwestern Highway,
Suite 401
Southfield, MI 48075-2209
Federal Screw Works Contribution --
Ford Motor Company Contribution --
CNA Holdings LLC Contribution --
Michelin North America, Inc. Contribution --
TRW Automotive U.S. LLC Contribution --
Pension Benefit Guaranty Contribution --
Corporation
Bondex International's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Jenkins & Martin, L.L.P. Professional $750,601
2615 Calder, Suite 500 Services
Beaumont, Texas 77702
Walsworth Franklin Bevins Professional $635,249
& McCall, L.L.P Services
One City Boulevard West, 5th Floor
Orange, CA 92868-3677
Cooley Manion Jones, L.L.P. Professional $288,362
21 Custom House Street Services
Boston, MA 02110
Weiner Lesniak, L.L.P. Professional $169,145
Services
Updike, Kelly & Spellacy, P.C. Professional $150,751
Services
Cronin & Maxwell Professional $48,836
Services
Collins, Einhorn, Farrell Professional $40,492
& Ulanoff Services
Simon, Peragine, Smith & Professional $27,426
Redfearn, LLP Services
Vickers, Riis, Murray & Professional $17,120
Curran, LLC Services
Smith Amundsen, LLC Professional $16,359
Services
Clarke, Dolph, Rapaport, Hardy Professional $14,860
& Hull, PLC Services
Horvitz & Levy, LLP Professional $14,339
Services
Proffitt & Cox, LLP Professional $10,854
Services
Modrall, Sperling, Roehl, Harris Professional $10,183
& Sisk, P.A. Services
Markusson Green Jarvis, P.C. Professional $7,457
Services
Bingham McCutchen, LLP Professional $7,366
Services
Foland, Wickens, Eisfelder, Roper Professional $7,094
& Hofer, P.C. Services
Wooden & McLaughlin, LLP Professional $5,509
Services
Bennett & Guthrie, PLLC Professional $3,506
Services
Pension Benefit Guaranty Statutory --
Corporation
STRATOS GLOBAL: Moody's Withdraws B1 Probability of Default Rating
------------------------------------------------------------------
Moody's Investors Service withdrew all ratings for Stratos Global
Corporation following the repayment in full of all rated debt.
Stratos is a wholly-owned subsidiary of Inmarsat plc (Ba1 -
Stable) and used cash resources and financing from Inmarsat to
fund the repayments.
Stratos Global Corporation
-- Probability of Default Rating, Withdrawn, previously rated B1
-- Speculative Grade Liquidity Rating, Withdrawn, previously
rated SGL-2
-- Corporate Family Rating, Withdrawn, previously rated B1
-- Senior Secured Bank Credit Facility, Withdrawn, previously
rated Ba2, LGD2, 22%
-- Senior Unsecured Bonds, Withdrawn, previously rated B3, LGD5,
80%
The last action for Stratos Global Corporation occurred on
April 16, 2009, when Moody's affirmed the B1 Corporate Family
Rating and revised the rating outlook to positive from stable.
Stratos Global Corporation is a global provider of mobile and
fixed satellite-based communications services.
SUNRISE SENIOR: Enters Into Purchase and Sale Deal with GHS
-----------------------------------------------------------
Sunrise Senior Living, Inc. disclosed that the company and certain
of its affiliates have entered into a purchase and sale agreement
with GHS Pflegeresidenzen Grundstucks GmbH and Prudential Real
Estate Investors (operating on behalf of investors in a fund
managed by its Munich-based business, TMW Pramerica Property
Investment GmbH) to sell eight of the Company's nine German
assisted living facilities. The aggregate purchase price under
this agreement is EUR 60.8 million, which, after expenses, shall
be paid directly to the respective lenders to the German
communities.
The closing, which is subject to certain conditions described in
Sunrise's Form 8-K filed, is expected to occur on or after
August 31, 2010. Upon closing, Sunrise will transfer the
management of these eight communities to Kursana Seniorenvilla
GmbH, a Germany-based senior living provider.
"We're delighted that our residents, team and fine properties will
be in capable hands," said Mark Ordan, Sunrise's chief executive
officer. "We are also very pleased that this agreement is
beneficial to Sunrise's stakeholders, as we continue to strengthen
the organization."
Sunrise previously announced that it had entered into certain
restructuring and settlement agreements with lenders to its nine
German communities. As part of these agreements, Sunrise agreed
to market for sale these communities for their respective lenders.
Sunrise is continuing to market for sale one remaining property in
Germany.
Going Concern Doubt
According to the Troubled Company Reporter on March 3, 2010, Ernst
& Young LLP of McLean, Virginia, expresses substantial doubt about
Sunrise Senior Living Inc.'s ability as a going concern after
auditing the company's financial statement for the year ended
December 31, 2009. The auditor said the Company cannot borrow
under the bank credit facility and the Company has significant
debt maturing in 2010 which it does not have the ability to repay.
The Company's balance sheet as of March 31, 2010, showed
$891.5 million, $874.9 million of liabilities, and $16.6 million
of stockholders' equity.
About Sunrise Senior
McLean, Virginia-based Sunrise Senior Living --
http://www.sunriseseniorliving.com/-- employs 40,000 people. As
of November 9, 2009, Sunrise operated 403 communities in the
United States, Canada, Germany and the United Kingdom, with a
combined unit capacity of approximately 41,500 units. Sunrise
offers a full range of personalized senior living services,
including independent living, assisted living, care for
individuals with Alzheimer's and other forms of memory loss, as
well as nursing and rehabilitative services. Sunrise's senior
living services are delivered by staff trained to encourage the
independence, preserve the dignity, enable freedom of choice and
protect the privacy of residents.
TARAZ KOOH: Wants to Use Sale Proceeds to Complete Fitness Center
-----------------------------------------------------------------
Taraz Kooh, LLC, asks the U.S. Bankruptcy Court for the Northern
District of Texas for authorization to use the proceeds from sale
of real property which secures obligation to its prepetition
lenders.
The Debtor sold 0.95 acre unimproved lot adjacent to the hotel
located at 1540 Municipal Drive, Richardson, Texas to MobileComm
Ventures for $225,000.
As of the petition date, the Debtor is owed to Column Financial,
Inc., $16,503,721 in principal plus accrued interest and other
charges arising under the CMBS loan. Wells Fargo Bank, N.A., as
trustee for the registered Holders of Credit Suisse First Boston
Mortgage Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 2008-C1, contends that it is the owner and
holder of the CMBS Note and Deed of Trust.
