/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/100723.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, July 23, 2010, Vol. 14, No. 202 Headlines 7677 EAST BERRY: Creditors Seek More Info on Transactions ACCURIDE CORP: S&P Assigns Corporate Credit Rating at 'B' ADVANCE AUTO: Moody's Reviews 'Ba1' Corporate for Upgrade ADVOCATE FINANCIAL: Amends List of Largest Unsecured Creditors AMBAC FINANCIAL: Managing Director Stevens Sells 20,800 Shares AMES TRUE: S&P Puts 'B-' Corp. Rating on CreditWatch Positive AMR CORP: Says Revenue Enhancement & Cost Savings Options Scarce AUTOZONE INC: CEO Rhodes Acquires, Then Sells, 8,945 Shares AUTOZONE INC: Controller Acquires, Then Sells, 3,000 Shares AUTOZONE INC: Director Crowley Reports Sale of Shares AUTOZONE INC: Edward Lampert, ESL Partners Sell Shares AUTOZONE INC: Gen. Counsel Goldsmith Acquires 2,800 Shares AVISTAR COMMS: SVP Michael Dignen Holds 200,000 in RSUs BENCHMARK ELECTRONICS: Moody's Retains 'Ba3' Corp. Family Rating BERNARD MADOFF: Picard Amends Lawsuit vs. Fairfield BEST PAYPHONES: Dist. Ct. Affirms MetTel's Lost Profits Claim BLOCKBUSTER INC: Wattles Sell-off Continues; 1.19MM Shares Dumped BRIGHAM EXPLORATION: Files 11-K Report for 401(k) Plan BRIGHAM EXPLORATION: General Counsel Potts Receives Options CABI DOWNTOWN: Committee Now Supports Reorganization Plan CHEMTURA CORP: Wins Approval of Disclosure Statement CHRYSLER FINANCIAL: Mulls Return to Lending Business COMARCO INC: Has Silicon Valley Bank Forbearance Until Aug. 15 CONCHO RESOURCES: Marbob Deal Cues Moody's to Review Low-B Ratings DOUGLAS JOHNSON: S.D. Tex. Frowns on Special Divorce Counsel ENVIROSOLUTIONS HOLDINGS: Wins Confirmation of Chapter 11 Plan FAIRFAX FINANCIAL: S&P Assigns 'BB' Rating on Preferred Shares FIELDSTONE LESTER: Judge Drops Negligence Claims on $30MM Loan FIRSTFED FIN'L: Working on Liquidating Plan FORD MOTOR: Expects to Report $1.6-Bil. Second-Quarter Profit FORD MOTOR: Financing Arm Pulls Out Plan to Issue New Debt GARLOCK SEALING: Asbestos Panel Proposes Caplin as Counsel GARLOCK SEALING: Asbestos Panel Proposes Hamilton as Co-Counsel GARLOCK SEALING: Boyer Appointed to Asbestos Committee GARLOCK SEALING: Files Schedules of Assets & Liabilities GARLOCK SEALING: Files Statement of Financial Affairs GARLOCK SEALING: Wants Asbestos Lawyers to File Rule 2019 Forms GENERAL MOTORS: To Buy AmeriCredit for $3.5 Billion, in Cash GENTA INC: BAM Opportunity Fund et al. Report 8.90% Stake GOLDSPRING INC: Buys Seven Patented Mining Claims for $1 Million GREAT ATLANTIC: Shares Increase, Directors' Reelection Approved GREENSHIFT CORP: 1-for-10 Reverse Stock Split to Take Effect GTC BIOTHERAPEUTICS: Reacquires Rights to Atryn Recombinant HAWAII BIOTECH: Federal Judge Approves Deal with Merck & Co. HEALTHSOUTH CORP: Morgan Stanley Reports De Minimis Stake HEALTHSOUTH CORP: Director Hanson Receives 1,345 Shares HEALTHSOUTH CORP: Director Chidsey Receives 43,721 Shares HIGHLANDS OF LOS GATOS: Files for Chapter 11 in California INNKEEPERS USA: Midland Loan Opposes Debtor Use of Cash Collateral INNKEEPERS USA: Proposes $17.5 Mil. Solar Finance DIP Loan INNKEEPERS USA: Proposes to Access $50.7MM Five Mile DIP Loan INNKEEPERS USA: Proposes to Honor Hotel Management Obligations INTERFACE INC: S&P Gives Stable Outlook, Affirms 'B+' Rating JENNIFER CONVERTIBLES: Great American to Lead Auction JENNIFER CONVERTIBLES: Posts $4.8MM Net Loss in Q3 Ended May 29 K2 PURE: Moody's Assigns 'B1' Rating on $115 Mil. Senior Loan KGEN LLC: Moody's Affirms 'B1' Rating on Senior Secured Facilities KINSLEY FOREST: Dismissal or Conversion Hearing Set for Aug. 10 KIRKLAND HUTCHESON: Plan Confirmation Hearing Set for July 29 LAKE AT LAS VEGAS: Trustee Sues Ex-Owners for Fraudulent Transfers LEHMAN BROTHERS: Class Action Plaintiffs Seek $100MM in Insurance LEVI STRAUSS: Exchange Offer for 2018 & 2020 Notes Expire Aug. 2 LEXINGTON PRECISION: Wins Confirmation of Chapter 11 Plan LOWER BUCKS: Has Until October 2 to Access BoNY Cash Collateral LUCKY CHASE: Trustee Has Access to Cash Collateral Until Sept. 3 MATTRESS HOLDING: Moody's Upgrades Corporate Family Rating to 'B3' MICHAEL GBADEBO: BANCPA Partially Abrogated Absolute Priority Rule MID-STATES EXPRESS: Bankr. Ct. Balks at ERISA Plan Liquidation MOVIE GALLERY: Streambank Selected to Market Intangible Assets NEC HOLDINGS: Cenveo to Rival Gores Bid for Assets NEXT INC: Posts $322,200 Net Loss in Q2 Ended May 30 NOVA CHEMICALS: Fitch Affirms 'B+' Issuer Default Ratings NRG ENERGY: Moody's Assigns Rating on $875 Mil. Senior Facility OFFSHORE GROUP: Moody's Assigns 'B3' Corporate Family Rating OWENS CORNING: Asks for Final Decree Closing Chapter 11 Case OWENS CORNING: Enters Into New $800 Mil. Revolver With Wells Fargo OWENS CORNING: Receives Approval of NJDEP Claims Settlement PACIFICA MESA: Files for Bankruptcy over Looming Loan Deadline POINT BLANK: Balks at Committee Request for Examiner PONIARD PHARMACEUTICALS: Receives NASDAQ Deficiency Notice PROJECT ORANGE: Stay Lifted to Let Cogeneration Suit Proceed RADIENT PHARMACEUTICAL: Appoints Robert Beart as Director REALOGY CORP: Cendant Settles IRS Examination of Taxable Years PCS EDVENTURES!.COM: President Grover Acquires 1,561 Shares REDDY ICE: Registers 2015 Notes for Exchange Offer RENAISSANT LAFAYETTE: Has Access to Cash Collateral Until Sept. 3 RIVIERA HOLDINGS: Section 341(a) Meeting Scheduled for Aug. 26 RIVIERA HOLDINGS: Taps Gordon Silver as Bankruptcy Counsel RIVIERA HOLDINGS: Taps XRoads as Financial & Restructuring Advisor RIVIERA HOLDINGS: To Enter Into Backstop Commitment Agreement SAND HILL: U.S. Trustee Forms 5-Member Creditors Committee SAND HILL: Gets Final Okay to Use Cash Collateral SEDONA DEVELOPMENT: Has Until October 4 to Access Specialty's Cash SHERWOOD/CLAY: Plan Confirmation Hearing Set for August 6 SKYWORKS VENTURES: N.J. Court Says Involuntary Ch. 7 in Bad Faith SMART ONLINE: Atlas Capital Pays $19.6 Mil. for 40% Stake SMURFIT-STONE: Officers Dispose of Shares of Stock SMURFIT-STONE: Reorganized Smurfit to Release Results August 3 SMURFIT-STONE: Works with Missoula Officials to Sell Mill SPECIALTY TRUST: Amends List of Largest Unsecured Creditors SPECIALTY TRUST: Cash Collateral Use Gets 3rd Interim OK TALECRIS BIOTHERAPEUTICS: Moody's Reviews 'B1' Corp. Family Rating TEXAS RANGERS: Greenberg Traurig Confirms Cuban's Interest TEXAS RANGERS: May Seek Court Help to Adjust Budget TLC AMERICAS: Judge Grants Interim DIP Financing from Parent TRIBUNE CO: GreenCo Proposes to Settle With MediaNews Group TRIBUNE CO: Opposes Wells Fargo Claims Adjudication Protocol TRIBUNE CO: Wins OK to Assume Agreements With Carsey-Werner TRILOGY DEVELOPMENT: JE Dunn's Fights $12.4 Million Mechanic Lien UAL CORP: Posts $273 Million Net Income for June 30 Quarter UNICO INCORPORATED: Posts $1.1 Million Net Loss in Q1 Ended May 31 US AIRWAYS: Moody's Affirms 'Caa1' Corporate; Outlook Now Stable UTEX COMMUNICATIONS: Gets Continued Access to Cash Collateral UTEX COMMUNICATIONS: Plan Outline Hearing Set for August 23 VISION SOLUTIONS: Double-Take Stockholders OK Merger Agreement VISTEON CORP: Court OKs Valuation Services for E&Y VISTEON CORP: Reaches Deal With Aurelius on Stock Purchase VISTEON CORP: Third Circuit Reverses Ruling on Retiree Benefits VISTEON CORP: Wins Nod to Sell 46.6% Interest in TMD WASHINGTON MUTUAL: Plan Outline Not Approved; Examiner Appointed WAVERLY GARDENS: Has Until October 31 to Access Cash Collateral WILLIAM DEL BIAGGIO: Predators to Acquire Shares for $15.2 million W.R. GRACE: Settles Harper Insurance Coverage Issues W.R. GRACE: Settles Munich Re Insurance Coverage Issues WYNN RESORTS: S&P Assigns 'BB+' Rating on $1.32 Bil. Notes XODTEC LED: Significant Losses Prompt Going Concern Doubt YRC WORLDWIDE: CEO Zollars Dumps 1,535 Shares for Tax Purposes * Massive Asset Liquidation at Major Cash Mgt. Services Corp * Liquidity Deteriorating Among Junk-Rated Companies, Says Moody's * BOOK REVIEW: All Organizations Are Public - Comparing Public and Private Organizations ******** 7677 EAST BERRY: Creditors Seek More Info on Transactions --------------------------------------------------------- Bankruptcy Law360 reports that the unsecured creditors of a bankrupt affiliate of Everest Development Co. have filed nine requests with a federal judge for a closer look at the Debtor's bank accounts and transactions, including several recent payments to Tiffany & Co. Law360 says the requests were filed Tuesday in the U.S. Bankruptcy Court for the District of Colorado in the suit concerning 7677 East Berry Avenue Associates LP. About 7677 East Berry 7677 East Berry Avenue Associates, L.P., and two other affiliates -- Everest Holdings, LLC -- filed for Chapter 11 on __, 2009 (Bankr. D. Col. Case No. 09-28000). Brownstein Hyatt Farber Schreck, LLP, serves as counsel for the Debtors. 7677, a Delaware limited partnership, develops and operates a luxury residential, retail, and entertainment development in Greenwood Village, Colorado. The Project includes two residential condominium towers, The Landmark (which opened in 2004) and The Meridian (which opened in 2007). Neither tower is fully occupied and sales efforts for both towers are ongoing. EDC Denver is the general partner of 7677 and Everest Holdings is the sole member of EDC Denver. Zach Davidson is the manager of both EDC Denver and Everest Holdings. ACCURIDE CORP: S&P Assigns Corporate Credit Rating at 'B' --------------------------------------------------------- Standard & Poor's Ratings Services said it has assigned its preliminary 'B' corporate credit rating and stable outlook to Evansville, Ind.-based Accuride Corp. S&P also assigned a preliminary 'B' issue-level rating and a preliminary '3' recovery rating to Accuride's proposed issuance of $300 million senior secured notes. S&P expects to assign final ratings upon closing of the transaction and S&P's review of final documentation. Accuride emerged from Chapter 11 bankruptcy protection in February 2010, having reduced debt by about one-third during the bankruptcy process. The company recently announced plans to issue the senior secured notes and add an unrated $75 million asset-based revolving credit facility to replace its emergence secured credit facility. The proposed refinancing does not significantly affect total debt but improves liquidity by extending debt maturities and adding borrowing availability, as the company currently has no revolving credit facility. The ratings reflect what S&P considers to be Accuride's highly leveraged financial risk profile and weak business risk profile. Accuride's business risk profile reflects mainly the extreme volatility of demand rather than any company-specific problems. The company has good market share as North America's largest manufacturer of heavy steel wheels and other commercial-truck components. Still, its markets are extremely cyclical, and the company's high fixed-cost base and capital intensity can lead to large fluctuations in profitability. The ratings also reflect S&P's assumption that heavy-duty truck demand in North America will improve in the second half of 2010 and in 2011 after a nearly four-year decline. S&P assumes heavy- duty truck production could increase by 10% or more for all of 2010 compared to 2009 levels, which could lead to a slightly higher increase in sales for Accuride because of net new business for military trucks. S&P expects a more significant increase in production in 2011 as the industry nears but does not quite reach normal demand, which S&P currently estimates to be about 200,000 heavy-duty Class 8 trucks per year. This assumption is consistent with S&P's view of a gradual, rather than a robust, improvement in the economy. The outlook is stable. S&P assumes truck demand will improve gradually throughout the rest of 2010 and show a more pronounced improvement in 2011. S&P currently assumes demand under normal economic conditions to be about 200,000 units of production in North America. However, volatility in production by Accuride's key truck maker customers is possible if economic factors fail to support a return to normal demand. S&P could raise the ratings if Accuride reduces leverage, as measured by debt to EBITDA including S&P's adjustments, significantly below 4x and produces consistent free operating cash flow that increases total liquidity to $150 million or more. For example, if the company were to improve EBITDA margins to 15% or better, and revenues double from the trough levels of 2009, S&P estimates that leverage (including S&P's adjustments) could approach 3.5x or better. In such a scenario, S&P could revise its assessment of the financial risk profile to aggressive from highly leveraged, and under its criteria, this could support an upgrade of one notch. An upgrade of more than one notch is unlikely, given S&P's assessment of the business risk profile as weak due primarily to high industry volatility. S&P could lower the ratings if the company fails to generate free operating cash flow for the remainder of 2010 or for all of 2011, as S&P believes this would put pressure on liquidity. Specifically, if total cash plus revolving credit availability fell below $50 million, S&P could lower the rating. ADVANCE AUTO: Moody's Reviews 'Ba1' Corporate for Upgrade --------------------------------------------------------- Moody's Investors Service placed the ratings of Advance Auto Parts, Inc., including the Ba1 Corporate Family Rating, on review for possible upgrade. The company's SGL-2 Speculative Grade Liquidity Rating was affirmed. This rating action recognizes the improvement in Advance's operating performance, resulting in credit metrics that are reflective of an investment grade profile. "Advance has been the beneficiary of positive trends in the auto parts segment of retail" stated Moody's Senior Analyst Charlie O'Shea. "The company has done a nice job of capitalizing on these trends, with the result that its credit profile has shown significant improvement, especially over the past few quarters. Moody's review for upgrade will focus on, among other things, the potential sustainability of this credit profile over the medium term, and will take into account the potential impact on the company of a less favorable operating environment," O'Shea added. Moody's will also focus on the progress the company is making with respect to the October 2011 expiration of its revolving credit facility. Ratings placed on review for possible upgrade (LGD point estimates subject to change) include: * Corporate Family Rating at Ba1 * Probability of Default rating at Ba1 * Senior unsecured notes at Ba1 (LGD 4, 54%) * Senior unsecured shelf at (P) Ba1 Rating affirmed: * Speculative grade liquidity rating at SGL-2 The last rating action for Advance Auto Parts was the April 26, 2010 affirmation of the Ba1 Corporate Family Rating, upgrade of the Probability of Default Rating to Ba1 from Ba2, assignment of a (P) Ba1 senior unsecured shelf rating, the affirmation of the SGL- 2 speculative grade liquidity rating, the assignment of a Ba1 (LGD 4, 54%) rating to the $300 million senior unsecured notes, and a continuation of the positive outlook. Advance Auto Parts, Inc., headquartered in Roanoke, Virginia, is a leading retailer of after-market auto parts, with annual revenues of around $5.5 billion. ADVOCATE FINANCIAL: Amends List of Largest Unsecured Creditors -------------------------------------------------------------- Advocate Financial, L.L.C., has filed with the U.S. Bankruptcy Court for the idle District of Louisiana an amended list of its 20 largest unsecured creditors, disclosing: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hancock Bank of Louisiana 2600 Citiplace Dr. Baton Rouge, LA 70808 Bank Loan $6,341,820 La Chenaie Holdings, L.L.C. 1319 St. Charles Avenue New Orleans, LA 70130 Loan $3,907,139 Citibank BSI SA 8 Boulevard di theatre Geneva, 1204 Bank Loan $520,000 JTS Consolidated/Corporate Atrium Office Rental $7,052 AT&T Telephone Services $2,207 AT&T Telephone Services $1,804 Pitney Bowes, Inc. Equipment Lease $1,033 Baton Rouge Bar Association Advertising Costs $880 Planche, Politz, Ledet, LLC Accounting Services $754 Federal Express Courier Services $609 CIT Technology Fin. Serv. Inc. Copier Rental $513 LA Association For Justice Advertising Costs $450 Paychex Services $419 Shell Card Center Revolving Credit $265 Beta-Tech Systems, Inc. Telephone Services $84 Pitney Bowes, Inc. Postage Fees $75 Kentwood/DS Waters of America, Inc. $66 Office Depot Revolving Credit $49 Shredmasters Services Rendered $45 Pitney Bowes, Inc. $35 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). Baldwin Haspel Burke & Mayer serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $19,370,268 in total assets and $10,769,568 in total liabilities. AMBAC FINANCIAL: Managing Director Stevens Sells 20,800 Shares -------------------------------------------------------------- Timothy J. Stevens, senior managing director at Ambac Financial Group Inc., sold 20,607 Ambac common shares for $0.69 a share on June 30, 2010; and 200 Ambac common shares for $0.64 apiece on July 1, 2010. Following the transaction, Mr. Stevens retained 9,606 common shares. Mr. Stevens also holds 481 shares indirectly through the Savings Plan Trust. About Ambac Financial Headquartered in New York, Ambac Financial Group, Inc., through its subsidiaries, provided financial guarantees and financial services to clients in both the public and private sectors around the world. The Company's balance sheet as of December 31, 2009, showed $18.886 billion in assets and $20.520 billion in debts, resulting in a stockholders' deficit of $1.634 billion. KPMG LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the significant deterioration of the guaranteed portfolio coupled with the inability to write new financial guarantees has adversely impacted the business, results of operations and financial condition of the Company's operating subsidiary. KPMG also noted that of the Company's limited liquidity. AMES TRUE: S&P Puts 'B-' Corp. Rating on CreditWatch Positive ------------------------------------------------------------- Standard & Poor's Rating Services said that it placed its 'B-' corporate credit rating and all other related ratings on Camp Hill, Pa.-based Ames True Temper Inc. on CreditWatch with positive implications. Standard & Poor's could either raise or affirm the rating when it resolves the CreditWatch listing. "The CreditWatch placement follows the announcement that Ames entered into a definitive agreement on July 19, 2010, to be acquired by Griffon in a transaction valued at $542 million," said Standard & Poor's credit analyst Linda I. Phelps. The transaction has fully committed financing consisting of $75 million in cash from Griffon and up to $650 million in secured credit facilities ($500 term loan and $150 million revolving credit facility) provided by Goldman Sachs Lending Partners LLC. Completion of the transaction is subject only to customary closing conditions, including satisfaction of the antitrust waiting period. Management has indicated that it expects to complete the transaction by Sept. 30, 2010. As of April 3, 2010, Ames had about $329 million in total debt outstanding. In accordance with the purchase agreement, S&P expects Griffon to redeem both the $150 million senior floating rate notes due 2012 and the $150 million 10% senior subordinated notes due 2012 through a tender offer, which would close in conjunction with closing of the acquisition transaction. The CreditWatch listing reflects S&P's expectation that credit metrics would improve upon completion of the acquisition transaction. S&P could raise or affirm its ratings following its analysis of the combined entity's business and financial profile and the closing of the transaction. In addition, S&P would withdraw its ratings if Ames' existing debt is repaid, which S&P currently anticipates. AMR CORP: Says Revenue Enhancement & Cost Savings Options Scarce ---------------------------------------------------------------- AMR Corp.'s American Airlines Inc. warned on Wednesday it has become increasingly difficult to identify and implement significant revenue enhancement and cost savings initiatives. "The Company's ability to become profitable and its ability to continue to fund its obligations on an ongoing basis will depend on a number of factors, many of which are largely beyond the Company's control. . . . In addition, most of the Company's largest domestic competitors and several smaller carriers have filed for bankruptcy in previous years and have used this process to significantly reduce contractual labor and other costs. In order to remain competitive and to improve its financial condition, the Company must continue to take steps to generate additional revenues and to reduce its costs. Although the Company has a number of initiatives underway to address its cost and revenue challenges, some of these initiatives involve changes to the Company's business which it may be unable to implement," American said in a Form 10-Q filing with the Securities and Exchange Commission. American on Wednesday reported a net loss of $7 million in the second quarter of 2010 compared to a net loss of $388 million in the same period last year. The Company's improved performance is primarily the result of higher unit revenues (passenger revenue per available seat mile). American, however, noted that passenger yields remain insufficient to drive positive net earnings. The Company believes this is the result of a fragmented industry with numerous competitors, excess capacity and pricing transparency resulting from the use of the Internet and other factors. The Company believes that its limited pricing power could persist indefinitely. As of June 30, 2010, the Company: -- is required to make scheduled principal payments of: $517 million on long-term debt; $26 million in payments on capital leases, and -- expects to spend approximately $1.0 billion on capital expenditures, including aircraft commitments, for the remainder of 2010. On Wednesday, American reported $23.430 billion in total assets, including $192 million in cash, at June 30. Current assets total $7.255 billion. American reported $29.730 in total liabilities, including $11.825 billion in current liabilities. American said it believes it has approximately $2 billion in assets that could be used as possible financing sources. Last month, AMR reiterated its intent to evaluate the possible divestiture of AMR Eagle, its wholly owned regional carrier. AMR Eagle owns two regional airlines -- American Eagle Airlines, Inc. and Executive Airlines, Inc. American Eagle feeds American Airlines hubs throughout North America, and its affiliate, Executive, carries the American Eagle name throughout the Bahamas and the Caribbean from bases in Miami and San Juan, Puerto Rico. No prediction can be made as to the outcome of any such evaluation, and if AMR were to decide to pursue a divestiture of AMR Eagle, no prediction can be made as to whether any such divestiture will be completed or the impact of any such divestiture on the Company. American is also in active labor contract negotiations with each of its organized labor groups. The Company has negotiated tentative agreements with several workgroups within the Transport Workers Union of America, AFL-CIO including the Maintenance Control Technician group, the Material Logistics Specialists group and the Mechanic and Related group. Agreements with these TWU groups are subject to ratification by the relevant membership of TWU, and there are no assurances that these tentative agreements will be ratified. These tentative agreements include lump sum payments and contractual salary increases. If these contracts are ratified by union membership during the third quarter of 2010, the Company will incur approximately $60 million for lump sum payments and contractual salary increases in that period. The Company anticipates implementing productivity improvements consistent with the agreements that will help to offset the ongoing cost of salary increases. About AMR Corporation 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. AUTOZONE INC: CEO Rhodes Acquires, Then Sells, 8,945 Shares ----------------------------------------------------------- William C. Rhodes III, chairman, president and CEO of AutoZone Inc., disclosed in a regulatory filing that on July 8, 2010, he acquired 8,945 shares of common stock for $71.12 a share following his exercise of Non-Qualified Stock Options. This raised his stake to 22,585 shares. The shares were granted in accordance with the AutoZone, Inc. 1996 Stock Option Plan. That same day, he sold those shares in several transactions for roughly $198 a share. Mr. Rhodes directly holds 13,650 shares following the transactions. Mr. Rhodes directly holds 545 shares as custodian for his daughter, and another 545 shares as custodian for his son. About AutoZone As of February 13, 2010, in Memphis, Tenn.-based AutoZone, Inc. (NYSE:AZO) sells auto and light truck parts, chemicals and accessories through 4,289 AutoZone stores in 48 U.S. states plus the District of Columbia and Puerto Rico and 202 stores in Mexico. AutoZone is a retailer and distributor of automotive replacement parts and accessories in the United States. AutoZone does not derive revenue from automotive repair or installation. As of February 14, 2010, the Company had $5,424,992,000 in total assets, including $2,648,713,000 in total current assets; against total current liabilities of $2,749,324,000; debt of $2,774,700,000; and other liabilities of $322,639,000; resulting in stockholders' deficit of $421,671,000. AUTOZONE INC: Controller Acquires, Then Sells, 3,000 Shares ----------------------------------------------------------- Charles Pleas III, AutoZone Inc.'s senior vice president and controller, acquired 3,000 company shares for $71.12 a share on July 6, 2010. The shares were granted in accordance with the AutoZone, Inc. 1996 Stock Option Plan. That same day, he sold all those shares in various transactions for roughly $196. Mr. Pleas directly holds 585 shares following the transactions. About AutoZone As of February 13, 2010, in Memphis, Tenn.-based AutoZone, Inc. (NYSE:AZO) sells auto and light truck parts, chemicals and accessories through 4,289 AutoZone stores in 48 U.S. states plus the District of Columbia and Puerto Rico and 202 stores in Mexico. AutoZone is a retailer and distributor of automotive replacement parts and accessories in the United States. AutoZone does not derive revenue from automotive repair or installation. As of February 14, 2010, the Company had $5,424,992,000 in total assets, including $2,648,713,000 in total current assets; against total current liabilities of $2,749,324,000; debt of $2,774,700,000; and other liabilities of $322,639,000; resulting in stockholders' deficit of $421,671,000. AUTOZONE INC: Director Crowley Reports Sale of Shares ----------------------------------------------------- AutoZone Inc. director William C. Crowley reports in a regulatory filing that he sold 140 company shares for roughly $205 a share on July 14 and 192 shares for roughly $205.03 a share on July 15. He now directly holds 17,728 shares. Tynan, LLC, a limited liability company of which Mr. Crowley is the manager and a member, sold 201 shares for roughly $205 a share on July 14, and 276 shares for $205.03 a share on July 15. Tynan reduced its stake to 25,520 shares following the sale. Mr. Crowley may be deemed to indirectly hold those shares. About AutoZone As of February 13, 2010, in Memphis, Tenn.-based AutoZone, Inc. (NYSE:AZO) sells auto and light truck parts, chemicals and accessories through 4,289 AutoZone stores in 48 U.S. states plus the District of Columbia and Puerto Rico and 202 stores in Mexico. AutoZone is a retailer and distributor of automotive replacement parts and accessories in the United States. AutoZone does not derive revenue from automotive repair or installation. As of February 14, 2010, the Company had $5,424,992,000 in total assets, including $2,648,713,000 in total current assets; against total current liabilities of $2,749,324,000; debt of $2,774,700,000; and other liabilities of $322,639,000; resulting in stockholders' deficit of $421,671,000. AUTOZONE INC: Edward Lampert, ESL Partners Sell Shares ------------------------------------------------------ Edward S. Lampert disclosed in a regulatory filing that he sold 33,989 shares of AutoZone Inc. common stock for roughly $205 a share on July 14, 2010. He sold 46,693 shares on July 15 for roughly $205.03 a share. Following the transactions, Mr. Lampert held 4,287,862 common shares. Mr. Lampert directly holds those shares. Institutional funds affiliated with Mr. Lampert also sold company shares on July 14 and 15. ESL Partners, L.P., sold an aggregate of 162,901 shares, paring its stake to 8,720,593 shares; and 48,618 shares held in an account established by the investment member of ESL Investors, L.L.C., were also sold, reducing its stake to 2,602,684 shares. ESL Institutional Partners, L.P., sold 35 shares, reducing its stake to 1,882 shares. Mr. Lampert may also be deemed to indirectly hold 31,316 shares which are held in grantor retained annuity trusts, of which Mr. Lampert is the trustee. He may also be deemed to hold 2,000,000 shares held by Acres Partners, L.P. About AutoZone As of February 13, 2010, in Memphis, Tenn.-based AutoZone, Inc. (NYSE:AZO) sells auto and light truck parts, chemicals and accessories through 4,289 AutoZone stores in 48 U.S. states plus the District of Columbia and Puerto Rico and 202 stores in Mexico. AutoZone is a retailer and distributor of automotive replacement parts and accessories in the United States. AutoZone does not derive revenue from automotive repair or installation. As of February 14, 2010, the Company had $5,424,992,000 in total assets, including $2,648,713,000 in total current assets; against total current liabilities of $2,749,324,000; debt of $2,774,700,000; and other liabilities of $322,639,000; resulting in stockholders' deficit of $421,671,000. AUTOZONE INC: Gen. Counsel Goldsmith Acquires 2,800 Shares ---------------------------------------------------------- Harry L. Goldsmith, Executive Vice President, Secretary and General Counsel at AutoZone Inc., disclosed in a regulatory filing that on July 21, 2010, he exercised incentive stock options that gives him the right to buy company shares. The options were granted in accordance with the AutoZone, Inc. 1996 Stock Option Plan. Mr. Goldsmith acquired 1,800 shares at $89.18 a share, and another 1,000 shares at $82 a share. Following the transaction, Mr. Goldsmith is deemed to directly hold 18,508 shares. Mr. Goldsmith also indirectly holds 1,200 shares in a trust and another 200 shares in trusts for his daughters. About AutoZone As of February 13, 2010, in Memphis, Tenn.-based AutoZone, Inc. (NYSE:AZO) sells auto and light truck parts, chemicals and accessories through 4,289 AutoZone stores in 48 U.S. states plus the District of Columbia and Puerto Rico and 202 stores in Mexico. AutoZone is a retailer and distributor of automotive replacement parts and accessories in the United States. AutoZone does not derive revenue from automotive repair or installation. As of February 14, 2010, the Company had $5,424,992,000 in total assets, including $2,648,713,000 in total current assets; against total current liabilities of $2,749,324,000; debt of $2,774,700,000; and other liabilities of $322,639,000; resulting in stockholders' deficit of $421,671,000. AVISTAR COMMS: SVP Michael Dignen Holds 200,000 in RSUs ------------------------------------------------------- Michael James Dignen, Avistar Communications Corp.'s SVP for National Accounts & Sales, disclosed that he holds Restricted Stock Units that may be converted to 200,000 shares of Common Stock. The Restricted Stock Units were granted pursuant to Avistar Communications Corporation 2009 Incentive Equity Plan. Each RSU represents a contingent right to receive one share of Avistar's common stock. The RSUs vest 100% on July 19, 2012, two years after the awards being granted. Change of Control provision triggers 100% vesting. Termination without cause triggers pro rata vesting. About Avistar Communications Headquartered in San Mateo, California, Avistar Communications Corporation (Nasdaq: AVSR) -- http://www.avistar.com/-- holds a portfolio of 80 patents for inventions in video and network technology and licenses IP to videoconferencing, rich-media services, public networking and related industries. Current licensees include Sony Corporation, Sony Computer Entertainment Inc. (SCEI), Polycom Inc., Tandberg ASA, Radvision Ltd. and Emblaze-VCON. * * * As of March 31, 2010, the Company had total assets of $2.070 million against total liabilities of $5.120 million, resulting in stockholders' deficit of $3.050 million. BENCHMARK ELECTRONICS: Moody's Retains 'Ba3' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service said Benchmark Electronics' Ba3 Corporate Family Rating and stable outlook are supported by recent improvement in the company's operating performance. Moody's most recent communication on Benchmark was an issuer comment on July 8, 2009. The last rating action was on January 17, 2008, when Moody's affirmed Benchmark's Ba3 CFR and stable outlook, and assigned a Ba2 rating to its $100 million senior secured revolving credit facility due 2012. Headquartered in Angleton, Texas, Benchmark Electronics, Inc., provides electronic manufacturing services to original equipment manufacturers of telecommunication equipment, computers and related products for business enterprises, industrial control equipment, medical devices, testing and instrumentation products, and video/auto/entertainment products. Revenues and EBITDA (Moody's adjusted) for the twelve months ended March 31, 2010, were $2.2 billion and $124 million, respectively. BERNARD MADOFF: Picard Amends Lawsuit vs. Fairfield --------------------------------------------------- Irving H. Picard, Esq., as trustee for the substantively consolidated liquidation of the business of Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff, under the Securities Investor Protection Act Sections 78aaa et seq., filed on July 20, 2010, a 223-page amended complaint against Fairfield Sentry Limited and its affiliates. Mr. Picard, Bloomberg News notes, added 43 new defendants to a $3.5 billion lawsuit he began in May 2009 against Fairfield's three hedge funds. The new defendants include the group's cofounder Walter Noel. Chad Bray at Dow Jones Newswires reports that the amended complaint -- filed late Tuesday in U.S. Bankruptcy Court in New York -- is a new push by Mr. Picard to recover assets for victims of Mr. Madoff, whose firm took in nearly $7 billion from Fairfield Greenwich. Mr. Picard says 19 people and 25 affiliates of the firm actively participated with Mr. Madoff's scheme to mislead investors and ignored signs of the fraud to enrich themselves. "Serving as one of Madoff's largest marketing and investor relations arms, the Defendants were active participants in, and substantially aided, enabled, and helped sustain Madoff's Ponzi scheme. Every dollar the Defendants purportedly 'earned,' and every dollar they kept to unjustly enrich themselves, was stolen money. Every asset the Defendants own that originated from the purported management and performance fees drawn from fictitious returns is in fact Customer Property . . . and must be returned to the Trustee for equitable distribution to BLMIS customers," the complaint said. A full-text copy of the complaint is available at no charge at http://bankrupt.com/misc/picardamendedsuit.pdf About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert $64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) BEST PAYPHONES: Dist. Ct. Affirms MetTel's Lost Profits Claim ------------------------------------------------------------- WestLaw reports that under New York law, the judgment creditor, a competitive local exchange carrier (CLEC) which had provided dial- tone service for the Chapter 11 debtor, a payphone operator, prepetition and which subsequently had been assigned a second CLEC's service contract with the debtor, did not unequivocally repudiate the assigned service contract, even though it breached the agreement by demanding payment of its unrelated outstanding judgment in its notice of disconnection. While the disconnect notice threatened suspension of service if payment was not made, it also contemplated continuation of service and invited the debtor to contact the judgment creditor about the matter, and provided a telephone number for that purpose. Such invitation to engage in dialogue did not convey finality, the court reasoned. Moreover, given the parties' history, including a prior incident in which the judgment creditor reversed a suspension order, the debtor's assertion that dialogue would have been futile did not seem well founded. In re Best Payphones, Inc., --- B.R. ----, 2010 WL 2402927 (S.D.N.Y.) (Gardephe, J.). Manhattan Telecommunications Corporation d/b/a MetTel (MetTel) filed a multifaceted proof of claim against Best Payhones, Inc. (Bankr. S.D.N.Y. Case No. 01-B-15472), that sought, among other things, damages in the form of lost profits arising from the breach by Reorganized Best Payphones of a certain contract. Best objected to the lost profits claim. The Honorable Stuart M. Bernstein conducted a three-day bench trial on Dec. 4, 13 and 14, 2006, and concluded, 2007 WL 1388103, that MetTel holds an allowed claim for lost profits in the principal sum of $238,082.43, plus statutory interest accruing through the petition date. Best appealed to the U.S. District Court and the Honorable Paul G. Gardephe affirmed Judge Bernstein's ruling. BLOCKBUSTER INC: Wattles Sell-off Continues; 1.19MM Shares Dumped ----------------------------------------------------------------- Mark J. Wattles sold 1,192,622 shares of Blockbuster Inc. Class B common stock in various transactions between July 19 and 21. The Class B Shares sold for between $0.061 and $0.066. The transactions reduced his stake to 9,349,868 Class B shares -- of which 6,134,881 shares are held directly by Wattles Capital Management, LLC, and 3,214,987 shares are held directly by HKW Trust. Mr. Wattles owns 100% of the membership interests of WCM. Mr. Wattles is the settler and sole trustee of HKW Trust and exercises sole discretion over HKW Trust. Last week, Mr. Wattles disclosed he held 11,050,000 shares or 15.3% of the outstanding Class B Common Stock of Blockbuster Inc. Mr. Wattles has been selling off his Blockbuster shares. Mr. Wattles' principal occupation is serving as President of WCM, which is primarily engaged in investing in public and private companies in the consumer products and retail sectors. WCM indirectly owns a majority interest in Ultimate Acquisition Partners, LP, a Delaware limited partnership, which owns and operates consumer electronics retail stores under the name Ultimate Electronics. Mr. Wattles also serves as Chairman of UAP. Prior to forming WCM, Mr. Wattles founded Hollywood Entertainment Corporation, the second largest video rental and retail chain (after Blockbuster Inc.) and the second largest video game specialty retailer (after Game Stop Corp.), where he was Chairman and Chief Executive Officer for more than 17 years before Hollywood was sold for $1.25 billion to Movie Gallery, Inc. in April 2005. The Trust acquires, holds, manages and disposes of assets for the benefit of a member of Mr. Wattles' family and The Wattles Family Foundation. About Blockbuster Inc. Blockbuster Inc. is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. The company may be accessed worldwide at http://www.blockbuster.com/ Blockbuster's quarterly report on Form 10-Q showed a net loss of $65.4 million on $939.4 million of revenue for the 13 weeks ended April 4, 2010, compared with net income of $27.7 million on $1.086 billion of revenue for the 13 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. BRIGHAM EXPLORATION: Files 11-K Report for 401(k) Plan ------------------------------------------------------ Brigham Exploration Company has filed with the Securities and Exchange Commission an annual report on Form 11-K for the Brigham, Inc. 401(k) Plan for the year ended December 31, 2009. At December 31, 2009, net assets available for plan benefits total $8,596,892. A full-text copy of the Form 11-K is available at no charge at http://ResearchArchives.com/t/s?66cf Brigham Exploration Company is headquartered in Austin, Texas. As reported by the Troubled Company Reporter on June 17, 2010, Moody's Investors Service upgraded Brigham Exploration Company's Corporate Family Rating to Caa1 from Caa2 and the Probability of Default Rating to Caa1 from Caa2. Moody's also upgraded Brigham's $160 million senior unsecured notes due 2014 to Caa2 from Caa3 and its Speculative Grade Liquidity rating to SGL-1 from SGL-2. The rating outlook is positive. BRIGHAM EXPLORATION: General Counsel Potts Receives Options ----------------------------------------------------------- Kari Arneil Potts, Brigham Exploration Co. General Counsel and Secretary, disclosed acquiring on July 1 Incentive Stock Options, giving him the right to buy 25,000 company shares. The employee incentive stock options granted pursuant to the 1997 Incentive Plan. The stock options vest in five consecutive equal annual installments beginning one year from the date of the grant, with final vesting on July 1, 2015. Brigham Exploration Company is headquartered in Austin, Texas. As reported by the Troubled Company Reporter on June 17, 2010, Moody's Investors Service upgraded Brigham Exploration Company's Corporate Family Rating to Caa1 from Caa2 and the Probability of Default Rating to Caa1 from Caa2. Moody's also upgraded Brigham's $160 million senior unsecured notes due 2014 to Caa2 from Caa3 and its Speculative Grade Liquidity rating to SGL-1 from SGL-2. The rating outlook is positive. CABI DOWNTOWN: Committee Now Supports Reorganization Plan --------------------------------------------------------- Bill Rochelle at Bloomberg News reports that the Official Committee of Unsecured Creditors for Cabi Downtown LLC settled its disputes and agreed to support a modified Chapter 11 plan resulting from a settlement between the lender and the Debtor. According to the report, the Plan allows Bank of America NA, the construction lender, to take title to the project while the developer remains as manager. BofA is owed $207 million. Mr. Rochelle recounts that under the previous iteration of the Plan, general unsecured creditors were to share $750,000 cash, although only if they voted in favor of the Plan. If the class voted "no," they were to receive $500,000. Following the revisions negotiated by the Committee, the Plan, among other things, now provides for unsecured creditors to receive $750,000, for a 25% recovery on $3 million in claims. Plan confirmation hearing will take place in October. About Cabi Downtown Aventura, Florida-based Cabi Downtown, LLC, operates a real estate business and owns the 49-story Everglades on the Bay condominium in Miami. The condominium project has 849 units in two towers, with 60,000 square feet of retail space. The Company is owed by GICSA, which says it is the largest and most profitable real estate developer in Mexico. The Company filed for Chapter 11 on Aug. 18, 2009 (Bankr. S.D. Fla. Case No. 09-27168). The Debtor's legal advisors are Kasowitz, Benson, Torres & Friedman LLP; and Bilzin Sumberg Baena Price & Axelrod LLP. In its petition, the Debtor listed assets and debts both ranging from US$100,000,001 to US$500,000,000. CHEMTURA CORP: Wins Approval of Disclosure Statement ---------------------------------------------------- Bill Rochelle at Bloomberg News reports that the bankruptcy judge said at a hearing on July 21 that he will approve the disclosure statement explaining the Chapter 11 plan of Chemtura Corp. after changes are made. The Plan, supported by the Creditors Committee and an ad hoc bondholder group, is designed to pay creditors in full while holding the possibility of preserving some value for existing shareholders. The plan would reduce debt for borrowed money from $1.3 billion to approximately $750 million. According to Bloomberg, the hearing for approval of a plan-support agreement signed by the Creditors Committee and the Bondholder Group was put off until Aug. 4. The official committee of shareholders is objecting to the agreement. The equity committee has lost its bid to file a competing plan of its own. 