/raid1/www/Hosts/bankrupt/TCR_Public/100901.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, September 1, 2010, Vol. 14, No. 242
Headlines
1031 TAX: Judge Orders Lender to Return $24-Mil. in Repayments
2122 24TH: Case Summary & 6 Largest Unsecured Creditors
A-ACCESS SELF: Case Summary & 7 Largest Unsecured Creditors
ABITIBIBOWATER INC: Proposes Deloitte as Consulting Svc. Providers
ABITIBIBOWATER INC: Proposes Settlement With USW, Other Unions
ABITIBIBOWATER INC: Reduces Woodbridge Claim to $9 Million
AGUA CALIENTE: Fitch Downgrades Issuer Default Rating to 'BB'
ALL AMERICAN: Financing Constraints Pose Challenges
AMBAC FIN'L: Harrisburg to Skip $3MM Bond Payment Due in 2 Weeks
BANK OF AMERICA: Must Face Lawsuits in Merrill Merger
BEAR ISLAND: Sixth Avenue Submits Bid to Buy Assets
BIO-KEY INT'L: Files Amended 10-Q; Earns $234,800 in June 30 Qtr.
BRIDGEVIEW AEROSOL: Gets 8th Interim OK to Use Well Fargo's Cash
BROWN PUBLISHING: Asks for Plan Extension, Sees Sale to PNC Friday
BROWNIE'S MARINE: June 30 Balance Sheet Upside-Down by $303,309
BUTTERMILK TOWNE: Can Access BofA's Cash Until December 10
BUTTERMILK TOWNE: Plan Contemplates Full Payment to All Creditors
CARE INVESTMENT: Trading Suspended at New York Stock Exchange
CHEMTURA CORP: Canadian Unit Files Schedules & Statement
CHEMTURA CORP: Proposes Chartis Buybank Agreement
CHEMTURA CORP: Wins OK for Contract Interest Rate Procedures
CITIZENS DEV'T: Section 341(a) Meeting Scheduled for Oct. 5
CLIFFORD ROBINSON: Ch. 11 Trustee Has OK to Sell New York Property
COATES INT'L: Inks Securities Purchase Deal With Asher & Dutchess
COMPOSITE TECHNOLOGY: June 30 Balance Sheet Upside-Down by $20MM
CONSPIRACY ENTERTAINMENT: Earns $19,400 in June 30 Quarter
COZUMEL CARIBE: Note Servicer Disputes Chapter 15 Bid
DIVERSIFIED RESTAURANT: June 27 Balance Sheet Upside-Down by $779K
DOLLAR THRIFTY: Now Expects $240MM to $260MM EBITDA for 2010
DREIER LLP: Ch. 7 Trustee Wants to Disallow Clients' $6MM Claims
ELOYALTY CORP: June 26 Balance Sheet Upside-Down by $962,000
EVANS & SUTHERLAND: July 2 Balance Sheet Upside-Down by $11MM
FIREBIRD INVESTMENT: Case Summary & 3 Largest Unsecured Creditors
FIRST METALS: Gets Forbearance from Bondholders Until Nov. 1
GENERAL NUTRITION: S&P Raises Corporate Credit Rating to 'B+'
GENOIL INC: Incurs C$1.26 Million Net Loss in June 30 Quarter
GEORGE W PARK: Ch. 11 Trustee Wants Plan Exclusivity Until Nov. 28
GIOCONDA EGAN: Case Summary & 5 Largest Unsecured Creditors
GLOBAL CONTAINER: Plan Confirmation Hearing Set for September 8
GRANT STREET: Owes Money to IRS, First Bank of Denver
GREAT ATLANTIC: Names Tom O'Boyle as Executive Vice President
GSC GROUP: Files for Bankruptcy Protection in New York
GSC GROUP: Case Summary & 10 Largest Unsecured Creditors
HARRISBURG, PA: Won't Make $3.29MM Bond Payment Due in 2 Weeks
HAWKS PRAIRIE: Chapter 11 Filing Halted Foreclosure
HEALTH BENEFITS: June 30 Balance Sheet Upside-Down by $3.26MM
HEMAGEN DIAGNOSTICS: June 30 Balance Sheet Upside-Down by $1.8MM