The Debtor will use the cash collateral to pay approximately
$70,000 in expenses necessary to complete the fitness center,
which is required in the franchise agreement with Doubletree Hotel
Richardson. The Debtor will apply the remaining funds towards
the 2010 tax liability.
The Debtor relates that the completion of the fitness center will
increase its opportunity to successfully reorganize.
The Debtor says that the trustee will be adequately protected if
it be allowed to apply the sale proceeds. In addition to the
adequate protection payments, the Debtor agrees that the trustee
maintains replacement liens and security interests in and upon all
of the properties and assets of the estate, and recoveries under
the Chapter 5 of the Bankruptcy Code.
The Debtor is represented by:
J. Mark Chevallier, Esq.
E-mail: mchevallier@mcslaw.com
David L. Woods, Esq.
E-mail: dwood@mcslaw.com
James G. Rea, Esq.
E-mail: jrea@mcslaw.com
McGuire, Craddock & Strother, P.C.
2501 N. Harwood, Suite 1800
Dallas, TX 75201
Tel: (214) 954-6800
Fax: (214) 954-6850
About Taraz Kooh
Richardson, Texas-based Taraz Kooh, LLC, filed for Chapter 11
bankruptcy protection on March 14, 2010 (Bankr. N.D. Texas Case
No. 10-31814). John Mark Chevallier, Esq., at McGuire, Craddock &
Strother, P.C., assists the Company in its restructuring effort.
The Company estimated its assets and debts at $10,000,001 to
$50,000,000.
TAYLOR BEAN: Selling Reverse Mortgages for 41% or More
------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Taylor Bean &
Whitaker Mortgage Corp. will sell 23 reverse mortgages for $1.135
million unless a better offer is made by June 17. The mortgages
have a combined principal balance of $2.763 million. Fourteen are
guaranteed by the Federal Housing Administration.
About Taylor Bean
Taylor, Bean & Whitaker Mortgage Corp. is a 27-year-old company
that grew from a small Ocala-based mortgage broker to become one
of the largest mortgage bankers in the United States. In 2009,
Taylor Bean was the country's third largest direct-endorsement
lender of FHA-insured loans of the largest wholesale mortgage
lenders and issuer of mortgage backed securities. It also managed
a combined mortgage servicing portfolio of approximately
$80 billion. The company employed more that 2,000 people in
offices located throughout the United States.
Taylor Bean filed for Chapter 11 on August 24 (Bankr. M.D. Fla.
Case No. 09-07047). Taylor Bean filed under Chapter 11 three weeks
after federal investigators searched its offices. The day
following the search, the Federal Housing Administration, Ginnie
Mae and Freddie Mac prohibited the company from issuing new
mortgages and terminated servicing rights.
Taylor Bean has more than $1 billion of both assets and
liabilities, and between 1,000 and 5,000 creditors, according to
the bankruptcy petition.
TAYLOR CAPITAL: Fitch Affirms 'B-' Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has affirmed the 'B-' long-term Issuer Default
Ratings of Taylor Capital Group Inc. and 'B' long-term IDR of Cole
Taylor Bank following the company's recent capital raise. All
other ratings have been affirmed. The Rating Outlook for TAYC and
Cole Taylor Bank is now Stable. A complete list of ratings is
detailed at the end of this release.
TAYC announced the completion of its capital raise that included
the issuance of approximately $32 million of preferred stock,
$34 million of subordinated debt, and the conversion of existing
preferred stock into common stock. An additional $9 million,
funded by existing investor, is being held in escrow at Cole
Taylor Bank pending regulatory review and approval. Fitch
estimates pro forma TCE/TA will improve from 2.10% at March 31,
2010 to approximately 3.45% on a pro forma basis, which is still
below peer averages, and reflective of the assigned ratings.
Nonetheless, Fitch views the completed capital raise favorably as
it augments regulatory capital, provides additional loss
absorption for unexpected losses, and enhances the parent company
cash position.
Fitch's affirmation and Stable Rating Outlook reflect the
aforementioned capital raise coupled with stabilizing asset
quality trends. Over the past few quarters, TAYC's credit metrics
appear to have stabilized, as TAYC reported lower levels of non-
performing assets in dollar terms during the third quarter of 2009
(3Q09) and 4Q09 and only a slight increase in 1Q10. NPAs are down
17% at March 31, 2010, versus a year ago. Delinquency statistics
were good with essentially no loans 90 days past due, and loans 30
to 89 days past due low at 44 basis points (bps) of total loans at
March 31, 2010. Fitch expects that TAYC will continue to report
higher levels of net charge-offs, as the company works through its
elevated level of problem loans, but reserve coverage of loans
will continue to decline given moderating credit trends.
While Fitch believes that TAYC's asset quality has stabilized, the
company's loan portfolio includes a high percentage of CRE and
construction loans at 51% of total loans and approximately 600% of
stockholder's equity at March 31, 2010. Despite the bank's CRE
concentration and expectation for higher credit costs, Fitch
maintained the lead bank's ratings in part due to the cushion for
future loan losses provided by the completed capital raise. The
enhanced capital base, combined with stabilizing credit trends,
remove the near term downward risk to the company's ratings.
TAYC's long-term IDR could be positively affected through a
continuation of moderating credit trends and improving financial
performance, augmented with improving capital ratios. Conversely,
TAYC's long-term IDR could be negatively affected if the company
needs to raise further capital given a deterioration in asset
quality.
Fitch has affirmed these ratings, and assigned a Stable Rating
Outlook:
Taylor Capital Group, Inc.
-- Long-term Issuer Default Rating at 'B-';
-- Individual at 'D/E';
-- Preferred stock at 'CC/RR6'.
-- Short-term IDR at 'B'.
-- Support Rating at '5';
-- Support Floor at 'NF'.
Cole Taylor Bank
-- Long-term IDR at 'B';
-- Short-term at 'B';
-- Individual at 'D';
-- Long-term deposits at 'B+/RR3';
-- Short-term deposits at 'B';
-- Support Rating at '5';
-- Support Floor at 'NF'.
TAYC Capital Trust I
-- Preferred stock at 'CC/RR6'.
TEFRON LTD: Posts $3.3 Million Net Loss in Q1 2010
--------------------------------------------------
Tefron Ltd. reported a net loss of $3.3 million on $25.8 million
of revenue for the three months ended March 31, 2010, compared
with net income of $145,000 on $47.0 million of revenue for the
same period ended March 31, 2009.