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) CHRYSLER FINANCIAL: Mulls Return to Lending Business ---------------------------------------------------- Dow Jones Newswires' Jeff Bennett reports that Chrysler Financial is considering whether it will once again compete in the lending business after it was dumped by Chrysler Group LLC during the auto maker's bankruptcy last year. The former lending unit has contacted dealers to see if they would use the company when offering consumer loans, according to three dealers contacted by The Wall Street Journal. One dealer told the Journal Chrysler Financial didn't disclose its full intentions but was "gauging" potential interest. A Chrysler spokesman couldn't immediately be reached for comment. According to Dow Jones, Chrysler Financial may find a difficult challenge in returning to lending since about 70% of its former Chrysler dealer customers have switched to Ally Financial Inc. Dow Jones notes Chrysler dropped Chrysler Financial as its primary lender as part of its bankruptcy a year ago. Chrysler Financial had been quietly winding down its operations. COMARCO INC: Has Silicon Valley Bank Forbearance Until Aug. 15 -------------------------------------------------------------- Effective July 15, 2010, Comarco, Inc., and Comarco Wireless Technologies, Inc., the wholly owned subsidiary of Comarco, entered into a Forbearance to Loan and Security Agreement by and among the Borrower and Silicon Valley Bank. SVB agreed that, so long as no event of default under the Loan and Security Agreement between Borrower and SVB, as amended by that certain First Amendment to Loan and Security Agreement exists other than the Company's failure to comply with the quick ratio covenant set forth in Section 6.9(a) of the Loan Agreement for the month of June 2010, SVB shall forbear from exercising any of its rights and remedies against the Borrower until after August 15, 2010, the date at which the Borrower's June 2010 quick ratio calculation is due to be reported to SVB. The Forbearance also contains representations and warranties by Borrower and a release by Borrower of SVB. Comarco Inc. -- http://www.comarco.com/-- provides programmable slim and light universal power supplies. Comarco is based in Lake Forest, California. CONCHO RESOURCES: Marbob Deal Cues Moody's to Review Low-B Ratings ------------------------------------------------------------------ Moody's Investors Service placed Concho Resources Inc.'s ratings under review for downgrade following its highly leveraging acquisition of Marbob Energy Corporation's oil and gas properties for $1.65 billion. The properties are located within Concho's largest core area of operations, the West Texas and eastern New Mexico Permian Basin region. The properties increase Concho's overall reserve and production scale, and its diversification within the that Basin, although it does so at a high cost per flowing barrel of oil-equivalent of reserves. Funding includes $300 million in privately placed common equity, $50 million in common equity issued to the seller and $1.3 billion in debt. Leverage is further amplified by the comparatively low proportion of drilled, developed, cash flowing reserves relative to the price paid, elevating bondholders' exposure to subsequent associated heavy capital spending and inherent geologic, drilling and commerciality risk of the properties. Nevertheless, Concho was already conservatively positioned within its ratings to accommodate Concho's stated intention at the time to remain opportunistically acquisitive although the Marbob acquisition may exceed the credit parameters anticipated by the ratings. However, the company has been specific about potential asset sales. Accordingly, the ratings review will assess the potential for material near term asset sales and the degree of potential leverage reduction on daily production and reserves. Secondarily, the review will also assess the degree to which leverage on reserves and production may decline in the next four quarters due to cost effective volume growth from the drill bit. The acquisition increases Concho's leverage on daily production by 122% to approximately $40,030/boe of daily production and its leverage on proven developed reserves by 112% to $13.20/boe of PD reserves. While leverage (debt plus all future years FAS 69 capital outlays) on pro-forma proven reserves rises by approximately 40%, this is calculated without the benefit of year- end SEC reserve data. Ratings under review include Concho's B1 Corporate Family Rating and Probability of Default Rating, and the B3 (LGD6-90%) rating on its $300 million of senior unsecured notes. The $1.3 billion of debt financing consists of at least $300 million of new senior unsecured notes issued to the public, $150 million of new senior unsecured notes issued to the seller, and up to $850 million borrowed under the company's revolving credit facility. The equity funding consists of a $300 million PIPE (Private Placement of Public Equity) issuance and a $50 million issuance of common equity to the seller. Partially offsetting the impact of higher leverage is the increased scale of Concho's operations post-acquisition, its continued oil weighting (pro-forma production is 65% liquids), and the sound operational track record the company has demonstrated since initially receiving its B1 rating in September of 2009. From June 30, 2009 to March 31, 2010, Concho grew production by approximately 19% while maintaining a quarterly trend in falling leverage on PD reserves. Finding and development costs have been competitive, although this may rise as Concho funds the drilling and development of its large proportion of proven undeveloped reserves. Concho has adequate liquidity to meet its anticipated cash needs over the next twelve months. Concho will have a $2 billion senior secured borrowing base credit facility with approximately $500 million of availability. The company will be well within compliance with the two covenants of its credit facility. Concho has no debt maturities until July 31, 2013 when its credit facility matures. The size of the secured debt overhang results in a B3 note rating under Moody's LGD Methodology. The last rating action for Concho was September 11, 2009 when Moody's assigned the current ratings. Concho's ratings have been assigned by evaluating factors that Moody's believes are relevant to the company's risk profile, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside Concho's core industry; Concho's ratings are believed to be comparable to those of other issuers with similar credit risk. The last rating action was on September 11, 2009, when Concho was assigned a first time B1 Corporate Family Rating, a B1 Probability of Default Rating, and a B3 (LGD 6, 90%) rating was assigned to its senior unsecured notes. Concho Resources Inc. is an independent exploration and production company headquartered in Midland, Texas. DOUGLAS JOHNSON: S.D. Tex. Frowns on Special Divorce Counsel ------------------------------------------------------------ WestLaw reports that an individual Chapter 11 debtor-in-possession seeking leave to employ special counsel in an effort to modify the terms of a final divorce decree, not in any ongoing state court proceeding, but in bankruptcy court, on the theory that the proposed modification was a bankruptcy issue, failed to satisfy his burden of showing that employment as special counsel of the attorney who represented him in the divorce proceedings was necessary for any specified, special purpose or that such relief could not be pursued by his regular bankruptcy counsel. The debtor could not have it both ways in asserting that his modification request was a bankruptcy issue, for purpose of opposing his ex-wife's motion for abstention, while simultaneously asserting that the request could not be prosecuted by his regular bankruptcy counsel. In re Johnson, --- B.R. ----, 2010 WL 2402925 (Bankr. S.D. Tex.). Douglas R. Johnson sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 08-36584) on Oct. 13, 2008; is represented by Craig Harwyn Cavalier, Esq., in Houston, Tex.; and estimated his assets and debts at $10 million to $50 million at the time of the filing. ENVIROSOLUTIONS HOLDINGS: Wins Confirmation of Chapter 11 Plan -------------------------------------------------------------- Bankruptcy Law360 reports that U.S. Bankruptcy Judge Stuart M. Bernstein has approved a reorganization plan for EnviroSolutions of New York LLC, allowing the Company to emerge from Chapter 11 protection by handing virtually all its equity over to secured lenders. The Plan was confirmed July 21. About EnviroSolutions Holdings Based in Manassas, Virginia, EnviroSolutions Holdings, Inc., is an integrated solid waste management company with a presence in Virginia, Maryland, New Jersey, Kentucky, West Virginia, and the District of Columbia. The company's assets include three landfills, four transfer stations and several hauling and collection operations. The Company filed for Chapter 11 bankruptcy protection on March 10, 2010 (Bankr. S.D.N.Y. Case No. 10-11261). John Longmire, Esq., at Willkie Farr & Gallagher LLP, assists the Company in its restructuring effort. Alvarez and Marsal North America, LLC, is the Company's restructuring advisor. The Company's financial advisor is Barclays Capital. The Company estimated its assets and liabilities at $100,000,001 to $500,000,000. FAIRFAX FINANCIAL: S&P Assigns 'BB' Rating on Preferred Shares -------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB' global scale and 'P-3' Canadian scale ratings on Toronto-based Fairfax Financial Holdings Ltd.'s pending issuance of up to C$200 million in preferred shares, series G, with an option on an additional C$50 million available to the underwriters. Fairfax intends to issue the preferred shares from its current $2 billion universal shelf filing. It will use the proceeds to augment its cash position, to increase short-term investments and marketable securities held at the holding company level, to retire outstanding debt and other corporate obligations from time to time, and for general corporate purposes. The ratings on Fairfax reflect its strong business and financial profiles. Fairfax, through its insurance units -- including Odyssey Reinsurance, Northbridge Financial, Crum & Forster, and Zenith National -- maintains a competitive presence in the North American commercial insurance marketplace and in the global reinsurance market. In 2009, Fairfax reported strong consolidated pretax operating income of US$1.2 billion, largely resulting from investment interest, dividends, and gains. Its consolidated combined loss and expense ratio was a satisfactory 99.8%. During the first three months of 2010, Fairfax reported consolidated pretax earnings of $364 million despite the impact of higher catastrophe losses and a 111.5% combined ratio. Upon completion of the issuance, Fairfax's total financial leverage will be approximately 28%, which is in S&P's expected range of 25% to 30%, and fixed- charge coverage will be approximately 1.7x, versus 1.8x in 2009. Ratings List Fairfax Financial Holdings Ltd. Counterparty Credit Rating BBB-/Stable/-- New Ratings Fairfax Financial Holdings Ltd. C$250 mil. in preferred shares Global scale rating BB Canadian scale rating P-3 FIELDSTONE LESTER: Judge Drops Negligence Claims on $30MM Loan -------------------------------------------------------------- A federal judge has dropped negligence claims from a real estate firm's suit accusing law firm Fieldstone Lester Shear & Denberg LLP and a title insurer of misconduct in representing a now- bankrupt borrower in its quest to secure a $30 million loan, leaving only a breach of contract claim in play. Judge K. Michael Moore of the U.S. District Court for the District of Delaware dismissed the bulk of RAIT Partnership LP's amended complaint Tuesday, Law360 says. FIRSTFED FIN'L: Working on Liquidating Plan ------------------------------------------- First Fed Financial Corp. said in a report to the Bankruptcy Court that it is currently in the process of drafting the liquidating plan. In June, the Debtor engaged the firm of Rus Miliband & Smith, LLP in investigate potential claims which may be brought by the Debtor. The initial engagement is on an hourly basis with a $50,000 cap. An application for employment has been submitted to the bankruptcy court for approval. No work has commenced and no fees have accrued pending bankruptcy court approval of the engagement. The Debtor said there is a potential refund of more than $90 million relating to loss carrybacks from earlier tax years. The Federal Deposit Insurance Corp., in its capacity as Receiver for the Debtor's bank subsidiary, has submitted a proof of claim which, among other things, claims that the FDIC is entitled to some or all of any such tax refund and may have other super priority claims. According to the Debtor, if the FDIC's claim is successful, it will reduce or potentially eliminate any assets available for distribution to general unsecured creditors. The Debtor reserves its rights with respect to any such claims by the FDIC. The Debtor continues to investigate potential claims against third parties to determine potential for recovery. No Committee of Unsecured Creditors has been appointed in the case. However, the Debtor continues to work and communicate cooperatively with Wilmington Trust, its principal unsecured creditor, concerning all aspects of the case. Based in California, FirstFed Financial Corp. filed for Chapter 11 protection on Jan. 6, 2010 (Bankr. C.D. Calif. Case No. 10-10150). Jon L. Dalberg, Esq., at Landau Gottfried & Berger LLP, represents the Debtor in its restructuring efforts. In its petition, the Debtor listed assets of between $1 million and $10 million, and debts of between $100 million and $500 million. FORD MOTOR: Expects to Report $1.6-Bil. Second-Quarter Profit ------------------------------------------------------------- The Wall Street Journal's Matthew Dolan reports that Ford Motor Co. is expected to report a second-quarter profit of $1.6 billion on Friday, compared to a $424 million loss a year ago, on the strength in its increasing ability to sell pricier models and persuade customers to pay for expensive options, analysts say. The Journal relates the success with improving pricing and model mix comes on the heels of a healthy sales quarter in the U.S. for Ford, which outpaced the overall industry in its critical home market. The Journal notes Ford's combined U.S. sales in April, May and June grew 21% over the same period last year, compared to 17% for the industry. Although Ford lost market share in Europe as its competitors ratcheted up incentives, it had a strong quarter in China and India, where the company has invested in new plants and introduced updated models. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The Company provides financial services through Ford Motor Credit Company. At March 31, 2010, the Company had $191.968 billion in total assets against $197.405 billion in total liabilities. As reported by the Troubled Company Reporter on June 7, 2010, Moody's released an Issuer Comment stating that the ratings and outlook of Ford Motor Company are being maintained following the company's announcement that it will end production of Mercury vehicles during the fourth quarter of this year. Ford's ratings include: B1 Corporate Family Rating and Probability of Default Rating; Ba1 secured rating; B2 unsecured rating; and SGL-2 Speculative Grade Liquidity Rating. The rating outlook is stable. The last rating action on Ford was an upgrade of the Company's Corporate Family Rating to B1 on May 18, 2010. FORD MOTOR: Financing Arm Pulls Out Plan to Issue New Debt ---------------------------------------------------------- Dow Jones Newswires' Anusha Shrivastava and Fawn Johnson report that Ford Motor Co.'s financing arm withdrew plans to issue new debt, the first casualty of a bond market thrown into turmoil by the financial overhaul signed into law Wednesday. According to Dow Jones, market participants said Ford pulled a recent deal, backed by packages of auto loans, because it was unable to use credit ratings in its offering documents, a legal requirement for such sales. Ford declined to comment. Dow Jones relates that the ratings firms have in recent days refused to allow their ratings to be used in bond registration statements. The firms, including Moody's Investors Service, Standard & Poor's and Fitch Ratings, fear they will be exposed to new liability created by the Dodd-Frank law. The law says that the ratings firms can be held legally liable for the quality of their ratings. In response, Dow Jones continues, the firms yanked their consent to use the ratings, hoping for a reprieve from the Securities and Exchange Commission or Congress. The trouble is that asset-backed bonds are required by law to include ratings in official documents. Dow Jones relates ratings companies argued that the new law effectively would render them "experts," which brings with it potential new liability akin to those held by auditors and lawyers. "The inclusion in the offering documents are an unacceptable risk," Dow Jones quotes Dan Curry, president of DBRS Inc., a bond rater, as saying. He said the expert liability is "really the standard for an auditor" and shouldn't be used for rating agencies, since their opinions are "an attempt to predict future outcomes." According to Dow Jones, some suggested that ratings companies may eventually consent to having their ratings used, but would charge higher fees for the extra risk. Another provision of the new law raises additional uncertainty by requiring the findings and conclusions of all third parties involved in the underwriting be made publicly available. That appears to include statements from lawyers and accountants, which until now have been treated as privileged and confidential information. Lawyers and accountants also have begun balking at these demands, say market participants. "Lawyers and accountants would be highly reluctant to publish their opinions and conclusions because their letters are specifically for parties to whom they are addressed," said Ed Gainor, a partner in the structured-finance group at the Bingham McCutchen law firm in New York. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The Company provides financial services through Ford Motor Credit Company. At March 31, 2010, the Company had $191.968 billion in total assets against $197.405 billion in total liabilities. As reported by the Troubled Company Reporter on June 7, 2010, Moody's released an Issuer Comment stating that the ratings and outlook of Ford Motor Company are being maintained following the company's announcement that it will end production of Mercury vehicles during the fourth quarter of this year. Ford's ratings include: B1 Corporate Family Rating and Probability of Default Rating; Ba1 secured rating; B2 unsecured rating; and SGL-2 Speculative Grade Liquidity Rating. The rating outlook is stable. The last rating action on Ford was an upgrade of the Company's Corporate Family Rating to B1 on May 18, 2010. GARLOCK SEALING: Asbestos Panel Proposes Caplin as Counsel ---------------------------------------------------------- The Official Committee of Asbestos Personal Injury Claimants for Garlock Sealing Technologies LLC seeks the Court's permission to retain Caplin & Drysdale, Chartered, as its counsel effective as of June 16, 2010. As the Asbestos Claimants Committee's counsel, Caplin & Drysdale will render these services, including: (a) assisting and advising the Asbestos Claimants Committee in its consultations with the Debtors and other committees relative to the overall administration of the estates; (b) representing the Asbestos Claimants Committee at hearings to be held before the Court or Federal District Court or any appellate courts and communicating with the Asbestos Claimants Committee regarding the matters heard and issues raised as well as the decisions and considerations of the Court and any other courts; (c) assisting and advising the Asbestos Claimants Committee in its examination and analysis of the Debtors' conduct and financial affairs; (d) reviewing and analyzing all applications, orders, operating reports, schedules and statements of affairs filed and to be filed with the Court by the Debtors or other interested parties in the Debtors' Chapter 11 cases; advising the Asbestos Claimants Committee as to the necessity and propriety and their impact upon the rights of asbestos-related claimants, and upon the case generally; and after consultation with and approval of the Asbestos Claimants Committee or its designee, consenting to appropriate orders on its behalf or otherwise objecting thereto; (e) assisting the Asbestos Claimants Committee in preparing appropriate legal pleadings and proposed orders as may be required in support of positions taken by the Asbestos Claimants Committee and preparing witnesses and reviewing relevant documents; (f) coordinating the receipt and dissemination of information prepared by and received from the Debtors' independent certified accountants or other professionals retained by it as well as such information as may be received from independent professionals engaged by the Asbestos Claimants Committee and other committees, as applicable; (g) assisting the Asbestos Claimants Committee in the solicitation and filing with the Court of acceptances or rejections of any proposed plan or plans of reorganization; (h) assisting and advising the Asbestos Claimants Committee with regard to communications to the asbestos-related claimants regarding its efforts, progress and recommendation with respect to matters arising in the Debtors' Chapter 11 cases as well as any proposed plan of reorganization; and (i) assisting the Asbestos Claimants Committee generally by providing other services as may be in the best interest of the creditors it represents. The Debtors will pay Caplin & Drysdale's professionals according to their customary hourly rates: Title Rate per Hour ----- ------------- Members and of Counsel $410 to $950 Associates I $230 to $410 Paralegals $200 to $240 Specific professionals to render services to the Asbestos Claimants Committee are: Name Title Rate per Hour ---- ----- ------------- Elihu Inselbuch Member $950 Peter Van N. Lockwood Member $860 Trevor W. Swett III Member $675 Nathan D. Finch Member $625 Jeffrey A. Liesemer Member $510 Kevin C. Maclay Member $510 James P. Wehner Member $510 Rita C. Tobin Of Counsel $545 Jeanna M. Rickards Koski Associate $340 Andrew J. Sackett Associate $310 Todd E. Phillips Associate $300 Sara Joy DelSavio Paralegal $200 The Debtors will reimburse Caplin & Drysdale for expenses incurred. Trevor W. Swett, Esq., at Caplin & Drysdale, Chartered -- tws@capdale.com -- relates that Nathan D. Finch, a member of Caplin & Drysdale, is co-counsel with Waters & Kraus for several mesothelioma victims in cases pending in federal district court, including James and Jane Prange and John and Bonnie Schumacher. Mr. and Mrs. Prange and Mr. and Mrs. Schumacher hold separate asbestos-related claims against the Debtors, Mr. Swett says. Mr. Finch does not represent any person with respect to any claim to be made against Debtors in their bankruptcy cases, Mr. Finch assures the Court. Caplin & Drysdale is also co-counsel with Motley Rice LLC in two pending financial litigation cases arising from securities transactions and was co-counsel with the same firm in another case of that kind that was resolved, Mr. Swett notes. Effective September 1, 2010, Mr. Finch will leave his position at Caplin & Drysdale to become a member of Motley Rice LLC, Mr. Swett discloses. Despite those disclosures, Mr. Swett maintains that Caplin & Drysdale is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W. D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor listed $500,000,001 to $1,000,000,000 in assets and $100,000,001 to $500,000,000 in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Asbestos Panel Proposes Hamilton as Co-Counsel --------------------------------------------------------------- The Official Committee of Asbestos Personal Injury Claimants for Garlock Sealing Technologies LLC seeks the U.S. Bankruptcy Court for the Western District of North Carolina's permission to retain Hamilton, Moon, Stephens, Steele & Martin, PLLC, as their co- counsel, nunc pro tunc to July 6, 2010. As the Asbestos Claimants Committee's co-counsel, Hamilton Moon will render these services, including: (a) assisting and advising the Asbestos Claimants Committee in its consultations with the Debtors and other committees relative to the overall administration of the Debtors' estates; (b) representing the Asbestos Claimants Committee at hearings to be held before the Bankruptcy Court or Federal District Court or any appellate courts and communicating with the Asbestos Claimants Committee regarding the matters heard and issues raised as well as the decisions and considerations of the Bankruptcy Court and any other courts; (c) assisting and advising the Asbestos Claimants Committee in its examination and analysis of the Debtors' conduct and financial affairs; (d) reviewing and analyzing all applications, orders, operating reports, schedules and statements of affairs filed and to be filed with the Bankruptcy Court by the Debtors or other interested parties in these Chapter 11 cases; advising the Asbestos Claimants Committee as to the necessity and propriety of those pleadings and their impact upon the rights of asbestos-related claimants, and upon the Debtors' Chapter 11 cases; and after consultation with and approval of the Asbestos Claimants Committee or its designee, consenting to appropriate orders on its behalf or otherwise objecting to it; (e) assisting the Asbestos Claimants Committee in preparing appropriate legal pleadings and proposed orders as may be required in support of positions taken by the Asbestos Claimants Committee and preparing witnesses and reviewing relevant documents; (f) coordinating the receipt and dissemination of information prepared by and received from the Debtors' independent certified accountants or other professionals retained by it as well as other information as may be received from independent professionals engaged by the Asbestos Claimants Committee and other committees, as applicable; (g) assisting the Asbestos Claimants Committee in the solicitation and filing with the Bankruptcy Court of acceptances or rejections of any proposed plan or plans of reorganization; (h) assisting and advising the Asbestos Claimants Committee with regard to communications to the asbestos-related claimants regarding its efforts, progress and recommendation with respect to matters arising in the Debtors' Chapter 11 cases as well as any proposed plan of reorganization; (i) assisting the Asbestos Claimants Committee generally by providing other services as may be in the best interest of the creditors represented by the Asbestos Claimants Committee; and (j) assisting and advising the Asbestos Claimants Committee with regard to the local rules and practice of the Bankruptcy Court and the U.S. District Court for the Western District of North Carolina. The Debtors will pay Hamilton Moon's professionals according to their customary hourly rates: Name Rate per Hour ---- ------------- T. Jonathan Adams $315 Brooke Bishop $95 L. Stanley Brown $450 Rebecca K. Cheney $295 Adrianne Chillemi $285 Tracey A. Farrar $125 David B. Hamilton $400 Adam L. Horner $265 Andrew T. Houston $265 Mark R. Kufny $300 Heide R. Larkin $140 Michael Aaron Lay $225 Debbie Mankus $135 Bentford E. Martin $350 Keith J. Merritt $350 Travis W. Moon $575 Amy Morris $135 Shannon Myers $155 Allison C. Pauls $275 Erik M. Rosenwood $325 George W. Sistrunk, III $300 Jackson N. Steele $450 Robert C. Stephens $400 Glenn C. Thompson $275 Allen L. West $315 Reba R. Whaley $125 Richard S. Wright $350 The Debtors will reimburse Hamilton Moon for expenses incurred. Travis W. Moon, Esq., -- tmoon@lawhms.com -- a member of Hamilton Moon assures the Court that his firm is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W. D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor listed $500,000,001 to $1,000,000,000 in assets and $100,000,001 to $500,000,000 in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Boyer Appointed to Asbestos Committee ------------------------------------------------------ The Hon. George R. Hodges of the U.S. Bankruptcy Court of the Western District of North Carolina granted the request to change membership of the Official Committee of Personal Injury Claimants filed by Joseph D. Boyer. In light of that ruling, the order appointing the Asbestos Claimants Committee is deemed amended. Mr. Boyer is appointed as a member of the Claimants Committee in the Debtors' Chapter 11 cases on July 20, 2010, Judge Hodges ruled. Mr. Boyer can be reached at: Joseph D. Boyer c/o Allan Kellman The Jaques Admiralty Law Firm, PC 645 Grisworld, Suite 1370 Detroit, MI 48226 The existing members of the Asbestos Claimants Committee are: * John & Diane Allen * William Ames Warren * John Koeberle * Madonna Guzzo * Robert Wirwicz * Charles & Loretta Willis * Gary Terry * Deborah Papaneri * Ruth Sossamon * Thomas Carroll * Dorothy Burns About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W. D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor listed $500,000,001 to $1,000,000,000 in assets and $100,000,001 to $500,000,000 in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Files Schedules of Assets & Liabilities -------------------------------------------------------- A. Real Property Fee Simple Palmyra Plant 1666 Division Street, Palmyra, NY 14522 $18,116,989 Sodus Plant 300 Alling Road, Sodus, NY 14551 150,000 B. Personal Property B.1 Cash on hand Petty cash 1,000 B.2 Bank Accounts Banc of America Securities, LLC 26,552,238 Bank of America 152,886 Scotia Bank 29,770 B.3 Security Deposits with public utilities 0 B.4 Household goods and furnishings 0 B.5 Books, picture and furnishings 0 B.6 Wearing apparel 0 B.7 Furs and jewelry 0 B.8 Firearms and sports 0 B.9 Interests in insurance policies 0 See http://bankrupt.com/misc/Garlock_B9InsurancePolicies.pdf B.10 Annuities 0 B.11 Interests in an education IRA 0 B.12 Interests in IRA, ERISA, Keogh or other pension plan 0 B.13 Stock and interests in incorporated and unincorporated businesses Garlock Pty Limited (Australia) - 100% 34,949,000 Garlock de Mexico, S.A. (Mexico) - 99.9% 19,961,019 Garlock International, Inc. (DE) - 100% 13,888,000 Garlock Valqua Japan, Inc. - 49% 1,387,000 Garlock Overseas Corp. (DE) - 100% 19,981 B.14 Interests in partnerships or joint ventures 0 B.15 Government and corporate bonds and other negotiable and non-negotiable instruments 0 B.16 Accounts receivable Intercompany Note 168,998,373 Amended and Restated Promissory Note from Stemco LP 161,052,390 Amended and Restated Promissory Note from Coltec Industries Inc. 76,808,795 Third Party Trade Receivables 13,685,225 Intercompany Gride Note from Coltec 3,378,899 Vendor Receivable Anchor Packing Company 2,025,298 Coltec Industries Pacific 819,858 Garlock GMBH 689,339 Coltec Do Brazil Productos Industrias LTDA 519,798 Garlock Pty Limited 453,280 Garlock Sealing Technologies Company, Ltd. 284,186 Garlock (Great Britain), Ltd. 187,147 Garlock De Mexico S.A. De C.V. 170,858 GST Middle East 152,081 Garlock France, SAS 124,275 Helicoflex 101,364 Garlock of Canada, Ltd. - Sherbrooke 51,185 Corrision Control Corporation 26,698 EnPro India Private Limited 25,594 Garrison Litigation Management Group 20,793 GGB 7,024 Garlock Rubber Technologies 3,339 Texolon 3,238 Fairbanks Morse Engine 2,425 Compressor Products International 21 Quincy Compressor (190) B.17 Alimony, maintenance and property settlements 0 B.18 Other liquidated debts owed to debtor including tax refunds NY State Brownfield Redevelopment Tax Credits 3,552,944 B.19 Equitable or future interests, life estates 0 B.20 Contingent and non-contingent interest 0 B.21 Other contingent and unliquidated claims unknown B.22 Patents, copyrights, other intellectual property 258,580 See http://bankrupt.com/misc/Garlock_B22Patents.pdf B.23 Licenses, franchises and other general intangibles Goodwill 15,003,329 B.24 Customer lists or other compilations 0 B.25 Automobiles, trucks, trailers, and other vehicles 2006 New Holland Tractor 23,630 Komatsu wheel loader 19,440 2001 Ford F-350 pickup with plow 5,616 1996 Chevrolet pickup with plow 0 B.26 Boats, motors and accessories 0 B.27 Aircraft and accessories 0 B.28-29 Office equipment, machinery and equipment 16,884,310 B.30 Inventory Finished goods 3,304,124 Raw Material 2,619,113 Semi finished goods 1,596,289 Work in Process 276,897 Other 125,075 Valuation Allowances (3,209,963) B.31 Animals 0 B.32 Crops 0 B.33 Farming equipment and implements 0 B.34 Farm supplies, chemicals and feed 0 B.35 Other personal property Various prepaid expenses 479,913 TOTAL SCHEDULED ASSETS $585,738,480 ============================================================ C. Property Claimed as Exempt n/a D. Creditors Holding Secured Claims Bank of America $8,833,323 Daikin America Inc. 397,950 First American Equipment Finance 212,171 SGL Polycarbon, LLC 0 SunTrust Bank 0 Wells Fargo Capital Finance, LLC 0 E. Creditors Holding Unsecured Priority Claims Wages, salaries and commissions 0 Contributions to employee benefit plans 0 Taxes and certain other debts to governmental units Ohio Treasurer of State 287,791 Wayne County Industrial Dev. Agency 160,380 Internal Revenue Service 0 NC Department of Revenue 0 NY State Dept. of Taxation & Finance 0 F. Creditors Holding Unsecured Non-priority Claims Garrison Litigation Management Group Ltd. -- Intercompany Note 377,203,767 Coltec Industries Inc. - Intercompany Payable 715,484 Garlock De Mexico S.A. De C.V. 472,533 Garlock De Sherbrooke 338,558 Douglas E. Sergeant 208,907 Wayne T. Gedney 170,833 Steven C. Gittens 133,169 I G P Engineers Pvt. Limited 111,582 Fairbanks Morse Engine 91,352 Garlock Sealing Technologies 87,717 AAC Contracting Inc. 86,829 Pulcini's Contracting Inc. 84,355 Solvay Solexis Inc. 56,085 Betty Steurrys 54,575 Polycarbon 54,175 Karl L. Luckenbach 52,586 Martina L. Carreon 47,579 Dell Marketing 40,844 MSC Industrial Supply Co. Inc. 39,751 Dupont Company 39,387 James Blankenberg 33,490 Dexter Foundry Inc. 33,361 The Anchor Packing Company 32,525 Annabel Carlson 31,662 Viatech Publishing Solutions Inc. 31,454 H M Cross & Sons Inc. 30,387 Personal Injury Asbestos Claims Unknown See http://bankrupt.com/misc/Garlock_SchedFAsbestosClaimants.pdf Others 1,506,329 See http://bankrupt.com/misc/Garlock_SchedFClaims.pdf TOTAL SCHEDULED LIABILITIES $391,680,892 ============================================================ Garlock Sealing notes that with respect to Schedule E, they intend to file a motion seeking authority to exclude employee benefit plans, and sales and use tax claims because they paid them in full or intend to pay them in full under: (i) the order honoring prepetition sales and use taxes; and (ii) the order honoring prepetition employment obligations. About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W. D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor listed $500,000,001 to $1,000,000,000 in assets and $100,000,001 to $500,000,000 in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Files Statement of Financial Affairs ----------------------------------------------------- Donald G. Pomeroy, II, vice president and chief financial officer of Garlock Sealing Technologies LLC, discloses that the Debtor generated revenues from business operations within the two years immediately preceding the Petition Date: Year Income ---- ------- 2008 $149,584,000 2009 113,268,000 Garlock also gained income during the two years immediately preceding the Petition Date from other sources other than the operation of its business: Source Year Income ------ ---- ------- Third Party Interest 2008 $75,027 Third Party Interest 2009 5,384 Third Party Interest 2010 3,198 Intercompany Interest 2008 15,118,487 Intercompany Interest 2009 14,784,051 Intercompany Interest 2010 15,227,307 Within 90 days immediately before the Petition Date, Garlock made transfers: (i) to various creditors, a schedule of which is available for free at: http://bankrupt.com/misc/Garlock_CreditorPayments.pdf (ii) totaling $9,701,039 to numerous asbestos claimants, a schedule of which is available for free at: http://bankrupt.com/misc/Garlock_AsbestosClaimsPayment.pdf (iii) $7,908,999 as professionals fees incurred in asbestos litigation, a schedule of which is available for free at: http://bankrupt.com/misc/Garlock_AsbestosFees.pdf (iv) $288,963 as wire transfers to several firms, a schedule of which is available for free at: http://bankrupt.com/misc/Garlock_WireTransfers.pdf Mr. Pomeroy notes that Garlock also made payments aggregating $13,970,488, C$1,303,567 and EUR100,000 within one year immediately before the Petition Date to, or for the benefit of creditors who are or were insiders. A schedule of those insider payments is available for free at: http://bankrupt.com/misc/Garlock_InsiderPayments.pdf Garlock and Garrison Litigation Management Group Ltd. made transfers to Coltec from June 9, 2009, to June 4, 2010, he further discloses. A schedule of those payments is available for free at: http://bankrupt.com/misc/Garlock_PaymentstoColtec.pdf Garlock is a party to administrative proceedings within one year immediately preceding the Petition Date: Nature of Plaintiff Proceeding Court ------------------ ---------- ----- Deborah, Larkin Product Liability District Court, Clark County, Nevada Robert Reitano Resource Conservation U.S. District and Recovery Act Court for Western District of New York In addition to those proceedings, Garlock is also a party to: (1) numerous asbestos-related proceedings, a list of which is available for free at: http://bankrupt.com/misc/Garlock_PendingAsbestosActions.pdf (2) several workers compensation proceedings, a list of which is available for free at: http://bankrupt.com/misc/Garlock_WorkersCompActions.pdf Mr. Pomeroy notes that Garlock made gifts and charitable contributions totaling $23,182, within one year immediately preceding the Petition Date. A list of all gifts is available for free at http://bankrupt.com/misc/Garlock_Gifts.pdf Garlock has paid certain professionals for debt counseling or bankruptcy-related services rendered within one year before the Petition Date: Firm Amount ---- ------ Rayburn Cooper & Durham, PA $333,978 Robinson Bradshaw & Hinson, P.A. 548,590 Garlock transferred to Coltec Industries Inc. a $12,563,544 set- off of note payable to Coltec against note receivable from Coltec on March 1, 2010. Garlock closed its financial accounts in Bank of America, with branches at Georgia and Texas, in March 2010. Garlock also held certain property for another entity, a schedule of the property is available for free at: http://bankrupt.com/misc/Garlock_PropertyHeld.pdf Mr. Pomeroy discloses that the Debtor provided notices to the New York State of Department of Environmental Conservation of a release of hazardous material in its plant in Palmyra, New York. In addition, Garlock was a party to these administrative proceedings under any Environmental Law: Governmental Unit Status ----------------- ------ NY State Dept. of Environ. Conservation Paid & Closed NY State Dept. of Environ. Conservation Paid & Closed NY State Dept. of Environ. Conservation Remediation per Brownfield Site U.S. Environmental Protection Agency Settlement Entered Dan Grgurich and Don Pomeroy keep the Debtor's books and records. Robert Rehley was accountant to the Debtor from June 2008 to February 2010. Enpro Industries, Inc., on behalf of Coltec and its affiliates, including the Debtors, issued consolidated financial statements within two years immediately before the Petition Date to Bank of America, Wells Fargo and SunTrust Bank. Garlock cites these inventories taken before the Petition Date: Site Supervisor Amount ----- ---------- ------- Palmyra Chuck Volo $4,899,592 Palmyra Various 5,442,601 Klozure George Whittier 2,324,477 Houston Marcia Preston 2,192,516 Klozure Various 1,983,156 Houston Marcia Preston 1,935,793 Pascagoula Marcia Preston 224,487 Pascagoula Marcia Preston 214,238 Stockholders who directly or indirectly own, control or hold 5% or more of the voting or equity securities of Garlock are: Percentage of Name Title Stock Ownership ---- ----- --------------- Coltec Industries Inc. Member 100% Dale Herold President & None Manager Donald G. Pomeroy, II CFO, Vice None President & Manager Christopher Drake Vice President, None Secretary & Manager Dan Grgurich Vice President & None Treasurer David Fold Assistant Treasurer None Paul Baldetti served as president and manager of Garlock until August 31, 2009. The Debtor's pension plan within six years before the Petition Date is Garlock Sealing Technologies LLC Pension Plan for Hourly Employees. * * * On July 20, 2010, Garlock filed another Statement of Financial Affairs and related attachment, citing that the original Statement and Attachment contained certain information that was filed in error. At Garlock's behest, the Court authorized Garlock to (i) refile the Statement and Attachment; and (ii) file under seal the Original Statement and Attachment to avoid confusion. Specifically, the Original Statement appended a 12-page schedule of payments made by Garrison and Garlock to Coltec from June 17, 2009, to June 1, 2010. In the subsequent Statement, Garlock appended a 6-page schedule of payments made by Garlock and Garrison to Coltec from June 5, 2009 to June 1, 2010. A copy of the amended payments schedule is available for free at: http://bankrupt.com/misc/Garlock_PaymentstoColtec.pdf About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W. D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor listed $500,000,001 to $1,000,000,000 in assets and $100,000,001 to $500,000,000 in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GARLOCK SEALING: Wants Asbestos Lawyers to File Rule 2019 Forms --------------------------------------------------------------- As of the Petition Date, Garlock Sealing Technologies LLC had about 100,000 Asbestos Claims pending against it. The Debtors expect that individuals asserting Asbestos Claims will file claims in their Chapter 11 cases. The Debtors further anticipate that many, if not most, of those Asbestos Claimants are represented by law firms that will represent more than one Asbestos Claimant in the Debtors' bankruptcy cases. Many firms appearing in the Debtors' Chapter 11 cases periodically will be retained by new clients who will allege that they hold Asbestos Claims. Rule 2019 of the Federal Rules of Bankruptcy Procedure requires attorneys representing more than one creditor in a bankruptcy case to submit a verified statement identifying each creditor it represents, the nature and amount of each creditor's claim, and pertinent facts relating to the attorney's employment by the creditors. By this motion, the Debtors ask the Court to compel every Firm representing more than one Asbestos Claimant to electronically file a statement that complies with Rule 2019 within 10 days filing of an appearance, filing a claim, or taking any other affirmative action to participate in the Chapter 11 cases. The Debtors propose that the Rule 2019 Statement must include: (A) an Excel spreadsheet in electronic format containing this data: * the name of the creditor or equity security holder represented by the Firm filing the Rule 2019 Statement; * the personal address of each creditor or equity security holder; * a reserved space for the creditor's or equity security holder's social security number or other identifier as may be required by the Court; * the amount of the claim of any creditor if liquidated, and for unliquidated claims, an indication that those claims are unliquidated; * the date of acquisition of that claim, unless alleged to have been acquired more than one year before the Petition Date; * the type of disease giving rise to the Asbestos Claim; and * the facts and circumstances in connection with the employment of that Firm, including a list and a detailed explanation of any type of co-counsel, consultant or fee-sharing relationships and arrangements whatsoever, in connection with the Debtors' Chapter 11 cases or claims against any of the Debtors and a description of any documents that were signed in conjunction with creating that relationship or arrangement. (B) Copies of (i) the instruments whereby any Firm is empowered to act on behalf of the holder and any Asbestos Claim; (ii) documents that were signed in conjunction with creating that Firm's employment relationship; and (iii) any documents evidencing or creating any type of co- counsel, consultant or fee-sharing relationships and arrangements whatsoever, in connection with the Debtors' Chapter 11 cases or claims against any of the Debtors. The objective of Rule 2019 is to further the Bankruptcy Code's goal of complete disclosure during the business reorganization process, Garland S. Cassada, Esq., at Robinson, Bradshaw & Hinson, P.A., in Charlotte, North Carolina, tells the Court. He explains that the information to be contained in the Rule 2019 Statement promotes the fundamental purposes of the Rule that is "to assure equality of distribution among creditors, to root out conflicts of interest and to secure overall fairness of [a chapter 11 plan]." About Garlock Sealing Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, Garlock filed a voluntary Chapter 11 petition (Bankr. W. D. N.C. Case No. 10-31607) in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor listed $500,000,001 to $1,000,000,000 in assets and $100,000,001 to $500,000,000 in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in its Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for Asbestos matters. Bankruptcy Creditors' Service, Inc., publishes Garlock Sealing Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Garlock Sealing Technologies LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: To Buy AmeriCredit for $3.5 Billion, in Cash ------------------------------------------------------------ To meet customer demand for leasing and non-prime financing for GM vehicles, General Motors and AmeriCredit Corp. (NYSE: ACF) said Thursday they have entered into a definitive agreement for GM to acquire AmeriCredit, one of the nation's leading independent auto finance companies, in an all-cash transaction valued at approximately $3.5 billion. "This acquisition supports our efforts to design, build and sell the world's best vehicles by expanding the financing options we can offer to consumers who want to buy GM vehicles," said GM Chairman and Chief Executive Officer, Ed Whitacre. "Adding AmeriCredit to our team will improve our competitiveness in auto financing offerings, and I am very pleased to have them on board." The acquisition establishes the core of a new GM captive financing arm that will enable GM to provide customers with a more complete range of financing options, while creating significant growth opportunities for both GM and AmeriCredit. Since GM and AmeriCredit launched a successful non-prime program in September 2009, GM's non-prime penetration has increased significantly. Upon completion of the transaction, AmeriCredit intends to also re-enter the leasing business which will provide expanded leasing availability for all GM customers. Direct ownership of AmeriCredit's expertise will provide consistent availability of non-prime financing for GM customers throughout all economic cycles. While AmeriCredit already has relationships with approximately 4,000 GM dealers, this transaction will enhance dealer receptivity and improve sales penetration rates through coordinated GM branding and targeted customer marketing initiatives. "With AmeriCredit providing us niche capabilities in leasing and non-prime financing, along with the continued strong support of Ally Financial and others for prime retail and dealer financing, we've set up a very competitive solution for our financing needs, which will be resilient through credit and business cycles," said GM Vice Chairman and Chief Financial Officer, Chris Liddell. AmeriCredit President and Chief Executive Officer Daniel Berce said, "We're excited about joining the GM team. While we will be expanding our product set to more fully support GM, we'll continue to offer our loan products to the more than 11,000 dealers across the country we serve today. Long term, this transaction will deliver benefits to our dealers, customers and employees." The highly regarded AmeriCredit management team will remain intact, which will assist in minimizing integration risk and maximizing opportunities between the two companies. With total assets of approximately $10 billion, the acquisition of AmeriCredit poses minimal impact to GM's balance sheet, and does not change GM's objective of achieving strong investment grade status. Under GM ownership, AmeriCredit will maintain its own direct access to the capital markets for its financing requirements. Under the terms of the agreement, which has been approved by both companies' boards of directors, at closing, AmeriCredit shareholders will receive $24.50 in cash for each share of stock held as of the transaction closing date. The transaction is expected to close by the end of the fourth quarter of 2010, pending certain closing conditions, including the approval of AmeriCredit shareholders. * * * Sharon Terlep at The Wall Street Journal reports that Mike Jackson, CEO of AutoNation, the largest U.S. car retailer, predicted the deal will bolster GM sales by 10% to 20%. Improving access to credit is key to keeping the industry on the road to recovery in 2011 and 2012, he said. "We need credit to normalize for this auto-industry recovery to continue," he said. The Journal notes that leasing makes up 7% of GM's business compared to a car-industry average of 21%, Mr. Liddell said. Around 4% of GM buyers have nonprime credit scores, matching the industry average, but GM sees potential for growth in that market. The Journal also reports that Ally Financial, formerly GMAC, said its relationship with GM won't change. It will continue to provide loans to GM buyers with prime credit and to finance wholesale vehicle purchases by GM dealers as well as some leasing. The Journal notes GM this summer considered a move to regain control of its former finance arm, but GM's lack of creditworthiness and lack of interest from GMAC ended those efforts, said people familiar with the situation. About AmeriCredit: AmeriCredit Corp. -- http://www.americredit.com/-- is an independent automobile finance company that provides financing solutions indirectly through auto dealers across the United States. AmeriCredit has 3,000 employees in the U.S. and Canada, 800,000 customers and $9 billion in auto receivables. The Company was founded in 1992 and is headquartered in Fort Worth, Texas. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 207,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At March 31, 2010, GM had US$136.021 billion in total assets, total liabilities of US$105.970 billion and preferred stock of US$6.998 billion, and non-controlling interests of US$814 million, resulting in total equity of US$23.053 billion. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENTA INC: BAM Opportunity Fund et al. Report 8.90% Stake --------------------------------------------------------- BAM Opportunity Fund SPV, LLC, BAM Management, LLC, and AM Investment Partners, LLC, and their affiliates disclose holding 80,632,105 shares or roughly 8.90% of Genta Incorporated's common stock as of July 19, 2010. The SPV beneficially owned the shares. Of this amount, 80,603,105 consist of shares underlying convertible notes and 29,000 consist of shares of Common Stock. The SPV acquired beneficial ownership of 80,000,000 shares underlying $800,000 face value of the convertible notes on July 19, 2010, as the notes may first be converted on September 17, 2010. The SPV also holds convertible notes that are convertible into 70,628 shares of Common Stock. The notes cannot be converted until January 4, 2011. Accordingly, SPV et al. do not currently have beneficial ownership of the shares underlying these convertible notes. The SPV also holds warrants to purchase 1,916,250 shares, which are subject to a contractual limitation prohibiting their exercise to the extent that the SPV and its affiliates would beneficially own in excess of 4.999% of Genta Common Stock. Accordingly, the warrants are not exercisable, and BAM et al. do not currently have beneficial ownership of the Common Stock underlying the warrants. AMIP LLC and its affiliates have entered into an agreement in principle to combine their business with BAM Management and its affiliates. This Business Combination has not yet closed. However AMIP LLC, BAM Management, and their affiliates began sharing office space on May 17, 2010. While there is no agreement or understanding whereby AMIP LLC, Adam Stern, or Mark Friedman, or their affiliates have authority to manage the investment positions held by the SPV, it is possible that AMIP LLC and its affiliates may from time to time coordinate investment decision-making with BAM Management. About Genta Berkeley Heights, New Jersey, Genta Incorporated (OTCBB: GETA.OB) -- http://www.genta.com/-- is a biopharmaceutical company with a diversified product portfolio that is focused on delivering innovative products for the treatment of patients with cancer. At December 31, 2009, the Company had total assets of $12.229 million against total current liabilities of $10.501 billion and total long-term liabilities of $4.590 million, resulting in stockholders' deficit of $2.862 million. GOLDSPRING INC: Buys Seven Patented Mining Claims for $1 Million ---------------------------------------------------------------- GoldSpring Inc. said in a statement that it has purchased seven patented mining claims totaling 48 acres, surface rights to two additional patented mining claims totaling 15 acres, 12 unpatented lode claims, and 15 acre-feet of water rights, in Storey County, Nevada from the estate of William Michael Donovan Jr. The property contains a significant portion of the mineral resource summarized in the May 2010 Technical Report authored by Behre Dolbear & Company of Denver, Colorado. These claims have been controlled under a mining lease agreement since 1987 by GoldSpring and its predecessor organizations. The purchase price was $1,025,000, with an initial payment of $300,000. The Company financed the remaining $725,000 with an installment note bearing 6% interest, requiring 60 monthly payments of $6,178 and a final payment of then-unpaid principal and interest. The Donovan estate will retain a 1.5% Net Smelter Royalty on all future mineral production from these claims. "This purchase builds value for our shareholders by ensuring our long-term control of these important claims, at an attractive price, and reduces our royalty obligation from 5% to 1.5% on a significant portion of our currently-planned mine production," stated Corrado De Gasperis, GoldSpring's Chief Executive Officer. "The acquisition of this property, in addition to the Obester purchase of eleven patented lode-mining claims, announced earlier this year, is consistent with our intermediate production plans and definitively secures critical claims surrounding the recently- drilled Hartford/Lucerne/Billie the Kid area. We appreciate and thank the Donovans for their patience throughout this transaction process." The Company's Spring 2010 drilling program included several reverse circulation drill holes on the Donovan Property. Hole P10-26, intercepted five mineralized zones in the first 560 feet, totaling 325 feet averaging 0.034 ounces per ton gold and 0.154 opt silver. It includes a zone from 405-560' of 0.042 opt gold and 0.213 opt silver. Hole P10-51 intercepted two mineralized zones totaling 170 feet averaging 0.035 opt gold and 0.664 opt silver. It includes a zone from 185-305' of 0.045 opt gold and 0.671 opt silver. The Company's latest resource estimate indicates that the mineral deposit is open to the northwest and southeast, along the Silver City fault trend, and down-dip to the east. "The Donovan Property includes down-dip targets in an area of known mineralization, which provides a great opportunity for expanding our mineral resources," stated Larry Martin, GoldSpring's Chief Geologist. "This area is one of our top priorities for additional drilling." Mr. De Gasperis concluded, "In addition to these land and mineral acquisitions, we are also nearing the completion of the debt-for- equity and the land components of our previously disclosed recapitalization plan and we will announce the transaction when it is completed. A recapitalized balance sheet will usher in a new era for the Company, enabling our commitment to maximize the value of our Comstock Lode land holdings for our shareholders." About GoldSpring Inc. Virginia City, Nev.-based Goldspring, Inc. (OTC BB: GSPG) is a North American precious metals mining company, focused in Nevada, with extensive, contiguous property in the Comstock Lode District. * * * The Company's balance sheet as of March 31, 2010, showed $4,886,495 in assets and $33,865,489 of liabilities, for a stockholders' deficit of $28,978,994. GREAT ATLANTIC: Shares Increase, Directors' Reelection Approved --------------------------------------------------------------- The Great Atlantic & Pacific Tea Company Inc. held its Annual Meeting of Stockholders on July 15, 2010 at which the Company's stockholders approved: a) an amendment to the Company's charter to increase the total number of shares of common stock which the Company has authority to issue from 160,000,000 to 260,000,000 shares, b) the reelection of these persons to the Company's Board of Directors: i) Bobbie Andrea Gaunt, Dan Plato Kourkoumelis, Edward Lewis, Gregory Mays and Maureen B. Tart-Bezer, by an affirmative vote of a plurality of all the voting securities of the Company cast, ii) John D. Barline, Dr. Jens-Jurgen Bockel, Dr. Andreas Guldin and Christian W. E. Haub, by a majority vote of the shares of the Company's Series A-T Preferred Stock present at the Annual Meeting and iii) Frederic F. Brace and Terrence J. Wallock, by a majority vote of the shares of the Company's Series A-Y Preferred Stock present at the Annual Meeting, and c) the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm. About A&P Based in Montvale, New Jersey, The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP), founded in 1859, is one of the nation's first supermarket chains. The Company operates 429 stores in 8 states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a- Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. At February 27, 2010, the Company had total assets of $2,827,217,000 against total liabilities of $3,223,663,000 and Series A redeemable preferred stock of $132,757,000, resulting in stockholders' deficit of $529,203,000. GREENSHIFT CORP: 1-for-10 Reverse Stock Split to Take Effect ------------------------------------------------------------ GreenShift Corporation filed with the Secretary of State of the State of Delaware a certificate of amendment to the Company's certificate of incorporation to give effect to a 1-for-10 reverse stock split as of 6:00 p.m. on August 2, 2010. The Company has submitted to FINRA the requisite notification of the corporate action. There were 17,411,564,435 shares of Company common stock outstanding as of July 16, 2010, an amount which corresponds to an estimated 1,741,156,444 shares of Company common stock outstanding after completion of the Reverse Split. About Greenshift Corporation Headquartered in New York, GreenShift Corporation develops and commercializes clean technologies designed to integrate into and leverage established production and distribution infrastructure to address the financial and environmental needs of its clients by decreasing raw material needs, facilitating co-product reuse, and reducing waste and emissions. Rosenberg Rich Baker Berman & Company expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficiency as of December 31, 2009. GTC BIOTHERAPEUTICS: Reacquires Rights to Atryn Recombinant ----------------------------------------------------------- In a regulatory filing Wednesday, GTC Biotherapeutics, Inc. discloses that on July 15, 2010, it entered into an agreement with Lundbeck, Inc. that terminates the Acquisition, Licensing, Development and Supply Agreement dated June 22, 2008, by and among the Company, ATIII LLC, and Lundbeck, Inc. As part of the termination agreement, the Company reacquired from Lundbeck the U.S. commercialization rights for ATryn(R), the Company's recombinant form of human antithrombin. The Company also agreed to purchase all of Lundbeck's Atryn(R) inventory for a purchase price of $400,000 and agreed to pay Lundbeck a royalty on net sales beginning in two years, with a predefined cumulative maximum. In connection with the termination agreement, the Company also will pay Lundbeck to perform certain services on the Company's behalf for a transition period of up to six months to ensure that ATryn(r) will continue to be available to physicians and their patients in an uninterrupted fashion as commercialization responsibilities are transitioned to the Company from Lundbeck. About GTC Biotherapeutics Framingham, Mass.-based GTC Biotherapeutics, Inc. (OTC BB: GTCB) - http://www.gtc-bio.com/- develops, supplies and commercializes therapeutic proteins produced through transgenic animal technology. ATryn(R), GTC's recombinant human antithrombin, has been approved for use in the United States and Europe. ATryn(R) is the first and only therapeutic product produced in transgenic animals to be approved anywhere in the world. In addition to ATryn(R), GTC is developing a portfolio of recombinant human plasma proteins with known therapeutic properties. These proteins include recombinant forms of human coagulation factors VIIa and IX, which are being developed for the treatment of patients with hemophilia, and recombinant alpha- fetoprotein, which is being developed for the treatment of myasthenia gravis and multiple sclerosis. The Company's balance sheet as of April 4, 2010, showed $27.0 million in assets and $54.1 million of liabilities, for a stockholders' deficit of $27.1 million. * * * As reported in the Troubled Company Reporter on March 15, 2010, PricewaterhouseCoopers LLP, in Boston, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that of the Company's recurring losses from operations and limited available funds as of January 3, 2010. "We have incurred losses from operations and negative operating cash flow since inception and have an accumulated deficit of approximately $337 million at April 4, 2010. We also have negative working capital of $13.1 million as of April 4, 2010. Based on our cash balance as of April 4, 2010, as well as potential cash receipts from existing programs, we believe our capital resources will be sufficient to fund operations to the end of the second quarter of 2010. Our recurring losses from operations and limited funds raise substantial doubt about our ability to continue as a going concern." HAWAII BIOTECH: Federal Judge Approves Deal with Merck & Co. ------------------------------------------------------------ Alan Yonan, Jr., at Star Advertiser, reports that a federal bankruptcy judge approved a deal between Hawaii Biotech and Merck & Co., wherein Merck agreed to acquire Hawaii's dengue fever vaccine research unite. Neither Merck nor Hawaii would disclose the terms of the deal. The deal, according to the report, would give the Company needed capital as it works toward emerging from bankruptcy protection. Hawaii Biotech Inc. -- http://www.hibiotech.com/-- focuses on the research and development of vaccines for established and emerging infectious diseases. The Company filed for Chapter 11 protection on Dec. 11, 2009 (Bankr. D. Hawaii Case No. 09-02908). Jerrold K. Guben, Esq., at O'Connor Playdon & Guben, represents the Debtor in its restructuring effort. The petition says that assets and debts are between $1,000,001 and $10,000,000. HEALTHSOUTH CORP: Morgan Stanley Reports De Minimis Stake --------------------------------------------------------- Morgan Stanley disclosed that as of June 30, 2010, it held 6,200 shares of HealthSouth Corp. common stock. HealthSouth had 93,563,432 shares of common stock outstanding, net of treasury shares, as of April 30, 2010. Birmingham, Alabama, HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. As of March 31, 2010, the Company had total assets of $1.716 billion against total liabilities of $2.190 billion and convertible perpetual preferred stock of $387.4 million. HEALTHSOUTH CORP: Director Hanson Receives 1,345 Shares ------------------------------------------------------- HealthSouth Corp. director Jon F. Hanson on July 8, 2010, acquired 1,345 shares of common stock, raising his stake 55,987 shares. The transaction is a purchase of shares of common stock of HealthSouth pursuant to an election by Mr. Hanson to participate in the Directors Deferred Stock Investment Plan of the Company. The Plan is a non-qualified deferral plan adopted and effective November 1, 2007, allowing non-employee directors to make elections during 2009 to defer fixed percentages of their directors fees for 2010. The amount each participant defers under the Plan is deducted, on a quarterly basis, from the directors fees the participant would otherwise have received in cash. The transaction is the acquisition of Company common stock for Mr. Hanson's account, for an aggregate purchase price equal to the amount of fees deferred by Mr. Hanson for the current quarter of 2010 under the Plan. Birmingham, Alabama, HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. As of March 31, 2010, the Company had total assets of $1.716 billion against total liabilities of $2.190 billion and convertible perpetual preferred stock of $387.4 million. HEALTHSOUTH CORP: Director Chidsey Receives 43,721 Shares --------------------------------------------------------- HealthSouth Corp. director John Chidsey disclosed that on July 8 he acquired 1,300 shares, raising his stake to 43,721 company shares. The transaction is a purchase of shares of HealthSouth common stock pursuant to an election by Mr. Chidsey to participate in the Directors Deferred Stock Investment Plan of the Company. The Plan is a non-qualified deferral plan adopted and effective November 1, 2007, allowing non-employee directors to make elections during 2009 to defer fixed percentages of their directors fees for 2010. The amount each participant defers under the Plan is deducted, on a quarterly basis, from the directors fees the participant would otherwise have received in cash. The transaction is the acquisition of the Company's common stock for Mr. Chidsey's account, for an aggregate purchase price equal to the amount of fees deferred by Mr. Chidsey for the current quarter of 2010 under the Plan. Birmingham, Alabama, HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- is the nation's largest provider of inpatient rehabilitative healthcare services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. As of March 31, 2010, the Company had total assets of $1.716 billion against total liabilities of $2.190 billion and convertible perpetual preferred stock of $387.4 million. HIGHLANDS OF LOS GATOS: Files for Chapter 11 in California ---------------------------------------------------------- Highlands of Los Gatos LLC filed for Chapter 11 in San Jose, California (Bankr. N.D. Calif. Case No. 10-57370). Highlands is the owner of a 66-acre development near Los Gatos, California, filed a Chapter 11 petition on July 16 in San Jose. The petition says the property is worth $32 million. The secured debt, $23 million, is owed to East-West Bank. INNKEEPERS USA: Midland Loan Opposes Debtor Use of Cash Collateral ------------------------------------------------------------------ Innkeepers USA Trust and its 91 debtor affiliates seek the Court's authority to continue to use their cash generated from their hotel assets, which is collateral for their secured lenders, to fund their operations and restructuring for the benefit of all of their constituents. As of March 31, 2010, the Debtors had incurred aggregate funded secured indebtedness of approximately $1.42 billion, including approximately $1.29 billion of property-level secured debt, of which approximately $1.05 billion has been securitized and sold in the commercial mortgage-backed security market. The debt is secured by mortgages on the hotels or pledges of the equity of the Property Owners. The Debtors' funded secured debt is comprised of nine mortgage loans, two with related mezzanine loans, each of which is secured by distinct hotel properties and related equity interests in the Property Owners. The Debtors, according to James H.M. Sprayregen, P.C., Esq., at Kirkland & Ellis, LLP, in New York, need to use their cash collateral for a seamless transition into bankruptcy to ensure they are able to continue operating. The Debtors need the cash collateral to honor obligations to parties that provide goods and services, including their franchisors, employees, hotel management companies, suppliers of hotel-related goods and services, utilities, and taxing authorities, Mr. Sprayregen adds. The Debtors propose that each group of Debtors under a Tranche of Debt, and Innkeepers USA Trust, will use Cash Collateral to pay expenses of operating the Debtors' business and fund the restructuring materially in accordance with a 13-week forecast from July 24 to October 16, 2010, a full-text copy of which is available for free at http://bankrupt.com/misc/ikucashflow.pdf The Floating Rate Debtors, a list of which is available for free at http://bankrupt.com/misc/iku20debtor.pdfwill use Cash Collateral of the Floating Rate Lenders to pay any commitment and closing fees under the Floating Rate Property Improvement Program DIP on the closing date thereof. The rights of the Debtors under a Tranche of Debt, but not the rights of any Debtors under any other Tranche of Debt, to use Cash Collateral relating to that Tranche of Debt will terminate upon the business day immediately following written notice. The key events that qualify as termination events with respect to the Debtors within a Tranche of Debt are: i. Failure to have entered a Final Order in respect of the use of Cash Collateral within 45 days of the Petition Date; ii. Failure to make payments required to be made within five business days from when the payment is due; iii. Breach of other covenants or agreements contained in the Interim Cash Collateral Order unremedied for more than 10 business days following notice; iv. Except for certain matters, permit any superpriority claim, other than the Carve Out, or grant any other lien or security interest, including any other adequate protection lien, senior or equal to the claims and liens, including the adequate protection claims and liens, of the applicable Adequate Protection Party; v. Assertion by the Debtors that an Adequate Protection Party's prepetition lien or security interest is not valid and perfected; vi. Except for expressly permitted payments, make any payment of principal or interest or otherwise on account of any prepetition indebtedness or payables, including without limitation, reclamation claims; vii. Permit inter-tranche borrowings to exceed, in the aggregate, $2,000,000 at any one time outstanding; viii. One or more franchisors terminated franchise agreements; ix. Entry of an order permitting foreclosure, or the granting of a deed in lieu of foreclosure or the like, on a hotel constituting Prepetition Collateral, and that order will not be subject to timely appeal; x. One or more events of default under the Fixed Rate PIP DIP or the Floating Rate PIP DIP that cause or permit the lenders thereunder to cause, the obligations under the Fixed Rate PIP DIP or the Floating Rate PIP DIP, as the case may be, to become immediately due and payable; xi. Use of Cash Collateral for a purpose not permitted hereunder except for de minimis amounts; xii. Entry of an order to permit any exercise of remedies by the lenders or special servicer under a Tranche of Debt other than in certain limited circumstances; xiii. The Debtors file any motion, or the Court enters an order, to (i) dismiss any of the Chapter 11 Cases, (ii) convert any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, or (iii) appoint a trustee or an examiner with expanded powers pursuant to Section 1104 of the Bankruptcy Code in any of the Chapter 11 Cases; or xiv. There will have occurred, after the entry of the Interim Cash Collateral Order, (i) a change that has a material adverse effect on the use, value, or condition of the Debtors, their assets, or the legal or financial status or business operations, in each case taken as a whole, or (ii) a material disruption or material adverse change in the financial, real estate, banking, or capital markets. As adequate protection, the Debtors will pay or reimburse certain fees and expenses of attorneys and other professional advisors retained by the Representatives. The Debtors will also grant the Adequate Protection Liens on all of the applicable Debtor's rights in, to, and under all present and after-acquired property and assets of the like kind or type that would constitute Prepetition Collateral of the Adequate Protection Party in accordance with the applicable Loan Documents subject only to (A) the Carve Out, (B) liens granted in respect of a Permitted DIP, and (C) Prior Liens. The Postpetition Collateral will not include Avoidance Actions, but will include the proceeds of Avoidance Actions recovered by the applicable Debtor to the extent the Court includes that provision in the Final Order. For any Adequate Protection Obligations, the applicable Adequate Protection Party will have an administrative expense claim against the Debtors with obligations arising under the applicable Tranche of Debt under Section 507(b) of the Bankruptcy Code. The proposed Cash Collateral order includes a carve out from liens and claims in favor of the Clerk of the Court and the U.S. Trustee pursuant to Section 1930(a) of Title 28 of the U.S. Code, any trustee and any professionals retained by the trustee in a Chapter 7 case, and for the fees and expenses of professionals retained by the Debtors and any committee appointed in the Chapter 11 Cases. Mr. Sprayregen tells the Court that the Debtors have already received the consent of one of their largest lenders, and the Debtors are in discussions with the other lenders. Midland Loan Objects Midland Loan Services, Inc., special servicer pursuant to a pooling and servicing agreement dated August 13, 2007, for the Fixed Rate Trustee, objects to the cash collateral motion and asserts these points: a. Its cash collateral should not be commingled, and the segregation of its cash collateral currently in place should not be abandoned. Rather, its cash collateral should continue to be segregated pursuant to a revised cash collateral protocol, similar to one currently in place, but more debtor-friendly in the context of the Chapter 11 cases. b. There should be "real time" ability to monitor cash collateral use to make certain that Midland's cash collateral is used for the benefit of its hotel collateral. c. There should not be any inter-debtor borrowing or lending between the various debtors and their separate collateral pools. d. Midland's cash collateral should not be used to fund estate professionals in furtherance of a cram-down plan of reorganization providing for a coerced write down of more than $300 million of principal. Midland's objection to the use of its cash collateral includes its attempted use in furtherance of any plan that would benefit Apollo Investment Corporation through Apollo's retention or receipt of equity in the newly reorganized debtors. e. The proposed Cash Collateral Order is missing language necessary for the protection of the Midland cash collateral. Midland's objection was accompanied by a declaration prepared by Ronald F. Greenspan, a senior managing director in the corporate finance and restructuring practice of FTI Consulting. Mr. Greenspan disclosed that Midland is owed more than $825 million by the Debtors, which amount is more than the total amount owed to all of the remaining creditors combined Midland is represented by Lenard M. Parkins, Esq., John D. Penn, Esq., and Mark Elmore, Esq., at Haynes and Boone, LLP, at 1221 Avenue of the Americas, 26th Floor, in New York, with telephone number (212) 659-7300 and facsimile number (212) 884-8211. About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and a number of affilaites filed for Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Attorneys at Kirkland & Ellis LLP, serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. The petition listed assets and debts of more than $1 billion. In 2009, Innkeepers' consolidated revenues were approximately $292 million and adjusted EBITDA were approximately $85 million. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. Bankruptcy Creditors' Service, Inc., publishes Innkeepers USA Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Innkeepers USA Trust and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). INNKEEPERS USA: Proposes $17.5 Mil. Solar Finance DIP Loan ---------------------------------------------------------- Innkeepers USA Trust and its 91 debtor affiliates seek the Court's authority to obtain postpetition debtor-in-possession financing for $17,498,095 from Solar Finance Inc., an affiliate of Lehman ALI Inc., on a senior secured, priming, superpriority basis. The Borrowers in this DIP Financing Agreement are these Floating Rate Debtors: * KPA/GP Valencia LLC; * Grand Prix West Palm Beach LLC; * KPA/GP Ft. Walton Beach LLC; * Grand Prix Ft. Wayne LLC; * Grand Prix Indianapolis LLC; * KPA/GP Louisville (HI) LLC; * Grand Prix Bulfinch LLC; * Grand Prix Woburn LLC; * Grand Prix Rockville LLC; * Grand Prix East Lansing LLC; * Grand Prix Grand Rapids LLC; * Grand Prix Troy (Central) LLC; * Grand Prix Troy (SE) LLC; * Grand Prix Atlantic City LLC; * Grand Prix Montvale LLC; * Grand Prix Morristown LLC; * Grand Prix Albany LLC; * Grand Prix Addison (SS) LLC; * Grand Prix Harrisburg LLC; and * Grand Prix Ontario LLC. The DIP Agent is still to be determined. The DIP Financing matures in 360 days from the Closing Date. The DIP Facility will automatically become due and payable upon: -- the acceleration of the DIP Facility due to the occurrence and continuation of an Event of Default; -- the effective date of any plan in the bankruptcy proceeding that provides for payment in full of all obligations owing under the DIP Facility; -- the closing date of any sale of all or substantially all of any Borrower's assets that constitute collateral; -- the entry of an order by the Court granting relief from the automatic stay permitting foreclosure of any assets of any Borrower constituting collateral in excess of $1,000,000 in the aggregate; -- the entry of an order of dismissal or conversion of the Chapter 11 cases with respect to the Borrowers; or -- the acceleration of the obligations under any other debtor-in-possession financing of the Debtors. Proceeds of the DIP Facility will be used solely for (i) payment of the financing fees owed to the DIP Lenders, (ii) to fund postpetition PIP Work, and (iii) to fund certain fire safety improvements to hotel properties. The Non-Default Interest Rate is a monthly interest payments accruing at a per annum floating rate equal to the sum of 30-day LIBOR, subject to a floor of 2%, plus 5%. The Default Interest Rate is a rate of 3% per annum in excess of the Non-Default rate. The liens under the DIP Facility will be first priority, senior secured and priming liens on and security interests in (i) all of the Borrowers' real property and its proceeds that secure the prepetition obligations, (ii) the Controlled Disbursement Account, and (iii) all Chapter 5 causes of action that relate to the hotel properties owned by the Borrowers. The Events of Default are: (a) Dismissal of the Chapter 11 Cases or conversion into a Chapter 7 case; (b) Filing or support of a proposed plan of reorganization by any Borrower or any affiliate of the Borrowers that does not provide for the payment in full and in cash of the Borrower's obligations outstanding under the DIP Facility on the effective date of that plan of reorganization; (c) Entry of a final order confirming a plan of reorganization that does not require repayment in full in cash of the DIP Facility as of the effective date of the plan, unless otherwise consented to by the Controlling DIP Lenders; (d) Appointment of a trustee under Section 1104 of the Bankruptcy Code; (e) The appointment of an examiner with enlarged powers, which are powers beyond those set forth in Sections 1106(a)(3) and (4) of the Bankruptcy Code, under Section 1106(b); (f) Termination by a franchisor of a franchise agreement upon any hotel owned by any Borrower constituting collateral; (g) One or more franchisors taking steps to terminate 10 or more franchise agreements in the aggregate during the term of the DIP Facility upon hotels owned by any of the Borrowers constituting collateral; (h) Variance in the PIP Budget, subject to certain exceptions; (i) Variance in the Cycle Renovations Budget; (j) Any default under an affiliate's debtor-in-possession financing; (k) Sale of any hotel constituting collateral for the DIP Facility; and (l) Certain other customary events of default. The DIP Lenders will have customary remedies following an Event of Default, including (i) the right to realize on all collateral securing the DIP Facility, including the right to complete the PIP work, and (ii) any remedies set forth in any cash collateral order entered by the Court in the event that there is an event of default under that cash collateral order. James H.M. Sprayregen, P.C., Esq., at Kirkland & Ellis LLP, in New York, contends that the DIP Financing will provide the Debtors with access to $17,498,095 immediately after entry of the DIP Order. He notes that the Debtors have determined this should be sufficient to complete the PIPs required under those Franchise Agreements covering the Floating Rate Collateral, to fund the other obligations under the DIP Facility, and together with the $50.75 million in debtor-in-possession financing sought in a separate request, sufficient to complete all required PIPs. Any loss of the Debtors' key Franchise Agreements would have a material adverse effect on their operations and on the underlying value of the affected hotel, Mr. Sprayregen argues. By making these PIP investments, he asserts, the Debtors are both increasing the value of particular properties and preserving the overall value of the enterprise by protecting the Franchise Agreements. Copies of the DIP Financing's Commitment Letter and Term Sheet are available for free at: http://bankrupt.com/misc/IKU_Solar_TermSheet_071910.pdf http://bankrupt.com/misc/IKU_Solar_CommitmentLetter_071910.pdf About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and a number of affilaites filed for Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Attorneys at Kirkland & Ellis LLP, serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. The petition listed assets and debts of more than $1 billion. In 2009, Innkeepers' consolidated revenues were approximately $292 million and adjusted EBITDA were approximately $85 million. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. Bankruptcy Creditors' Service, Inc., publishes Innkeepers USA Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Innkeepers USA Trust and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). INNKEEPERS USA: Proposes to Access $50.7MM Five Mile DIP Loan ------------------------------------------------------------- Innkeepers USA Trust and its 91 debtor affiliates seek authority from the United States Bankruptcy Court for the Southern District of New York to obtain postpetition debtor-in-possession financing for $50.75 million from Five Mile Capital Partners on a senior secured, priming, superpriority basis to fund the Debtors' property improvement programs, or PIPs, required under their franchise agreements for their 72 hotel properties. James H.M. Sprayregen, P.C., Esq., at Kirkland & Ellis LLP, in New York, contends that a variety of factors have led to the Debtors being unable to comply with their PIP obligations under certain Franchise Agreements, and the failure to complete the PIPs could result in the termination of those Franchise Agreements. He points out that the loss of these Franchise Agreements would have a damaging and, perhaps, crippling effect on the Debtors' operations and on the underlying value of their enterprise due to the loss of associated name recognition, marketing support, brand loyalty and centralized reservation systems. Mr. Sprayregen asserts that the DIP Financing will allow the Debtors to complete the PIPs, remain in compliance with the Franchise Agreements, increase the value of those hotels that enjoy capital improvements by virtue of the PIPs, and generally maintain and enhance the value of the Debtors' enterprise. He adds that the DIP Financing is crucial to the success of the Debtors' restructuring, will allow the Debtors to maintain and improve both current revenue and enterprise value, and is structured to minimize the extent to which the Debtors' prepetition lenders are primed. The $50.75 million DIP Financing is divided into three tranches with different borrowers: (a) Tranche A. A $44.35 million facility allocated to 45 properties securing the Fixed Rate Loans. The borrowers are the borrowers under the Fixed Rate Loans, which include Grand Prix Belmont LLC and Grand Prix Campbell/San Jose LLC. (b) Tranche B. A $4.0 million facility allocated to the property securing the Capmark $47.4 Million Loan. The borrowers are the borrowers under the Capmark Loan -- Mission Valley, KPA RIMV LLC and Grand Prix RIMV Lessee LLC. (c) Tranche C. A $2.4 million facility allocated to the property securing the Merrill Lynch $25.2 Million Loan. The borrowers are the borrowers under the Merrill Lynch Loan -- Tysons Corner, KPA Tysons Corner RI LLC and Grand Prix General Lessee LLC. The Lead DIP Lender is Five Mile Capital II Pooling International LLC. The DIP Agent is yet to be named. Maturity of the DIP Financing is 360 days from its closing date. The applicable Tranche of the DIP Facility will automatically become due and payable upon: -- the acceleration of the Tranche by the DIP Lenders due to the occurrence and continuation of an Event of Default with respect to the Tranche; -- the effective date of any plan in the bankruptcy proceeding that provides for payment in full of all obligations owing under the DIP Facility; -- the closing date of any sale of all or substantially all of any Borrower's assets that constitute collateral for the Tranche, which in the case of the Tranche A Facility means more than 22 of the hotel properties; -- the entry of an order by the Court granting relief from the automatic stay permitting foreclosure of any assets of any Borrower constituting collateral with respect to the Tranche in excess of $1,000,000 in the aggregate, subject to certain cure rights; -- the entry of an order of dismissal or conversion of the Chapter 11 cases with respect to the Borrowers under the Tranche; or -- the acceleration of the obligations under any other debtor-in-possession financing of the Debtors. Proceeds of the DIP Facility will be used solely for (i) payment of the financing fees owed to the DIP Lenders, and (ii) to fund postpetition PIP Work. The Non-Default Interest Rate is a monthly interest payments accruing at a per annum floating rate equal to the sum of 30-day LIBOR, subject to a floor of 2%, plus 5%. The Default Interest Rate is a rate of 3% per annum in excess of the Non-Default rate. The liens under the DIP Facility will be first priority, senior secured and priming liens on and security interests in (i) all of the Borrowers' real property and proceeds that secure the prepetition obligations, (ii) the Controlled Disbursement Account, and (iii) all Chapter 5 causes of action that relate to the hotel properties owned by the Borrowers. The Tranche A Facility, the Tranche B Facility, and the Tranche C Facility will not be cross- collateralized. The Events of Default are: (a) Dismissal of the Chapter 11 Cases or conversion into a Chapter 7 case; (b) Filing or support of a proposed plan of reorganization by any Borrower or any affiliate of the Borrowers that does not provide for the payment in full and in cash of the Borrower's obligations outstanding under the DIP Facility on the effective date of that plan of reorganization; (c) Entry of a final order confirming a plan of reorganization that does not require repayment in full in cash of the DIP Facility as of the effective date of the plan, unless otherwise consented to by the Controlling DIP Lenders; (d) Appointment of a trustee under Section 1104 of the Bankruptcy Code; (e) The appointment of an examiner with enlarged powers, which are powers beyond those set forth in Sections 1106(a)(3) and (4) of the Bankruptcy Code, under Section 1106(b); (f) Termination by a franchisor of a franchise agreement upon any hotel owned by any Borrower constituting collateral; (g) One or more franchisors taking steps to terminate 10 or more franchise agreements in the aggregate during the term of the DIP Facility upon hotels owned by any of the Borrowers constituting collateral; (h) Variance in the PIP Budget, subject to certain exceptions; (i) Any default under an affiliate's debtor-in-possession financing; and (j) Certain other customary events of default. The DIP Lenders will have customary remedies following an Event of Default, including (i) the right to realize on all collateral securing the applicable Tranche of the DIP Facility, including the right to complete the PIP work, and (ii) any remedies set forth in any cash collateral order entered by the Court in the event that there is an event of default under that cash collateral order. Copies of the DIP Financing's Commitment Letter and Term Sheet are available for free at: http://bankrupt.com/misc/IKU_5Mile_TermSheet_071910.pdf http://bankrupt.com/misc/IKU_5Mile_CommitmentLetter_071910.pdf About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and a number of affilaites filed for Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Attorneys at Kirkland & Ellis LLP, serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. The petition listed assets and debts of more than $1 billion. In 2009, Innkeepers' consolidated revenues were approximately $292 million and adjusted EBITDA were approximately $85 million. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. Bankruptcy Creditors' Service, Inc., publishes Innkeepers USA Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Innkeepers USA Trust and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). INNKEEPERS USA: Proposes to Honor Hotel Management Obligations -------------------------------------------------------------- Certain of the affiliates of Innkeepers USA Trust, called "Operating Lessees," are taxable real estate investment trust subsidiaries that lease the Hotels from certain Debtors that are the fee owners or ground lessees of the Hotels. The Operating Lessees are parties to various hotel management agreements with (a) Island Hospitality Management, Inc., which manages all but one of the Debtors' Hotels, and (b) Dimension Development Company, Inc., which manages the Debtors' Hotel located in Ft. Walton Beach, Florida. In addition, Innkeepers and Island are party to a Shared Services Agreement, as amended on June 18, 2008. Pursuant to the Hotel Management Agreements, the Hotel Managers address employee staffing requirements, implement sales and marketing strategies, supervise property operations, and negotiate and sign purchase orders and national service agreements. The Hotel Managers also provide management information systems, purchase all operating supplies and operating equipment, ensure that expenses are paid promptly to avoid interruptions of goods and services, and coordinate the maintenance and repair of the Hotels where necessary. In exchange for these services, the Hotel Managers receive monthly management fees. On a monthly basis over the prior year, the Debtors have paid approximately $600,000 to Island and approximately $18,000 to Dimension on account of Monthly Management Fees. In addition, the Operating Lessees are required to reimburse and compensate the Hotel Managers on account of expenses incurred and services performed by the Hotel Managers, as well as to indemnify the Hotel Managers for liabilities arising out of the Hotel Managers' performance under the Hotel Management Agreements. While the Debtors currently are not defending the Hotel Managers in any significant litigation, if a party sues the Hotel Managers, the Debtors intend to defend in accordance with their obligations under the Hotel Management Agreements, James H.M. Sprayregen, P.C., Esq., at Kirkland & Ellis, LLP, in New York, says. Pursuant to the Shared Services Agreement, the Debtors and Island share the costs of certain expenses necessary to manage the Debtors' portfolio of Hotels. Specifically, the Debtors are obligated to pay or reimburse Island for the costs of office space shared by the Debtors and Island, as well as for the services of certain human resource, payroll, purchasing, accounts payable, and tax department employees provided by Island that are critical to the Debtors' ability to manage their Hotels on a portfolio-wide basis. On a monthly basis over the prior year, the Debtors have paid approximately $60,000 to Island on account of the Shared Services Obligations. The Hotel Managers' willingness to continue to provide the services that are critical to the ability of the Debtors to operate their portfolio of Hotels, hinges upon the Debtors' ability to satisfy their Hotel Manager Obligations and Shared Services Obligations, Mr. Sprayregen tells the Court. As of the Petition Date, the Debtors do not believe they owe any amounts on account of the Hotel Management Obligations or Shared Services Obligations. The Debtors, Mr. Sprayregen says, have determined that it is critical that they receive the authority, but not the direction, to continue performing under the Hotel Management Agreements and Shared Services Agreement and honor the Hotel Manager Obligations and Shared Services Obligations to effectuate a seamless and successful transition into operating under Chapter 11. * * * The Debtors are authorized, on an interim basis, to continue to perform under the Hotel Management Agreements and the Shared Services Agreement; provided that they will not pay any fee, commission, or other amount payable under the Hotel Manager Obligations or the Shared Services Obligations. The Court will convene a hearing on August 12, 2010, to consider final approval of the request. Objections to entry of the final order are due August 5. Midland Loan Services, Inc., prior to the entry of the interim order, objected to the Motion on a number of grounds, including that Island has contractually agreed with the Debtors and the lender that it is not entitled to receive payments "during any period of time that any amount due and owing to the Lender under the Note and the Loan Agreement is not paid when due." The agreement includes a subordination agreement whereby Island's Management Agreement is subordinate to Midland's liens. Midland asked the Court to recognize the subordination agreement. About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and a number of affilaites filed for Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800). Attorneys at Kirkland & Ellis LLP, serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. The petition listed assets and debts of more than $1 billion. In 2009, Innkeepers' consolidated revenues were approximately $292 million and adjusted EBITDA were approximately $85 million. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. Bankruptcy Creditors' Service, Inc., publishes Innkeepers USA Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Innkeepers USA Trust and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). INTERFACE INC: S&P Gives Stable Outlook, Affirms 'B+' Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said it revised its outlook on Atlanta, Ga.