HERON LAKE: Posts $173,000 Net Loss in July 31 Quarter
INNATECH LLC: Court Decides Today on Case Dismissal or Conversion
INNOTRAC CORP: Trading Restrictions Extended Until Dec. 1
ISECURETRAC CORP: June 30 Balance Sheet Upside-Down by $24.5MM
JAPAN AIRLINES: Files Turnaround Plan, Sees Bigger Work Force Cut
JOSEPH CHRISTIANA: Oct. 1 Deadline to File Proofs of Claim
KENNETH ANDERSON: Case Summary & 19 Largest Unsecured Creditors
KILEY RANCH: Section 341(a) Meeting Scheduled for Oct. 4
KNOLOGY INC: June 30 Balance Sheet Upside-Down by $33.89MM
LEHMAN BROTHERS: Gets Approval of TS Boston Release Agreement
LEHMAN BROTHERS: Three Insurers to Pay Litigation Costs
LEHMAN BROTHERS: Wins Approval to Finance Heritage Project
LEHMAN BROTHERS: Wins Nod to Amend RACERS Transaction
LEHMAN BROTHERS: Ex-CEO Fuld to Appear Before Fin'l Crisis Panel
LEVEL 3: Seven Directors Purchase 2 Million Shares on Aug. 25
LIGHTING SCIENCE: June 30 Balance Sheet Upside-Down by $148MM
LONE TREE: Wins Approval of $1 Million DIP Financing
LONE TREE: Voluntary Chapter 11 Case Summary
MARCO COMMUNITY: Bank's Closing Cues Going Concern Qualification
MCINTOSH BANCSHARES: Incurs $1.1 Million Net Loss in June 30 Qtr.
METROFINANCIERA SA: Seeks Bankruptcy Protection in U.S.
MICHAELS STORES: Reports $1-Mil. Net Loss for July 31 Quarter
MILLENNIUM TRANSIT: Proofs of Claim Due 45 Days After Notice
MPG OFFICE: Inks Separation & Consulting Deal With SVP Goodwin
MT ZION: Hearing on Cash Collateral Use Continued until Sept. 14
MT ZION: Hearing on Ch. 11 Trustee Continued Until September 14
MT ZION: Plan Promises Full Recovery for Unsecured Creditors
NCOAT INC: Proposes Fort Ashford-Led Auction on September 16
NORTEL NETWORKS: Ex-Employees to File Claims if Benefits Ended
NORTEL NETWORKS: Proposes Sept. 24 Auction for Switch Business
NORTEL NETWORKS: Reports $1.504 Billion Net Loss for Q2
NYC OFF-TRACK: Workers' Union Willing to Negotiate
OTC HOLDINGS: Gets OK to Hire Kurtzman Carson as Claims Agent
OTC HOLDINGS: Organizational Meeting to Form Panel on September 8
OTTER TAIL: Has Until October 6 to Raise $12 Mil. Working Capital
PATRICK BARKER: Case Summary & 14 Largest Unsecured Creditors
PETER LAY: Case Summary & 7 Largest Unsecured Creditors
PTC ALLIANCE: Consummates Sale of All Assets to Black Diamond
QWEST COMMUNICATIONS: 11.6% of Notes Tendered for Purchase
REFCO INC: Court of Appeals Retains Ruling on Suit vs. Mayer Brown
REFCO INC: Deal With Underwriters & THL Wins Interim Approval
REFCO INC: Ex-CEO Sexton Forfeits $2MM+ to Settle Claims
RESERVE MANAGEMENT: Moody's Reviews Ratings on Three Funds
RIVER 2 SEA: Files for Chapter 7 Liquidation
SCO GROUP: Trustee to Sell Assets at October Auction
SKILLED HEALTHCARE: Judge Rejects Motion for Mistrial
SPHERIS INC: Wins Court Confirmation of Liquidating Plan
ST. BERNARD SOFTWARE: June 30 Balance Sheet Upside-Down by $9.2MM
STATION CASINOS: Court Confirms Chapter 11 Plan
STATION CASINOS: Creditors Committee Down to Four Members
STATION CASINOS: Reports $69,615,000 Loss for June 30 Quarter