The Company's balance sheet as of March 31, 2010, showed
$97.1 million in assets, $49.3 million of liabilities, and
$47.8 million of capital.
As reported in the Troubled Company Reporter on May 5, 2010,
Kost Forer Gabay & Kasierer, in Haifa, Israel, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
had losses of $17.4 million in 2009, has a negative working
capital of $6.6 million as of December 31, 2009, and had negative
cash flows from operating activities of $1.5 million in 2009. In
addition, the independent auditors said that the Company's ability
to meet its obligations will depend on its ability to comply with
its new financial covenants, including positive EBITDA, during
2010. "If the Company will not comply with the covenants and the
banks will demand that the credit be payable immediately, then the
Company's ability to raise financing from other sources will be
very limited."
A full-text copy of the interim quarterly report is available for
free at http://researcharchives.com/t/s?63ff
Based in Misgav, Israel, Tefron Ltd. (OTC: TFRFF; TASE: TFRN)
manufactures boutique-quality everyday seamless intimate apparel,
active wear and swimwear sold throughout the world by such name-
brand marketers as Victoria's Secret, Nike, Target, The Gap, J.C.
Penney, Maidenform, Lululemon Athletica, Warnaco/Calvin Klein,
Patagonia, Reebok, Swimwear Anywhere, and El Corte Englese, as
well as other well known retailers and designer labels. The
Company's product line includes knitted briefs, bras, tank tops,
boxers, leggings, crop, t-shirts, nightwear, bodysuits, swimwear,
beach wear and active-wear.
The Company's foreign subsidiaries are Tefron USA and Tefron UK
which primarily conducts marketing and sale activities.
TELKONET INC: Delays Subscription Rights Offering
-------------------------------------------------
Telkonet Inc. has filed with the Securities and Exchange
Commission Amendment No. 2 to Form S-1 Registration Statement
under the Securities Act of 1933 to delay a planned subscription
rights offering. Pursuant to the registration statement, Telkonet
is seeking to register an undetermined number of shares of Common
Stock; and Warrants to Purchase Shares of Common Stock Issuable
upon Exercise of Rights to Subscribe for Such Shares and Warrants.
Telkonet plans to distribute, at no charge to holders of shares of
its common stock, other than those who hold shares of common stock
solely as participants in the Telkonet, Inc. 401(k) Plan, and
holders of shares of the Company's Series A convertible redeemable
preferred stock, transferable subscription rights to subscribe for
shares of common stock and transferable warrants to purchase
additional shares of common stock. Telkonet is offering the
subscription rights in the rights offering to holders of the
Company's common stock and holders of Telkonet Series A
convertible redeemable preferred stock of record as of 5:00 p.m.,
Eastern time, on [_____], 2010, the record date. Telkonet
shareholders will receive one transferable subscription right for
every share of common stock held of record and every share of
common stock into which Telkonet Series A convertible redeemable
preferred stock held of record is convertible as of 5:00 p.m.,
Eastern time, on the record date. Pursuant to the terms of the
rights offering, the rights may only be exercised for a maximum of
[_____] shares of common stock and related warrants, or $[_____]
of subscription proceeds.
A full-text copy of the registration statement is available at no
charge at http://ResearchArchives.com/t/s?63e0
About Telkonet
Milwaukee, Wisconsin-based Telkonet, Inc. is a clean technology
company that develops and manufactures proprietary energy
efficiency and smart grid networking technology.
The Company's balance sheet at March 31, 2010, showing
$16.1 million in total assets, $6.2 million in total current
liabilities, and $3.2 million in total long-term liabilities, for
a $5.8 million total stockholders' equity.
RBSM LLP, in New York, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that of the Company's significant operating losses
in the current year and in the past.
TELKONET INC: Files Initial Notice of Annual Stockholders Meeting
-----------------------------------------------------------------
Telkonet, Inc., has filed with the Securities and Exchange
Commission a revised preliminary notice and proxy regarding its
planned annual stockholders' meeting. No fixed date has been set
for the meeting.
The purposes of the meeting are:
1. To elect four directors, each to serve until the next
annual meeting of stockholders and until his successor has
been elected and qualified;
2. To approve an amendment to the Telkonet, Inc. Amended and
Restated Articles of Incorporation, as amended, to
increase the number of authorized shares of the Company's
common stock from 155,000,000 to 575,000,000;
3. To ratify the appointment of independent accountants for
2010; and
4. To transact such other business as may properly come
before the Meeting.
Only holders of record of the Company's common stock, par value
$0.001 per share, and the Company's Series A Preferred Stock, par
value $0.001 per share, at the close of business on [_____], 2010,
the record date, are entitled to notice of and to vote at the
Meeting.
A full-text copy of the revised preliminary notice and proxy is
available at no charge at http://ResearchArchives.com/t/s?63df
On May 13, 2010, the Company entered into an Employment Agreement
with Jason Tienor for a term commencing as of March 16, 2010 and
expiring on March 15, 2011. Mr. Tienor will continue to serve as
President and Chief Executive Officer. Mr. Tienor will receive a
base salary of $200,000 per year and bonuses and benefits based on
the Company's internal policies and participation in our incentive
and benefit plans.
Mr. Tienor has been employed by the Company pursuant to an
employment agreement dated March 15, 2007. The March 15 Agreement
was for a term of three years, renewable upon the agreement of the
parties and provided for, among other things, an annual base
salary of $148,000 per year and bonuses and benefits based on the
Company's internal policies and participation in the Company's
incentive and benefit plans. On August 20, 2007, Mr. Tienor's
annual salary was increased to $200,000. Mr. Tienor has served as
the Company's President and Chief Executive Officer since December
2007. Notwithstanding the expiration of the March 15 Agreement,
Mr. Tienor continued to be employed and to perform services
pursuant to the terms of his employment agreement pending
completion of a replacement agreement.
On May 13, 2010, the Company entered into an Employment Agreement
with Jeffrey Sobieski for a term commencing as of March 16, 2010,
and expiring on March 15, 2011. Mr. Sobieski will continue to
serve as Chief Operating Officer. Mr. Sobieski will receive a
base salary of $190,000 per year and bonuses and benefits based on
the Company's internal policies and participation in the Company's
incentive and benefit plans.