-based Interface Inc. to stable from negative. At the same time, S&P affirmed its ratings on the company, including the 'B+' corporate credit rating. As of April 4, 2010, the company had about $255 million of debt outstanding. In addition, S&P affirmed the 'BB-' issue level rating on Interface's senior secured notes due 2013. The recovery rating is '2', which indicates S&P's expectation of substantial (70% to 90%) recovery of principle in the event of a payment default. At the same time S&P affirmed the 'B-' issue-level rating on the company's senior subordinated notes due 2014. The recovery rating is '6', indicating S&P's expectation of negligible recovery for debt holders in the event of a payment default. "The ratings affirmation and outlook revision reflect S&P's belief that Interface will continue to improve its operating performance and sustain its recently strengthened credit measures," said Standard & Poor's credit analyst Rick Joy. Although sales have declined by about 14% over the last 12 months ended April 4, 2010, S&P believes the operating environment has stabilized in recent months and sales and profitability will improve over the near term. For the quarter ended April 4, 2010, sales gained 9% due to positive currency translations and increased demand in the corporate office sector in the Americas and in the education, retail, and hospitality sectors globally. The company reported strong order growth in the quarter, and S&P believes this positive momentum will continue over the next year as demand recovers. S&P estimates adjusted EBITDA margins for the 12 months ended April 4, 2010, improved to 12.6%, from 12.4% in the prior year and versus 11.3% as of Oct. 4, 2009. S&P believes adjusted EBITDA margins could improve another 100 basis points over the next year as the company realizes the benefits of cost-saving initiatives and volume growth. The speculative-grade ratings on Atlanta, Ga.-based Interface Inc. reflect the competitive and cyclical market conditions in the global floor covering market, as well as the company's narrow business focus and heavy dependence on the corporate office segment. However, S&P believes Interface benefits from a significant market share (estimated at 35%) in the worldwide modular carpet segment, which has been growing faster than the rest of the floor covering market over the past decade. The cyclical nature of the commercial carpeting sector remains a risk factor. Although Interface's revenue base is still concentrated in the corporate office sector, the company has benefited from its strategy to diversify its revenue base into other end markets, including the educational, government, health care, and residential sectors. However, S&P believes that the corporate office sector currently represents a little more than half of Interface's sales mix. Standard & Poor's Ratings Services also recognizes that Interface has made considerable efforts to reduce operating expenses and rationalize capacity in all of its business segments. The outlook is stable. S&P expects the company to continue to improve operating performance and profitability as demand recovers. Although unlikely in the near term, S&P could consider a higher rating if the company is able to substantially improve EBITDA margins and is able to sustain stronger operating performance and credit measures, including leverage in the 2.5x to 3x area. Alternatively, S&P would consider lowering the ratings if operating performance falls below expectations and adjusted debt to EBITDA were to increase well above the 4x level. S&P believes this could occur if a 15% sales decline were to occur over the next year while adjusted EBITDA margins declined by more than 200 basis points. JENNIFER CONVERTIBLES: Great American to Lead Auction ----------------------------------------------------- Clint Engel at Furniture Today reports that Jennifer Convertibles has named Great American Furniture Services as stalk-horse bidder for its assets, and asked a federal bankruptcy court to approve a closing sale process with Great American offer. Great American is expected to get a $50,000 break-up fee if the company consummates the sale to another party. An auction will take place on July 26, 2010. The sale process would run for up to 60 days, Mr. Engel notes. Furniture Today relates that the U.S. Trustee protested to (i) the sale process, citing that it would give the Official Committee of Unsecured Creditors little time to react and object, and (ii) agreement with Great American because it would give the Company's supplier, Haining Mengnu Group, weekly payments of $400,000 and a 95% ownership stake in the reorganized company by converting its prepetition debts to equity. Jennifer Convertibles is the owner and licensor of the largest with 144 Jennifer Convertibles(R) stores and is the largest specialty retailer of leather furniture with 13 Jennifer Leather stores. Following a transaction with the former affiliated private company, as of February 25, 2010, the Company owns 157 stores and operates five licensed Ashley Furniture HomeStores Jennifer Convertibles Inc. filed for Chapter 11 on July 18, 2010 in Manhattan (Bankr. S.D.N.Y. Case No. 10-13779). Michael S. Fox, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky, LLP, in New York, represents the Debtor in its Chapter 11 effort. TM Capital is financial advisor. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. is special securities counsel. The petition listed assets of $25,974,334 against debts of $46,353,345. JENNIFER CONVERTIBLES: Posts $4.8MM Net Loss in Q3 Ended May 29 --------------------------------------------------------------- Jennifer Convertibles, Inc., filed its quarterly report on Form 10-Q, reporting a net loss $4,775,000 on $22,639,000 of revenue for the thirteen weeks ended May 29, 2010, compared with a net loss of $1,532,000 on $21,648,000 of revenue for the thirteen weeks ended May 30, 2009. The Company's balance sheet at May 29, 2010, showed $21,645,000 in assets and $44,086,000 of liabilities, for a stockholders' deficit of $22,441,000. On July 18, 2010, the Company filed a voluntary petition for bankruptcy under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. "The decision to file for Chapter 11 protection was driven primarily by the lack of financing available to the Company given the state of the credit markets. We have been seeking financing alternatives that would allow us to continue operating outside of bankruptcy, however, the Board of Directors determined that a Chapter 11 reorganization, was in the best interests of the Company, its customers, creditors, employees, and other interested parties." A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?66df Jennifer Convertibles is the owner and licensor of the largest with 144 Jennifer Convertibles(R) stores and is the largest specialty retailer of leather furniture with 13 Jennifer Leather stores. Following a transaction with the former affiliated private company, as of February 25, 2010, the Company owns 157 stores and operates five licensed Ashley Furniture HomeStores Jennifer Convertibles Inc. filed for Chapter 11 on July 18, 2010 in Manhattan (Bankr. S.D.N.Y. Case No. 10-13779). Michael S. Fox, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky, LLP, in New York, represents the Debtor in its Chapter 11 effort. TM Capital is financial advisor. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. is special securities counsel. The petition listed assets of $25,974,334 against debts of $46,353,345. K2 PURE: Moody's Assigns 'B1' Rating on $115 Mil. Senior Loan ------------------------------------------------------------- Moody's Investors Service has assigned a B1 rating to K2 Pure Solutions NoCal, L.P's (K2 Pittsburg or Project) proposed $115 million senior secured term loan due 2015. The rating outlook is stable. K2 Pittsburg owns a chlor-alkali project under construction that is located inside Dow's Pittsburg manufacturing site in Pittsburg, CA. The Project is designed to produce up to 296.5 tons per day of ECUs and up to 200 tons per day of bleach. The Project's ECU facility primarily utilizes salt, water and electricity to produce chlorine, caustic soda and hydrogen, commonly referred to as electrochemical units via electrolysis. The Project is able to further produce bleach by processing the chlorine and caustic soda produced by its ECU facility. The Project is currently under construction and is being built by DPR Construction Inc under a design-build contract (DB Contract). The expected construction completion date is in April 2011 and completion of all commissioning activities is expected by mid July 2011. Once in operation, the Project will supply approximately 96 million pounds of ECUs to Dow Chemical Company (rated Baa3) under a 20-year agreement and the remaining output will be sold into the wholesale market. A third party marketer will serve as the Project's marketing agent for sales into the wholesale market with certain exclusions. The proceeds from the $115 million term loan and approximately $78 million of equity will be used to fund the construction of the Project, pay interest during construction, fund reserves and pay transaction costs. The Project sponsor will also provide a $14.6 million of contingent equity to backstop a $14.6 construction contingency. The Sponsor's unfunded equity commitment is expected to be backed by a letter of credit. The B1 rating for K2 Pittsburg considers these credit strengths: * Nearly 50% of total revenues under the base case are provided under a 20 year "tolling" type agreement with Dow for the ECU plant * The Project should be able to meet its minimum delivery obligations to Dow since approximately half of the Project's capacity is merchant. * The Project benefits from location in a destination market and benefits from rising transportation costs for chlorine. * The Project utilizes membrane technology which is more efficient than the older diaphragm and mercury based production methods. * The Project will utilize mature technology and construction while operating risks of chlor-alkali facilities are generally lower relative to other types of projects such as gas-fired power plants. * Project is located inside to an existing Dow facility and the Project benefits from an environmental indemnity for any direct costs incurred due to environmental conditions not caused by the Project. * The Project is able to service debt under conservative cases considered by Moody's while the Project's base case forecasts 3- year average metrics at 31% FFO/Debt and 4.1 times DSCR * The Project benefits from $14.6 million of contingent equity (8.7% of construction costs), DPR's internal contingency of $3.7 million, approximately 9% retainage on payments to DPR, OEM performance guarantees for major pieces of equipment, relatively short construction with COD around Q2 2011 and large portion of equipment costs fixed. * The lenders will benefit from a 1st lien on the underlying contracts and non-leased assets, a cash flow waterfall, a major maintenance reserve, a 6-month debt service reserve and ring fencing provisions. * K2 Solutions's management and staff have extensive experience in the chlor-alkali and bleach industry. Key Credit Weaknesses * The DB Contract's low liquidated damage and liability cap, lack of overall performance guarantees and various exceptions to the guaranteed maximum price result in limited construction protection. * The lack of an all-encompassing EPC contract creates potential for conflict between DPR, project and equipment provider especially if problems arise during construction. * The construction schedule is aggressive which provides little cushion for delays or problems during construction and several permits will be outstanding at financial close. * Moody's considers DPR to have speculative grade credit characteristics and DPR does not have experience in building chlor-alkali plants. * The Project derives approximately half of the revenues under the base case from the sale of basic chemicals into the wholesale market. * The distribution of bleach in the region is dominated by a few major entities which could negatively affect the Project's merchant sales. * The industry has experienced significant capacity reductions and 2010 & 2011 are expected to be trough years for the chlor-alkali industry. * The Project's total production capacity is expected to be a large portion of local and regional consumption. * The Project's cost of raw inputs are generally not correlated with the wholesale price of end products sold into the wholesale market. * The Dow contracts have various weaknesses including Dow's ability to terminate the agreement in year 11 subject to a scheduled termination payment starting at $32.5 million, various penalties and adjustments for under performance and no explicit penalties on Dow for non-delivery of raw materials. * The Project could incur inefficiencies at partial operations of any individual electrolytic cell trains though the ECU facility's 3 electrolytic cell trains provides some flexibility to minimize this risk. * Project has not conducted an environmental site assessment and Dow's environmental indemnity does not cover indirect costs such as debt service which indirectly exposes the Project to existing environmental risks. * The Project's location near various fault lines around the San Francisco area increases earthquake risk while the earthquake insurance coverage during construction incorporates a large deductible. * Sizeable refinancing risk exists since up to 85% of the debt could be outstanding at maturity under conservative cases considered by Moody's though the base case has about 47% outstanding at maturity. The stable outlook reflects Moody's expectation that the Project will achieve full commissioning in the third quarter of 2011, the Project will be able to meet its performance obligations under the Dow contracts and the Project will achieve FFO/Debt of at least 6% and DSCR of at least 1.6 times. The rating could be negatively affected if the Project incurs significant delays or cost overruns during construction, the Project is unable to meet its performance obligations under the Dow contracts, if the Project is unable to achieve the expected financial metrics including debt amortization. The rating could also be negatively affected if a major earthquake occurs near the Project's location and the Project incurs significant damage. The rating could be positively affected if the Project reaches full construction completion according to budget, demonstrates consistently strong operations and achieves sustained financial performance commensurate with the base case. K2 Pittsburg's rating were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of K2 Pittsburg's core industry and K2 Pittsburg's ratings are believed to be comparable to those of other issuers of similar credit risk. K2 Pittsburg owns and is constructing a chlor-alkali project located in Pittsburg, CA and is designed to produce up to 296.5 tons per day of ECUs and up to 200 tons per day of bleach. The Project is being built by DPR and mechanical completion is expected by April 2011. Once in operations, the Project will sell approximately half its output to Dow under a long-term 20-year contract. The Project is indirectly owned by K2 Pure Solutions. K2 Solutions is indirectly owned by K2 Solutions's management and Centre Capital Investors IV LP and related parties. KGEN LLC: Moody's Affirms 'B1' Rating on Senior Secured Facilities ------------------------------------------------------------------ Moody's Investors Service has affirmed the B1 rating on KGen LLC's senior secured credit facilities and revised the outlook to stable. The affirmation follows KGen's recent sale of its 640 MW Sandersville peaking unit to ArcLight for $130 million. While cash flows are expected to remain negative in FY 2011, the sale has significantly enhanced KGen's liquidity position. It also supports a collateral valuation of KGen's remaining assets well in excess of its outstanding debt, particularly on a net basis. The stable outlook considers that liquidity should be more than sufficient to cover any shortfalls in operating cash flows over the next twelve to eighteen months. The sale price appears to be very favorable for KGen and the sale is not expected to have a significant impact on the company's cash flows. In fact, it is actually expected to result in a minor improvement. The sale values Sandersville at $203/kw, which is well above the estimated $20 net debt/kw of the company's remaining assets, all of which are combined cycles units. A substantial portion of the sale proceeds will eventually be used to pay down debt. After it has fully funded its reserves, accumulated a balance of $50 million in its revenue account, and repaid any draws on its revolver, the company is required to sweep 50% of excess cash flows to prepay debt, and up to 75% if necessary for it to achieve its targeted debt balances. Given the limited debt pay down to-date, Moody's believes the company would be required to sweep almost 75% of these excess cash flows in order to achieve its targeted debt balance. However, the timing of the debt paydown remains uncertain at this point. While it is permitted to prepay debt at any time, the company is only required to sweep excess cash flow once a year on June 30, and it is only permitted to take distributions on that date. KGen could potentially negotiate with lenders an amendment to the credit facility that would permit an earlier distribution provided that at the same time it sweeps as much of the proceeds to prepay debt as it would do if it were occurring on June 30, though it has not yet announced any plans to do so. Strict limits on investments, acquisitions, and capital improvements should help to ensure that the asset proceeds will remain available to pay down debt on June 30, 2011 if the negotiations are unsuccessful. Notwithstanding a slight improvement attributable to the sale, cash flows are expected to remain negative this year. Even if the sales proceeds are applied towards paying down the debt in a timely manner as discussed above and the company realizes a reduction in 2011 interest expense as a result, it expects to have a $700,000 cash flow shortfall. If the sale proceeds are not applied to paying down debt until next June 30, the shortfall would be $2.6 million. (If it were not for the asset sale, the cash flow shortfall was projected to have been $6.5 million.) Regardless, the company has ample unrestricted cash with which to cover the operating cash flow shortfall. The company's power sales agreement with Georgia Power, which contributes from 60%-70% of its gross margins, is scheduled to expire in May of 2012. If this agreement is not renewed or replaced on favorable terms, or if market conditions do not improve significantly, the company faces a significant decline in cash flows when the current agreement expires, which could put downward pressure on the rating. However, the rating could be preserved if the company successfully executes another asset sale that enables it to repay a meaningful portion of its remaining debt. Given the expiration of the Georgia Power PPA, the rating is unlikely to be upgraded in the near to medium term. The last rating action on KGen occurred on April 23, 2009, when the B1 rating was confirmed and the outlook was revised to negative. Based in Houston, Texas, KGen is a power generating company formed in 2004 as a vehicle to purchase and hold a portfolio of power generation assets from Duke Energy. KGen currently owns a portfolio of four combined cycle gas fired generating plants serving the Entergy, Southern, and TVA subregions of SERC, with a total capacity of 2,390 MWs. One of the plants comprising approximately 25% of the total capacity is under contract with Georgia Power (senior unsecured debt rated A2 under review for possible downgrade) until 2012. The other plants are completely merchant. The project benefits from very low leverage relative to similar power projects rated by Moody's located in other parts of the country. However, this is not sufficient to mitigate its significant merchant exposure and the generally unfavorable nature of the SERC market, which is the least deregulated wholesale energy market in the country and is characterized by significant market power exercised by the load serving entities, a lack of transparency and liquidity, and an excess of gas-fired generating capacity. KINSLEY FOREST: Dismissal or Conversion Hearing Set for Aug. 10 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri will consider on August 10, 2010, at 1:30 p.m., the dismissal or conversion of Kinsley Forest Estates, LLC's Chapter 11 case to one under Chapter 7 of the Bankruptcy Code. The hearing will be held at the U.S. Courthouse, Courtroom 6A, 400 E. 9th St., Kansas City, Missouri. Nancy J. Gargula, the U.S. Trustee for Region 13, explained that the Debtor's primary asset is subject to foreclosure and the Debtor is unlikely to be able to rehabilitate its financial operations. Lenexa, Kansas City-based Kinsley Forest Estates, LLC, filed for Chapter 11 bankruptcy protection on March 2, 2010 (Bankr. W.D. Mo. Case No. 10-40896). Nancy S. Jochens, Esq., at Jochens Law Office, Inc., assists the Company in its restructuring effort. According to the schedules, the Company has assets of $16,250,485, and total debts of $7,859,000. KIRKLAND HUTCHESON: Plan Confirmation Hearing Set for July 29 ------------------------------------------------------------- The Hon. Arthur B. Federman of the U.S. Bankruptcy Court for the Western District of Missouri will consider on July 29, 2010, at 8:30 a.m., the final approval of the disclosure statement and confirmation of Kirkland Hutcheson, LLC's proposed Plan of Reorganization. The hearing will be held at Bankruptcy Courtroom, U.S. Courthouse, 222 John Q. Hammons Parkway, Springfield, Missouri. The Court also set July 26 as the deadline for filing and serving: -- objections to the disclosure statement or plan confirmation. -- serving ballots accepting or rejecting the Plan As reported Troubled Company Reporter on June 15, the Plan treats claims and interests in this manner: Class 1 - Missouri Department of Revenue will be paid with interest in full. Class 2 - BancorpSouth Bank will be paid with interest at 5.5% payable monthly excluding months of December, January and February for a three year period from the effective date whereupon outstanding obligation amortized over 20 years at same interest rate and same payment schedule. Class 3 - Great America Leasing Corporation will be paid in accordance with the contract. Class 4 - Kirkland will be paid quarterly with interest at 5.5% per annum. Class 5 - For mechanic lien claimants, any claims determined to be unperfected in any state court action or adversary action or adversary action will be treated as unsecured creditors in Class 6. Claims with valued secured claims will be paid pro rata on a quarterly basis until claims are paid in full. Class 6 - Holders of general unsecured claims will be paid pro rata quarterly payment of $0.10 for each dollar (10%) of each allowed claim over 60 months. Class 7 - Holders of equity security interests will receive no distribution until all obligations under the Plan have been performed. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/KirklandHutcheson_DS.pdf About Kirkland Hutcheson, LLC Branson, Missouri-based Kirkland Hutcheson, LLC -- dba Castle Rock Resort and fka Atrium Inn -- operates a hotel facility. The Company filed for Chapter 11 bankruptcy protection on November 24, 2009 (Bankr. W.D. Mo. Case No. 09-62695). David E. Schroeder, Esq., assists the Debtor 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. LAKE AT LAS VEGAS: Trustee Sues Ex-Owners for Fraudulent Transfers ------------------------------------------------------------------ Patrick Fitzgerald at Dow Jones Daily Bankruptcy Review reports that Larry Lattig, the court appointed trustee in Lake Las Vegas' bankruptcy case, sued the project's former owners to recoup some of the $470 million they took out of the project before its bankruptcy filing. The lawsuit was filed on July 16 -- a day after Lake Las Vegas emerged from bankruptcy. Dow Jones reports that the trustee said the $470 million that billionaire Texas brothers Sid and Lee Bass and California developer Ron Boeddeker paid themselves and other Lake Las Vegas insiders in 2004 was a "mortal wound" to the project from which it never recovered. The suit says the insider payments "resulted in [Lake Las Vegas] slowly bleeding to death in a sea of red ink." Mr. Lattig is seeking to void the insider payments as a fraudulent transfer. Mr. Lattig heads the trust created under the company's bankruptcy- exit plan to pursue lawsuits for the benefit of Lake Las Vegas's creditors. Mr. Lattig is an executive at Mesirow Financial Consulting. According to Dow Jones, other defendants named in the suit are: -- Mr. Boeddeker's son, Matt, -- long-time Bass family lawyer William Hallman, and -- trusts affiliated with the Bass and Boeddeker families. Ron Boeddeker teamed with the Bass brothers in the late 1980s on the Lake Las Vegas project. He died last month from cancer. About Lake Las Vegas Headquartered in Henderson, Nevada, Lake at Las Vegas Joint Venture, LLC and 14 of its debtor-affiliates -- http://www.lakelasvegas.com/-- are owners and developers of 3,592-acre residential and resort destination Lake Las Vegas Resort in Las Vegas, Nevada. Centered around a 320-acre man-made lake, Lake Las Vegas contains more than 9,000 residential units, and also includes two luxury resort hotels (a Loews and a Ritz- Carlton), a casino, a specialty retail village shopping area, marinas, three signature golf courses and related clubhouses, and other real property. The Debtors filed separate petitions for Chapter 11 relief on July 17, 2008 (Bankr. D. Nev. Lead Case No. 08-17814). When Lake at Las Vegas Joint Venture, LLC, filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1.0 billion. Courtney E. Pozmantier, Esq., Martin R. Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, Jason D. Smith, Esq., at Santoro, Driggs, Walch, Kearney, Holley & Thompson, Jeanette E. McPherson, Esq., Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, represent the Debtors as counsel. Kaaran E. Thomas, Esq., Ryan J. Works, Esq., at McDonald Carano Wilson LLP, represent the Official Committee of Unsecured Creditors as counsel. LEHMAN BROTHERS: Class Action Plaintiffs Seek $100MM in Insurance ----------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that plaintiffs in a class-action lawsuit against Lehman Brothers Holdings Inc. is asking the bankruptcy judge to modify the automatic stay so they can continue a suit aimed at collecting damages from a $100 million insurance policy that Lehman had for the years 1999 to 2002. The suit, Fogarazzo v. Lehman Brothers, alleges that Lehman and other investment banks shaded research reports to garner investment banking business. The defendants in an enforcement action by the Securities and Exchange Commission agreed to pay $1.4 billion. Lehman's share was $80 million, the plaintiffs said. Later, the suit against Lehman was certified as a class action. The hearing on the motion for permission to sue the insurance company is scheduled for Aug. 18. 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: Exchange Offer for 2018 & 2020 Notes Expire Aug. 2 ---------------------------------------------------------------- Levi Strauss & Co. is offering to exchange all outstanding: -- unregistered 7-3/4% Senior Notes due 2018 (EUR300,000,000 aggregate principal amount outstanding) for 7-3/4% Senior Notes due 2018 (EUR300,000,000 aggregate principal amount) which have been registered under the Securities Act of 1933, and -- all outstanding unregistered 7-5/8% Senior Notes due 2020 ($525,000,000 aggregate principal amount outstanding) for 7-5/8% Senior Notes due 2020 ($525,000,000 aggregate principal amount) which have been registered under the Securities Act of 1933. The Exchange Offer: -- expires 5:00 p.m., New York City time on August 2, 2010, unless extended. -- not conditional upon any minimum principal amount of outstanding unregistered 7-3/4% Senior Notes due 2018 -- old Euro Notes -- and unregistered 7-5/8% Senior Notes due 2020 -- old Dollar Notes -- being tendered for exchange. -- all outstanding old notes that are validly tendered and not validly withdrawn will be exchanged. -- tenders of outstanding old notes may be withdrawn any time prior to 5:00 p.m., New York City time on the date of the expiration of the exchange offer. -- the exchange of old notes will generally not be a taxable exchange for U.S. federal income tax purposes. -- the Company will not receive any proceeds from the exchange offer. The terms of the exchange notes to be issued in the exchange offer for the old Euro Notes are substantially similar to the old Euro Notes and the terms of the exchange notes to be issued in the exchange offer for old Dollar Notes are substantially similar to the old Dollar Notes, except, in each case, for transfer restrictions and registration rights relating to the old notes. The Company intends to list the Euro Exchange Notes on the Luxembourg Stock Exchange and have the Euro Exchange Notes traded on the Euro MTF Market. The Company does not intend to apply for listing or quotation of the exchange notes on any U.S. securities exchange or for quotation through any U.S. automated dealer quotation system. The existing market for the Euro Exchange Notes is limited, and there is currently no public market for the Dollar Exchange Notes. Broker dealers who receive exchange notes pursuant to the exchange offer acknowledge that they will deliver a prospectus in connection with any resale of such exchange notes. Broker dealers who acquired the outstanding old notes as a result of market making or other trading activities may use the prospectus for the exchange offer, as supplemented or amended, in connection with resales of the exchange notes. A full-text copy of the prospectus is available at no charge at http://ResearchArchives.com/t/s?66cd 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-'. LEXINGTON PRECISION: Wins Confirmation of Chapter 11 Plan --------------------------------------------------------- Bill Rochelle at Bloomberg News reports that a bankruptcy judge in New York signed an order confirming the reorganization plan for The Lexington Precision Corp. To confirm the plan, Lexington needed to use the cramdown process because unsecured creditors of the operating company Lexington Rubber Group voted "no." The plan has the class being paid in full over ten quarterly installments, with interest. Mr. Rochelle also reported that prior to the confirmation hearing, the Official Committee of Unsecured Creditors negotiated an improvement in the interest rate to be paid to the class that voted against the plan. With the sweetened plan, the Committee didn't object to confirmation and cramdown. The Plan, the report relates, will be funded in part by the sale of $22 million in stock, at $10 a share, to Commercial Finance Services 407 LLC. Subordinated noteholders are being given the chance to change their votes to "no" because they were only told this week that their stock recovery would be diluted by 5.4% on account of equity given to the so-called plan investors. The plan reduces debt by more than $50 million while giving holders of senior subordinated notes an estimated 51% recovery. Subordinated noteholders, owed $34.18 million in principal, may elect between taking 51% in cash or swap for stock at roughly $20 of debt for each new share. Bloomberg continues that general unsecured creditors of Lexington Precision are estimated to have an 85.4% recovery, according to the disclosure statement. They are to have 8% in cash on implementation of the plan, with the remainder paid 8.6% in cash at each of the ensuing nine quarters. The disclosure statement says that the present value of the payments is 80%. Alternatively, unsecured creditors can elect to receive 51% paid in cash. Asbestos claims are to be paid in full with insurance proceeds. If insurance is insufficient, the remainder will be paid over time like general unsecured creditors. Secured debt under the Company's plan is to be paid in full through revised credit agreements. About Lexington Precision Headquartered in New York, Lexington Precision Corp. -- http://www.lexingtonprecision.com/-- manufactures tight-tolerance rubber and metal components for use in medical, automotive, and industrial applications. As of February 29, 2008, the Company employed about 651 regular and 22 temporary personnel. The Company and its affiliate, Lexington Rubber Group Inc., filed for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead Case No.08-11153). Christopher J. Marcus, Esq., and Victoria Vron, Esq., at Weil, Gotshal & Manges, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Systems - Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 2 appointed six creditors to serve on an official committee of unsecured creditors. Paul N. Silverstein, Esq., and Jonathan Levine, Esq., at Andrews Kurth LLP, represent the Committee as counsel. On June 30, 2008, the Debtors filed with the Bankruptcy Court a plan of reorganization. It was amended twice, the latest amendment dated December 8, 2008. The Debtors currently plan to complete the liquidation of their connector-seal business before seeking approval of the Amended Plan. LOWER BUCKS: Has Until October 2 to Access BoNY Cash Collateral --------------------------------------------------------------- The Hon. Eric L. Frank of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania, in a fourth interim order, authorized Lower Bucks Hospital, et al., to use the cash securing repayment of loan with The Bank of New York Mellon Trust Company, N.A., until October 2, 2010, or the occurrence of a termination event. The Bank of New York Mellon Trust Company, N.A., is the trustee for the Borough of Langhorne Manor Higher Education and Health Authority Hospital Revenue Bonds, Series of 1992. A final hearing on the Debtors' access to the cash collateral will be held on September 29, 2010, at 11:00 a.m. Objections, if any, are due on September 22. The Debtors would use the money to fund their Chapter 11 case, pay suppliers and other parties. As of the petition date, the aggregate amount of prepetition indebtedness is $24,870,000, exclusive of any interest and other amounts that may be due and owing. In exchange for using the cash collateral, the Debtors will grant the prepetition lenders (i) a replacement lien in unrestricted gross revenues received by the Lower Buck Hospital subsequent to the petition date; (ii) a lien on and security interest in LBH's real estate, subject to that certain lien of the Township of Bristol in the principal amount of $133,000; and (iv) a superpriority claim. The liens and superpriority expense claims are subject to carve out covering fees payable to the U.S. Trustee and the Clerk of the Bankruptcy Court, and unpaid professional fees, among others. About Lower Bucks Hospital Bristol, Pennsylvania-based Lower Bucks Hospital is a nonprofit hospital based in Bristol, Pennsylvania. The Hospital is currently licensed to operate 183 beds. Together with affiliates Advanced Primary Care Physicians and Lower Bucks Health Enterprises, Inc., Lower Bucks owns a 36-acre campus with several medical facilities. The Hospital's emergency room serves approximately 30,000 patients annually. For the fiscal year ending June 30, 2009, Lower Bucks had $114 million in consolidated revenues. The Hospital filed for Chapter 11 bankruptcy protection on January 13, 2010 (Bankr. E.D. Pa. Case No. 10-10239). The Hospital's affiliates -- Lower Bucks Health Enterprises, Inc, and Advanced Primary Care Physicians also filed Chapter 11 petitions. Jeffrey C. Hampton, Esq., and Adam H. Isenberg, at Saul Ewing LLP, assist the Hospital in its restructuring effort. Donlin, Recano & Company, Inc., is the Hospital's claims and notice agent. The Hospital listed $50,000,001 to $100,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. LUCKY CHASE: Trustee Has Access to Cash Collateral Until Sept. 3 ---------------------------------------------------------------- The Hon. Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida, in a ninth interim order, authorized Kenneth A. Welt, Chapter 11 trustee in the Chapter 11 case of Lucky Chase II, LLC, to use cash collateral until September 3, 2010, unless superseded by a final order, or extended by further order of the Court. A further hearing on the trustee's continued authority to use cash collateral will be held on August 31, 2010, at 1:30 p.m. at the Bankruptcy Court, Claude Pepper Federal Building, 51 Southwest First Avenue, Courtroom 1406, Miami, Florida. Federal Deposit Insurance Corporation, as receiver for AmTrust Bank, consented to the trustee's use of the cash collateral to fund the operation and management of the Debtor's property, provided that the trustee will not exceed 10% of the line item amounts set forth in the budget. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant FDIC replacement liens on all of the Debtor's postpetition assets. The trustee must also maintain all necessary insurance, including, without limitation, life, fire, hazard, comprehensive, public liability, and worker's compensation as may be currently in effect, and obtain additional insurance in an amount as is appropriate for the business in which the Debtor is engaged, naming AmTrust as an additional insured and loss payee with respect thereto. About Lucky Chase II, LLC Headquartered in Pittsburgh, Pennsylvania, Lucky Chase II, LLC, operates a single-asset, real estate company. The Company filed for Chapter 11 on April 29, 2009 (Bankr. S.D. Fla. Case No. 09-18087). Arthur J. Spector, Esq., represents the Debtor in its restructuring effort. The Debtor listed assets and debts between $10 million and $50 million each. MATTRESS HOLDING: Moody's Upgrades Corporate Family Rating to 'B3' ------------------------------------------------------------------ Moody's Investors Service upgraded Mattress Holding Corp.'s debt ratings, including its Corporate Family Rating and Probability of Default ratings to B3 from Caa1 and the ratings on its Senior Secured Credit Facilities to B1 from B2. The ratings outlook is stable. The upgrade and stable outlook acknowledge the recent improvement in Mattress Holding's operating performance and credit metrics, and reflects Moody's view that the company, despite its high leverage, has some cushion to withstand modest adverse fluctuations in performance during a protracted economic recovery. The company's near term liquidity is good, supported by balance sheet cash, expected free cash flow generation and revolver availability, although continued contractual covenant step downs could pose a longer term challenge. Material negative variances in performance, any increase in financial leverage or a significant deterioration in liquidity, including covenant concerns, could lead to downward pressure in the outlook and/or ratings. Pressure could also stem from more aggressive financial policies such as debt-financed dividends, acquisitions or further ramp-up in new store openings. The B3 corporate family rating reflects Mattress Holding's weak credit metrics, particularly its high leverage, and small size relative to other global retailers. Recent volatility of mattress sales, which are tied to consumer confidence, availability of consumer credit, and home sales, also constrain the rating. Positive rating consideration is given to the company's good liquidity, as well as its credible market position in the narrowly defined specialty retail sleep channel, its regional presence, and moderate seasonality. Ratings upgraded: * Corporate family rating to B3 from Caa1; * Probability of Default rating to B3 from Caa1; * Senior secured revolving credit facilities to B1 (LGD2, 29%) from B2 (LGD2, 29%). The last rating action on Mattress Holding was on June 9, 2009, when Moody's confirmed the company's Caa1 corporate family rating with a negative outlook. Mattress Holding Corp., headquartered in Houston, TX, is a leading specialty retailer of conventional and specialty mattresses, with stores in 22 states, primarily located in the South and Southwestern, and a portion of the Midwestern United States. Revenues for the twelve months ended May 4, 2010, approached $450 million. MICHAEL GBADEBO: BANCPA Partially Abrogated Absolute Priority Rule ------------------------------------------------------------------ WestLaw reports that a bankruptcy judge in California held that the "absolute priority rule," as applied in Chapter 11 cases to prevent a debtor from retaining estate assets if unsecured creditors are receiving less than full payment on their claims, was abrogated only in part, as applied, following enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), in Chapter 11 cases filed by individual debtors. Such debtors may retain only postpetition assets of estate, and not any prepetition property included in the estate, if their plans will result in less than full payment of allowed unsecured claims. The judge disagreed with contrary decisions out of Nebraska, Kansas and Nevada. In re Gbadebo, --- B.R. ----, 2010 WL 1568609, Bankr. L. Rep. P 81,753 (Bankr. N.D. Cal.). Michael A. Gbadebo sought Chapter 11 protection (Bankr. N.D. Calif. Case No. 09-42526) on March 31, 2009; is represented by Lawrence L. Szabo, Esq., in Oakland, Calif.; and estimated his assets and debts at less than $10 million at the time of the filing. MID-STATES EXPRESS: Bankr. Ct. Balks at ERISA Plan Liquidation -------------------------------------------------------------- WestLaw reports that a Chapter 7 trustee's motion for authorization to liquidate the debtor's employee benefit plan governed by Employee Retirement Income Security Act (ERISA), disburse the plan corpus to the plan participants, and pay the administrative expenses associated with the plan's liquidation and disbursement from the plan corpus did not come within the bankruptcy court's "arising in" jurisdiction, even though the trustee was attempting to comply with his duty, under the Bankruptcy Code, to perform the obligations of the ERISA plan administrator for the benefit plan, and would not be seeking the requested relief but for the statute's imposition of that duty upon him. The trustee did not carry "arising in" jurisdiction with him, and the factual circumstances underlying the trustee's "but-for" argument were irrelevant in determining the court's "arising in" jurisdiction. Through the motion, moreover, the trustee sought to have the bankruptcy court adjudicate non- bankruptcy rights governed by ERISA and its regulations. In re Mid-States Express, Inc., --- B.R. ----, 2010 WL 2653376 (Bankr. N.D. Ill.) (Black, J.). Mid-States Express, Inc., sought Chapter 11 protection (Bankr. N.D. Ill. Case No. 09-10818) on March 27, 2009, represented by Gerald F. Munitz, Esq., at Goldberg Kohn. The regional trucking company employed more than 500 individuals and reported less than $10 million in assets and debts at the time of the filing. The Debtor ceased operations on the day of the chapter 11 filing and subsequently converted its Chapter 11 case to a Chapter 7 liquidation proceeding. Edward T. Joyce serves as the Chapter 7 Trustee and is represented by Ronald Peterson, Esq., at Jenner & Block in Chicago. MOVIE GALLERY: Streambank Selected to Market Intangible Assets -------------------------------------------------------------- Streambank, LLC, disclosed that the firm will lead the marketing and sales efforts for intangible assets of Movie Gallery Inc., including their Hollywood Video, Movie Gallery and Game Crazy brands. Streambank's retention by Movie Gallery Inc., was approved Friday July 16, 2010, by the Bankruptcy Court for the Eastern District of Virginia. Movie Gallery had operated over 4,000 retail video and game rental and sales locations throughout the United States and Canada under the Hollywood Video, Movie Gallery and Game Crazy brands. The company filed voluntary Chapter 11 bankruptcy petitions in February and is currently liquidating its remaining stores. Among the available intangible assets are the trademarks, domain names and databases associated with Movie Gallery, Hollywood Video, and Game Crazy. Other assets include the famous Reel.com domain name which Hollywood Video acquired in 1998 in an all-stock deal valued at $100 million. "While the video distribution business continues to evolve with new technologies, the rationale for leapfrogging the competition with a strong brand has never been more apparent," said Gabe Fried, Managing Member and Founder, Streambank, LLC. "Innovative entertainment companies can utilize these highly recognized brands and well-trafficked websites to promote streaming video, kiosks, satellite and cable channels, or other video & entertainment ventures." Hollywood Video was founded in 1988 by Mark Wattles and his wife in Portland, OR, and eventually grew to several thousand stores before being acquired by Movie Gallery. Game Crazy, which pioneered the used game cartridge trade-in and sales business, grew to 700 locations, some of which were resident inside Hollywood Video stores and others were freestanding locations. "These names are among the most recognized and trusted brands in media and content delivery," said Ben Riggsby, Chief Merchandising Officer for Movie Gallery and an industry veteran. "The path to building a trusted connection with consumers is never easy or inexpensive. We have spent hundreds of millions of dollars promoting these brands and creating awareness over the last two decades, and consumers have placed tremendous trust in our names." The Company has built a base of more than 40 million customers and comprised a significant percentage of video sales and rentals with sales of $2.4 billion in 2007. The Company had per-store sales averaging above $1 million annually. "We are pleased to have engaged Streambank to assist us in marketing these assets," said Steve Moore of Corliss Moore & Associates, Movie Gallery's Chief Restructuring Officer. "Streambank's experience in liquidating IP and their general bankruptcy expertise will provide a great benefit to the estate." The marketing of the Movie Gallery, Hollywood Video, Game Crazy and Reel.com trademark and goodwill assets is underway. About Streambank Streambank is an advisory firm, specializing in the valuation, marketing and sale of intangible assets for businesses at all stages. Streambank identifies, preserves, and extracts value for clients through the application of experience, diligence and creativity. The firm's experience spans a broad range of industries including apparel, automotive, consumer products, food, manufacturing, medical technologies, retail and textiles. Streambank's recent client engagements include Tavern on the Green, Goody's Family Clothing, Circuit City Stores, and KB Toys. Streambank provides sound advice on value maximization strategies and liquidity options. Streambank is headquartered in Needham, MA and has an office in New York, NY. About Movie Gallery Based in Wilsonville, Ore., Movie Gallery, Inc., is the second largest North American video and game rental company, operating stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853). Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 protection on February 3, 2009 (Bankr. E.D. Va. Case No. 10-30696). Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represent the Debtors in their second restructuring effort. Kurtzman Carson Consultants serves as claims and notice agent. Bankruptcy Creditors' Service, Inc., publishes Movie Gallery Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Movie Gallery Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 begin_of_the_skype_highlighting 215/945-7000 end_of_the_skype_highlighting). NEC HOLDINGS: Cenveo to Rival Gores Bid for Assets -------------------------------------------------- Bill Rochelle at Bloomberg News reports that Cenveo Corp. said it is prepared to bid at auction for National Envelope Corp. and pay more than the $134.5 million offered by Gores Group LLC, without the breakup fee Gores demands. According to the report, Cenveo contends that the sale process so far has been "designed to exclude Cenveo and bidders like it." It told the bankruptcy court in Delaware that financial information it was given contained redactions that made the information incomplete. Cenveo is a competitor of National Envelope. Bankruptcy Law360 reports that National Envelope is also facing stiff opposition to its plan for auctioning off its assets, with objections coming in from its lenders, labor unions representing its employees and would-be buyer Cenveo Corp. The bankruptcy judge was scheduled to convene a hearing on July 22 to consider approval of rules for an auction where Gores Group LLC will make the first bid at $134.5 million. If the judge goes along, other bids will be due initially on Aug. 16, followed by an auction on Aug. 20 and an Aug. 23 hearing for approval of the sale. Committee Proposes Compromise According to Bill Rochelle, the Official Committee of Unsecuerd Creditors has proposed a compromise it hopes will enable to Cenveo to receive financial information and participate in an auction. The Committee said it understands National Envelope's concern that Cenveo, a major competitor, may not have financial resources to complete an acquisition. To resolve the uncertainty, the committee proposes that Cenveo procure a letter from its lenders saying that use of the credit facilities and cash won't violate loan covenants. About National Envelope Corporation Uniondale, New York-based National Envelope Corporation -- http://www.nationalenvelope.com/-- is the largest manufacturer of envelopes in the world with 14 manufacturing facilities and 2 distribution centers and approximately 3,500 employees in the U.S. and Canada. The company is an environmental leader in the paper and envelope converting industries with certifications from the Forest Stewardship Council (FSC), Rainforest Alliance, Sustainable Forestry Initiative (SFI), Programme for the Endorsement of Forest Certification (PEFC), Chlorine Free Products Association, and Green Seal. NEC Holdings Corp., together with affiliates, including National Envelope Inc., filed for Chapter 11 on June 10, 2010 (Bankr. D. Del. Lead Case No. 10-11890). Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor LLP, serves as bankruptcy counsel. David S. Heller, Esq., at Josef S. Athanas, Esq., and Stephen R. Tetro II, Esq., at Latham & Watkins LLP, serve as co-counsel. The Garden City Group is the claims and notice agent. NEC Holdings' petition says assets and debts range from $100,000,001 to $500,000,000. NEXT INC: Posts $322,200 Net Loss in Q2 Ended May 30 ---------------------------------------------------- Next, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $322,233 on $2,247,716 of revenue for the three months ended May 30, 2010, compared with a net loss of $329,007 on $2,555,559 of revenue for the three months ended May 31, 2009. The Company's balance sheet at May 30, 2010, showed $7,152,913 in assets, $6,931,871 of liabilities, and $221,042 of stockholders' equity. As reported in the Troubled Company Reporter on March 18, 2010, Joseph Decosimo and Company, PLLC, in Chattanooga, Tenn., 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 November 29, 2009. The independent auditors noted that the Company is in violation of certain term loan financial covenants as of November 29, 2009, and has experienced difficulty in obtaining debt financing at acceptable terms to fund continuing operations. The Company has also suffered recurring losses from operations and has a working deficit as of November 29, 2009, due to all financing obligations being classified as current liabilities. "The Company is dependent upon available cash, operating cash flow, its term loans with Crossroads Bank and its revolving line of credit [with National City Bank] to meet its capital needs. The Company is currently in a technical, undeclared state of default under its term loans with Crossroads Bank, despite having made all payments on time under the agreements, due to its failure to satisfy the fixed charge ratio covenant." The Company continues to negotiate with Crossroads Bank regarding the covenant failure on the term loans, and Crossroads Bank has not declared a state of default. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?66de Chattanooga, Tenn.-based Next, Inc. -- http://www.nextinc.net/-- designs, develops, embellishes, markets, and distributes licensed and branded imprinted sportswear primarily through key licensing agreements as well as the Company's own proprietary brands. NOVA CHEMICALS: Fitch Affirms 'B+' Issuer Default Ratings --------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Ratings of NOVA Chemicals Corporation at 'B+'. Fitch has also affirmed the ratings for NOVA's secured revolving credit facility at 'BB+/RR1' and its unsecured credit facilities and notes at 'B+/RR4'. The Rating Outlook is Stable. NOVA has significantly improved its credit profile following the closing of its acquisition by Abu Dhabi-based International Petroleum Investment Company (Fitch IDR of 'AA/F1'). Although IPIC does not guarantee NOVA's debt, the company has received $350 million in tangible credit support in the form of proceeds for debt repayments and equity injection from IPIC. Fitch also expects that IPIC will continue to forgo taking dividends from NOVA in 2010 in order to prioritize further strengthening of the balance sheet. In October, the company improved its maturity profile by issuing $700 million long-term notes. Proceeds were used to repay $496 million outstanding under the company's secured and unsecured credit facilities and to redeem the remaining $75 million preferred shares total return swap. In the absence of hard credit support and only limited integration of NOVA's operations into IPIC's other portfolio companies, Fitch analyzes and rates NOVA on a standalone basis with some implied credit support by IPIC if needed. The ratings reflect NOVA's leading market positions in ethylene and polyethylene and, mainly through its INEOS NOVA joint venture, also in styrene and polystyrene. The company benefits from integrated production facilities and economies of scale, particularly at its Joffre, Alberta chemical production complex, which is substantially larger than the average facility along the U.S. Gulf Coast. NOVA has cost-advantaged access to feedstock, as it sources ethane, the key feedstock for the ethylene production in Joffre, in Alberta at natural gas cost plus a fee for extraction and delivery compared to market-rate transactions at the U.S. Gulf Coast. The ratings are constrained by the extreme cyclicality of commodity chemicals, which was emphasized in the recent recession. NOVA's revenue decline of approximately 45% in fiscal 2009 was followed by a mainly price-driven 71% increase in the first quarter of 2010 over the same period a year ago. Third party polyethylene sales volume improved only 1.7% year-over-year to 784 million pounds in the first quarter of 2010. The cyclicality coupled with the volatility of feedstock costs provides very limited visibility into future operational and financial performances and requires NOVA to manage its capacity tightly in order to match production with demand. The ratings also incorporate sizeable new capacity that comes online in various countries in the Middle East and in Asia in 2010 and beyond. The Middle Eastern supply can be priced at very competitive rates as producers benefit from the lowest feedstock cost globally. Although the capacity is not directly targeted at the North American markets, the new supply competes with exported products from North America in the Asian markets and could adversely impact NOVA's export opportunities. Sales outside of North America accounted for 21% of the company's revenues in 2009. In addition, the rating considers feedstock supply constraints at NOVA's Joffre complex, as the natural gas flow from Alberta to the U.S. continues to decline due to low natural gas prices in the U.S. Without increasing feedstock supply, NOVA would continue to operate its Joffre production below nameplate capacity even if demand improves. In order to address the supply situation, NOVA has signed a memorandum of understanding with Hess Corporation (Hess) and Mistral Energy, Inc (Mistral) to purchase ethane from a Hess gas plant in North Dakota. The gas will be transported through a proposed pipeline to the Joffre complex. NOVA expects the North Dakota supply to begin in the third quarter of 2012. On the financial performance side, the ratings reflect still fairly weak cash flow and cash flow-based credit metrics. Last 12 month ending March 31, 2010 funds from operations (FFO) improved to $271 million from a negative $90 million a year ago. However, sizeable working capital requirements due to higher feedstock costs and the ramp-up of production reduced cash flow from operations to a negative $18 million. Free cash flow was negative $149 million after $131 million capital expenditure. FFO adjusted leverage improved but is still at a high 4.5 times. FFO fixed charge coverage stood at 2.1x. The Stable Outlook is based on NOVA's substantially improved liquidity position that would allow the company to withstand possible set-backs in the recovery of demand for its basic plastics in the second half of 2010. As of March 31, 2010, NOVA's liquidity totaled $625 million, consisting of $156 million cash on hand and $469 million available under its credit facilities after adjusting for $51 million outstanding letters of credit (LOCs) and excluding the company's accounts receivables securitization programs. In November 2009, NOVA renewed its main secured $350 million revolving credit facilities. The new maturity is November 2012. The renewed facility has revised financial covenants that provide substantially more headroom than the ones under the previous facility. The debt to cash flow covenant is defined as senior debt (revolver outstandings including LOCs plus A/R securitization balances) to cash flow (net income plus interest expense, income taxes and D&A less all non cash items) of a maximum of 3.0x. Actual compliance was 0.3 x as of March 31. The second covenant is total net debt to capital of a maximum of 60%. Actual compliance was 46%. Fitch expects NOVA to remain in compliance with the covenants throughout the lifetime of the facility. The Canadian and U.S. accounts receivable securitization programs, each $100 million and with an expiration date of February 2012, are also governed by the same financial covenants. The bilateral unsecured revolving credit facilities, a $100 million commitment expiring March 2011 and a $70 million commitment maturing September 2011 ($30 million) and September 2013 ($40 million) are not governed by financial covenants. The next major maturity is the C$250 million notes due in August. NOVA intends to use cash on hand and drawdowns under its revolvers to repay the notes. Fitch expects that the combination of moderately lower debt and the trailing off of the still weak second and third quarter of 2009 will reduce FFO adjusted leverage to at least 3.5x by year-end. NOVA's next major maturities are $381 million unsecured notes due in 2012 and $345 million unsecured notes in 2013. Each of the notes has a $400 million face value. Almost all of its remaining debt is long-term. Fitch's Recovery Rating of 'RR1' on NOVA's secured revolving credit facility indicates outstanding recovery prospects (91%- 100%) for the lenders. The facility is secured by the net book value of assets in Canada including NOVA's interest in the Joffre, Alberta chemical complex and the Corunna, Ontario plant. The Recovery Rating of 'RR4' for NOVA's senior unsecured credit facilities and notes indicates average recovery prospects (31%- 50%) for lenders and holders of the notes. Fitch applied a Going Concern Enterprise Value analysis for these recovery ratings. Catalysts for an upgrade or a Positive Outlook would be further improving demand for plastics, an ongoing strengthening of cash flows and cash flow based credit metrics, as well as tangible credit support from IPIC if needed. Catalysts for a downgrade or a Negative Outlook would be a deterioration of supply/demand balance, particularly against the backdrop of additional capacity coming online in the Middle East and Asia, further reduction in either the supply or in the cost advantage of feedstock, persistent negative free cash flow, and resulting inability to reduce leverage. These ratings of NOVA are affirmed: -- Long-term IDR at 'B+'; -- Senior secured revolving credit facility at 'BB+/RR1'; -- Senior unsecured revolving credit facilities at 'B+/RR4'; -- Senior unsecured notes and debentures at 'B+/RR4'. The Rating Outlook is Stable. NRG ENERGY: Moody's Assigns Rating on $875 Mil. Senior Facility --------------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to NRG Energy, Inc. $875 million senior secured revolving credit facility and $1.8 billion senior secured term loan commitments and letter of credit facility both due August 31, 2015. Concurrent with this rating assignment, Moody's affirmed all of NRG's ratings, including its Corporate Family Rating and Probability of Default Rating at Ba3, its Baa3 rating on nearly $2 billion of senior secured term loans and secured tax-exempt bonds, its B1 rating on $5.4 billion of senior unsecured notes, and its speculative grade liquidity rating at SGL-1. NRG's rating outlook is stable. NRG's Ba3 CFR reflects the relatively strong credit metrics based upon margins that have historically been underpinned by various intermediate term hedges or contracts. Through March 31, 2010, Moody's calculates the ratio of CFO pre-W/C to debt at more than 20%, the cash flow coverage of interest expense at more than 4.0x, and the ratio of free cash flow to debt at 15%. These financial metrics strongly position NRG in the "Ba" rating category and may suggest a higher CFR. However, the Ba3 CFR incorporates Moody's concerns about the size and scope of the company's ambitious and multi-faceted capital investment program relative to its approximate $6 billion market capitalization along with management's history of implementing numerous shareholder focused capital strategies. With these hedges expiring and being replaced with arrangements that provide weaker than historical margins, key cash flow credit metrics over the intermediate term will weaken from recent levels thereby utilizing the portion of the financial flexibility incorporated in the existing Ba3 CFR. The rating incorporates the value of operating a regionally diverse portfolio of unregulated generation assets with a particularly strong position in Texas and to a lesser extent, in PJM. NRG's market position in Texas has been enhanced by its 2009 acquisition of Reliant Energy which provides a natural hedge for its electric output and helps to reduce potential collateral requirements associated with the unregulated electric business. The rating affirmation of NRG's speculative grade liquidity rating at SGL-1 reflects Moody's expectation that NRG will maintain a very good liquidity profile over the next 4-quarter period as a result of its generation of strong internal cash flows, maintenance of significant cash balances plus continued access to substantial credit availability, and ample headroom under the company's covenants. Total liquidity at March 31, 2010, exceeded $3.2 billion, including credit facility availability of approximately $1.4 billion and unrestricted cash on hand of nearly $1.8 billion which reflects first quarter debt repayments of more than $400 million. The company's extension of an $875 million secured revolver and an $800 million LC facility due August 2015 coupled with the maintenance of a $500 million LC facility expiring February 2013, provides NRG with amply sized multi-year credit facilities. Over the next four quarters, Moody's calculate NRG to be modestly cash flow positive even with expected lower cash flow generation and a substantial pick-up in maintenance, environmental and growth capital expenditures. Moody's anticipates the company continuing to remain comfortably in compliance with the covenants in its bank facilities and has demonstrated an ability to opportunistically enhance its liquidity profile from non-strategic asset sales. In conjunction with the refinancing of the $875 million secured revolver facility, NRG amended and extended $1.8 billion of term loan commitments and LC facility, while amending certain of the terms and conditions of the secured credit agreement. The non- extended portions of the term loan commitments and LC facility aggregate $1.476 billion and mature on the originally scheduled date of February 1, 2013. NRG's stable rating outlook reflects Moody's expectations for strong cash flow over the next twelve to eighteen months due to an active hedging program which has been aided by the Reliant acquisition. While near-term credit metrics will weaken from 2009 levels, Moody's anticipate the company's results to remain at the lower end of the "Ba" rating category, which effectively utilizes the degree of financial flexibility incorporated in the ratings. The stable outlook recognizes the company's shareholder return strategy along with a sizeable capital investment program which Moody's believe still provides NRG with exit strategies on certain large investments. In light of the ambitious capital investment program being executed by the company at a time when downward pressure on margins and cash flows is likely to persist, limited prospects exist for the ratings to be upgraded in the near-term. However, to the extent that management reduced the size and scope of its growth capital investment program, did not greatly expand shareholder rewards programs, and used any free cash flow generation for debt reduction, the possibility of a rating upgrade could surface. The rating could be downgraded should NRG's growth capital expenditure plans remain largely unchanged, particularly if the company's investment in South Texas Project 3&4 moves forward following the receipt of a Department of Energy loan guarantee. This is particularly relevant given the size and complexity of this construction project as well as the challenges that Moody's believe may exist in NRG reducing further its ownership in STP 3&4. The rating could also be downgraded if weaker than expected market conditions persist across NRG's generation fleet causing cash flow to debt to fall below 12% for an extended period. To that end, should market fundamentals remain at weaker than anticipated levels for an extended period and there is no corresponding recalibration of future growth capital spending initiatives by management, the rating could be downgraded. The last rating action on NRG occurred on January 21, 2010, when NRG's ratings were affirmed with a stable outlook. The ratings for NRG's individual securities were determined using Moody's Loss Given Default methodology. Based upon NRG's Ba3 CFR and Ba3 PDR, the LGD methodology suggests a Baa3 rating for NRG's senior secured debt. Importantly, Moody's observes that changes to the capital structure at NRG which increases the relative amount of secured debt while decreasing the relative amount of unsecured debt could result in lower instrument ratings for each of the senior secured classes of NRG debt. Assignments: Issuer: NRG Energy, Inc. -- $875 Million Senior Secured Bank Credit Facility due August 31, 2015, Assigned Baa3, LGD2 13% -- $1.8 Billion Senior Secured Bank Credit Facility due August 31, 2015, Assigned Baa3, LGD2 13% Withdrawals: Issuer: NRG Energy, Inc. -- $1.0 Billion Senior Secured Bank Credit Facility, Withdrawn, previously rated Baa3, LGD2, 14% LGD Point Estimate Changes: Issuer: Chautauqua (Cnty of) NY, Ind. Dev. Agency -- Senior Secured Revenue Bonds, to LGD2, 13% from LGD2, 14% Issuer: NRG Energy, Inc. -- Senior Secured Bank Credit Facility, to LGD2, 13% from LGD2, 14% -- Senior Unsecured Regular Bond/Debenture, to LGD4, 68% from LGD4, 69% Headquartered in Princeton, NRG owns approximately 24,000 MW of generating facilities, primarily in Texas and the northeast, south central and western regions of the US. NRG also owns generating facilities in Australia and Germany. OFFSHORE GROUP: Moody's Assigns 'B3' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned Offshore Group Investment Limited a B3 Corporate Family Rating, Caa1 Probability of Default Rating, a Speculative Grade Liquidity rating of SGL -- 3, and a B3 (LGD 3, 32%) rating to the company's proposed $960 million senior secured notes due 2015. The rating outlook is stable. The proceeds from the notes offering, in addition to approximately $50 million in equity proceeds and $60 million in convertible note proceeds, will be used: (1) to acquire the remaining 55% stake in Mandarin Drilling Corporation (which owns the construction contract for the deepwater drillship Platinum Explorer) for $140 million, (2) fund $589 million in remaining construction and equipment payments for the Platinum Explorer, and (3) refinance approximately $287 million of existing debt. The notes will be guaranteed by Vantage Drilling Company, the parent holding company, and by all of OGIL's subsidiaries, as well as certain subsidiaries of Vantage Drilling Company. The notes will be secured by three of Vantage's four jack-up rigs (the Emerald Driller, Sapphire Driller, and Topaz Driller) and the deepwater Platinum Explorer drillship. Vantage's fourth jack-up, the Aquamarine Driller, is not part of the collateral package and has approximately $103 million of secured debt due in 2014, which is also guaranteed by Vantage Drilling Company. In addition, the notes do not contain guarantees from Vantage's subsidiaries involved in its rig management services business. OGIL's B3 Corporate Family Ratings reflects Vantage's small size and limited operating history. Vantage is a small offshore drilling company with four premium jack-up rigs and one drillship under construction. The company has a short operating history, with its first jack-up delivered in February 2009. While limited, Vantage's operating performance to date has been good, and the company benefits from owning new and high quality rigs. The rating also reflects construction risk associated with its Platinum Explorer drillship and termination clauses in its contract with India's Oil and Natural Gas Corporation Ltd. (A2, Stable). The drillship is currently in the commissioning phase with delivery expected in November 2010. While successful rig performance faces a degree of uncertainty until the drillship is delivered, Moody's note that Vantage is using an experienced shipyard, construction is at an advanced stage, and that Vantage has successfully managed its newbuild program to date. The drillship has a five-year contract with ONGC beginning December 31, 2010. Assuming no performance issues, reasonable operating costs and timely delivery of the rig, the ONGC contract should be supportive of Vantage's cash flows over the near to medium term. However, Vantage's cash flows could be negatively impacted if delivery of the rig is delayed. Vantage would be required to pay liquidated damages in the event of a rig delay, and ONGC can terminate the contract if delivery of the rig is delayed past March 11, 2011. ONGC also has the option to terminate the contract due to unacceptable performance that has not been rectified or a force majeure event. Over the near-term, Vantage should benefit from near-term revenue visibility provided by its existing jack-up contracts. However, due to the relatively short-term nature of its jack-up contracts and increasing jack-up supply in the market, the company could be challenged in securing new contacts at favorable dayrates when its existing contracts expire. While Vantage has good contract cover for 2010, with all of its jack-ups currently under contract, it faces contract renewal risk in 2011. As a result of the primarily debt financed acquisition of the Platinum Explorer and funding of the remaining construction payments, Vantage will have high financial leverage given the capital intensive, highly cyclical nature of the offshore contract drilling sector. Moody's considered the financial leverage profile for both OGIL only and Vantage on a fully consolidated basis. Under management's case, debt/EBITDA for OGIL only is estimated at 4.3x in 2011 and 3.4x on a fully consolidated basis. Using a more conservative dayrate and utilization forecast for the jack-up rigs once they roll off contract, Moody's downside case assumes Debt/EBITDA for OGIL at 5.0x for 2011 and 4.0x on a fully consolidated basis. OGIL's SGL-3 rating reflects Moody's expectation that the company will maintain adequate liquidity over the next twelve months. The company's liquidity is supported by Moody's expectations of limited near term cash obligations once the notes financing is completed and assuming that the Platinum Explorer is delivered on time. However, OGIL's short term liquidity is tempered by the current lack of a revolving credit facility. There is a $25 million revolver carve out provision within the senior secured notes, and Moody's expect the company to attempt to put in place a revolver over the next 6-12 months. The B3 rating on the secured notes considers the high quality nature of the rigs and the likelihood of favorable recovery in a default scenario. Moody's believe that the tangible asset cover for the secured debt is better than average given the quality and relatively young age of Vantage's rigs, as well as the advanced stage of the construction of the Platinum Explorer and its contract with ONGC. Therefore Moody's used a 65% recovery rate in Moody's LGD analysis instead of the standard 50% recovery rate. However, the rating of the notes at B3 is at par with the B3 Corporate Family Rating since the notes comprise the majority of the capital structure. The rating outlook is stable and reflects the expectation that the Platinum Explorer will meet its requirements under the ONGC contract, including the timely delivery of the rig. A positive rating action is possible if Vantage continues to demonstrate solid operational performance over time and if the company is successful in maintaining reasonable credit metrics (debt/EBITDA below 4.0x on a sustainable basis at both the issuer and family level). The rating or outlook could come under downward pressure in the event of a significant delay in delivery of the Platinum Explorer, if Vantage generates weaker than anticipated earnings and cash flows, or as a result of diminished liquidity. Offshore Group Investment Limited is a subsidiary of Vantage Drilling Company and is headquartered in the Cayman Islands. OWENS CORNING: Asks for Final Decree Closing Chapter 11 Case ------------------------------------------------------------ Owens Corning nka Owens Corning Sales, LLC, seeks the entry of a final decree closing its pending bankruptcy case, Case No. 00-03837, pursuant to Section 350 of the Bankruptcy Code and Rule 3022 of the Federal Rules of Bankruptcy Procedure. Section 350 provides that "[a]fter an estate is fully administered and the Court has discharged the trustee, the Court must close the case." Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington., Delaware -- mminuti@saul.com -- tells Judge Fitzgerald that the case of Owens Corning can be deemed fully administered based on the six factors set forth in the Advisory Committee Note to Bankruptcy Rule 3022. He articulates that: (1) The Plan Confirmation Order entered by the Bankruptcy Court on September 26, 2006, in the cases of Owens Corning is final. The U.S. District Court for the District of Delaware subsequently entered an order affirming the Confirmation Order on September 28, 2006. (2) Any deposits required by the Plan have been distributed; (3) Any property proposed to be transferred by Reorganized Owens pursuant to the Plan has been conveyed; (4) Reorganized Owens has assumed the business and management of its properties under the Plan; (5) Except for final distributions to Class A6-A creditors, which are anticipated to be made prior to the scheduled hearing on the Motion to Close, all payments pursuant to the Plan have been made; and (6) No unresolved motions, contested matters and adversary proceedings remain in Reorganized Owens' case. The Owens Corning Plan was declared effective on October 31, 2006. By August 29, 2008, at the request of the Reorganized Debtors, Judge Fitzgerald entered an order closing the Chapter 11 cases of the 17 Owens Subsidiary Debtors. At that time, a final decree with respect to the Owens Corning case was not sought because several claims against Owens Corning were, at that time, subject to unresolved objections pending before the Bankruptcy Court. Among those claims was Claim No. 7212 of the New Jersey Department of Environmental Protection for $73.6 million. That matter has been resolved. Delaware Bankruptcy Court Local Rule 5009-1 establishes "substantial consummation" as a pre-requisite for the entry of a final decree. The Bankruptcy Code defines Substantial Consummation as (1) the transfer of all substantially all of the property proposed by the plan to be transferred; (2) the assumption by the debtor under the plan of the business or of the management of all or substantially all of the property dealt with by the plan; and (3) commencement of distribution under the plan. Each of the pre-requirements for Substantial Consummation will have been satisfied as Reorganized Owens anticipates making payments to Class-A6-A creditors prior to the hearing of the Motion to Close. The Court will convene a hearing to consider the merits of the Motion to Close on August 9, 2010, at 9:00 a.m. Objections are due no later than July 23. Mr. Minuti clarifies that the closing of the Owens Corning case under Section 350(a) does not foreclose the possibility of completing additional administration of a chapter 11 case should the need arise. To emphasize this premise, the proposed form of order Owens Corning submitted with respect to its Motion to Close provides that the Bankruptcy Court retain jurisdiction for these purposes: -- to permit the filing of Annual Reports by the Owens Corning/Fibreboard Asbestos Personal Injury Trust, as contemplated by the Plan; -- to permit the Bankruptcy Court to enforce any of its orders issued in the Debtors' cases; -- to enforce the terms and conditions of the Plan; and -- to consider any proper requests to reopen any of the Debtors' cases under Section 350(b). Owens Corning adds that it will work with the U.S. Trustee before the August 9 hearing to resolve any issues it may have. About Owens Corning Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning (Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/-- is a producer of residential and commercial building materials and glass fiber reinforcements, and other similar materials for composite systems. The company has operations in 26 countries. The Company filed for Chapter 11 protection on October 5, 2000 (Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Official Committee of Asbestos Creditors. James J. McMonagle served as the Legal Representative for Future Claimants until June 20, 2007. Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames served as Mr. McMonagle's counsel until July 2005, when he retired from the law firm Kaye Scholer LLP. On September 28, 2006, the Honorable John P. Fullam, Sr., of the U.S. District Court for the Eastern District of Pennsylvania affirmed the order of Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware confirming Owens Corning's Sixth Amended Plan of Reorganization. The Plan took effect on October 31, 2006, marking the company's emergence from Chapter 11. Reorganized Owens sought on July 25, 2008, from the Delaware Bankruptcy Court a final decree closing the Chapter 11 cases of 17 of its affiliates. Only the Chapter 11 case of Owens Corning Sales, LLC, formerly known as Owens Corning, under Case No. 00-03837 will remain open. (Owens Corning Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) * * * Reorganized Owens Corning carries a 'Ba1' corporate family rating from Moody's. OWENS CORNING: Enters Into New $800 Mil. Revolver With Wells Fargo ------------------------------------------------------------------ Owens Corning, together with its subsidiaries, entered into a credit agreement with a syndicate of lenders led by Wells Fargo Bank, National Association, as administrative agent on May 26, 2010. The new Credit Agreement provides for a revolving credit facility in an aggregate available principal amount of $800 million, including borrowings and letters of credit. The New Credit Agreement establishes a new multi-currency senior revolving credit facility to replace the Company's existing $1.0 billion multi-currency senior revolving credit facility and $600 million senior term loan facility available under an Old Credit Agreement, Owens Corning Assistant Secretary Rodney A. Nowland related in a regulatory filing with the U.S. Securities and Exchange Commission. The loans under the Old Credit Agreement were due and payable on October 31, 2011. In addition to refinancing all outstanding amounts under the Old Credit Agreement, borrowings under the New Credit Facility may be used by the Company for general corporate purposes and working capital. The New Credit Agreement also allows the Company to request incremental revolving credit commitments in an additional aggregate principal amount of up to $200 million, provided certain conditions are met. Interest on outstanding indebtedness under the New Credit Facility currently accrues as: (1) revolving credit loans: at a rate equal to, at the Company's option (A) the highest of (i) Wells Fargo's prime rate, (ii) the federal funds rate plus 0.50%, and (iii) except when LIBOR is unavailable, LIBOR plus 1.00%; plus an applicable margin based on the then applicable corporate credit ratings of the Company; or (B) if available, LIBOR plus an applicable margin based upon the then applicable corporate credit ratings of the Company; (2) alternative currency revolving credit loans: at a rate equal to LIBOR (if available) plus an applicable margin based upon the then applicable corporate credit ratings of the Company; and (3) swingline loans: at a rate equal to the highest of (i) Wells Fargo's prime rate, (ii) the federal funds rate plus 0.50% and (iii) except when LIBOR is unavailable, LIBOR plus 1.00%; plus an applicable margin based on the then applicable corporate credit ratings of the Company. The New Credit Facility matures on May 26, 2014. It requires compliance with conditions precedent that must be satisfied prior to any borrowing as well as ongoing compliance with certain affirmative and negative covenants to which the Company and most of its wholly owned subsidiaries must adhere. The New Credit Facility also contains customary events of default, including a cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants. The obligations under the New Credit Agreement are guaranteed by Owens Corning's wholly owned domestic subsidiaries. Those subsidiaries also guarantee Owens Corning's obligations under the Notes. On May 26, 2010, Owens Corning, certain of its subsidiaries and Wells Fargo entered into a Fourth Supplemental Indenture covering the Company's 6.500% Notes due 2016 and 7.000% Notes due 2036, and a Second Supplemental Indenture covering the Company's 9.000% Notes due 2019, in order to add OC Canada Holdings General Partnership as a guarantor of the Notes. A full-text copy of the Owens Corning/Wells Fargo $800 million New Credit Facility is available at the SEC at: http://ResearchArchives.com/t/s?66d1 About Owens Corning Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning (Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/-- is a producer of residential and commercial building materials and glass fiber reinforcements, and other similar materials for composite systems. The company has operations in 26 countries. The Company filed for Chapter 11 protection on October 5, 2000 (Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Official Committee of Asbestos Creditors. James J. McMonagle served as the Legal Representative for Future Claimants until June 20, 2007. Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames served as Mr. McMonagle's counsel until July 2005, when he retired from the law firm Kaye Scholer LLP. On September 28, 2006, the Honorable John P. Fullam, Sr., of the U.S. District Court for the Eastern District of Pennsylvania affirmed the order of Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware confirming Owens Corning's Sixth Amended Plan of Reorganization. The Plan took effect on October 31, 2006, marking the company's emergence from Chapter 11. Reorganized Owens sought on July 25, 2008, from the Delaware Bankruptcy Court a final decree closing the Chapter 11 cases of 17 of its affiliates. Only the Chapter 11 case of Owens Corning Sales, LLC, formerly known as Owens Corning, under Case No. 00-03837 will remain open. (Owens Corning Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) * * * Reorganized Owens Corning carries a 'Ba1' corporate family rating from Moody's. OWENS CORNING: Receives Approval of NJDEP Claims Settlement ----------------------------------------------------------- Owens Corning Sales, Inc., fka Owens Corning, received permission from the Hon. Judith K. Fitzgerald of the United States Bankruptcy Court for the District of Delaware to enter into a settlement of the claim asserted against it by the New Jersey Department of Environmental Protection. The Settlement is related to a lawsuit filed by the New Jersey Department of Environmental Protection in March 2002 against Owens Corning and certain former customers of Burlington Environmental Management Services, Inc. landfill site in Burlington County, New Jersey. The action was initiated in the New Jersey Superior Court, in Burlington County. The BEMS landfill had been used for many years for waste disposal by numerous parties, including Owens Corning and certain municipalities. The NJDEP Lawsuit sought recovery, on a joint and several basis, under New Jersey's Spill Compensation and Control Act, for NJDEP's past and future investigation; clean-up and removal cost related to the BEMS site; natural resource damages; and a penalty equal to three times the total clean-up cost as a result of the defendants' failure to comply with prior administrative orders requiring clean-up. NJDEP then filed Claim No. 7212 for $73,600,000 against Owens Corning on April 12, 2002. The Claim repeated some or all of the allegations under the State Court Action and was asserted in the amount three times NJDEP's claimed remediation costs of $23,844,514, plus three times its asserted restoration costs of $669,789. Owens Corning objected to Claim No. 7212 in September 2003, contending that environmental cost recovery cases under the Spill Act, the Comprehensive Environmental Response, Compensation, Liability Act, and Section 9602 of The Public Health and Welfare Code are typically settled among potentially responsible parties by cost-sharing arrangements that equitably account for the relative volume and toxicity of waste sent to a site by each party. In view of this, Owens Corning asked the Bankruptcy Court to disallow the NJDEP Claim in order to promote the equitable result of assigning to it only its allowable share of the response costs at the BEMS site based on its volumetric share and the relative toxicity of its waste. Owens Corning further noted that it has agreed to participate in an alternative dispute resolution process established in the State Court Action for allocation of liability at the BEMS site among potentially responsible parties. The Reorganized Debtor also agreed to abide by the percentage of liability allocated to them as a result of the ADR process. Owens Corning's multi-year discussions with the NJDEP eventually resulted in the formulation of a Consent Judgment, which reflects the agreement of the relevant parties regarding the NJDEP Claim and the resolution of the State Court Action, according to Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington, Delaware. The effectiveness of the Consent Order is conditioned on the entry of a Bankruptcy Court order allowing the NJDEP Claim as a Class A6-A Claim in an amount -- which Owens Corning has calculated as $3,697,054 -- that is calculated to result in the Settlement payment of $2,000,000 to NJDEP under the Plan, Mr. Minuti relates. The salient terms of the Consent Judgment are: (a) The NJDEP will be allowed a Class A6-A Claim against Owens Corning in an amount calculated to result in a cash distribution of $2,000,000 under the Plan. Based on the Reorganized Debtor's updated calculations, the NJDEP Claim will need to be allowed as a Class A6-A claim for $3,697,054 to provide the NJDEP a $2,000,000 recovery. (b) The Settlement Payment is in reimbursement of NJDEP's Past Cleanup and Removal Costs, Future Cleanup and Removal Costs and Natural Resource Damages, as these terms are defined in the Consent Judgment. (c) The Settlement Payment is to be credited toward any Global Mediated Settlement offer and any settlement reached in any consent decrees entered into by the other ADR Participants arising out of the Mediation Process. The Settlement Payment is to be applied against and will reduce the amount of NJDEP's claims against the other ADR Participants in the State Court Action. (d) In consideration of the Settlement Payment, the State Court Action will be dismissed with prejudice as against the Debtors, and the NJDEP will provide Owens Corning with a covenant not to sue and contribution protection under the terms of the Consent Judgment. (e) The Consent Judgment does not release Owens Corning from certain claims, and actions, including: -- claims based on Owens Corning's failure to satisfy any term or provision of the Consent Judgment; -- liability arising from Owens Corning's past, present or future discharge or unsatisfactory storage or containment of any hazardous substance outside the BEMS Site; -- liability for any future discharge or unsatisfactory storage or containment of any hazardous substance by the Settling Defendant at the BEMS Site, other than as ordered or approved by the NJDEP; -- criminal liability; and -- liability for any violation by Owens Corning of federal or state law that occurs during or after the remediation of the Site. The Consent Judgment, Mr. Minuti avers, will have no force or effect, unless both (i) the Consent Judgment is entered by the State Court, and (ii) the Bankruptcy Court has entered a final order allowing the NJDEP Claim as a Class A6-A claim against the Debtors for $2,000,000. About Owens Corning Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning (Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/-- is a producer of residential and commercial building materials and glass fiber reinforcements, and other similar materials for composite systems. The company has operations in 26 countries. The Company filed for Chapter 11 protection on October 5, 2000 (Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Official Committee of Asbestos Creditors. James J. McMonagle served as the Legal Representative for Future Claimants until June 20, 2007. Mr. McMonagle was replaced by Michael J. Crames. Mr. Crames served as Mr. McMonagle's counsel until July 2005, when he retired from the law firm Kaye Scholer LLP. On September 28, 2006, the Honorable John P. Fullam, Sr., of the U.S. District Court for the Eastern District of Pennsylvania affirmed the order of Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware confirming Owens Corning's Sixth Amended Plan of Reorganization. The Plan took effect on October 31, 2006, marking the company's emergence from Chapter 11. Reorganized Owens sought on July 25, 2008, from the Delaware Bankruptcy Court a final decree closing the Chapter 11 cases of 17 of its affiliates. Only the Chapter 11 case of Owens Corning Sales, LLC, formerly known as Owens Corning, under Case No. 00-03837 will remain open. (Owens Corning Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) * * * Reorganized Owens Corning carries a 'Ba1' corporate family rating from Moody's. PACIFICA MESA: Files for Bankruptcy over Looming Loan Deadline -------------------------------------------------------------- Koat.com report that Pacifica Mesa Studios filed for bankruptcy under Chapter 11, saying the Company has a loan of more than $80 million that is coming due. According to Koat, a person familiar with the matter said the Company could not get the money anywhere at any price. The Company does not have an agreement with its creditor Amalgamated Bank of New, the person notes. Pacifica Mesa Studios is the parent company of Albuquerque Studios that operates a studio in Albuquerque, New Mexico. POINT BLANK: Balks at Committee Request for Examiner ---------------------------------------------------- Bill Rochelle at Bloomberg News reports that Point Blank Solutions Inc. said the Official Committee of Unsecured Creditors' request for a Chapter 11 trustee or examiner is based on "reckless accusations with no factual basis whatsoever." The Company also sees the committee as being motivated by "personal animosity against" the chief executive and a "desire to control these Chapter 11 cases at any cost." Point Blank contends that the motion is based partly on misdeeds by executives who left the Company four years ago. The Creditors Committee, in its motion, claims that a "neutral and independent fiduciary" is necessary because "the Debtors have placed the interests of insiders above maximizing value of these estates" and the Creditors' Committee "has lost all confidence in the Debtors." A hearing on the request to appoint a trustee is scheduled for Aug. 3. According to the Bloomberg report, the bankruptcy judge scheduled to consider a at a hearing on July 21 a separate motion by the Committee to conduct examinations under oath and require production of documents by lenders, insiders and customers. A lender, Bloomberg continues, is opposing another motion by the committee to extend the deadline for filing a complaint challenging the validity of the pre-bankruptcy loan. About Point Blank Pompano Beach, Fla.