Mr. Sobieski has been employed by the Company pursuant to an
employment agreement dated March 15, 2007. The March 15 Agreement
was for a term of three years, renewable upon the agreement of the
parties and provided for, among other things, an annual base
salary of $148,000 per year and bonuses and benefits based on the
Company's internal policies and participation in the Company's
incentive and benefit plans. On December 11, 2007, Mr. Sobieski's
annual salary was increased to $190,000. Mr. Sobieski has served
as the Company's Chief Operating Officer since June 2008.
Notwithstanding the expiration of the March 15 Agreement, Mr.
Sobieski continued to be employed and to perform services pursuant
to the terms of his employment agreement pending completion of a
replacement agreement.
About Telkonet
Milwaukee, Wisconsin-based Telkonet, Inc. is a clean technology
company that develops and manufactures proprietary energy
efficiency and smart grid networking technology.
The Company's balance sheet at March 31, 2010, showing
$16.1 million in total assets, $6.2 million in total current
liabilities, and $3.2 million in total long-term liabilities, for
a $5.8 million total stockholders' equity.
RBSM LLP, in New York, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that of the Company's significant operating losses
in the current year and in the past.
TEXAS HILL: Affiliate Files List of Largest Unsecured Creditor
--------------------------------------------------------------
Texas Hill Diamante Cooling, L.L.C., a debtor-affiliate of Texas
Hill Enterprises, GP (THE), filed with the U.S. Bankruptcy Court
for the District of Arizona a list of its largest unsecured
creditor, disclosing:
Entity Claim Amount
------ ------------
Texas Hill Enterprises, GP $200,000
50505 E. County 1st St.
Roll, AZ 85347
Roll, Arizona-based Texas Hill Enterprises, GP, dba Texas Hill
Farms, and Texas Hill Diamante Cooling, L.L.C., filed for
Chapter 11 bankruptcy on April 15, 2010 (Bankr. D. Ariz. Case No.
10-11121). Daniel P. Collins, Esq., and Allysse M. Medina, Esq.,
at Collins, May, Potenza, Baran & Gillespie, 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 debts.
TEXAS RANGERS: Lenders Say They Have Competing Bidder
-----------------------------------------------------
Bill Rochelle at Bloomberg News reports that secured lenders owed
$525 million in connection with the Texas Rangers professional
baseball club say they have a potential buyer who is willing to
participate in an auction. The bankruptcy judge said he hasn't
decided whether to require an auction.
Texas Rangers Baseball Partners has proposed a $575 million sale
of the team, which plays in Arlington, Texas, to a group including
Hall of Fame pitcher Nolan Ryan, the team's president, and Chuck
Greenberg. Lenders, who are owed $525 million by team owner Tom
Hicks, have said they believe the team can get a better deal.
The sale was proposed as part of the May 24 bankruptcy filing by
Texas Rangers Baseball Partners, which is owned by two entities
controlled by Mr. Hicks' HSG Sports Group LLC.
About Texas Rangers
Texas Rangers Baseball Partners owns and operates the Texas
Rangers Major League Baseball Club, a professional baseball club
in the Dallas/Fort Worth Metroplex.
TRBP is a Texas general partnership, in which subsidiaries of HSG
Sports Group LLC own a 100% stake. Controlled by Thomas O. Hicks,
HSG also indirectly wholly-owns Dallas Stars, L.P., which owns and
operates the Dallas Stars National Hockey League franchise. The
Texas Rangers have had five owners since the club moved to
Arlington in 1972. Mr. Hicks became the fifth owner in the
history of the Texas Rangers on June 16, 1998.
In its petition, Texas Rangers Baseball Partners said it had both
assets and debt of less than $500 million.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtor. Forshey & Prostok LLP serves as conflicts counsel.
Parella Weinberg Partners LP serves as financial advisor.
Lenders to the Texas Rangers sought to force the baseball team's
equity owners -- Rangers Equity Holdings, L.P. and Rangers Equity
Holdings GP, LLC -- into bankruptcy court protection (Bankr. N.D.
Tex. Case No. 10-43624 and 10-43625). The lenders, a group that
includes investment funds Monarch Alternative Capital and
Kingsland Capital Management, filed an involuntary bankruptcy
petition on May 28 against the two companies. The two companies
were not included in the May 24 Chapter 11 filing of TRBP.
THELEN LLP: Wins Approval to Settle Loewen Bond Offering Suit
-------------------------------------------------------------
Bankruptcy Law360 reports that the estate of Thelen LLP has won
approval to settle claims brought by State Street Bank & Trust
Co., Skadden Arps Slate Meagher & Flom LLP and others over bond
offerings conducted more than a decade ago for Loewen Group Inc.
Judge Allan L. Gropper issued an order Wednesday in the U.S.
Bankruptcy Court for the Southern District of New York allowing
Thelen's insurer, MPC Insurance Ltd., to pay $900,000, according t
Law360.
Thelen LLP, formerly known as Thelen Reid Brown Raysman & Steiner
-- http://thelen.com/-- is a bicoastal American law firm in
process of dissolution. It was formed as a product between two
mergers between California and New York-based law firms, mostly
recently in 2006. Its headcount peaked at roughly 600 attorneys
in 2006, and had 500 early in 2008, with offices in eight cities
in the United States, England and China.
As reported by the Troubled Company Reporter on September 22,
2009, citing The Recorder, Thelen LLP filed for Chapter 7
protection, after its partnership agreed to dissolve the Company.
According to The Recorder, the filing was expected due to the
timing of a writ of attachment filed by one of Thelen's landlords,
entitling the landlord to $25 million of the Company's assets.
The Recorder says that the landlord won approval for that writ in
June 2009, but Thelen could void the writ by filing for bankruptcy
within 90 days of that court ruling. Thelen, according to AM Law
Daily, has repaid most of its debt to its lending banks.
TIERRA VERDE: Ch. 11 Case Dismissed for No Possible Rehabilitation
------------------------------------------------------------------
The Hon. K. Rodney May of the U.S. Bankruptcy Court for the Middle
District of Florida dismissed the Chapter 11 case of Tierra Verde
Marina Holdings, LLC.
Encore Bank sought for the dismissal of the Debtor's case relating
that there is no likelihood of rehabilitation.
Saint Petersburg, Florida-based Tierra Verde Marina Holdings, LLC,
filed for Chapter 11 bankruptcy protection on January 29, 2010
(Bankr. M.D. Fla. Case No. 10-01993). The Company listed
$10,000,001 to $50,000,000 in assets and $10,000,001 to
$50,000,000 in liabilities.
TOUSA INC: Ending 401(k); Cash Almost $490 Million in April
-----------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Tousa Inc., which is
liquidating and which has reduced 1,000 workers to 29, is
terminating the 401(k) savings plan for employees. The Company
had been matching contributions as much as 6% of a worker's wages.
According to the report, Tousa reported cash of $489.7 million on
April 30, an increase of $700,000 over the month.
Additional recoveries for creditors may come from a lawsuit the
creditors committee successfully brought against lenders,
contending that a bailout and refinancing in mid-2007 of a joint
venture in Transeastern Properties Inc. resulted in fraudulent
transfers. To take an appeal, the bankruptcy judge required the
banks to post $700 million in bonds to hold up enforcement of the
judgment pending appeal.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-
10928). The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta,
Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at
Berger Singerman, to represent them in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
TRUVO INTERMEDIATE: S&P Downgrades Corporate Credit Rating to 'SD'
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its long-
term corporate credit rating on Delaware-based international
publisher of classified directories TRUVO Intermediate LLC to 'SD'
from 'CC'.
At the same time, S&P lowered the debt rating on TRUVO Subsidiary
Corp.'s $200 million and ?395 million subordinated notes due 2014
to 'D' (Default) from 'C'. The recovery rating of '6' on these
notes remains unchanged.
"The rating actions reflect Truvo's failure, on June 1, 2010, to
pay financial interest on its $200 million and ?395 million
subordinated notes, both due 2014," said Standard & Poor's credit
analyst Carlo Castelli.
Under the notes' indentures, the company still has a 30-day grace
period for payment (until June 30, 2010). However, S&P considers
it unlikely that a payment will be made within this period, given
that Truvo's debt restructuring plan, to be finalized by July 1,
2010, will focus on the Truvo U.S. holding companies that issued
the notes and certain payment-in-kind debt. In accordance with
S&P's criteria, S&P lower a debt rating to 'D' on the day an
interest payment is due but not paid. S&P make an exception if
the instrument provides a grace period and S&P believes that a
payment will be made within that period.
S&P will raise the corporate credit rating on Truvo on completion
of the debt restructuring. At this stage, S&P lack all the
information necessary to assess the potential rating on Truvo post
restructuring. In particular, S&P need detailed information on
the implications of the debt restructuring; the new capital
structure; strategy and liquidity updates; management's operating
forecasts and underlying assumptions over the next few years; and
information on the new covenants.
UAL CORP: Execs to Appear Before House Panel on June 16
-------------------------------------------------------
United Air Lines CEO Glenn Tilton and Continental Airlines CEO
Jeff Smisek will testify before the U.S. House Transportation and
Infrastructure Committee and House Judiciary Committee on June 16
in Washington, D.C.
On May 27, 2010, Messrs. Tilton and Jeff Smisek appeared before a
U.S. Senate panel with oversight of antitrust matters to discuss
the airlines' proposed merger and answer questions from senators.
Others testifying included a professor of economics and an analyst
representing a consumer group who suggested that the merger would
reduce competition and drive fares higher.
At the May 27 hearing, Mr. Tilton told the United States Senate
Committee on the Judiciary, Subcommittee on Antitrust, Competition
Policy and Consumer Rights the merger company would have a
significant presence in Houston, Continental's hometown.
"We'll have a significant presence in Houston. A significant,
head-office, headquarter presence. I would hypothesize just that,
that the technological functions of the new company such as
information technology would be very, very logically headquartered
in Houston. Simply because of the tremendous resource that the
Houston technological economy provides for recruitment in that
segment of the business. So we will continue to keep a commitment
to Houston. We will be a significant employer in Houston. And
that hub is going to continue to grow. From a Bush perspective,
the new company will continue to be a significant employer," Mr.
Tilton said.
Keith Halbert, United's Senior Vice President and Chief
Information Officer, told certain employees in a May 28 e-mail, "I
realize that this proposed merger creates uncertainty for both
United and Continental employees. As we have discussed any
decisions about where workgroups will be located will be made
after thoughtful consideration and analysis through the
integration planning process. As you know, we established our
Integration Management Office (IMO) last week and we expect the
planning process to begin before the end of June. It is critical
that we allow the planning process to follow the course to ensure
we develop the best possible integration solutions."
About Continental Airlines
Houston, Texas-based Continental Airlines (NYSE: CAL) --
http://www.continental.com/-- is the world's fifth largest
airline. Continental, together with Continental Express and
Continental Connection, has more than 2,700 daily departures
throughout the Americas, Europe and Asia, serving 132 domestic and
137 international destinations. Continental is a member of Star
Alliance, which overall offers more than 21,050 daily flights to
1,167 airports in 181 countries through its 27 member airlines.
With more than 40,000 employees, Continental has hubs serving New
York, Houston, Cleveland and Guam, and together with its regional
partners, carries approximately 63 million passengers per year.
At December 31, 2009, Continental had total assets of
$12.781 billion against total current liabilities of
$4.389 billion; long-term debt and capital leases of
$5.291 billion; deferred income taxes of $203 million; accrued
pension liability of $1.248 billion; accrued retiree medical
benefits of $216 million; and other liabilities of $844 million.
At December 31, 2009, the Company had accumulated deficit of
$442 million, accumulated other comprehensive loss of
$1.185 billion and stockholders' equity of $590 million. The
December 31 balance sheet showed strained liquidity: Continental
had total current assets of $4.373 billion against total current
liabilities of $4.389 billion.
* * *
As reported by the Troubled Company Reporter on May 5, 2010, Fitch
Ratings has affirmed the Issuer Default Rating for Continental
Airlines, Inc., at 'B-' and the senior unsecured rating at
'CC/RR6' following the announcement of the planned merger between
CAL and UAL Corp. The Rating Outlook for CAL is Stable.
The TCR on May 5, 2010, also said Standard & Poor's Ratings
Services placed its 'B' corporate credit rating on Continental
Airlines, and S&P's ratings on its secured and unsecured debt, on
CreditWatch with negative implications. S&P also placed its
ratings on Continental's enhanced equipment trust certificates on
CreditWatch with developing implications. Although S&P's recovery
ratings on selected Continental unsecured debt are unaffected by
the rating action, S&P will review them as well.