-based Point Blank Solutions, Inc. -- http://www.pointblanksolutionsinc.com/-- designs and produces body armor systems for the U.S. Military, Government and law enforcement agencies, well as select international markets. The Company is recognized as the largest producer of soft body armor in the U.S. The Company maintains facilities in Pompano Beach, Florida and Jacksboro, Tennessee. Point Blank Solutions filed for Chapter 11 on April 14, 2010 (Bankr. D. Del. Case No. 10-11255). The Company's bankruptcy counsel is Pachulski Stang Ziehl & Jones LLP. PONIARD PHARMACEUTICALS: Receives NASDAQ Deficiency Notice ---------------------------------------------------------- Poniard Pharmaceuticals, Inc., received a letter from the Nasdaq Stock Market stating that the minimum bid price of the Company's common stock has been below $1.00 per share for 30 consecutive business days and that the Company therefore is not in compliance with the minimum bid price requirement for continued listing set forth in Marketplace Rule [5450(a)(1)]. The notification of noncompliance has no immediate effect on the listing or trading of the Company's common stock on the Nasdaq Global Market. The Company has been provided 180 calendar days, or until January 18, 2011, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company's common stock must meet or exceed $1.00 per share for at least ten consecutive business days during this 180-day grace period. Nasdaq may, in its discretion, require the Company's common stock to maintain a closing bid price of at least $1.00 for a period in excess of ten consecutive trading days, but generally no more than 20 consecutive business days, before determining that the Company has demonstrated an ability to maintain long-term compliance. If the Company does not regain compliance by January 18, 2011, it will receive written notification from Nasdaq that its common stock is subject to delisting. The Company may, at that time, appeal the delisting determination to a Nasdaq Hearings Panel. Such an appeal, if granted, would stay delisting until a Panel ruling. Alternatively, if at that time the Company satisfies all of the initial listing standards, with the exception of the minimum bid price, for the Nasdaq Capital Market, the Company could apply to transfer the listing of its common stock to the Nasdaq Capital Market and thereby receive an additional 180 calendar days to regain compliance with the minimum bid price requirement. The Company will consider available options to resolve the minimum bid price deficiency and regain compliance with the Nasdaq minimum bid price requirement. There can be no assurance that the Company will be able to regain or maintain compliance with the minimum bid price rule or other listing criteria or that an appeal, if taken, would be successful. About Poniard Pharmaceuticals Poniard Pharmaceuticals, Inc. -- http://www.poniard.com.-- is a biopharmaceutical company focused on the development and commercialization of innovative oncology products. PROJECT ORANGE: Stay Lifted to Let Cogeneration Suit Proceed ------------------------------------------------------------ WestLaw reports that under the Second Circuit's Sonnax test, "cause" existed to lift the automatic stay to allow state-court litigation involving the Chapter 11 debtor, the operator of a cogeneration facility built on land leased from a university, and the university, which had contracted prepetition to purchase steam from the debtor, to proceed. Permitting the state judge to rule in the various actions and proceedings would likely result in complete resolution of issues surrounding whether the lease and the other agreements could be assumed, the bankruptcy court reasoned. Lifting the stay would greatly assist the bankruptcy court with the case, not interfere with it. Moreover, termination of the lease and repudiation of the parties' steam contract raised issues of state contract, fraud, and landlord-tenant law best resolved by a state court. Finally, litigation in state court would not prejudice the interests of other creditors, but was more likely to result in a quick ruling, as the parties' agreements were complicated, long-term arrangements with which the state judge was familiar. In re Project Orange Associates, LLC, --- B.R. ----, 2010 WL 2653632 (Bankr. S.D.N.Y.). Project Orange Associates, LLC, sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-12307) on April 29, 2010. Timothy W. Walsh, Esq., at DLA Piper LLP (US), filed the Chapter 11 petition. The Company disclosed $9.7 million in assets and $15.4 million in liabilities at the time of the filing. RADIENT PHARMACEUTICAL: Appoints Robert Beart as Director --------------------------------------------------------- Radient Pharmaceuticals Corporation appointed Dr. Robert Beart Jr., MD, as an independent member of the company's Board of Directors to fill the vacancy of the late Dr. Edward Arquilla. Dr. Beart is currently the medical director of the Glendale Hospital CRC Institute. Previously he had been with the University of Southern California (USC) since 1992, establishing the Division of Colorectal Surgery in the USC Department of Surgery as well as launching the USC Center for Colorectal Diseases at USC University Hospital and USC/Norris Cancer Center and Hospital. His appointment increases the number of independent directors at RPC to three. Dr. Beart is a recognized specialist and expert in colorectal diseases and cancer, pioneer of the ileal pouch-anal anastomosis, and thought leader in the medical, scientific and research communities. Dr. Beart's primary experience and research includes continence preservation, colostomy avoidance and the identification and management of recurrent colorectal cancer. He has broad and deep clinical involvement in colorectal diseases, covering key areas that include colorectal cancer, chronic constipation and diarrhea, anorectal health care issues and diverticulitis, fecal incontinence, recurrent rectal cancer, inflammatory bowel disease and polyps. From 1976 through 1992 Dr. Beart worked at the Mayo Clinic in Rochester, Minnesota where he was Chairman of Department of Colorectal Surgery and pioneered the ileal pouch-anal anastomosis. He is a past president of the American Society of Colon and Rectal Surgeons, the Society of Surgery of the Alimentary Tract and the International Society of University Colorectal Surgeons. He had his surgical training at the University of Colorado and the Mayo Clinic. Dr. Beart graduated from Harvard Medical School in 1971 and is board-certified and recertified in General and Colorectal Surgery. According to Radient Pharmaceuticals Chairman and CEO Mr. Douglas MacLellan, "Dr. Beart brings extensive experience and expertise in oncology, specifically as it relates to colorectal health issues, diseases and cancer, to RPC that will be invaluable as we work to advance our In Vitro Diagnostic cancer test, vaccines and therapies. His innovative brilliance, success and deep relationship across the medical, research and scientific communities is a tremendous asset to our product commercialization and corporate development efforts. We are delighted to welcome him to our Board." "I am very excited to join Radient's Board of Director and look forward to supporting the development of its portfolio of promising IVD cancer test, vaccines and therapies," commented Dr. Beart. "The company is on a tremendous growth trajectory and I believe it offers a very promising future to physicians and their cancer patients, the business community and to RPC shareholders." About Radient Pharmaceuticals Headquartered in Tustin, Calif., Radient Pharmaceuticals Corporation -- http://www.Radient-Pharma.com/-- is an integrated pharmaceutical company devoted to the research, development, manufacturing, and marketing of diagnostic, and premium skin care products. The Company's balance sheet as of March 31, 2010, showed $26.4 million in assets, $7.1 million of liabilities, and $19.3 million of stockholders' equity. * * * As reported in the Troubled Company Reporter on April 19, 2010, KMJ Corbin & Company LLP, in Costa Mesa, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred a significant operating loss and negative cash flows from operations in 2009 and has a working capital deficit of roughly $4.2 million at December 31, 2009. REALOGY CORP: Cendant Settles IRS Examination of Taxable Years -------------------------------------------------------------- Cendant Corporation now known as Avis Budget Group Inc. and the Internal Revenue Service agreed to settle the IRS examination of Cendant's taxable years 2003 through 2006, during which time Realogy Corporation and Wyndham Worldwide Corporation were included in Cendant's tax returns. Pursuant to the Tax Sharing Agreement by and among Realogy, Cendant, Wyndham and Travelport, Inc. dated as of July 28, 2006, as amended, as modified by the Allocation Agreement between Realogy and Wyndham executed on the same date as the IRS settlement, Realogy has agreed to pay an aggregate of approximately $48 million to reimburse (x) Cendant for a portion of the amount payable by Cendant to the IRS under the IRS settlement and (y) Wyndham for certain tax credits used to offset additional Cendant income under the IRS settlement. Realogy expects to make such payments to Cendant and Wyndham in the third quarter of 2010. These amounts exclude interest which is not expected to exceed $10 million. Furthermore, these amounts do not include Cendant state taxes that may be due as a result of changes to the federal tax returns for the 2003 to 2006 period under the IRS settlement; Realogy's share of those amounts is not expected to be material. Under the TSA, Realogy is generally responsible for 62.5% and Wyndham 37.5% of certain payments made to the IRS to settle claims with respect to tax periods ended on or prior to December 31, 2006 that relate to income taxes imposed on Cendant and certain of its subsidiaries. In implementing the TSA relative to the overall IRS settlement, on July 15, 2010, Realogy and Wyndham entered into a supplemental agreement to specifically address the allocation of certain liabilities under the IRS settlement. Under the Allocation Agreement, among other things, the parties specified that Wyndham has sole responsibility for taxes and interest associated with additional recognition of gain on the sale of vacation timeshares and that neither Wyndham nor Realogy has any obligation to reimburse the other party under Section 8.12 of the TSA for the elimination of any basis step up in assets. Realogy and Wyndham are also parties to the Separation and Distribution Agreement, dated July 27, 2006, by and among Cendant, Realogy, Travelport and Wyndham, under which Realogy and Wyndham separated from Cendant effective July 31, 2006. About Realogy Corp. Realogy Corp. -- http://www.realogy.com/-- a global provider of real estate and relocation services with a diversified business model that includes real estate franchising, brokerage, relocation and title services. Realogy's world-renowned brands and business units include Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group, ERA, Sotheby's International Realty, NRT LLC, Cartus and Title Resource Group. Collectively, Realogy's franchise systems have approximately 15,000 offices and 270,000 sales associates doing business in 92 countries around the world. Headquartered in Parsippany, N.J., Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. Realogy fully supports the principles of the Fair Housing Act. Realogy carries a 'CC' corporate credit rating with a "developing" outlook from Standard & Poor's Ratings Services. S&P noted that leverage was high, at 15x at March 2010, although this was an improvement compared to 20x one year ago. PCS EDVENTURES!.COM: President Grover Acquires 1,561 Shares ----------------------------------------------------------- Robert O. Grover, PCS Edventures!.Com Inc.'s President, COO and CTO, disclosed acquiring 1,561 shares of the Company's common stock on July 15. He now holds 361,582 common shares. The shares were issued for services rendered for the period July 1, 2010, through July 15, 2010. Boise, Idaho-based PCS Edventures!.com, Inc. (OTC BB: PCSV) -- http://www.edventures.com/-- is engaged in the design, development and delivery of educational learning labs bundled with related technologies and programs to the K-12 market worldwide. The PCS suite of products ranges from hands-on learning labs in technology-rich topics in Science, Technology, Engineering and Math (STEM) to services rich in imagination, innovation, and creativity. PCS programs operate in over 6,000 sites in all 50 United States as well as in 17 countries internationally. PCS Edventures!.com's balance sheet at March 31, 2010, showed $1.3 million in total assets and $432,859 in total liabilities, for a stockholder's equity of $950,711. M&K CPAS PLLC expressed substantial doubt about the Company's ability to continue as a going concern. The firm noted that the Company has suffered reoccurring losses and negative cash flow from operations after auditing the Company's financial results for fiscal 2010 and 2009. REDDY ICE: Registers 2015 Notes for Exchange Offer -------------------------------------------------- Reddy Ice Corporation filed with the Securities and Exchange Commission a Form S-4 Registration Statement under the Securities Act of 1933 to register $300,000,000 of 11.25% Senior Secured Notes due 2015; and $139,400,000 of 13.25% Senior Secured Notes due 2015. Reddy Ice is offering to exchange $300,000,000 aggregate principal amount of its 11.25% Senior Secured Notes due 2015 and $139,400,000 aggregate principal amount of its 13.25% Senior Secured Notes due 2015, each of which have been registered under the Securities Act of 1933, as amended, for any and all of its outstanding 11.25% Senior Secured Notes due 2015 and 13.25% Senior Secured Notes due 2015, respectively. No expiration date has been set for the exchange offers. The Company will not receive any cash proceeds from the exchange offers. A full-text copy of the registration statement is available at no charge at http://ResearchArchives.com/t/s?66d0 About Reddy Ice Reddy Ice Holdings, Inc. -- http://www.reddyice.com/-- manufactures and distributes packaged ice in the United States. The company serves variety of customers in 31 states and the District of Columbia under the Reddy Ice brand name. As of March 31, 2010, the Company had total assets of $481,611,000 against total current liabilities of $26,506,000, long-term obligations of $450,605,000, and deferred taxes and other liabilities, net of $17,957,000, resulting in stockholders' deficit of $13,457,000. * * * According to the Troubled Company Reporter on Feb. 23, 2010, Moody's Investors Service assigned a B1 rating to Reddy Ice Corporation's (a wholly owned subsidiary of Reddy Ice Holdings, Inc.) proposed $300 million first lien senior secured notes due 2015. The company plans to use proceeds from the first lien notes to refinance its existing $240 million senior secured term loan due 2012 and for general corporate purposes. As reported by the TCR on March 30, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Reddy Ice Holdings Inc. to 'B-' from 'SD', and its wholly owned operating company, Reddy Ice Corp., to 'B-' from 'CC'. Following the transaction, S&P withdrew the corporate credit rating on Opco. S&P also raised its ratings on Holdings' remaining senior discount notes (not exchanged) to 'CCC' from 'D'. The recovery rating on this debt remains unchanged at '6'. RENAISSANT LAFAYETTE: Has Access to Cash Collateral Until Sept. 3 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Hon. Pamela Pepper of the Eastern District of Wisconsin granted interim authorization to Renaissant Lafayette, LLC, to obtain postpetition secured financing from Amalgamated Bank, the Trustee of Longview Ultra Construction Loan Investment Fund fka Longview Ultra 1 Construction Loan Investment Fund, and to use cash collateral until September 3, 2010. This is the eight time the bankruptcy court entered an interim order allowing the cash use. Funds will be granted the same superiority status and other protections as set forth in the original interim DIP order, which authorized the Debtor to, among other things, utilize any cash currently held by it or obtained by it in the normal course of its business through January 20, 2010, from rental income or assessments from owners. In the original interim order, the Court allowed the Debtor to borrow from Amalgamated Bank up to an aggregate principal amount of $116,742. Interim authorization to obtain DIP financing has already been granted eight times, on the same terms as stated in the original interim DIP financing order. The second interim DIP order extended the original interim DIP order until March 3, 2010. The Court entered a third interim order extending the original interim order until April 5, 2010. The fourth interim order extended the original interim order until April 21, 2010; the fifth interim order extended it until May 17, 2010; the sixth interim order extended it until June 7, 2010; and the seventh interim order extended the original interim order until July 9, 2010. As reported in the TCR on March 16, 2010, the Debtor related that Amalgamated Bank consented to the Debtor's continued use of cash collateral. In the eight interim order, the Debtor is authorized to borrow any additional amounts (plus interest at an annual rate of 12.5%) that were actually disbursed by the Lender following July 9, 2010, but before the entry of the eight interim order. The Debtor is authorized to borrow from the Lender an additional aggregate principal amount sufficient to cover budgeted expenses through September 3, 2010 (plus interest at an annual rate of 12.5%) pursuant to the terms of the original interim DIP order. The Lender will disburse the funds to the Debtor from week to week pursuant to the budget, a copy of which is available for free at: http://bankrupt.com/misc/RENAISSANT_LAFAYETTE_budget.pdf Forrest B. Lammiman, Esq., at Renaissant Lafayette LLC, the attorney for the Debtor, explains that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. A copy of the first interim order is available for free at: http://ResearchArchives.com/t/s?66e5 A copy of the second interim order is available for free at: http://ResearchArchives.com/t/s?66e6 Objections to the Debtor's request must be filed by August 9, 2010. About Renaissant Lafayette Oak Brook, Illinois-based Renaissant Lafayette LLC is the owner of a 280-unit luxury condominium development in Milwaukee named Park Lafayette. The project is at the intersection of North Prospect Avenue and Lafayette Place in Milwaukee. So far, 39 units were sold. The Company filed for Chapter 11 bankruptcy protection on December 23, 2009 (Bankr. E.D. Wis. Case No. 09-38166). Forrest B. Lammiman, Esq., at Meltzer, Purtill & Stelle LLC, assists the Company in its restructuring effort. The Company listed $50,000,001 to $100,000,000 in assets and $100,000,001 to $500,000,000 in liabilities. RIVIERA HOLDINGS: Section 341(a) Meeting Scheduled for Aug. 26 -------------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of Riviera Holdings Corporation, et al.'s creditors on August 26, 2010, at 1:00 p.m. The meeting will be held at Foley Federal Building and U.S. Courthouse 300 Las Vegas Boulevard, South, Room 1500, Las Vegas, NV 89101. 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. About Riviera Holdings Riviera Holdings, through its wholly-owned subsidiary, Riviera Operating Corporation, owns and operates the Riviera Hotel & Casino located in Las Vegas, Nevada, which consists of a hotel comprised of five towers with 2,075 guest rooms, including 177 suites, and which has traditional Las Vegas-style gaming, entertainment and other amenities. In addition, Riviera Holdings, through its wholly-owned subsidiary, Riviera Black Hawk, Inc., owns and operates the Riviera Black Hawk Casino, a casino in Black Hawk, Colorado and has various non-gaming amenities, including parking, buffet-styled restaurant, delicatessen, a casino bar and a ballroom. Riviera Holdings together with the two affiliates filed for Chapter 11 on July 12 in Las Vegas, Nevada (Bankr. D. Nev. Case No. 10-22910). Riviera Holdings' petition listed assets and debts of $100 million to $500 million. Attorneys at Gordon Silver represent the Debtors in the Chapter 11 cases. RIVIERA HOLDINGS: Taps Gordon Silver as Bankruptcy Counsel ---------------------------------------------------------- Riviera Holdings Corporation, et al., have asked for authorization from the U.S. Bankruptcy Court for the District of Nevada to employ Gordon Silver as bankruptcy counsel. Gordon Silver will: a. prepare motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; b. take actions in connection with a plan or plans of reorganization and related disclosure statement(s) and all related documents, and further actions as may be required in connection with the administration of the Debtors' estates; c. take actions to protect and preserve the estates of the Debtor, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors is involved, and the preparation of objections to claims filed against the Debtor's estates; and d. perform other necessary legal services in connection with the prosecution of these Chapter 11 case. GS will be paid based on the hourly rates of its personnel: Paraprofessionals $130-$175 Associates $185-$395 Shareholders $425-$650 To the best of the Debtors' knowledge, GS is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. About Riviera Holdings Riviera Holdings, through its wholly-owned subsidiary, Riviera Operating Corporation, owns and operates the Riviera Hotel & Casino located in Las Vegas, Nevada, which consists of a hotel comprised of five towers with 2,075 guest rooms, including 177 suites, and which has traditional Las Vegas-style gaming, entertainment and other amenities. In addition, Riviera Holdings, through its wholly-owned subsidiary, Riviera Black Hawk, Inc., owns and operates the Riviera Black Hawk Casino, a casino in Black Hawk, Colorado and has various non-gaming amenities, including parking, buffet-styled restaurant, delicatessen, a casino bar and a ballroom. Riviera Holdings together with the two affiliates filed for Chapter 11 on July 12 in Las Vegas, Nevada (Bankr. D. Nev. Case No. 10-22910). Riviera Holdings' petition listed assets and debts of $100 million to $500 million. Attorneys at Gordon Silver represent the Debtors in the Chapter 11 cases. RIVIERA HOLDINGS: Taps XRoads as Financial & Restructuring Advisor ------------------------------------------------------------------ Riviera Holdings Corporation, et al., have sought permission from the U.S. Bankruptcy Court for the District of Nevada to employ XRoads Solutions Group, LLC, as financial and restructuring advisor. XRoads will, among other things: a. review and analyze the business, operations, liquidity situation, assets and liabilities, financial condition, and prospects of the Debtors; b. assist the Debtors with the development of multi-year financial projections under various operating scenarios; c. analyze the Debtors' debt service capacity and long-term financing needs; d. perform valuation analyses under various assumptions with respect to some and/or all of the Debtors' operations/assets; XRoads has agreed to provide its restructuring services and bankruptcy compliance services on an hourly basis and according to the terms in its retention agreement with the Debtor. No copy of the agreement was provided. The Debtors have tendered amounts totaling $200,000 as an advance to XRoads. A portion of the Advance ($87,608.70) was applied against fees and expenses incurred during the period immediately preceding the commencement of the Chapter 11 Cases resulting in a "net" Advance balance of $112,392.30 as of the Petition Date. The unapplied portion of the Advance will be held as a retainer and applied against post-petition fees and expenses as specifically directed and approved by this Court. To the best of the Debtors' knowledge, XRoads is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. About Riviera Holdings Riviera Holdings, through its wholly-owned subsidiary, Riviera Operating Corporation, owns and operates the Riviera Hotel & Casino located in Las Vegas, Nevada, which consists of a hotel comprised of five towers with 2,075 guest rooms, including 177 suites, and which has traditional Las Vegas-style gaming, entertainment and other amenities. In addition, Riviera Holdings, through its wholly-owned subsidiary, Riviera Black Hawk, Inc., owns and operates the Riviera Black Hawk Casino, a casino in Black Hawk, Colorado and has various non-gaming amenities, including parking, buffet-styled restaurant, delicatessen, a casino bar and a ballroom. Riviera Holdings together with the two affiliates filed for Chapter 11 on July 12 in Las Vegas, Nevada (Bankr. D. Nev. Case No. 10-22910). Riviera Holdings' petition listed assets and debts of $100 million to $500 million. Attorneys at Gordon Silver represent the Debtors in the Chapter 11 cases. RIVIERA HOLDINGS: To Enter Into Backstop Commitment Agreement ------------------------------------------------------------- Riviera Holdings is seeking approval from the U.S. Bankruptcy Court to enter into and perform under the backstop commitment agreement with those senior secured lenders that are a party to the agreement and pay certain related fees and expenses, BankruptcyData.com reports. BData says Riviera proposes to pay the backstop lenders commitment fees on these terms: (i) If the $20,000,000 Series B Term Loan is funded and the $10,000,000 Working Capital Facility is fully committed on the Substantial Consummation Date of the Plan, 5% of the equity in Reorganized Debtor; (ii) In the event of the termination of the Agreement under certain circumstances, a fee of $1,000,000; (iii) In the event the Series B Term Loan is not made, but the entire Working Capital Facility is available as provided for in the Plan, a fee of $300,000." About Riviera Holdings Riviera Holdings, through its wholly-owned subsidiary, Riviera Operating Corporation, owns and operates the Riviera Hotel & Casino located in Las Vegas, Nevada, which consists of a hotel comprised of five towers with 2,075 guest rooms, including 177 suites, and which has traditional Las Vegas-style gaming, entertainment and other amenities. In addition, Riviera Holdings, through its wholly-owned subsidiary, Riviera Black Hawk, Inc., owns and operates the Riviera Black Hawk Casino, a casino in Black Hawk, Colorado and has various non-gaming amenities, including parking, buffet-styled restaurant, delicatessen, a casino bar and a ballroom. Riviera Holdings together with the two affiliates filed for Chapter 11 on July 12 in Las Vegas, Nevada (Bankr. D. Nev. Case No. 10-22910). Riviera Holdings' petition listed assets and debts of $100 million to $500 million. Attorneys at Gordon Silver represent the Debtors in the Chapter 11 cases. SAND HILL: U.S. Trustee Forms 5-Member Creditors Committee ---------------------------------------------------------- William T. Neary, the U.S. Trustee for Region 6, appointed five members to the official committee of unsecured creditors in the Chapter 11 cases of Sand Hill Foundation, LLC, et al. The Creditors Committee members are: 1. David Barber Omni Industrial Solutions, LLC 7031 Bryce Canyon Ave. Greenwell Springs, LA 70739 Tel: (225) 445-0465 (318) 525-3550 Fax: (318) 524-3551 E-mail: dbarber@osp.cc 2. Heath Nutt Little Nutt Oil Co. 344 Klondike St. Carthage, TX 75633 Tel: (903) 754-2211 (903) 693-6121 E-mail: littlenutt@aol.com 3. Anthony W. Price Shreveport Mack Sales, Inc. P.O. Box 5857 Bossier City, LA 71171 Tel: (318) 453-4343 (318) 742-1383 E-mail: awprice@shreveport-mack.com 4. Mark Morris Evergreen Tank Solutions 711 W. Bay Area Blvd., Suite 560 Webster, TX 77598 Tel: (281) 557-3018 E-mail: marc.morris@evergreentank.com 5. Elam A. "Freddy" Nixon Bass Drilling, Inc. c/o Preis & Roy, P.L.C. 24 Greenway Plaza, Suite 2050 Houston, Texas 77046 Tel: (713) 355-6062 Fax: (713) 572-9129 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. 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. SAND HILL: Gets Final Okay to Use Cash Collateral ------------------------------------------------- Sand Hill Foundation, LLC, et al., sought and obtained final authorization from the Hon. Bill Parker of the U.S. Bankruptcy Court for the Eastern District of Texas to use the cash collateral of Sabine State Bank & Trust Co. The Debtors have entered into several commercial security agreements with Sabine whereby Sabine was granted security interests in accounts, rents, moneys, payments, general intangibles and proceeds therefrom. Debtor Sand Hill Foundation, LLC entered into a Factoring Agreement with Security Agreement with Power Funding, Ltd., whereby Power Funding, Ltd., was granted a security interest in inter alia accounts, proceeds from the accounts, deposit accounts, general intangibles and proceeds therefrom. Power Funding, Ltd., purchased certain accounts receivable from the Debtor prior to the Petition Date. Proceeds of any purchased account in the possession of the Debtors or received by the Debtors is the property of Power Funding and are held in trust for the benefit of Power Funding. The proceeds aren't cash collateral and may not be utilized by the Debtors. The proceeds should be delivered to Power Funding. Jeffrey Wels Oppel, Esq., at Oppel, Goldberg & Saenz P.L.L.C., the attorney for the Debtors, explained that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The Debtors will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/Sand_Hill_budget.pdf In exchange for using the cash collateral, the Debtors will pay Sabine the non-default fixed payment as provided by a particular obligation, as the case may be. The Debtors will grant Sabine and Power Funding replacement security interests and liens on all of the Debtor's existing and hereafter acquired assets of the same type and category and that Sabine and Power Funding had a lien on before the Petition Date, and on all cash and non-cash proceeds of all of the foregoing, but only to the extent and in the priority of Sabine and Power Funding's liens on the assets prior to the Petition Date, which post-petition liens will be deemed to be valid, perfected, non- avoidable and effective from the Petition Date. The Debtors promise to provide the lenders monthly reports. 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. SEDONA DEVELOPMENT: Has Until October 4 to Access Specialty's Cash ------------------------------------------------------------------ The Hon. Redfield T. Baum of the U.S. Bankruptcy Court for the District of Arizona authorized, on a second interim basis, Sedona Development Partners, LLC, and The Club at Seven Canyons, LLC, to access the cash collateral until 5 p.m., Arizona time, on October 4, 2010. As reported in the Troubled Company Reporter on July 19, Specialty Financial and Specialty Trust, Inc., claimed that there exists a principal balance due and owing under the loans in excess of $54,384,000 secured by one or more of the parcels comprising the property, and portions of the income. The Debtors would use the revenue derived from the golf course and related facilities to fund its postpetition operations, plus a 10% variance on the entire budget. About Sedona Development Partners Sedona Development Partners owns an 18-hole golf course and related properties, including luxury villas, a practice park, range house, tennis courts and related facilities in Sedona, Arizona, known generally as Seven Canyons. The Club at Seven Canyons, LLC, operates the golf course and related facilities for SDP. SDP is the manager and sole member of the Club. Sedona Development Partners filed for Chapter 11 bankruptcy protection on May 27, 2010 (Bankr. D. Ariz. Case No. 10-16711). The Club At Seven Canyons filed a separate Chapter 11 petition (Bankr. D. Ariz. Case No. 10-16714). John J. Hebert, Esq., Philip R. Rudd, Esq., and Wesley D. Ray, Esq., at Polsinelli Shughart PC, serve as the Debtor's bankruptcy counsel. Lender Specialty Trust is represented by Joseph E. Cotterman, Esq., and Nathan W. Blackburn, Esq., at Gallagher & Kennedy, P.A. Sedona listed $10,000,001 to $50,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. SHERWOOD/CLAY: Plan Confirmation Hearing Set for August 6 --------------------------------------------------------- The Hon. Douglas D. Dodd of the U.S. Bankruptcy Court for the Middle District of Louisiana will consider on August 6, 2010, at 11:00 a.m., the confirmation of Sherwood/Clay-Austin Lights LLC's Plan of Reorganization. Ballots accepting or rejecting the amended plan, objections to the amended plan are due on July 29, 2010 at 5:00 p.m. The Debtor must file a summary of ballots indicating the number of ballots cast and percentage of ballots in favor of the plan, and copies of ballots, no later than August 4, at 12:00 noon local time. As reported in the Troubled Company Reporter on February 23, according to the Disclosure Statement, the Plan contemplates payment of all allowed claims against the Debtor based upon the sale of the property to New Hope Investors II, L.L.C., the purchaser. It is not anticipated that the holders of membership interest will receive any distribution. All property of the estate and the property will be transferred to the purchaser on the effective date. Under the Plan, each holder of an allowed general unsecured claim will receive a monthly payment of interest only at the rate of 7.0% annum, commencing 30 days after the effective date, with a balloon payment of all unpaid principal and interest and other sums comprising the allowed Class 4 claim due and payable in full on the fifth anniversary of the effective date. Estimated percentage recovery is 100% of the $235,539 claim. The purchaser will act as the disbursing agent under the Plan and make all distributions required under the Plan. A full-text copy of the amended Disclosure Statement is available for free at http://bankrupt.com/misc/SHERWOODCLAY_AmendedDS.pdf About Sherwood/Clay-Austin Lights LLC Baton Rouge, Louisiana-based Sherwood/Clay-Austin Lights LLC filed for Chapter 11 bankruptcy protection on November 2, 2009 (Bankr. M.D. La. Case No. 09-11725). Douglas S. Draper, Esq., who has an office in New Orleans, Louisiana, assists the Company in its restructuring efforts. The Company listed $10,000,001 to $50,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. SKYWORKS VENTURES: N.J. Court Says Involuntary Ch. 7 in Bad Faith ----------------------------------------------------------------- Charles Toutant at New Jersey Law Journal reports that U.S. Bankruptcy Judge Raymond Lyons in Trenton, New Jersey, said Scarola Ellis' bid to place Skyworks Ventures Inc. in Chapter 7 bankruptcy was made in "bad faith". Judge Lyons held that Scarola Ellis filed the involuntary bankruptcy petition against Skyworks Ventures to pressure a settlement in a district court suit. The report relates Scarola Ellis of New York claims Skyworks Ventures of Jamesburg, N.J., owes it $200,000 in legal fees, while the former client says in a related suit in U.S. District Court in the Southern District of New York that Scarola Ellis engaged in overbilling and legal malpractice. According to the report, Judge Lyons said the law firm must pay punitive damages, attorney fees and costs for its bad-faith filing. Judge Lyons set a Sept. 8 hearing date to determine the amount of fees, costs and punitive damages. This "use of the bankruptcy process for an improper purpose" constituted bad faith that warranted punitive damages, and, while the bankruptcy law is intended to benefit creditors as a group, Scarola Ellis's actions were intended to benefit only itself, Judge Lyons wrote, according to the report. According to the report, the lawyer for Skyworks Ventures in the involuntary bankruptcy case, Joseph DiPasquale of Trenk, DiPasquale, Webster, Della Fera & Sodono in West Orange, N.J., says, "the filing of the involuntary petition by a sole petitioning creditor was reckless, given the obvious exposure for attorneys' fees, costs and punitive damages." The report adds that Scarola Ellis, in a statement issued by Marshall Bilder of Sterns & Weinroth in Trenton, its counsel in the District of New Jersey action, said it hopes to show it acted reasonably in the face of a bankruptcy process begun against a related entity by other creditors "and a very real concern that not all creditors and issues would be considered. We believe that the company had acknowledged its debt to us and that the filing we made was the correct course of action in light of that other proceeding." A copy of the decision is available at no charge at: http://www.leagle.com/unsecure/page.htm?shortname=inbco20100715742 The case is In re: Skyworks Ventures, Inc., 10-24459. Joseph J. DiPasquale, Esq., at Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C., represents the Alleged Debtor. Jay L. Lubetkin, Esq., at Rabinowitz Lubetkin & Tully, L.L.C., represents Scarola Ellis in the bankruptcy case. SMART ONLINE: Atlas Capital Pays $19.6 Mil. for 40% Stake --------------------------------------------------------- Geneva, Switzerland-based Atlas Capital, SA, disclosed that as of July 1, 2010, it has acquired, in the aggregate, 7,265,269 shares -- or roughly 40% -- of Smart Online Inc. Common Stock either from Smart Online or from other shareholders of the Company. Atlas has paid an aggregate of $19,644,247.08 for the shares from corporate funds, including 56,206 shares acquired from Dennis Michael Nouri -- the former President and Chief Executive Officer of Smart Online -- pursuant to a note cancellation agreement. In exchange for the shares acquired from Mr. Nouri, Atlas cancelled a note under which Mr. Nouri owed Atlas principal and interest totaling $85,117. Atlas acquired the shares of Common Stock for investment purposes. Subject to, among other things, the Company's business prospects, prevailing prices, and market conditions, Atlas may purchase additional shares of Common Stock and/or other securities of the Company from time to time in the open market, in privately negotiated transactions, or otherwise. In addition, one of Atlas' investment goals is diversification, which may require Atlas to sell shares of Common Stock. Accordingly, Atlas may, from time to time, make decisions to sell shares of Common Stock based upon then-prevailing market conditions. On April 1, 2010, Smart Online sold a Note to Atlas in the principal amount of $350,000, due November 14, 2013. On June 2, 2010, the Company sold a Note to Atlas in the principal amount of $600,000, and on July 1, 2010, the Company sold a Note to Atlas in the principal amount of $250,000, each of which Notes are due November 14, 2013, and were issued upon substantially the same terms and conditions as the previously issued Notes. The Company is obligated to pay interest on the Notes at an annualized rate of 8% payable in quarterly installments commencing three months after the purchase date of the Notes. The Company does not have the ability to prepay the Notes without the approval of Noteholders holding at least a majority of the principal amount of the Notes then outstanding. About Smart Online Headquartered in Durham, North Carolina, Smart Online, Inc. (OTC BB: SOLN) -- http://www.smartonline.com/-- develops and markets software products and services targeted to small businesses that are delivered via a Software-as-a-Service (SaaS), or SaaS, model. The Company also provides website consulting services, primarily in the e-commerce retail industry products and services. * * * The Company's balance sheet as of March 31, 2010, showed $1,146,666 in assets and $17,453,810 of liabilities, for a stockholders' deficit of $16,307,144. SMURFIT-STONE: Officers Dispose of Shares of Stock -------------------------------------------------- In separate Form 4s filed with the U.S. Securities and Exchange Commission, these officers disclose the number of shares of Smurfit-Stone Container Corporation Common and Restricted Stocks that they own as of July 1, 2010: No. of Shares ------------------------- Name/Position Common Restricted ------------- ------ ---------- Ronald Hackney 14,303 35,520 Sr. VP - Human Resources Craig Hunt 4,903 39,913 Sr. VP, Secretary & General Counsel Steven Klinger 1,126 234,783 President and Chief Operating Officer John L. Knudsen 2,946 35,520 SVP Supply Chain & Board Sales Michael R. Oswald 4,072 31,304 SVP & Gen. Mgr - Recycling Division Steven Strickland 61 39.913 SVP - Container Operations Mark O'Bryan 1,034 22,174 SVP - Strat Initiatives & CIO Michael P. Exner - 39,913 SVP & GM - Containerboard Mills Matthew Todd Denton - 22,174 SVP - Planning & Analysis Paul Kaufman - 22,174 SVP and Controller Susan Neumann - 22,174 SVP Corp Communications In separate Form 4s filed on July 15, 2010, these officers disclosed that they disposed of these number of shares of common stock: Ownership Shares After Name Disposed Price Transaction Date ---- -------- ----- ----------- ---- Ronald Hackney 2,377 $20.24 11,926 07/14/10 33 20.41 11,893 07/14/10 Craig Hunt 811 20.24 4,092 07/14/10 12 20.41 4,080 07/14/10 John Knudsen 468 20.24 2,478 07/14/10 8 20.41 2,470 07/14/10 Mark O'Bryan 173 20.24 861 07/14/10 2 20.41 859 07/14/10 Michael Oswald 679 20.24 3,393 07/14/10 11 20.41 3,382 07/14/10 About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly US$7.450 billion in total assets and US$5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCoopers LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. The Company's Plan of Reorganization, which was confirmed by the U.S. Bankruptcy Court on June 21, 2010, and recognized by a Canadian court order, became effective July 1. The Plan provides that 2.25% of the new Smurfit-Stone common stock pool will be distributed pro rata to the Company's previous preferred stockholders and 2.25% percent of the New Smurfit-Stone common stock pool will be distributed pro rata to the Company's previous common stockholders. SMURFIT-STONE: Reorganized Smurfit to Release Results August 3 -------------------------------------------------------------- Smurfit-Stone Container Corporation (NYSE: SSCC) will announce financial results for the second quarter ended June 30 on Tuesday, Aug. 3, prior to the opening of the New York Stock Exchange. The Company will host a one-hour earnings conference call and webcast for analysts, institutional investors and shareholders at 10 a.m. ET on Tuesday, Aug. 3, to discuss Smurfit-Stone's results for the second quarter of 2010. Conference Call & Webcast Tuesday, Aug. 3, 2010 10 a.m. Eastern Time * Live dial-in telephone number: U.S. (888) 679-8037 or international (617) 213-4849 * Passcode: 20306220 (Please dial in 10 minutes before conference call start time) * The call will also be webcast and available at: www.smurfit-stone.com Replays * A telephone replay will be available through Aug. 17, 2010 at U.S. (888) 286-8010 or international (617) 801-6888 * Passcode: 16228881 * A replay of the webcast will also available at www.smurfit-stone.com About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly US$7.450 billion in total assets and US$5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCoopers LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. The Company's Plan of Reorganization, which was confirmed by the U.S. Bankruptcy Court on June 21, 2010, and recognized by a Canadian court order, became effective July 1. The Plan provides that 2.25% of the new Smurfit-Stone common stock pool will be distributed pro rata to the Company's previous preferred stockholders and 2.25% percent of the New Smurfit-Stone common stock pool will be distributed pro rata to the Company's previous common stockholders. SMURFIT-STONE: Works with Missoula Officials to Sell Mill --------------------------------------------------------- The local officials of Missoula, Montana, praised Smurfit-Stone Container Corporation for diligently appeasing creditors and making good-faith efforts to find a buyer for its closed Frenchtown mill, The Missoulian reports. During the Plant's closure, Smurfit-Stone owed more than $1,000,000 in back taxes, penalties, and interest but paid off all its debt. The Missoulian notes that Smurfit-Stone has even assigned an agent to work with officials to help sell the Frenchtown Mill. Evan Barrett, chief economic development officer of Montana Governor Brian Schweitzer, in an interview with The Missoulian, reveals that there are several parties that are interested in buying the Frenchtown Mill. However, he notes that he cannot reveal more information due to confidentiality agreements. Mr. Barrett, however, hinted that most of the queries fall under biomass energy production and one company is interested in the facility for its salvage value, and another in collaborating with other entities to create multiple forms of alternative energy. Betsy Cohen of The Missoulian reported that agents hired by Smurfit-Stone will narrow down the list of potential buyers and will reveal names after July 23, 2010. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly US$7.450 billion in total assets and US$5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. PricewaterhouseCoopers LLC, serves as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC acts as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acts as the Debtors' notice and claims agent. The Company's Plan of Reorganization, which was confirmed by the U.S. Bankruptcy Court on June 21, 2010, and recognized by a Canadian court order, became effective July 1. The Plan provides that 2.25% of the new Smurfit-Stone common stock pool will be distributed pro rata to the Company's previous preferred stockholders and 2.25% percent of the New Smurfit-Stone common stock pool will be distributed pro rata to the Company's previous common stockholders. SPECIALTY TRUST: Amends List of Largest Unsecured Creditors ----------------------------------------------------------- Specialty Trust, Inc., has filed with the U.S. Bankruptcy Court for the District of Nevada an amended list of its 12 largest unsecured creditors, disclosing: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Bank of New York 101 Barclay Street - 4W Subordinated New York, NY 10286 Unsecured Note $29,064,444 La Jolla Bank, FSB 390 West Valley Parkway Guarantor of Loan Escondido, CA 92025 to 5th & Lincoln $6,400,000 La Jolla Bank, FSB Guarantor of Loan 390 West Valley Parkway to Oak Creek Escondido, CA 92025 Condominiums, LLC $3,840,000 La Jolla Bank, FSB 390 West Valley Parkway Guarantor of Loan Escondido, CA 92025 to JFP 1330 LLC $3,020,000 Joseph Jay Schneider III Guarantor of Loan Caroline Schneider to Oak Creek 65559 East Morning Vista Lane Condominiums, Cave Creek, AZ 85331 LLC $372,582 National Title Co. Foreclosure fees $13,809 Jill Savini Design Printing and mailing costs $5,000 US Bank Administration and Transaction fees $3,900 Ballard & Spahr LLP Legal fees $3,753 State of Maryland Department Personal property of Assessments & Personal return for REIT as Property Division of 1/1/10 $300 Great Basin Internet Services Internet domain name renewal $35 Informative Research Fee for credit report $21 Reno, Nevada-based Specialty Trust, Inc., filed for Chapter 11 bankruptcy protection on April 20, 2010 (Bankr. D. Nev. Case No. 10-51432). Sallie B. Armstrong, Esq., at Downey Brand, assists the Company in its restructuring effort. The Company listed $100,000,001 to $500,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. These affiliates filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Specialty Acquisition Corp. 10-51437 04/20/10 Assets: $10 mil. to $50 mil. Debts: $10 mil. to $50 mil. SAC II 10-51440 04/20/10 Assets: $10 mil. to $50 mil. Debts: $1 mil. to $10 mil. SPECIALTY TRUST: Cash Collateral Use Gets 3rd Interim OK -------------------------------------------------------- The Hon. Gregg W. Zive of the U.S. Bankruptcy Court for the District of Nevada granted, for the third time, interim authorization to Specialty Trust, Inc., et al., for the use of the cash collateral. Sallie B. Armstrong, Esq., at Downey Brand LLP, the attorney for the Debtors, explained that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. U.S. Bank National has consented to the use of the cash collateral. The Debtors will submit to the prepetition secured lenders weekly cash report every Friday, by no later than 2:00 p.m., Pacific Time, following the immediately-preceding week for which the weekly cash report pertains. The Court ruled that the amount of each of the cash collateral used by the Debtors during the period covered by the third interim order will conclusively be deemed to be an amount equal to: (a) a fraction equal to the amount of the that lender's cash collateral received by the Debtors during the period covered by the third interim order divided by the total cash collateral received by the Debtors during the period covered by the third interim order. A status conference on the Debtors' request to use cash collateral was set for July 19, 2010, at 11:00 a.m. to address the status of the Debtors' use of the cash collateral and to schedule the final hearing. The Court ruled that Deutsche Bank National Trust Company, in its capacity as Indenture Trustee under certain indentures dated July 1, 2005 and March 1, 2009, is adequately protected by reason of the existence of an equity cushion in that the value of the collateral securing each of the obligations for which it acts exceeds the amount of those obligations. Deutsche Bank, in its status report, said that the Debtors haven't carried their burden of demonstrating that Deutsche Bank's interest in the cash collateral that the Debtors propose to use is adequately protected by an equity cushion. Deutsche Bank stated that the Debtors ought to be required to grant Deutsche Bank a replacement lien to provide the bank with adequate protection for the Debtors' proposed use of its cash collateral. Deutsche Bank said that "it is unclear when the parties will be prepared to proceed with an evidentiary hearing regarding the Debtors' request to use the cash collateral or, indeed, precisely what issues, if any, will be litigated at that hearing." Deutsche Bank believes that it would be appropriate for the Court to authorize the Debtors to continue to use cash collateral on the same terms as the Court's prior orders and to set the matter for a continued status conference in mid-August 2010. Deutsche Bank is represented by Lionel Sawyer & Collins and Morgan, Lewis & Bockius LLP. Debtors File Fourth Amended Budget On May 28, 2010, the Debtors submitted a notice of second amended budget, together with an amended DIP operating budget for the period April 26, 2010 through October 1, 2010. On June 21, 2010, the Debtors submitted the notice of third amended budget, together with an amended DIP operating budget for the period April 26, 2010 through October 1, 2010. The Debtors filed with the Court an amended budget for the period July 19, 2010, through December 31, 2010. The fourth amended budget extends the budgeted period for an additional one week, so that it ends October 8, 2010, instead of October 1, 2010. The Debtors propose an additional advance under its existing loan to CIC & S, LLC, in the amount of $83,500 to be used for construction costs. While Specialty Trust's existing loan to CIC&S already has a loan-to-value ratio of more than 100%, without the proposed advance, the borrowers won't get the certificate occupancy for the property and won't be able to make payments on the Specialty Trust loan. Specialty Trust is currently receiving $7,500 per month on the loan. Payments will increase to $15,000 per month once the certificate of occupancy is issued and additional units are rented. The proposed advance in the amount of $5,000 on the existing Johnson loan is a relatively small additional advance on a performing 12% loan with a loan-to-value-ratio of less than 25%. The Debtors no longer need to fund the $229,000 amount on the Nadador loan that was scheduled for the week of September 20 in the third amended budget, as Nadador is able to raise its own capital through a sale of one of its own assets. The budgeted amounts to be paid to the Debtors' professionals have been adjusted to reflect updated estimates. The Debtors' bankruptcy counsel, and perhaps other estate professionals, are accruing fees greater than the amounts budgeted for in the fourth amended budget. The Debtors say that it is anticipated that those unpaid accruing amounts that aren't reflected as expenditures in the fourth amended budget will be sought to be paid later when cash flow improves. The third amended budget provided for the payment of $50,000 of fees to the members of Specialty Trust's board of directors during the week of July 5, 2010. The Debtors said that the board has voted to defer the payment of the fees and thus the $50,000 expenditure that was previously budgeted for the week of July 5 hasn't been paid, nor has been budgeted to be paid during the period of the fourth amended budget. A copy of the fourth amended budget is available for free at: http://bankrupt.com/misc/SPECIALTY_TRUST_budget.pdf About Specialty Trust Reno, Nevada-based Specialty Trust, Inc., together with two affiliates, filed for Chapter 11 bankruptcy protection on April 20, 2010 (Bankr. D. Nev. Case No. 10-51432). Sallie B. Armstrong, Esq., at Downey Brand, assists the Company in its restructuring effort. The Company listed $100,000,001 to $500,000,000 in assets and $50,000,001 to $100,000,000 in liabilities. TALECRIS BIOTHERAPEUTICS: Moody's Reviews 'B1' Corp. Family Rating ------------------------------------------------------------------ Moody's Investors Service placed the ratings of Talecris Biotherapeutics Holdings' under review for possible downgrade following Grifols, S.A.'s announced capital structure and Moody's assignment of prospective ratings to Grifols including a B1 Corporate Family Rating, a (P)Ba3 to its proposed senior secured credit facility and a (P)B3 to its unsecured bridge facility. Grifols plans to acquire Talecris for about $4.0 billion (including net debt). Grifols' ratings were assigned under the assumption that Talecris' existing debt would be taken out. This transaction is not expected to close until the fourth quarter of 2010, subject to regulatory and shareholder approvals. Talecris' SGL-3 rating remains unchanged at this time. Assuming the transaction triggers a change in control, Moody's understand that bondholders have the option to put the bonds at 101%. If the acquisition closes, Moody's rating review will consider: (1) whether any Talecris debt remains outstanding; (2) if Grifols plans to guarantee this debt; or (3) if separate standalone financial statements for Talecris will be available. If all of Talecris' debt is taken out, or if there are no separate financial statements to be provided to assess non-guaranteed Talecris debt, the company's ratings would likely be withdrawn. If Talecris bondholders do not put back all existing notes, given Grifols' proposed capital structure, the rating on Talecris' unsecured notes, even in the event of a guarantee from Grifols, is likely to fall to B3, in line with Grifols' proposed unsecured facility at (P)B3. Moody's last rating action on Talecris was taken on June 7, 2010 when Moody's changed the company's rating outlook to developing from stable following the announcement that Grifols planned to acquire Talecris. Ratings placed under review for possible downgrade: Talecris Biotherapeutics Holdings Corp. * Corporate Family Rating at Ba3 * PDR at Ba3 * Senior unsecured notes at B1, LGD4, 65% Talecris Biotherapeutics, Inc., is a leading global manufacturer of plasma-derived, protein-based products for individuals suffering from life-threatening diseases. Talecris began operations on April 1, 2005, when the US assets of Bayer AG's worldwide plasma derived products business were acquired by financial sponsors, Cerberus Capital Management and Ampersand Ventures. TEXAS RANGERS: Greenberg Traurig Confirms Cuban's Interest ---------------------------------------------------------- Eric Morath at Dow Jones Daily Bankruptcy Review reports that Greenberg Traurig LLP attorney Clifton Jessup, Esq., introduced himself in court Thursday as a representative for a Mark Cuban company that is potentially interested in buying the Texas Rangers. Mark Cuban owns the Dallas Mavericks basketball team in the National Basketball Association. Mr. Morath notes that Mr. Cuban has publicly said he was considering making a bid for the Rangers, either alone or as part of a group, but he had not previously been officially named in court among the parties interested in buying the team. According to the report, Mr. Cuban's attorney, Mr. Jessup, has attended hearings held in the team's bankruptcy case this week, but did not name his client prior to Thursday. A group that includes former star pitcher Nolan Ryan, the team's president, and attorney Chuck Greenberg have made a more than $500 million bid for the Rangers. That offer is set to serve as the lead bid for the team at an upcoming auction. So far, Major League Baseball has publicly cleared Ryan's group, Houston businessman Jim Crane and Dallas investor Jeff Beck to make bids on the Rangers. Dow Jones Daily Bankruptcy Review reports that Judge Lynn said Thursday he will not delay the Aug. 4 auction for Texas Rangers. 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. TEXAS RANGERS: May Seek Court Help to Adjust Budget --------------------------------------------------- Eric Morath at Dow Jones Daily Bankruptcy Review reports that Judge D. Michael Lynn informed Texas Rangers president Nolan Ryan on Wednesday he could turn to the court to help him add more expensive players to the baseball team's roster. Dow Jones relates that Mr. Ryan, while testifying during a hearing at the Fort Worth, Texas, bankruptcy court, said budget restrictions that Major League Baseball placed on the club have made it difficult to add players. MLB has been placing budget restrictions on the team since it started providing financial assistance to the Rangers last year. According to the report, Judge Lynn told Mr. Nolan Ryan that now that the team has filed for bankruptcy, he has additional options to increase his budget. As the team's bankruptcy lender, the budget MLB sets for the Rangers is subject to court approval. "MLB has right to review your budget, but you have the opportunity to have MLB overruled," the report quotes Judge Lynn as saying. He said he would try to reduce the level of "pain" the team must endure during bankruptcy. TLC AMERICAS: Judge Grants Interim DIP Financing from Parent ------------------------------------------------------------ American Bankruptcy Institute reports that bankruptcy Judge Joan Feeney ruled Tuesday that TLC Americas LLC can use interim debtor- in-possession financing from U.K. parent company, TLC Marketing System Ltd. Boston-based TLC Americas LLC operates marketing promotions for T- Mobile USA and Levi's Dockers. TLC Americas LLC filed for bankruptcy under Chapter 11 in Boston on July 16 (Bankr. D. Mass. Case No. 10-17716). The petition listed assets and debts of $1,000,001 to $10,000,000. The Company owes $1.6 million to general unsecured creditors. Kara Zaleskas, Esq., at Duane Morris LLP, represents the Debtor in its Chapter 11 effort. TRIBUNE CO: GreenCo Proposes to Settle With MediaNews Group ----------------------------------------------------------- GreenCo, Inc., a debtor-affiliate of Tribune Co., seeks the Court's authority to enter into a settlement with MediaNews Group, Inc., formerly known as Affiliated Media, Inc. GreenCo and Garden State Newspapers, Inc., a predecessor-in- interest to MediaNews, on January 30, 1998, entered into an Option Purchase Agreement, which, among other terms, granted GreenCo an irrevocable option to purchase all of the assets and business operations of the L.A. Daily News, in consideration of a payment by GreenCo to MediaNews at the closing of $2,400,000. Under the Option Agreement, GreenCo hold the right to exercise the Option upon not less than 60 days' notice and not more than 90 days' notice at any time from January 30, 2003, until January 30, 2010, whereupon the Option expired. Pursuant to the Option Agreement, if GreenCo were to fail to exercise the Option before it expired, the Option Cancellation Amount would be due to GreenCo. Specifically, the Option Agreement provides that the Option Cancellation Amount is $8,400,000 and an additional amount derived from, among other things, the EBITDA of the L.A. Daily News over a particular time period. Prior to November 30, 2009, GreenCo advised MediaNews that it did not intend to exercise the Option. Consistent with that position, GreenCo did not, in fact, exercise the Option prior to its expiration on January 30, 2010. GreenCo initially made a demand upon MediaNews at the time it advised MediaNews that it did not intend to exercise the Option for payment of the Option Cancellation Amount, which GreenCo asserted was in the amount not less than $8,400,000. MediaNews responded to GreenCo's demand by disputing the amount claimed by GreenCo, and asserting that GreenCo was liable to MediaNews under the Option Agreement to pay the Option Cancellation Amount for not less than $55,600,000. Through subsequent correspondence, GreenCo disputed MediaNew's claim, reiterated its own claim, and sought further information from MediaNews necessary to calculate the final Option Cancellation Amount, while MediaNews continued to dispute GreenCo's claim and to assert its own claim. MediaNews, on January 22, 2010, filed a voluntary petition under Chapter 11 of the Bankruptcy Code and sought confirmation of a prepackaged plan of reorganization. GreenCo objected to confirmation of MediaNews's prepackaged plan for the limited purpose of ensuring that its claim against MediaNews for the Option Cancellation Amount was preserved unaffected by MediaNews's plan, which MediaNews confirmed on the record at the confirmation hearing on its plan. MediaNews, on March 1, 2010, filed a proof of claim in GreenCo's Chapter 11 case for amounts it alleged were owed to it under the Option Agreement in the face amount of $55,780,199, which proof of claim was assigned Claim No. 6394. GreenCo disputes the Proof of Claim on numerous grounds, including timeliness and the bases asserted by MediaNews for the amounts sought in the Proof of Claim. Notwithstanding the claims and defenses asserted by each party, in an effort to avoid arbitration, counsel for MediaNews and GreenCo have discussed a potential resolution of the parties' claims under the Option Agreement. As a result of these discussions, the parties have entered into a stipulation to resolve all of their potential claims and causes of action against each other relating to the Option Agreement. The Settlement Stipulation is available for free at: http://bankrupt.com/misc/Tribune_MediaNewsStip.pdf Pursuant to the Settlement, MediaNews will pay GreenCo $500,000. MediaNews and GreenCo agree that the Option Agreement is terminated, with no further force and effect. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Opposes Wells Fargo Claims Adjudication Protocol ------------------------------------------------------------ Tribune Company and its debtor affiliates, the Official Committee of Unsecured Creditors, and additional entities designated as the "Settlement Supporters" oppose Wells Fargo Bank, N.A.'s motion to adjudicate objections to Bridge Loan Claims in conjunction with the plan confirmation proceedings. Wells Fargo Bank, N.A., solely as successor administrative agent under a $1.6 billion Senior Unsecured Interim Loan Agreement dated as of December 20, 2007, has sought the Court's authority to establish procedures for adjudicating objections to the Bridge Loan Claims. The Bridge Loan Claims, in the amount of $1,619,506,849, were scheduled as undisputed in Tribune Company's Schedules of Assets and Liabilities filed on June 12, 2009. However, the Debtors' Amended Joint Plan of Reorganization provides that if Bridge Lenders do not vote to accept the Plan, the Bridge Loan Claims will be deemed disputed and subject to disallowance. Wells Fargo complains that the Debtors threaten to pursue fraudulent conveyance and avoidance theories to dispute the Bridge Lenders' claims and to engage in "protracted litigation" with the Bridge Lenders over the disallowance of their claims, which litigation will not commence until several months after the Effective Date. Accordingly, Wells Fargo has submitted the proposed procedures. In response, the Debtors complain that Wells Fargo's request threatens to fundamentally alter the confirmation hearing by transforming it from a hearing on whether the settlement should be approved into something entirely different. According to the Debtors, there is nothing inappropriate or unfair in resolving the Bridge Loan Claims through the normal claims and adversary proceeding process. The Committee, meanwhile, contends that putting aside that the Debtors' process is the one that should be followed during exclusivity, the reason for the changes are simply not well- founded or are greatly outweighed by the harm that the proposed procedures would cause. The Committee maintains that if the Bridge Lenders vote in favor of the Plan, all of the underlying issues become moot as the Debtors will never object to the Bridge Loan Claims. The Committee relates that the procedures the Debtors have proposed in connection with confirmation of the Plan are more than adequate to provide the Court and parties-in- interest with information required to evaluate the Bridge Loan Claims in connection with their assessment of the Global Settlement and confirmation of the Plan. JPMorgan Chase Bank, N.A., agent for the Debtors' prepetition senior lenders and a holder of senior loan claims; Angelo Gordon & Co. LP, on behalf of certain funds and managed accounts holding senior loan claims; Law Debenture Trust Company of New York, solely in its capacity as successor indenture trustee for certain series of the Debtors' prepetition senior notes; and Centerbridge Credit Advisors LLC, on behalf of certain funds and managed accounts holding senior notes claims -- the Settlement Supporters -- complain that Wells Fargo has no legal or practical bases to request the Court to establish Bridge Loan Claims Adjudication Procedures. The Settlement Supporters maintain that the issue for confirmation is not trial of the Settled Claims but whether the Court should approve the settlement. Wells Fargo Talks Back Wells Fargo, solely as successor administrative agent and not individually under a $1.6 billion Senior Unsecured Interim Loan Agreement, asserts that no party really addresses its central position that adjudication of the allowance of the Bridge Loan Claims during the Confirmation Proceedings will preserve judicial resources, ensure procedural fairness and avoid undue prejudice. According to Wells Fargo, the Objectors ignore the overall efficiencies that would be achieved by the Court and other parties by avoiding a duplicative, post-confirmation hearing on the allowance of Bridge Loan Claims. Wells Fargo maintains that it would be wasteful of the Court's time and resources, and prejudicial to the Bridge Lenders if it and other parties-in-interest were required to relitigate the merits of the LBO-Related Causes of Action months after the Court will have considered the probability of success associated with those claims. Debtors Seek Scheduling Order The Debtors aver that it would be useful for the Court to establish procedures regarding the conduct of the Plan Confirmation Hearing. To that end, the Debtors request, by cross- motion, that the Court enter a preliminary pre-trial scheduling order for the purpose of providing clarity to all parties as to the schedule and evidentiary matters to be addressed at the Plan Confirmation Hearing. Specifically, the Debtors request that the Court enter a Scheduling Order to: -- make clear that the determination does not, as Wells Fargo suggests, require a full blown trial on the merits of the claims to be settled; -- specify the nature of the evidentiary presentations that will be permitted; and -- allocate time for parties to make their presentations at the Confirmation Hearing. The Committee supports the Debtors' request for Preliminary Pre- Trial Scheduling Order. Wells Fargo, et al., Oppose Scheduling Order Wells Fargo, Wilmington Trust Company, and the Credit Agreement Lenders complain that the Cross-Motion is premature. According to Wells Fargo, the Cross-Motion should be considered only at a later date closer to the Confirmation Proceedings when votes have been tallied, the Examiner's Report is issued, discovery has been completed, and the precise confirmation issues become clearer. Wells Fargo asserts that it is premature for the Debtors to propose a Scheduling Order almost two months before the commencement of the Confirmation Proceedings. According to Wells Fargo, the Scheduling Order's proposed scope of expert and factual testimony and allocation of time are highly prejudicial to it. Until discovery is completed, it is too early to know whether limiting the scope of testimony and expert reports pertaining to the LBO-Related Causes of Action to the reasonableness of the Global Settlement is appropriate, Wells Fargo adds. Wilmington Trust Company, Successor Indenture Trustee for the Exchangeable Subordinated Debentures due 2029 in the aggregate principal amount of $1.2 billion issued in April 1999 by Tribune Company, contends that the Cross-Motion and Proposed Scheduling Order are so patently unconstitutional, so inconsistent with the law and general Delaware Court procedure, and so offensive to fundamental notions of fair case adjudication as to warrant rejection out-of-hand. "This is not some small retailer or family-owned tool and die bankruptcy where the dispute is over the proper appraisal of a piece of collateral machinery," contends Raymond H. Lemisch, Esq., at Benesch, Friedlander, Coplan & Aronoff LLP, in Wilmington, Delaware, counsel to Wilmington Trust Company. "This is the now infamous $13 billion failure of the 110-odd Debtors that chiefly comprise the Tribune media conglomerate, which failure was the result of the Zell-orchestrated leveraged-buyout 11 months before the bankruptcy filings," he adds. Mr. Lemisch also complains that the Cross-Motion also strangely fails to propose any procedure for adjudicating Wilmington Trust's 66-page proposed Amended Complaint for Equitable Subordination and Disallowance of Claims, Damages, and Constructive Trust. The Credit Agreement Lenders led by Contrarian Funds LLC assert that the Cross-Motion is premature. At this time, the Credit Agreement Lenders note, a number of the basic facts that will dictate the appropriate course and contours of the confirmation hearing are not yet known. According to the Credit Agreement Lenders, it is too early to make informed decisions with respect to the nature of the confirmation hearing now, without this information available to the Court and other parties. The Credit Agreement Lenders further complain that the Cross-Motion is imprecise, and potentially far-reaching. * * * Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware, on a hearing held July 14, 2010, said he will revisit the issue on how much time he will devote at the plan confirmation hearing to claims by some creditors relating to the 2007 leveraged buyout transaction in a hearing to be held August 9, Bloomberg News reported. Although Judge Carey said a full-blown fraudulent transfer trial isn't required before confirmation, the judge said the underlying merits of the claims must addressed, the report added. Judge Carey scheduled to convene a hearing on the confirmation of the Debtors' reorganization plan on August 30. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Wins OK to Assume Agreements With Carsey-Werner ----------------------------------------------------------- Debtors Tribune Broadcasting Company; KPLR, Inc.; Tribune Broadcast Holdings, Inc.; Tribune Television Company; Tribune Television Holdings, Inc.; and WTXX Inc. received approval of their motion to assume certain amended syndicated program agreements with Carsey-Werner Distribution. Prior to the entry of Bankruptcy Judge Kevin Carey's order, the Debtors certified to the Court that no objection was filed as to the Motion. The Debtors program their television stations with a variety of local news, sports, and general entertainment programming, much of which is obtained from third-party program suppliers. General entertainment programming comprises the bulk of a television station's daily broadcast schedule, and that programming has two primary sources: (i) network programming that is provided to the station by a broadcast network and generally airs on a uniform schedule on all network-affiliated stations nationwide; and (ii) syndicated programming that is provided to the station from third-party program suppliers, or "syndicators," for broadcast solely within a local designated market area, usually during negotiated time periods, or "windows." Prior to the Petition Date, the Debtors, or stations owned by the Debtors, entered into four syndicated program agreements with Carsey-Werner for the popular television series That '70s Show. Carsey-Werner is an independent distribution company that specializes in the creative development and distribution of quality, comedy programming for domestic and international markets, and currently distributes 27 "off-network" series. That '70s Show is a 30-minute situation comedy aired daily by the Debtors' television stations. In all, That '70s Show comprises 16.5 hours per week of programming for the Debtors. The Debtors view the Program Agreements as economically favorable and desire to maintain them. Among other things, the Debtors note, the Program Agreements allow them to broadcast That '70s Show in time periods that optimize the station's ability to retain their audience from program to program and to otherwise manage their broadcast schedules to greatest advantage. Additionally, the Debtors have the right to sell and insert commercial advertisements within the syndicated programming and to retain all the proceeds derived therefrom, an important source of revenue to the Debtors. As a result of recent discussions, the parties have agreed to certain amendments to the Program Agreements, on the basis of which the Debtors are prepared to assume those Agreements, as amended. The amended Program Agreements will reduce, effective July 5, 2010, the weekly fees paid to Carsey-Werner in the Portland and Hartford DMAs by approximately 35% and 20%, over the remaining term of the Agreements. The Debtors relate that their aggregate savings over time from these reductions will be approximately $445,000. In addition, the Debtors maintain, the amendments will expand the time period windows for them to air That '70s Show in the Hartford, Portland, and Grand Rapids DMAs. The Debtors and Carsey-Werner agree that the total amount that the Debtors would be required to pay to "cure" prepetition defaults as a condition of the assumption of the Program Agreements is $143,483. Copies of the Program Agreements, as amended, are available for free at http://bankrupt.com/misc/Tribune_CarseyAgmt.pdf About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on Dec. 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRILOGY DEVELOPMENT: JE Dunn's Fights $12.4 Million Mechanic Lien ----------------------------------------------------------------- Steve Vockrodt, staff writer at Business Journal of Kansas City, reports that JE Dunn Construction Co. is defends its claim against Trilogy Development Co. LLC, which is trying to invalidate JE's $12.4 million lien on Trilogy's West Edge project. According to the report, Trilogy asked a federal bankruptcy court to render JE Dunn's mechanic lien as unsecured debt because the company failed to follow strict Missouri law in providing notice requirements in its construction paper but JE Dunn's argued that the contract paper contained all the information required. Kansas City, Missouri-based Trilogy Development Company, LLC, was founded by advertising magnate Bob Bernstein to build his west edge project. The Company filed for Chapter 11 on May 15, 2009 (Bankr. W.D. Mo. Case No. 09-42219). Jonathan A. Margolies, Esq., and R. Pete Smith, Esq., at McDowell, Rice, Smith & Buchanan represent the Debtor in its restructuring efforts. In its petition, the Debtor disclosed assets and debts ranging from $100 million to $500 million. UAL CORP: Posts $273 Million Net Income for June 30 Quarter ----------------------------------------------------------- UAL Corporation reported results for the second quarter ended June 30, 2010. "We are pleased to report a significant net profit improvement in the quarter along with excellent operational results across the company," said Glenn Tilton, UAL Corporation chairman, president and CEO. "The United team continues to execute across our critical operating, service and financial metrics and this strong performance builds momentum that we take into our planned merger with Continental Airlines later this year." The Company reported a net income of $273.0 million on $5.1 billion of total revenues for the three months ended June 30, 2010, compared with a net income of $28.0 million on $4.0 billion of total revenues for the same period a year ago. The Company ended the quarter with a total cash balance of $5.2 billion, including an unrestricted cash balance of more than $4.9 billion and restricted cash balance of $250 million. In the second quarter, the Company generated $874 million of positive operating cash flow and $801 million of positive free cash flow, defined as operating cash flow less capital expenditures. In the second quarter, the company had scheduled debt and net capital lease payments of $135 million, and non- aircraft capital expenditures of $73 million. "We are clearly on the right path toward our goal of achieving sustained and sufficient profitability across the economic cycle," said Kathryn Mikells, UAL Corporation executive vice president and chief financial officer. "While there is more work needed, our current results, including improvements in unit revenue, cost control, cash flow and profit margin, demonstrate substantial progress against our objective." Total consolidated expense, including fuel and excluding non-cash net mark-to-market hedge gains and certain accounting charges, increased $455 million, or 11.1% year-over-year for the second quarter. Consolidated expense, excluding fuel, profit sharing programs and certain accounting charges, was up $91 million or 3.1%. Total GAAP consolidated expense, including these items, was up $816 million for the quarter. Consolidated CASM, excluding fuel, profit sharing programs and certain accounting charges, increased by 1.9% year-over-year in the second quarter against a consolidated capacity increase of 1.1%. Mainline CASM, excluding fuel, profit sharing programs and certain accounting charges, increased by 1.7% in the second quarter, against a 1.6% decline in mainline capacity. Mainline and Consolidated CASM, including these items, were up 21.1% and 19.6% respectively, compared to the year-ago quarter. A full-text copy of the Company's earnings release is available for free at http://ResearchArchives.com/t/s?66e4 A full-text copy of the Company's Form 10-Q is available for free at http://ResearchArchives.com/t/s?66c8 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. UNICO INCORPORATED: Posts $1.1 Million Net Loss in Q1 Ended May 31 ------------------------------------------------------------------ Unico, Incorporated, filed its quarterly report on Form 10-Q, reporting a net loss of $1,076,692 for the three months ended May 31, 2010, compared with a net loss of $1,004,132 for the three months ended May 31, 2009. For the three months ended May 31, 2010, and May 31, 2009, Unico reported no revenues. The Company's balance sheet at May 31, 2010, showed $6,191,920 in assets and $19,808,292 of liabilities, for a stockholders' deficit of $13,616,372. HJ Associates & Consultants, LLP, in Salt Lake City, 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 February 28, 2010. The independent auditors noted that the Company has incurred significant losses which have resulted in an accumulated deficit and a deficit in working capital. The Company has accumulated $72,087,450 of net operating losses through May 31, 2010. The Company also had a deficit in working capital of $19,798,947 as of May 31, 2010. A full-text copy of the quarterly report is available for free at: http://researcharchives.com/t/s?66e3 San Diego, Calif.-based Unico, Incorporated has been engaged in exploration and testing at the Deer Trail Mine through its subsidiary, Deer Trail Mining Company, LLC. Future exploration, if any, at the Silver Bell Mine will be conducted through Unico's subsidiary, Silver Bell Mining Company, Inc. US AIRWAYS: Moody's Affirms 'Caa1' Corporate; Outlook Now Stable ---------------------------------------------------------------- Moody's Investors Service affirmed all of its debt ratings of U.S. Airways Group, Inc., including the Caa1 Corporate Family and Probability of Default ratings, the B3 rating on the $1.17 Billion Senior Secured First Lien Term Loan due 2014, and the ratings on the respective rated Industrial Revenue Bonds. Moody's also affirmed its ratings on all of the rated tranches of the Enhanced Equipment Trust Certificates issued by USAirway's subsidiaries, U.S. Airways, Inc. or U.S. Airways, LLC (formerly America West Airlines, LLC). Moody's also upgraded the Speculative Grade Liquidity rating to SGL-3 from SGL-4 and changed the outlook to stable from negative. The upgrade of the Speculative Grade Liquidity rating follows the increase in unrestricted cash notwithstanding that USAirways traffic growth trailed that of its peers through the first six months of 2010. Similar to its industry peers, USAirways achieved stronger growth of yields in the 2nd quarter of 2010 relative to the growth it achieved in the 1st quarter. Stronger yields are the key driver of the build in the cash balance to $2.0 billion at June 30, 2010. Moody's believe that some cash burn is likely to occur in the second half of 2010 as the Air Traffic Liability declines in line with the normal seasonal pattern. However, Moody's anticipate that the sector's improved fundamentals and ongoing capacity discipline will allow USAirways to sustain unrestricted cash above $1.7 billion through the normal seasonal trough in a U.S. airline's cash that typically occurs near the calendar year end, and as long as the barrel price of oil remains below $90. Higher cash balances also increase the cushion with minimum cash covenants of the company's credit card processing agreement. The stabilization of the outlook considers the modestly strengthened liquidity profile and the positive effects of improved industry fundamentals on forecasted credit metrics. Moody's believes that these factors will continue to relieve near term default risk by USAirways, notwithstanding Moody's expectation of slower growth of airline operating metrics (USAirways' and the sector's) in the second half of 2010 as comparisons to prior year results become more difficult. The stable outlook reflects Moody's anticipation of a more steady demand environment and measured capacity growth by the U.S. carriers, which should allow USAirways to maintain yields at levels that allow it to modestly expand earnings and free cash flow, leading to an improving credit metrics profile in upcoming quarters. The Caa1 Corporate Family rating considers the company's business profile, which Moody's believes faces ongoing challenges relative to those of its legacy carrier and low cost competitors. "Having fewer hubs in smaller cities, a smaller route network and significantly fewer international ASM's as compared to its legacy carrier peers place USAirways at a competitive disadvantage and could inhibit its ability to sustain competitive passenger yields over time," said Moody's Senior Analyst, Jonathan Root. "In addition, the domestic route focus increases competition with the U.S. low cost carriers, which warrants ongoing vigilance on cost controls to minimize the unit cost gap and increase the ability to competitively price," continued Root. Year-to-date June 2010 traffic results seem to demonstrate USAirways' challenging position as it was the only airline to report a decline of RPMs, which was also greater than the percentage decline of its capacity. USAirways' unrestricted cash to revenue remains the lowest of the rated U.S. airlines and the company remains 100% exposed to fuel price risk. Credit metrics have recently improved to levels more supportive of the Caa1 rating category and could further strengthen through the remainder of 2010 if recent performance trends continue, albeit at a slower pace relative to that of the first half of 2010. However, the orderbook for new aircraft is large, leading to expectations of increasing debt and a larger interest burden as deliveries restart from September 2011. An outlook change to positive would be possible if unrestricted cash is sustained at about or above 20% of revenue while sustained positive free cash flow generation approaches 4% of debt, Debt to EBITDA is less than 6.0 times and/or FFO + Interest to Interest is sustained above 2.75. The outlook could be changed to negative or the ratings directly downgraded if the cost of jet fuel was to quickly approach or exceed $2.50 per gallon and USAirways was not able increase ticket prices to offset the higher fuel cost. A sustained decline in unrestricted cash to below $1.5 billion during a period where the barrel price of oil remains below $90 could exert negative pressure on the ratings. So could the inability to control non-fuel operating costs or to sustain competitive yields, either of which would challenge the company to maintain its operations over the long-term. Debt to EBITDA that approaches 9.0 times, FFO + Interest to Interest below 1.5 times or EBITDA margin below 15% could also place downwards pressure on the ratings. The last rating action was on February 3, 2010, when Moody's affirmed the Caa1 Corporate Family and Probability of Default ratings and. Downgrades: Issuer: Hillsborough County Aviation Authority, FL -- Senior Secured Revenue Bonds, Downgraded to LGD5, 89% from LGD5, 87% Issuer: Indianapolis Airport Authority, IN -- Revenue Bonds, Downgraded to LGD5, 89% from LGD5, 87% Issuer: Phoenix Industrial Development Authority, AZ -- Senior Unsecured Revenue Bonds, Downgraded to LGD5, 89% from LGD5, 87% Issuer: US Airways Group, Inc. -- Senior Secured Bank Credit Facility, Downgraded to LGD3, 42% from LGD3, 36% Upgrades: Issuer: US Airways Group, Inc. -- Speculative Grade Liquidity Rating, Upgraded to SGL-3 from SGL-4 Outlook Actions: Issuer: America West Airlines, Inc. -- Outlook, Changed To Stable From Negative Issuer: US Airways Group, Inc. -- Outlook, Changed To Stable From Negative Issuer: US Airways, Inc. -- Outlook, Changed To Stable From Negative US Airways Group, Inc., based in Tempe, Arizona, through its subsidiaries operates one of the largest airlines in the U.S. with service throughout the U.S. as well as Canada, the Caribbean, Latin America and Europe. UTEX COMMUNICATIONS: Gets Continued Access to Cash Collateral ------------------------------------------------------------- The Hon. Craig A. Gargotta of the U.S. Bankruptcy Court for the Western District of Texas extended UTEX Communications Corp.'s access to the cash collateral until the effective date of the Plan. The Debtor would use the cash collateral to fund its postpetition operations. As reported in the Troubled Company Reporter on April 14, 2010, Main Street Mezzanine Fund, LP. holds liens on the Debtor's real and personal property, including accounts receivable, inventory and equipment. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant Main Street postpetition liens and a priority claim on the its Chapter 11 case. About UTEX Communications Austin, Texas-based UTEX Communications Corp., dba FeatureGroup IP, filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. W.D. Texas Case No. 10-10599). Patricia Baron Tomasco, Esq., at Munch Hardt Kopf & Harr, P.C., assists the Company in its restructuring effort. The Company listed $100,000,001 to $500,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. UTEX COMMUNICATIONS: Plan Outline Hearing Set for August 23 ----------------------------------------------------------- The Hon. Craig A. Gargotta of the U.S. Bankruptcy Court for the Western District of Texas will consider on August 23, 2010, at 1:30 p.m., the approval of a Disclosure Statement explaining UTEX Communications Corp.'s Plan of Reorganization. The hearing will be held at Courtroom No. 1, Homer Thornberry Judicial Building, 903 San Jacinto Blvd., Third Floor, Austin, Texas. Objections, if any, are due on August 13. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Debtor anticipates that all classes of claims will be paid in full. However, the resolution of the AT&T claim may not have occurred at the time of Plan confirmation. The outcome of the AT&T dispute will not affect the treatment of allowed claims in Classes 1 through 4. If resolution of the AT&T dispute results in allowance of all, or substantially all, of the AT&T claim, the Debtor's projected cash flows will be inadequate to pay the allowed Class 5 Claims in full within the term of the Plan. For that reason, the Debtor's Plan provides for Alternate Treatment of allowed Class 5 claims and Class 6 Equity Interests in the event the resolution of the AT&T dispute results in less than full payment to General Unsecured Creditors. Additionally, Worldcall, Inc. will contribute additional capital of $60,000. Treatment of Claims Class 3 Secured Claim of Main Street Mezzanine Fund - MSMF will retain its first lien on substantially all of the Debtor's assets and will be paid the allowed amount of its secured claim in 120 monthly payments at 13% interest. Class 4 Secured Claim of Worldcall, Inc. - Worldcall, Inc. will retain its second lien on substantially all of the Debtor's assets and will be paid the allowed amount of its secured claim in 120 monthly payments at 8% interest. Class 5 Unsecured Claims - Unless an Alternate Treatment Event occurs, all allowed unsecured claims will be paid in full with 6% interest in 60 monthly payments. Alternate Treatment: If the Alternate Treatment Event occurs, a recalculation of allowed Class 5 claims will be completed by the Debtor within 30 days of the Alternate Treatment Event. Each allowed Class 5 Claim will be paid its pro rata share of 60 equal monthly payments of $2,742 each and all funds recovered from the OCN Receivables in full satisfaction of each allowed claim. Class 6 Equity Claims - Unless an Alternate Treatment Event occurs, holders of equity in the Debtor will retain interests but will receive no distribution of dividends until allowed claims of Classes 1 through 5 are paid in full. Alternate Treatment: If an Alternate Treatment Event occurs, all equity in the Debtor will be cancelled. Equity in the Reorganized Debtor will be acquired by the entity which provides sufficient and necessary cash or cash equivalent to the Debtor to constitute "new value". The Debtor believes the amount of cash or cash equivalent necessary to constitute "new value" is not less than $100,000. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/UTEXCOMMUNICATIONS_DS.pdf The Debtor is represented by: Joseph D. Martinec, Esq. Martinec, Winn, Vickers & McElroy, P.C. 600 Congress Avenue, Suite 500 Austin, TX 78701 Fax: (512) 476-0750/476-0753 E-mail: martinec@mwvmlaw.com About UTEX Communications Austin, Texas-based UTEX Communications Corp., dba FeatureGroup IP, filed for Chapter 11 bankruptcy protection on March 3, 2010 (Bankr. W.D. Texas Case No. 10-10599). Patricia Baron Tomasco, Esq., at Munch Hardt Kopf & Harr, P.C., assists the Company in its restructuring effort. The Company listed $100,000,001 to $500,000,000 in assets and $10,000,001 to $50,000,000 in liabilities. VISION SOLUTIONS: Double-Take Stockholders OK Merger Agreement -------------------------------------------------------------- Double-Take Software, Inc.'s stockholders approved the proposal to adopt the previously announced merger agreement with Vision Solutions, Inc., a portfolio company of Thoma Bravo, LLC, and HA Merger Sub, Inc., a wholly-owned subsidiary of Vision Solutions. The affirmative vote of the holders of a majority of the outstanding shares of the Company's common stock was required to approve the proposal to adopt the merger agreement. According to the final vote tally of shares of Double-Take Software common stock, approximately 71% of the outstanding shares of Double-Take Software common stock as of June 18, 2010, the record date for the special meeting, were voted to approve the proposal to adopt the merger agreement. Under the terms of the merger agreement, the Company's stockholders will receive $10.55 in cash for each share of Double-Take Software common stock they hold. Subject to the satisfaction or waiver of certain conditions set forth in the merger agreement and discussed in the Definitive Proxy Statement on Schedule 14A filed by Double-Take Software with the Securities and Exchange Commission on June 21, 2010, Double- Take expects the merger contemplated by the merger agreement to close on July 23, 2010, and that Double-Take Software's common stock will cease to trade on NASDAQ as of the close of business on July 23, 2010. At the effective time of the merger, Double-Take will become a wholly-owned subsidiary of Vision Solutions. About Double-Take Software Headquartered in Southborough, Massachusetts, Double-Take(R) Software is a leading provider of affordable software for recoverability, including continuous data replication, application availability and system state protection. Double-Take Software products and services enable customers to protect and recover business-critical data and applications such as Microsoft Exchange, SQL, and SharePoint in both physical and virtual environments. With its unparalleled partner programs, technical support, and professional services, Double-Take Software is the solution of choice for more than nineteen thousand customers worldwide, from SMEs to the Fortune 500. About Vision Solutions Inc. Vision Solutions, Inc., is a leading provider of high availability, disaster recovery and system management solutions for IBM Power Systems(R). Vision Solutions supports its worldwide customers in achieving their business goals through its leading- edge technologies and its global network of partners. A portfolio company of Thoma Bravo, LLC, Vision Solutions is headquartered in Irvine, California with offices worldwide. For more information, visit www.visionsolutions.com. * * * As reported in the Troubled Company Reporter on June 21, 2010, Moody's Investors Service assigned a B1 corporate family rating to first time issuer Vision Solutions, Inc. Moody's also assigned B1 ratings to Vision's pending senior secured debt facilities. The new debt facilities will be used to finance the acquisition of Double-Take Software, Inc. for $242 million. The ratings outlook is stable. VISTEON CORP: Court OKs Valuation Services for E&Y -------------------------------------------------- Visteon Corp. obtained the U.S. Bankruptcy Court's authority to further expand the scope of employment of Ernst & Young LLP to provide certain valuation services nunc pro tunc to April 1, 2010. Prior to the entry of the Court's order, the Debtors certified to the Court that no objection was filed as to their request. The Debtors have requested that Ernst & Young provide valuation services in connection with the acquisition by one of their non- debtor affiliates of Visteon Automotive (India) Private Limited, Inc. Pursuant to the Acquisition, a non-debtor affiliate purchased approximately 49% of the remaining common stock of Visteon Automotive (India) for approximately $1.3 million. The Debtors expect Ernst & Young to provide these valuation services: * General Valuation Services: -- conducting interviews with Visteon Automotive (India)'s senior management; -- considering applicable economic, industry, and competitive environments, including relevant historical and future estimated trends; -- applying various valuation techniques using, where appropriate, financial data based on a market participant perspective; and -- preparing a letter report summarizing the methodologies employed in Ernst & Young's analysis, the assumptions on which that analysis was based, and calculations of fair value; * Real Property Valuation Services: -- performing valuation services in connection with Visteon Automotive (India)'s real property, including valuation of land, buildings, and building environments; -- gathering and assessing information from interviews with management and operations personnel at Visteon Automotive (India), along with electronic fixed asset listings; -- analyzing the values of owned land, buildings, and site improvements using sales comparison and cost approaches; -- rationalizing the building and site improvement value conclusions; and -- determining economic support for real property asset values and adjusting values as required. * Personal Property Valuation Services: -- performing valuation services in connection with Visteon Automotive (India)'s personal property, including machinery and equipment, tools and molds, warehouse equipment, vehicles, leasehold improvements, and other personal property assets; -- performing valuations of certain personal property assets on an in-use and liquidation basis; -- gathering and assessing information from interviews with management and operations personnel at the subject properties along with electronic fixed asset listings; -- calculating the reproduction costs for personal property assets through application of asset-class-specific indices and normal-useful-life analysis; -- researching and estimating current replacement costs for major asset systems and categories of assets; -- comparing current replacement costs to the estimated production cost calculation to identify more efficient or cost-effective technologies, or layering of new technology costs in the asset ledgers, as applicable; -- considering applicable functional and technological differences between the subject assets and replacement systems, including excess operating costs and underutilization; and -- conducting a liquidation analysis of Visteon Automotive (India)'s assets, including reviewing the market for recent sales evidence of similar assets within the region to develop liquidation values of personal property asset; * Intangible Asset Valuation Services: -- performing valuation services in connection with Visteon Automotive (India)'s intangible assets, including customer relationships, loss contracts, and workforce; -- identifying other valuable intangible assets; and -- collecting data and conducting interviews with Visteon Automotive (India)'s management to obtain the information and assumptions needed to identify all relevant intangible assets, including leveraging information and assumptions from previous valuation analyses. * Debt Valuation Services -- performing valuation services on Visteon Automotive (India)'s debt, including considering Visteon Automotive (India)'s credit worthiness; -- in the absence of a readily obtainable credit rating, performing analyses of the historical and projected financial statements of Visteon Automotive (India) for the purposes of estimating credit rating; -- conducting interviews with Visteon Automotive (India)'s management concerning the details of certain debt; -- considering publicly available prices and yields on similar debt; and -- applying a discounted cash flow model on the interest and principle of certain debt to determine its fair value. The Debtors have agreed to the modifications of Ernst & Young's terms of compensation structure. The Debtors relate that the effect of the amendments is to clarify that they are responsible for the taxes resulting from Ernst & Young's services. The Amendments remove June 30, 2010, as the outside date for the applicability of Ernst & Young's 2010 billing rates. The 3% lockstep annual rate increase, which is set to occur on and after January 1, 2011, has also been removed so that the parties may negotiate appropriate rate increases contemporaneously with work performed. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of US$4,561,000,000 and debts of US$5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Reaches Deal With Aurelius on Stock Purchase ---------------------------------------------------------- Aurelius Capital Management, LP, and certain of its affiliates filed a Form 13D with the U.S. Securities and Exchange Commission on April 19, 2010, in which they made certain disclosures concerning their beneficial ownership of Visteon Corporation common stock. The Debtors relate that after receiving notice of the Form 13D filing, they contacted Aurelius Capital Master, Ltd., ACP Master, Ltd., and Aurelius Convergence Master, Ltd., to inform that they intended to file an objection in the Bankruptcy Court to Aurelius' purchase of Visteon Corp. common stock due to concern that the ownership of more than 6.4 million shares of Visteon stock might constitute a violation of a June 19, 2010 Bankruptcy Court order. The June 19 Order refers to a final order establishing notification and hearing procedures for certain transfers of Visteon common stock, pursuant to which Substantial Shareholders are required to give notice of, among other things, intent to purchase, acquire, or accumulate common stock of Visteon. The Aurelius Entities that each Aurelius entity should be treated as a separate Beneficial Owner for purposes of the June 19 Final Order. The Debtors, however, do not take a position on the matter. The Debtors believe that the question of whether the Aurelius Entities should be treated as separate Beneficial Owners is a question best resolved by the Internal Revenue Service. Counsel for the Debtors and the Aurelius Entities have engaged in substantive, cooperative discussions in an effort to consensually resolve the Potential Objection and ultimately reached a stipulation on the matter. The Parties' Stipulation provides, among others, that: (a) Based on the representation of Aurelius that each Aurelius Entity is a separate Beneficial Owner, the Debtors are not required to file an objection at this time asserting that Aurelius has violated the procedures set forth in the Final Order. Nothing will be deemed a waiver by the Debtors of their rights under the Final Order to declare the acquisition of Common Stock by Aurelius to be null and void under the Final Order. (b) The Debtors will apply to the Service for a Private Letter Ruling to confirm that the Aurelius Entities will not be treated as an "entity" within the meaning of Treasury Regulations for purposes of determining whether Visteon experienced an owner shift involving a 5% shareholder under Section 382 of the Internal Revenue Code of 1986, as amended. (c) After the Service issues a Ruling or chooses not to issue a Ruling, each of the Debtors and the Aurelius Entities reserves its rights to seek an order of the Bankruptcy Court granting that relief as it deems appropriate. (d) Nothing will be interpreted to suggest that the Stock Sales violated the procedures in the Final Order, or to prevent the Aurelius Entities from selling any Common Stock. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of US$4,561,000,000 and debts of US$5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Third Circuit Reverses Ruling on Retiree Benefits --------------------------------------------------------------- The United States Court of Appeals for the Third Circuit has reversed U.S. District Court for the District of Delaware's order that affirmed Bankruptcy Judge Christopher Sontchi's ruling permitting Visteon Corporation to terminate the provision of retiree health and life insurance benefits of without complying with Section 1114 of the Bankruptcy Code. The Industrial Division of the Communications Workers of America, as the representative of approximately 2,100 retirees from Visteon's manufacturing facilities in Connersville and Bedford, Indiana, appealed the District Court's order to the Third Circuit. Both the Bankruptcy Court and the District Court reasoned that it would be unreasonable to interpret Section 1114 as limiting an employer's right to modify or terminate benefits during the pendency of a Chapter 11 bankruptcy proceeding, if the employer could unilaterally terminate those benefits outside of bankruptcy pursuant to a reservation of rights clause in the benefit plan. Since Visteon reserved the right to unilaterally terminate the retiree benefits, the lower courts concluded that Congress did not intend Section 1114 to limit that right. On appeal, the Union argued that the plain language and legislative history of Section 1114 compel exactly the result the lower courts avoided. In a 95-page opinion, the Third Circuit held that the plain language of Section 1114 is very clear in that "it restricts a debtor's ability to modify any payments to any entity or person under any plan, fund or program in existence when the debtor files for Chapter 11 bankruptcy, and it does so notwithstanding any other provision of the bankruptcy code." Accordingly, the Third Circuit reversed the March 31, 2010 order of the District Court on the Visteon retiree benefits. The Third Circuit ruling means Visteon are to reinstate the payment of retiree benefits, which ceased in May 2010. The Third Circuit recognized that majority of bankruptcy and district court that have addressed the same issue -- among them the court presiding over the bankruptcy case of Delphi Corp. -- have concluded that Section 1114 does not limit a debtor's ability to terminate benefits during bankruptcy when it has reserved the right to do so in applicable plan documents. The Third Circuit also realized that its conclusion appears to be in tension with the decision of the Second Circuit in LTV Steel Co. v. United Mine Workers (In re Chateaugay Corp.) "We are convinced that in reaching these contrary conclusions as to the scope of Section 1114, these courts mistakenly relied on their own views about sensible policy, rather than on the congressional policy choice reflected in the unambiguous language of the statute," the Third Circuit held. The Third Circuit reminded the parties that the Section 1114 protections terminate upon plan confirmation. "Therefore, Section 1114 is neither entirely nor permanently in derogation of underlying contractual rights," the Third Circuit opined. "For the most part, all Section 1114 guarantees retirees is a voice, and some minimal amount of leverage, in a process that could otherwise be nothing short of devastating to them and to their families and communities." The Third Circuit Opinion was signed by Chief Judge McKee and Circuit Judges Rendell and Stapleton. The Third Circuit specifically remanded the matter to the District Court with instructions that it enter an order reversing the Bankruptcy Court's order on the termination of the Visteon retiree benefits. The District Court will direct the Bankruptcy Court to order Visteon to take action necessary to immediately restore all terminated or modified benefits to their pre- termination/modification levels. The District Court is also directed to compel the Bankruptcy Court to consider arguments from the parties as to whether Visteon should be required to reimburse the retirees for any costs incurred due to the termination of their benefits between May 1, 2010 and July 13, 2010, the date the Third Circuit ruling was entered. A full-text copy of the 95-page Third Circuit Opinion on the termination of Visteon's retiree benefits is available for free at: http://bankrupt.com/misc/Visteon_3rdCirOrdon1114Ruling_Jul13.pdf IUE-CWA's Statement "IUE-CWA took on this fight to make sure that the rights of our retirees were respected by Visteon and the courts," said IUE- CWA President Jim Clark. "It is never easy to win an appeal but we knew that the Connorsville and Bedford retirees deserved every opportunity to save their benefits. "IUE-CWA will continue to press Visteon to enter into a fair settlement that protects and rewards our members for their many decades of service to this company." The Division is contacting Visteon to demand that the company immediately comply with the court's orders. Division attorneys pointed out that with the company in bankruptcy, it may still seek to modify or terminate the retiree benefits. However, it can no longer do so unilaterally. Visteon has two weeks to appeal the court's ruling. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of US$4,561,000,000 and debts of US$5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) VISTEON CORP: Wins Nod to Sell 46.6% Interest in TMD ---------------------------------------------------- Visteon Corp. received authorization from the U.S. Bankruptcy Court to sell its 46.6% equity interest in Toledo Molding & Die, Inc., for $10.5 million, free and clear of all liens, claims, encumbrances and other interests, pursuant to a stock purchase agreement dated as of June 24, 2010. In 2000, when Visteon was still an affiliate of Ford Motor Company, Ford assigned to Visteon the shares of TMD that Ford had purchased throughout the 1990s -- 299,647.3 shares representing 46.6% of the outstanding capital stock of TMD. Ford and Visteon saw Visteon's ownership of TMD as a way to develop local, lower-cost manufacturing for selected technologies. As part of certain accommodation agreements with North American customers during the Debtors' Chapter 11 cases, Visteon reduced its U.S.-based interiors business in the last few months. With this reduction, the TMD joint venture no longer retains a strategic benefits for Visteon, says James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware. Mr. O'Neill relates that TMD has become a smaller supplier to Visteon than when the Joint Venture was first created, making Visteon's continued ownership in TMD less significant to Visteon's overall sourcing practice. Thus, Mr. O'Neil notes, in light of the changed relationship, Visteon no longer considers ownership of TMD to have strategic importance and therefore, wishes to divest itself of its stake in TMD. In this light, the Debtors relate that they propose to sell their shares in the Joint Venture to TMD by way of a private sale to avoid the costs and delay associated with conducting a public auction and because they believe a higher and better bid will not be obtained by an auction. A full-text copy of the Stock Purchase Agreement is available for free at http://bankrupt.com/misc/Visteon_TMDspa.pdf * * * The Court held that a private sale of the TMD Shares represents an exercise of the Debtors' business judgment and is appropriate because: (a) the Sale provides fair and reasonable value for the Shares; (b) no higher or better offer was received by the Debtors for the Shares despite reasonable marketing efforts; and (c) no commercial market exists for the Shares. Prior to the entry of Court's ruling, the Debtors certified to Judge Sontchi that no objections were filed as to Sale Motion and the Sealing Motion. C. Peterson Supports Sale Clifford Peterson, Visteon Corp.'s managing director for Corporate Transactions and Visteon Services asserted that the Debtors should divest themselves of their interest in Toledo Molding because continued ownership of Toledo Molding no longer provides them with benefits. He averred that divesting the Debtors' ownership of Toledo Molding presents the best going- forward strategy that will provide the most value to the Debtors, their estates, and all parties-in-interest. In a declaration filed with the Court, Mr. Peterson also maintained that a private sale for the Shares is entirely appropriate. He added that a private sale avoids the cost and delay associated with conducting a public auction that is unlikely to result in a higher and better offer for the Shares. Wilmington Trust's Statement Wilmington Trust FSB, as administrative agent of the Debtors' senior secured term loan facility, told the Court that it has not consented to a modification of or waiver of the Debtors' Credit Agreement in a manner that would permit the Toledo Molding Sale. However, Wilmington Trust conceded that the Debtors can meet the looser standards of Section 363 of the Bankruptcy Code with regard to the Sale Motion, even though the sale will constitute an incurable default under the Credit Agreement. About Visteon Corp. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The Company has corporate offices in Van Buren Township, Michigan (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. The Company has assets of US$4,561,000,000 and debts of US$5,311,000,000 as of March 31, 2009. Visteon Corporation and 30 of its affiliates filed for Chapter 11 protection on May 28, 2009, (Bank. D. Del. Case No. 09-11786 through 09-11818). Judge Christopher S. Sontchi oversees the Chapter 11 cases. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, represent the Debtors in their restructuring efforts. Laura Davis Jones, Esq., James E. O'Neill, Esq., Timothy P. Cairns, Esq., and Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the Debtors' local counsel. The Debtors' investment banker and financial advisor is Rothschild Inc. The Debtors' notice, claims, and solicitation agent is Kurtzman Carson Consultants LLC. The Debtors' restructuring advisor is Alvarez & Marsal North America, LLC. Bankruptcy Creditors' Service, Inc., publishes Visteon Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Visteon Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) WASHINGTON MUTUAL: Plan Outline Not Approved; Examiner Appointed ---------------------------------------------------------------- Bill Rochelle at Bloomberg News reports that Washington Mutual Inc. failed at a hearing July 20 to obtain approval of the disclosure statement explaining its Chapter 11 plan. As a result, the bank holding company failed to move ahead with the Chapter 11 plan, which implements a settlement with the Federal Deposit Insurance Corp. and JPMorgan Chase & Co. The bankruptcy judge pushed back the disclosure statement hearing to Sept. 7. The bankruptcy judge, according to the report, also granted a motion by shareholders to appoint an examiner to investigate the merits of the settlement. The examiner, to be named by the U.S. Trustee, must file a preliminary work plan by Aug. 6 followed by a preliminary report by Sept. 7. Shareholders wanted 120 days for the investigation. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. Washington Mutual Bank was taken over September 25 by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns 100% of the equity in WMI Investment. Weil Gotshal & Manges represents the Debtors as counsel. When WaMu filed for protection from its creditors, it listed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment listed assets of $500,000,000 to $1,000,000,000 with zero debts. Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with responsibility for the litigation. Brian Rosen, Esq., at Weil, Gotshal & Manges LLP served as legal counsel to WMI with responsibility for the Chapter 11 case. Bankruptcy Creditors' Service Inc. publishes Washington Mutual Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Washington Mutual Inc. (http://bankrupt.com/newsstand/or 215/945-7000). WAVERLY GARDENS: Has Until October 31 to Access Cash Collateral --------------------------------------------------------------- The Hon. Paulette J. Delk of the U.S. Bankruptcy Court for the Western District of Tennessee authorized Waverly Gardens of Memphis, LLC, and Kirby Oaks Integra, LLC, to use the cash collateral of First Tennessee Bank National Association until October 31, 2010. As reported in the Troubled Company Reporter on July 19, the Debtors owed, as of petition date, First Tennessee $8,494,044 consisting of principal and interest, fees and expenses, plus additional attorneys' fees, costs and expenses, and interest that continue to accrue. First Tennessee holds a lien in all rents, issues, profits, revenues, income, accounts, accounts receivable, contract rights, and general intangibles, any and all products and proceeds, as well as all fixtures, furnishings, furniture, machinery, equipment, appliances, and personal property owned by the Debtors. The Debtors would use the cash collateral to fund their business operations postpetition. First Tennessee consented to the Debtors' continued use of cash collateral. As adequate protection for any diminution in value of the lenders' collateral, the Debtors: -- agreed to retain and employ Expansion Management Services, Inc. as a professional of the bankruptcy estate specifically employed to manage and operate the 52 rental units and is located 6551 Knight Arnold Road, Memphis, Tennessee; -- will grant First Tennessee of a postpetition security interest and lien (of the same validity, extent and priority as First Tennessee' prepetition security interests in the First Tennessee prepetition collateral) in and to (a) all proceeds from the disposition of any of the cash collateral, and (b) any and all of its goods, property, assets and interests in property, including all property of the Debtor's estate; and -- maintain and insure collateral, with appropriate endorsements on all certificates of insurance naming First Tennessee as loss payee. About Waverly Gardens of Memphis Memphis, Tennessee-based Waverly Gardens of Memphis, LLC and Kirby Oaks Integra, LLC -- http://www.waverlygardens.com/-- operate two senior living facilities consisting of a total of 248 units. Waverly Gardens consists of 196 rental units and is located at 6539 Knight Arnold Road, Memphis, Tennessee 38115. Kirby Oaks consists of 52 rental units and is located at 6551 Knight Arnold Road, Memphis, Tennessee 38115. The Debtors filed separate petitions for Chapter 11 relief on Oct. 2, 2008 (Bankr. W.D. Tenn. Lead Case No. 08-30218). Michael P. Coury, Esq., and Robert Campbell Hillyer, Esq., at Butler, Snow, O'Mara, Stevens & Cannada, represent the Debtors as counsel. When Waverly Gardens filed for protection from its creditors, it listed assets of between $10 million to $50 million, and debts of $1 million to $10 million. When Kirby Oaks filed for protection from its creditors, it listed between $1 million and $10 million each in assets and debts. WILLIAM DEL BIAGGIO: Predators to Acquire Shares for $15.2 million ------------------------------------------------------------------ The National Hockey League said in its Web site that Nashville Predators Chairman Tom Cigarran announced Wednesday the club's ownership group has signed an agreement with the bankruptcy trustee to acquire Forecheck Investments LLC, the entity containing ownership shares in the franchise held by the William "Boots" Del Biaggio bankruptcy estate. Nashville Predator said the ownership group is buying the assets for $15.2 million. The group also agreed to withdraw its damage claims against the estate. The agreement has been approved by the creditors' committee and has been submitted to the bankruptcy court for final approval. Upon securing approvals from the court, the NHL, the team's lender, and the Sports Authority, the team expects to complete the purchase in August. The shares are being purchased by Predators Holdings LLC through funding from the local ownership group. "This is a significant step forward to strengthen our franchise's financial position," Cigarran said. "We have worked with Todd Neilson (trustee for the Del Biaggio estate) to arrive at reasonable terms. This transaction eliminates a significant future liability and allows the Predators to move forward. We are pleased that Warren Woo (who originally joined the ownership group through a minority investment in Forecheck Investments) will continue his involvement in our ownership group. He brings keen insight and knowledge of business and hockey to our group." Upon completion of this transaction, Predators Holdings, LLC will consist of: Tom Cigarran (Chairman), Herb Fritch, Joel and Holly Dobberpuhl, David Freeman, Chris Cigarran, De Thompson V, John Thompson and Warren Woo. Predators Holdings LLC originally purchased the Predators in December 2007. About William del Baggio Menlo Park, California-based BDB Management LLC and its affiliates filed for Chapter 11 protection on June 7, 2008 (Bankr. N.D. Calif. Lead Case No. 08-31001). William J. del Biaggio, III, an interest holder of the companies, filed for personal chapter 11 bankruptcy on June 6, 2008. Judith Whitman, Esq., at Diemer Whitman and Cardosi LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $50 million to $100 million in assets and $50 million to $100 million in debts. The TCR reported on July 9, 2008, that Sara L. Kistler, acting U.S. Trustee for Region 17, appointed R. Todd Nelson as the chapter 11 trustee in BDB Management LLC and its debtor- affiliates' bankruptcy cases. Sand Hill Capital Partners III, the investment fund that Mr. Del Biaggio co-founded, also filed for chapter 7 bankruptcy. Sand Hill disclosed $10.6 million in debts. Established in 1996, Sand Hill Capital has four debt funds under management, of which two are actively investing. Sand Hill has provided debt financing and equity co-investing in multiple portfolio companies of top-tier venture capital firms, including Broadcom, a semiconductor company specializing in VoIP, wireless networking, and broadband communications solutions; Commerce One, a provider of On-Demand Supplier Relationship Management solutions and The Open Supplier Network; IBahn, a provider of secure broadband-to-go at premium hospitality locations; and Odwalla, maker of fruit drinks and snacks. W.R. GRACE: Settles Harper Insurance Coverage Issues ---------------------------------------------------- U.S. Bankruptcy Judge Judith Fitzgerald approved the Amended and Restated Settlement Agreement W.R. Grace & Co. entered into with Harper Insurance Ltd., formerly known as Turegum Insurance Company. As previously reported, Harper severally subscribed to four policies of excess liability insurance that provide or are alleged to provide insurance coverage to Grace. The Amended and Restated Settlement Agreement essentially provides for a buy-out of certain of Harper's coverage obligations under the lower-layer Subject Policies at a settlement value that is within the range of Grace's settlements with its other insurers that have been approved by the Court. The Agreement also includes a complete, mutual release of claims under the Subject Policies with respect to asbestos Bodily Injury claims that fall within the products aggregate limit of the Subject Policies, as defined in the Agreement. The Agreement, however, does not release Harper from claims for coverage for non- products asbestos-related claims. The Debtors certified that they received no objections to the Harper Stipulation. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Settles Munich Re Insurance Coverage Issues ------------------------------------------------------- W.R. Grace & Co. and its units sought and obtained the U.S. Bankruptcy Court's approval of an Amended and Restated Asbestos Settlement Agreement they entered into with Munich Reinsurance America, Inc., formerly known as American Re-Insurance Company. Munich Re issued certain policies of insurance that provide, or are alleged to provide, insurance coverage to Grace and certain other of the Debtors. Prior to the Petition Date, Grace and Munich Re entered into an Asbestos Settlement Agreement dated June 14, 1996, which resolved disputes between the parties regarding certain asbestos-related bodily injury claims falling within the products or completed operations hazards of the Munich Re policies as well as certain other claims, and provided a mechanism for reimbursement by Munich Re of those claims. Pursuant to the 1996 Agreement, Munich Re reimbursed Grace with respect to certain asbestos-related claims prior to the Petition Date. Aggregate policy limits of $8,782,202 remain available under the 1996 Agreement. These limits are part of a $30 million layer of excess insurance that attaches at $20 million for the period June 30, 1973 to June 30, 1977. Grace has incurred and may incur in the future certain liabilities, expenses and losses arising out of asbestos-related claims and other claims, for which Grace seeks coverage under the Munich Re policies. Disputes have arisen between Grace and Munich Re regarding their respective rights and obligations under the insurance policies with respect to coverage for asbestos-related claims. The Amended Agreement confers these principal benefits on the Debtors' estate, among others: (a) The benefit of the bargain negotiated by Grace and Munich Re in the 1996 Agreement is made available to the Trust without the need for litigation to enforce either the assignment of the 1996 Agreement by Grace to the Trust or the specific terms of the 1996 Agreement. (b) The full remaining unexhausted limits of the Munich Re policies subject to the 1996 Agreement -- $8,782,202 -- are made available to reimburse the Trust for payments made to Asbestos Personal Injury Claimants, as well as for defense costs incurred, if any, with respect to Asbestos PI Claims. (c) The Amended Agreement incorporates modifications to the 1996 Agreement enabling the processing and payment of claims by the Trust under the Trust Distribution Procedures, as defined in the Debtors' First Amended Joint Plan of Reorganization, to be compatible with the criteria for reimbursement by Munich Re under the 1996 Agreement. (d) The Amended Agreement represents a compromise of defenses that Munich Re might have with respect to any individual Asbestos PT Claim. Neither the 1996 Agreement nor the Amended Agreement releases Munich Re from claims that are not within the scope of the products/completed operations hazards of the insurance policies subscribed to by Munich Re. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on January 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WYNN RESORTS: S&P Assigns 'BB+' Rating on $1.32 Bil. Notes ---------------------------------------------------------- Standard & Poor's Ratings Services assigned ratings to $1.32 billion first mortgage notes due 2020, to be co-issued by Wynn Resorts Ltd. subsidiaries Wynn Las Vegas LLC and Wynn Las Vegas Capital Corp. S&P assigned the notes S&P's issue-level rating of 'BB+' (one notch higher than the 'BB' corporate credit rating on Wynn Las Vegas) with a recovery rating of '2', indicating S&P's expectation of substantial (70% to 90%) recovery for noteholders in the event of a payment default. Proceeds from the notes will be used to purchase, and pay consent payments for, any and all of the company's approximately $1.32 billion outstanding first mortgage notes due 2014. WLV commenced a cash tender offer for the 2014 first mortgage notes concurrent with the offering of new 2020 first mortgage notes. Also concurrent with this transaction, WLV is entering into an amendment to its credit facilities. Among other changes, the amendment will extend maturities of a portion of the revolving credit facility and term facility to July 2015 and August 2015, respectively, and could increase the interest margin on the extended portion of each of these facilities after June 30, 2011, subject to a consolidated leverage test. While this transaction would substantially improve the debt maturity profile of WLV, as any meaningful debt maturities would be pushed out to 2015, it does not result in rating upside at this time. This is primarily because S&P's 'BB' corporate credit rating on WLV and its parent company, Wynn Resorts Ltd., reflects Wynn's significant current debt burden, the high levels of competition in the Las Vegas and Macau markets, S&P's expectation for modest declines in cash flow generation in Las Vegas in 2010, and significant expected debt-financed development plans in Cotai. Still, the company's assets are among the highest quality in the gaming sector, and S&P expects continued strong cash flow trends in Macau. Furthermore, S&P expects Wynn's solid liquidity position to allow the company to weather a prolonged gaming downturn in the U.S. and fund its longer term development plans in Cotai while preserving current credit quality. Ratings List Wynn Resorts Ltd. Wynn Las Vegas LLC Corporate Credit Rating BB/Stable/-- New Rating Wynn Las Vegas LLC Wynn Las Vegas Capital Corp. $1.32B first mtg nts due 2020 BB+ Recovery Rating 2 XODTEC LED: Significant Losses Prompt Going Concern Doubt --------------------------------------------------------- Xodtec LED, Inc., filed on July 19, 2010, its annual report on Form 10-K for the fiscal year ended February 28, 2010. Simon & Edward, LLP, in City of Industry, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses, has serious liquidity concerns and may require additional financing in the foreseeable future. The Company reported a net loss of $2,582,570 on $991,645 of revenue for fiscal 2010, compared with a net loss of $394,777 on $1,214,842 of revenue for fiscal 2009. The Company's balance sheet at February 28, 2010, showed $1,840,727 in assets and $2,757,828 of liabilities, for a stockholders' deficit of $917,101. A full-text copy of the annual report is available for free at: http://researcharchives.com/t/s?66e7 Headquartered in Jhonghe City, Taiwan, Xodtec LED, Inc. is a Nevada corporation incorporated on November 29, 2006, under the name Sparking Events, Inc. On June 28, 2009, the Company's corporate name was changed to "Xodtec Group USA, Inc." and on May 17, 2010, the Company's corporate name was changed to "Xodtec LED, Inc." The Company, through its subsidiaries, is engaged in the design, marketing and selling of advanced lighting solutions which are designed to use less energy and have a longer life than traditional incandescent, halogen, fluorescent light sources. The Company's wholly-owned subsidiaries, Xodtec Technology Co., Ltd.; Targetek Technology Co., Ltd.; UP Technology Co., Ltd., are organized under the laws of the Republic of China (Taiwan). The Company also owns a 35% interest in Radiant Sun Development S.A., a company organized under the laws of the Independent State of Samoa. YRC WORLDWIDE: CEO Zollars Dumps 1,535 Shares for Tax Purposes -------------------------------------------------------------- William D. Zollars, YRC Worldwide Inc.'s Chairman of Board, President and CEO, disposed of 1,535 common shares on July 14, 2010, paring his stake to 714,292. He directly holds those shares. Mr. Zollars surrendered the shares to satisfy the tax withholding obligations in respect of certain shares of YRC's common stock that vested on July 14, 2010. Mr. Zollars indirectly holds 626.9333 shares, which reflect the number of shares of YRC's common stock held in Mr. Zollar's 401(k) account as of June 30, 2010. In a separate filing, Michael Smid dumped 291 shares, paring his stake to 126,708 shares. The shares were surrendered to satisfy the tax withholding obligations in respect of certain YRC shares that vested on July 14, 2010. He directly holds those shares. Mr. Smid indirectly holds 1,265.6001 shares, which reflect the number of YRC shares held in Mr. Smid's 401(k) account as of June 30, 2010. Daniel J. Churay, YRC's EVP, General Counsel and Secretary, disposed of 257 shares, cutting his stake to 59,031. He directly holds those shares. Mr. Churay surrendered the shares to satisfy the tax withholding obligations in respect of certain YRC shares that vested on July 14, 2010. Mr. Churay also indirectly holds 318.5333 YRC shares, reflecting the number of shares held in his 401(k) account as of June 30, 2010. About YRC Worldwide Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ: YRCW) -- http://www.yrcw.com/-- is a holding company that through wholly owned operating subsidiaries offers its customers a wide range of transportation services. These services include global, national and regional transportation as well as logistics. The Company's balance sheet as of March 31, 2010, showed $2.919 billion in assets and $3.024 billion of liabilities, for a stockholders' deficit of $104.9 million. * * * As reported in the Troubled Company Reporter on March 18, 2010, KPMG LLP, in Kansas City, Missouri, expressed substantial doubt about YRC Worldwide's ability to continue as a going concern in its report on the Company's consolidated financial statements as of and for the year ended December 31, 2009. The independent auditors noted that the Company has experienced significant declines in operations, cash flows, and liquidity. * Massive Asset Liquidation at Major Cash Mgt. Services Corp ------------------------------------------------------------ Don't think that the Mount Vernon Money Center's corporate asset liquidation sale ordered by the US bankruptcy court is bad news for other cash management and cash-in-transit service companies. Instead, it will have a positive effect on these financial sector industries, according to Jim Grimwade, CEO of JG Resources, a national asset liquidation company headquartered in Grand Rapids, Michigan. JG Resources is conducting a massive asset liquidation sale at two New York City-area cash management service corporate headquarter locations. The assets are from the former "Mount Vernon Money Center" corporation, "Armored Money Services", and "NOWCASH." THOUSANDS of items must GO, including Automated Teller Machines (ATMs), Armored Vehicles, Self-service Coin Deposit Machines, Money Handling & Processing Equipment, Vaults, Cash Safes, Security Equipment, Firearms, Office Furniture, Company Cars, and much more. "Reselling these fixtures and equipment to other cash management or cash-in-transit companies, financial institutions, and ATM or Armored Vehicle dealers who are starting up or expanding, gives me a positive outlook," says Grimwade, "Reselling this equipment to other business owners at a FRACTION of the cost of new will help fuel the local and national economy's growth. It could also help business owners and managers create NEW jobs by cutting costs from their bottom line." Grimwade is eager to spread the word about the asset liquidation to cash management service companies, credit unions, ATM and armored vehicle dealers, financial institutions, security firms, banks, and check-cashing businesses, adding, "This total liquidation is a fantastic opportunity for any business in the financial sector to save significantly on ATM equipment and parts, armored trucks and vans, company cars, cash handling and money processing equipment, firearms, security equipment, vaults, and much more!" Under Grimwade's ownership, JG RESOURCES has successfully liquidated assets, fixtures, and more, from hundreds of corporate offices, big box chains, warehouses, supermarkets, and Fortune 500 companies as solo projects and in several joint venture partnerships. Savvy business owners and the general public have been saving money by purchasing pre-owned business fixtures, equipment, and other liquidation assets from Grimwade's liquidation projects for over 25 years. Business owners and the general public are invited to visit the website or call Tim Bonucelli, (914) 667-1426, NOW for an appointment to view these liquidation assets. The two New York City-area locations are open by appointment only, but the company website carries extensive inventory and photo brochure info on this project, and all other current asset liquidations. * Liquidity Deteriorating Among Junk-Rated Companies, Says Moody's ------------------------------------------------------------------ Liquidity among the lowest junk-rated companies is beginning to deteriorate for the first time in 15 months, Moody's Investors Service said in a report July 21, according to Bloomberg News. Bloomberg relates that Moody's liquidity-stress index for the lowest junk-rated companies increased to 5.5% in mid-July. It was 5% at the end of June and 4.8% in May. Moody's estimates that companies with junk debt are facing $800 billion in maturities through 2014. June 2007 was the last time Moody's liquidity-stress index began to deteriorate. The index peaked at 21% in March 2009 and declined every month until June. The index, at 5.5%, is still low by historical standards, Moody's said. The average since 2002 is 8.4%. * BOOK REVIEW: All Organizations Are Public - Comparing Public and Private Organizations ------------------------------------------------------------------ Author: Barry Bozeman Publisher: Beard Books Softcover: 201 pages List Price: $34.95 Bozeman breaks down the simple, widely-accepted categorization of organizations into either public or private, with the former being government organizations and everything else, private. This view of the innumerable and widely varied organizations in all parts of the United States has held up since at least the latter 1800s even though it is demonstrably inapplicable. It's plain that not all government organizations are public; the CIA and FBI are but two that can hardly be labeled this. And not all other organizations lumped into the category of private can be said to be this since they operate in one way or another in the public domain and are subject in varying ways to varying degrees to the public's representative, namely the government. Even in recent decades as government has grown ever larger and more involved in all areas of the society and corporations have become more expansive and changeable with globalization, the simplistic, inaccurate division of public and private continues to hold up. The "sector blurring" Bozeman was seeing when he first wrote this work in the 1980s has increased and accelerated, making All Organizations Are Public a more relevant and useful guide to understanding the topology and workings of today's organizations that it was when it was first published. The outsourcing of certain tasks traditionally done by American servicemen and women to civilian employees of a business organization is one current example of operations and an organization which cannot fall neatly into the public-private categorization. The more complex relationship -- at times virtually a cooperation -- between government and corporations in the globalization of business is another current example of the "sector blurring" prompting Bozeman to take the measure of what was very noticeably happening with modern-day organizations. He not only reports what has been going on, but also develops concepts and devises principles of use for corporate strategists and managers as well as business school teachers, entrepreneurs considering starting or expanding a business, and government officials. Bozeman's view of modern organizations rests not on the common and changeable references of popular opinion, the marketplace of ideas, or the phenomena of consumerism, but on the central social reality of "political authority." In doing away with the conventional, yet misleading categories of public and private, Bozeman does not leave the reader with a vague, cosmic-like view of the field of organizations. The two categories are replaced with an interrelated set of axioms and corollaries bringing a logic and order to the vast and diverse world of organizations. The first axiom is, "Publicness is not a discrete quality but a multidimensional property. An organization is public to the extent that it exerts or is constrained by political authority." The first corollary to this is, "An organization is private to the extent that it exerts or is constrained by economic activity." Bozeman recognizes that government -- i.e., "public" -- and organizations formed or owned by regular citizens-i.e., "private" -- do have differences. They come into being from different motives and different purposes, and they are related to the public in different ways and operate differently. Nonetheless, the structure and operations of all organizations are affected, and in some cases determined, by the overriding political authority. In Bozeman's conception, "publicness refers to the degree to which the organization is affected by political authority." Some are tightly controlled by this political authority, while others are barely touched by it. But no organization is entirely free of such authority. With his axioms and corollaries, Bozeman gives principles and characteristics for apprehending the nature of particular organizations. Today's research and development (R&D) organizations are a kind of organization that the conventional public-private categorization cannot begin to make sense of. "Research and development organizations provide a fertile ground for analysis of dimensions of publicness." As hybrids involving aspects of universities, government, and industry, R&D organizations are playing important economic and social roles in such areas as health, the environment, demographics, and welfare. Many are located at universities and run by faculty members. Many corporations have R&D divisions. The value and relevance of Bozeman's key factor of political authority is seen especially with respect to R&D organizations. Current government policies on stem cell research demonstrate how Bozeman's central factor of "political authority" is applied to understand any particular organization engaged in such research. It's a matter of where an organization falls in the spectrum of degrees of being affected by political authority, not the uninformative, sterile decision as to whether an organization should be labeled public or private. Bozeman's view of organizations takes into account the reality that the term "private" has little meaning with respect to organizations. All organizations, like all citizens, are subject to the political authority somehow, notably the laws and regulations. But Bozeman is not interested simply in arguing for a new theory of organizations. His "multidimensional view of publicness" in tune with the complexity, diversity, and changes among today's organizations can help readers more effectively steer and develop their own organization and work with other organizations. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2010. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***