About UAL Corporation
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) --
http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest air
carrier. The airline flies to Brazil, Korea and Germany.
The company filed for Chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven
R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in
their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors. Judge Eugene R. Wedoff
confirmed a reorganization plan for United on Jan. 20, 2006. The
Company emerged from bankruptcy on Feb. 1, 2006.
Reorganized UAL Corp. carries a 'Caa1' probability of default
rating from Moody's, 'B-' long term foreign issuer credit rating
from Standard & Poor's, and 'CCC' long term issuer default rating
from Fitch.
WALTER ENERGY: $210 Mil. Deal Won't Affect Moody's 'B1' Rating
--------------------------------------------------------------
Moody's Investors Service commented that Walter Energy, Inc.'s
acquisition of natural gas assets for $210 million in cash will
not immediately impact the company's B1 Corporate Family Rating or
stable rating outlook.
The last rating action was on October 14, 2009, when the ratings
of WLT were upgraded.
Walter Energy, Inc., headquartered in Tampa, Florida, is primarily
a metallurgical coal producer which also produces metallurgical
coke, steam and industrial coal, and natural gas. In 2009, WLT
had revenues of approximately $967 million and produced
approximately 6.0 million tons of high quality met coal. WLT
primarily sells its met coal to customers in South America and
Europe.
WASHINGTON MUTUAL: FDIC, Others Object to Shareholders Exam Bid
---------------------------------------------------------------
Bankruptcy Law360 reports that the U.S. Department of the
Treasury, Standard & Poor's Financial Services LLC, the Board of
Governors of the Federal Reserve System and others have objected
to a bid by Washington Mutual Inc. equity security holders to
conduct a bankruptcy examination of them.
The objections, filed Wednesday in the U.S. Bankruptcy Court for
the District of Delaware, are in response to a bid lodged Friday
by the official committee of equity security holders, according to
Law360.
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).
WEBNOTIONS INC: Organizational Meeting to Form Panel on June 8
--------------------------------------------------------------
Roberta A. DeAngelis, Acting United States Trustee for Region 3,
will hold an organizational meeting on June 8, 2010, at 1:00 p.m.
in the bankruptcy case of WebNotions, Inc. The meeting will be
held at the United States Trustee's Office, One Newark Center
21st Floor, Room 2106, Newark, NJ 07102.
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.
New-Jersey based WebNotions, Inc., operates as an on-line book
marketplace. The Company's platform enables users to buy and sell
books from publishers and sellers. WebNotions was founded in 1995
and is based in Netcong, New Jersey. On April 26, 2010, an
involuntary petition for liquidation under Chapter 7 is filed
against WebNotions Inc in the US Bankruptcy Court for the District
of New Jersey.
WESTCLIFF MEDICAL: Taps Levene Neale as Bankruptcy Counsel
----------------------------------------------------------
Westcliff Medical Laboratories, Inc., and Biolabs, Inc., have
sought permission from the U.S. Bankruptcy Court for the Central
District of California to employ Levene, Neale, Bender, Rankin &
Brill L.L.P. as bankruptcy counsel.
Levene Neale will, among other things:
a. represent the Debtors in any proceedings or hearing in the
Court involving their estates unless the Debtors are
represented in the proceeding or hearing by other special
counsel;
b. conduct examinations of witnesses, claimants or adverse
parties and represent the Debtors in any adversary
proceedings except to the extent that any adversary
proceeding is in an area outside of Levene Neale's
expertise or which is beyond Levene's staffing
capabilities;
c. prepare and assist the Debtors in the preparation of
reports, applications, pleading and orders including, but
not limited to, applications to employ professionals,
interim statements and operating reports, initial filing
requirements, schedules and statement of financial
affairs, lease pleadings, cash collateral pleadings,
financing pleadings, and pleadings with respect to the
Debtors' use, sale or lease of property outside the
ordinary course of business; and
d. represent the Debtors with regard to obtaining the use of
debtor-in-possession financing and/or cash collateral
including, but not limited to, negotiating and seeking the
Court's approval of any debtor-in-possession financing
and/or cash collateral pleading or stipulation and
preparing any pleadings relating to obtaining use of
debtor-in-possession financing and/or cash collateral.
Levene Neale will be paid based on the hourly rates of its
personnel:
David W. Levene $585
David L. Neale $585
Ron Bender $585
Martin J. Brill $585
Edward M. Worlkowitz $585
Timothy J. Yoo $585
David B. Golubchik $540
Monica Y. Kim $540
Beth Ann R. Young $540
Daniel H. Reiss $540
Irving M. Gross $540
Philip A. Gasteier $540
Jacqueline L. Rodriguez $485
Juliet Y. Oh $485
Michelle S. Grimberg $485
Todd M. Arnold $485
Todd A. Frealy $485
Anthony A. Friedman $415
Carmela T. Pagay $415
John-Patrick M. Fritz $335
Krikor J. Meshefejian $335
Lindsey L. Smith $225
Paraprofessionals $195
Ron Bender, a partner at Levene Neale, assures the Court that the
firm is disinterested as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Westcliff Medical
Santa Ana, California-based Westcliff Medical is a provider of
clinical testing and pathology services at 170 locations in
California. Westcliff filed a Chapter 11 petition on May 19 in
Santa Ana, California (Bankr. C.D. Calif. Case No. 10-16743). The
petition said that assets and debts range from $50,000,001 to
$100,000,000. Parent BioLabs Inc. also filed for Chapter 11. The
parent has no assets aside from owning Westcliff.
WESTCLIFF MEDICAL: Taps Garvey Schubert as Healthcare Counsel
-------------------------------------------------------------
Westcliff Medical Laboratories, Inc., and Biolabs, Inc., have
asked for authorization from the U.S. Bankruptcy Court for the
Central District of California to employ Garvey Schubert Barer as
special healthcare counsel.
GSB will represent the Debtors in healthcare regulatory matters.
David Gee, an attorney at GSB who will be assigned to the case,
will be paid $350 per hour.
Mr. Gee assures the Court that Garvey Schubert is disinterested as
that term is defined in Section 101(14) of the Bankruptcy Code.
Santa Ana, California-based Westcliff Medical is a provider of
clinical testing and pathology services at 170 locations in
California. Westcliff filed a Chapter 11 petition on May 19 in
Santa Ana, California (Bankr. C.D. Calif. Case No. 10-16743). The
petition said that assets and debts range from $50,000,001 to
$100,000,000. Parent BioLabs Inc. also filed for Chapter 11. The
parent has no assets aside from owning Westcliff.
WESTCLIFF MEDICAL: Wants Kirkland & Ellis as Special Counsel
------------------------------------------------------------
Westcliff Medical Laboratories, Inc., and Biolabs, Inc., have
asked for permission from the U.S. Bankruptcy Court for the
Central District of California to employ Kirkland & Ellis LLP as
special corporate counsel.
Kirkland & Ellis will, among other things:
a. assist the Debtors and Levene, Neale, Bender, Rankin &
Brill L.L.P. (LNBRB), the Debtors' proposed general
bankruptcy counsel, in drafting documents and taking
actions that may be necessary to consummate the sale;
b. assist the Debtors preparing all documents and take all
actions necessary for the Debtors' to maintain their
corporate status in good standing;
c. assist and advise the Debtors and LNBRB regarding
corporate matters that arose prior to the Petition Date
and that arise after the Petition Date; and
d. provide corporate information to LNBRB that may be
required to move the Debtors' bankruptcy cases forward.
Kirkland & Ellis will be paid based on the hourly rates of its
personnel:
Partners $550-$995
Associates $320-$660
Paraprofessionals $155-$280
Ryan Bennett, a partner at Kirkland & Ellis, assures the Court
that the firm is disinterested as that term is defined in Section
101(14) of the Bankruptcy Code.
Santa Ana, California-based Westcliff Medical is a provider of
clinical testing and pathology services at 170 locations in
California. Westcliff filed a Chapter 11 petition on May 19 in
Santa Ana, California (Bankr. C.D. Calif. Case No. 10-16743). The
petition said that assets and debts range from $50,000,001 to
$100,000,000. Parent BioLabs Inc. also filed for Chapter 11. The
parent has no assets aside from owning Westcliff.
WESTCLIFF MEDICAL: Wants to Hire Matthew Pakkala as CRO
-------------------------------------------------------
Westcliff Medical Laboratories, Inc., and Biolabs, Inc., have
sought permission from the U.S. Bankruptcy Court for the Central
District of California to employ Matthew Pakkala at FTI
Consulting, Inc., as chief restructuring officer.
Mr. Pakkala will, among other things:
a. identify and implement short-term process improvement and
control initiatives within the organization designed to
preserve liquidity;
b. work on the development of and implementation of cash
management strategies, tactics and processes;
c. work on any sale of the Debtors, significant assets or
business segments; and
d. work on the communication and/or negotiation with outside
constituents including lenders, customers and suppliers.
Mr. Pakkala will be compensated based on his engagement contract
with the Debtors. A copy of the contract is available for free
at http://bankrupt.com/misc/WESTCLIFF_engagementcontract.pdf
Mr. Pakkala assures the Court that he is disinterested as that
term is defined in Section 101(14) of the Bankruptcy Code.
Santa Ana, California-based Westcliff Medical is a provider of
clinical testing and pathology services at 170 locations in
California. Westcliff filed a Chapter 11 petition on May 19 in
Santa Ana, California (Bankr. C.D. Calif. Case No. 10-16743). The
petition said that assets and debts range from $50,000,001 to
$100,000,000. Parent BioLabs Inc. also filed for Chapter 11. The
parent has no assets aside from owning Westcliff.
WINDSTREAM CORPORATION: Fitch Affirms 'BB+' Issuer Default Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed these ratings of Windstream
Corporation:
-- Long-Term Issuer Default Rating at 'BB+';
-- Secured credit facility at 'BBB-';
-- Senior unsecured notes at 'BB+'.
Fitch has removed the ratings from Rating Watch Negative and
assigned a Stable Rating Outlook. Other subsidiary ratings were
affirmed as listed at the end of the release.
The affirmation of Windstream's ratings and assignment of a Stable
Outlook concludes a review of the company's prospective credit
profile following the completion of a series of four acquisitions
within less than a year. The last of the acquisitions, Iowa
Telecommunications Services, Inc., closed yesterday. To close the
transaction, the company issued approximately 26.7 million shares
of stock valued at $284 million, paid approximately $260 million
in cash and repaid all of Iowa Telecom's outstanding debt, which
was approximately $613 million. Windstream used balance sheet
cash and borrowings on its revolver to fund the cash portion of
the transaction and repay outstanding Iowa Telecom debt.
While leverage has increased as a result of the transactions, on a
pro forma basis the rise is relatively modest, and Fitch expects
leverage will return to historical levels in a relatively short
period as synergies are realized, and debt remains stable or
declines slightly. In addition, Fitch believes that, while there
is integration risk as a result of the transactions, the company's
experience with acquiring and incorporating modest-sized
acquisitions, as well as the fact that the integration of earlier
acquisitions is completed or well underway, will reduce the
potential for operational issues.
Windstream's 'BB+' IDR incorporates expectations for the company
to generate strong operating and free cash flows and to have
access to ample liquidity. Recent acquisitions have added
meaningful scale to the company, partly offsetting the effect of
competition on the company's operations, which is Fitch's primary
concern.
Fitch expects leverage to be in the 3.4 times to 3.5x range on a
pro forma basis at the end of 2010. Fitch estimates the
transactions increase leverage by approximately 0.2x, thus
increasing leverage slightly over the upper end of the company's
3.2x to 3.4x historical range until synergies are fully realized.
To complete the four acquisitions, Windstream used cash and debt,
which in the aggregate was approximately $1.7 billion, and issued
approximately $550 million in equity. Total incremental debt
arising from the transactions is expected to be approximately $1.2
to $1.3 billion by the end of 2010, in Fitch's estimation. The
acquired companies generated approximately $330 million in
historical annual EBITDA, prior to expected synergies of
approximately $85 million.
Windstream's liquidity on March 31, 2010 was strong, given
$580 million in cash on the balance sheet and availability of
approximately $492 million on its revolver (net of outstanding
letters of credit). The company has extended the maturity of
$409 million of the $500 million revolving credit facility from
July 2011 to July 2013, with the remainder maturing in July 2011.
In October 2009, Windstream amended its senior secured term loan
facilities to extend their maturities. The maturity of
$168.9 million of the $283 million outstanding on term loan A was
extended from July 2011 to July 2013. The term loan B, which as
of March 31, 2010, had a $1.362 billion balance outstanding, now
has approximately $1.073 billion maturing in December 2015 rather
than in July 2013. The amendment and extensions resulted in
certain increased fees, including increased interest rates on
loans with extended maturities.
Principal financial covenants in the credit facilities require a
minimum interest coverage ratio of 2.75x and a maximum leverage
ratio of 4.5x. There are limitations on capital spending, and the
dividend is limited to the sum of excess free cash flow and net
cash equity issuance proceeds subject to pro forma leverage of
4.5x or less.
Other than the portion of the revolver and term loan A facility
maturing in 2011, upcoming maturities are nominal through 2012.
Liquidity is also supported by free cash flow, which Fitch
estimates will be in the $200 million to $300 million range for
2010. Capital spending, per the company's guidance, is expected
to range from $360 million to $390 million.
Fitch has affirmed Windstream's subsidiary ratings, assigned a
Stable Rating Outlook and removed the ratings from Rating Watch
Negative:
Valor Telecommunications Enterprises, LLC, and Valor
Telecommunications Enterprises Finance Corp. (co-issuers)
-- IDR at 'BB+';
-- Senior notes at 'BBB-'.
Windstream Georgia Communications
-- IDR at 'BB+';
-- Senior Notes at 'BBB-'.
Windstream Holdings of the Midwest
-- IDR at 'BB+';
-- Senior Notes at 'BB+'.
The Rating Outlook for all ratings is Stable.
* Casual Restaurants & Smaller Chains Face Challenges
-----------------------------------------------------
Fast-casual restaurants and large chains are positioned for growth
and investment, while traditional casual restaurants and smaller
chains face a more challenging financial picture, according to Bob
Bielinski, Managing Director, Corporate Finance - Restaurant
Industry Practice for CIT Group Inc. (NYSE: CIT), which provides
financing to small businesses and middle market companies. This
is just one of the insights Mr. Bielinski offers in "U.S.
Restaurant Industry Update," the latest in a series of in-depth
executive Q&As featured in CIT's "Executive Spotlight" series --
http://executive-spotlight.cit.com
Mr. Bielinski explains the restaurant industry's important role in
the U.S. economy, saying, "On any given day, more than 130 million
people are served by the foodservice industry in America.
Restaurant industry jobs are critical entry level positions and
provided a first job for more than 25% of adults in America.
According to the National Restaurant Association, the industry
employs approximately 12.7 million people or 9% of the U.S.
workforce."
He goes on to identify which restaurant concepts are finding it
easiest to obtain capital, noting, "Fast-casual brands have not
had a problem raising capital, as long as the type of capital
(debt or equity) is appropriate for the company's stage of
development. I think that consumers are looking for higher
quality product and more convenience in their lives; thus the rise
of fast-casual concepts. There are many chains in the fast-casual
space that have tremendous growth potential and several larger
ones with enough stores to provide assurance to lenders of getting
repaid."
* Bryan Cave Partner Moves to Bankruptcy Bench
----------------------------------------------
A federal appeals court has selected a Bryan Cave LLP partner to
sit on the bench in the U.S. Bankruptcy Court for the Northern
District of Georgia, according to Bankruptcy Law360.
Law360 says Wendy L. Hagenau, a partner in Bryan Cave's Atlanta
office who specialized in workout and insolvency, was appointed to
the judgeship by the U.S. Court of Appeals for the Eleventh
Circuit.
* BOOK REVIEW: Corporate Turnaround - How Managers Turn Losers
Into Winners!
--------------------------------------------------------------
Author: Donald B. Bibeault
Publisher: Beard Books
Softcover: 424 pages
List Price: $34.95
Corporate Turnaround offers, claims the author, a "four-pronged
approach" to taking the "mystery out of turnaround management."
One of the prongs -- Mr. Biebeault's personal experiences -- is
complemented with another prong -- interviews with sixteen top
turnaround specialists. Together, they bring forth the drama and
the stakes of turnarounds. The other two prongs -- surveys of
eighty-one corporate presidents and the author's exhaustive
research (400 references in all, taken from books, periodicals,
and scholarly writings) -- lend a great deal of substance and
authority to the book's subject matter. This variety of material
greatly enriches the book, which is perhaps more relevant today
than it was in 1982 when it was first published.
Identifying the underlying causes for failure can be a futile
chicken-and-egg pursuit. "Businesses decline for both
uncontrollable external reasons and for controllable internal
reasons," says Mr. Bibeault. Nonetheless, Mr. Bibeault adds that
"[i]n most cases . . . business problems are internally
generated." As one of his sources explains, managing a company is
like piloting a ship. "If the ship is in good condition and the
captain is competent, it is almost impossible for it to be sunk by
a wave or a succession of waves." A competent captain with a ship
in good condition can even bring it through a storm.
The manager of a company is different from the captain of a ship,
however, in that the manager not only has to pilot the company,
but is also responsible for its condition. The central challenge
for a manager is to ensure that the company is structurally solid,
operationally relevant, efficient, and adaptable to be able to
weather any conditions the company might encounter. Even though,
as Bibeault maintains, in practically all cases business problems
are internally generated, this does not rule out having to heed
external conditions. External economic, political, or market
conditions expose and exacerbate a company's internal weaknesses.
"Management is not always able to deal with outside forces, even
when they can see them gathering." A manager can be effective,
however, in "getting a company into a posture, both from a
marketing and financial point of view, where it can resist normal
business hazards and other more serious external challenges." In
such circumstances, a turnaround may be a company's only hope for
survival, and the abilities of a turnaround manager are required.
Bibeault describes such managers as "the George Pattons of the
business world." "They don't have a lot of friends, they're not
social successes, they're just known as blood-and-guts guys," is
the way one corporate executive puts it; a description repeated in
different words by other experienced businesspersons Bibeault
consulted.
In Corporate Turnaround, Bibeault explores every facet of a
turnaround. The causes of a company's decline are followed with a
thorough consideration of the management basics in effecting a
turnaround. The book also examines the attributes of the
turnaround manager and offers specific pragmatic steps for getting
on the path to recovery. Lastly, Corporate Turnaround offers an
overall strategy. The book is not only informative about the
crucial subject of corporate turnaround, but also a manual for
managing one.
Bibeault has worked on turnarounds of distressed companies for
over 25 years in addition to holding top executive positions in a
number of corporations. He also holds advisory or governing board
positions with different universities and business groups.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard
C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez,
Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.
Copyright 2010. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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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-
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are $25 each. For subscription information, contact Christopher
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*** End of Transmission ***