STUDIO FRAMES: To Liquidate Assets Under Chapter 7
TITAN PHARMA: June 30 Balance Sheet Upside-Down by $2.14MM
TRAI THIEN: Posts $537,304 Net Loss in June 30 Quarter
TRICO MARINE: Organizational Meeting to Form Panel on September 7
TROPICANA ENT: Casino Dealers in Atlantic City Agree on CBA
TROPICANA ENT: Fee Auditor Submits Final Report on Applications
TROPICANA ENT: Icahn Sues Las Vegas Entities Over Trademarks
TRUVO USA: AllianceBernstein Challenges Bankruptcy Plan
TRUVO USA: Disclosure Statement Hearing on Today
U.S. CONCRETE: Emerges from Chapter 11 Reorganization
VASSALLO INDUSTRIES: Scales Back Under New Corporation
VISTEON CORP: Court Confirms Plan of Reorganization
VISTEON CORP: Claim Transfers in July Total $1.9 Million
VISTEON CORP: Goldman Sachs Continues to Have 3.90% Equity Stake
VISTEON CORP: Kempner, et al., Have 8.87% Equity Stake
VISTEON CORP: Patrick LI Has 4.50% Equity Stake
VISTEON CORP: UBS AG Still Has 0.12% Equity Stake
VITRO SAB: Bond Rally Shows Creditors See Sweetened Offer
VIVAKOR INC: Posts $663,700 Net Loss in June 30 Quarter
WARREN ZIDE: Files for Chapter 7 Bankruptcy Protection
WASHINGTON MUTUAL: Preferreds Wants Docs. From WaMu & JPMCC
WASHINGTON MUTUAL: Proposes Buss Class Action Settlement
WASHINGTON MUTUAL: Settles Wilmington Trust's $43MM Claims
WILLEMSEN DAIRY: Case Summary & 20 Largest Unsecured Creditors
YELLOWSTONE CLUB: Ch. 11 Trustee Wants Founder to Pay $286MM
* Benjamin Schrag Joins Kurtzman Carson Consultants
* Hughes Watters to Get Lender Processing Services Summit Award
* Latham's Baker Among Law360's Most Admired Bankruptcy Attorneys
* Upcoming Meetings, Conferences and Seminars
********
1031 TAX: Judge Orders Lender to Return $24-Mil. in Repayments
--------------------------------------------------------------
Bankruptcy Law360 reports that U.S. Bankruptcy Judge Martin Glenn
has ordered Boulder Capital LLC to return $24.3 million in loan
repayments it received from The 1031 Tax Group LLP.
As reported in the Troubled Company Reporter-Asia Pacific on
March 27, 2009, the Chapter 11 trustee of 1031 Tax Group LLC filed
a $56.3 million suit against Boulder Capital, contending the firm
ignored signs a fraud was being conducted so it could continue
profiting from a lending relationship.
About 1031 Tax Group
Headquartered in Richmond, Virginia, The 1031 Tax Group LLC --
http://www.ixg1031.com/-- was a privately held consolidated group
of qualified intermediaries created to service real property
exchanges under Section 1031 of the Internal Revenue Code.
The Company and 15 of its affiliates filed for Chapter 11
protection on May 14, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-
11448). Gerard A. McHale, Jr., was appointed Chapter 11 trustee.
Jonathan L. Flaxer, Esq., and David J. Eisenman, Esq., at
Golenbock Eiseman Assor Bell & Peskoe LLP, represent the Chapter
11 trustee. Kurtzman Carson Consultants LLC acts as claims and
notice agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq.,
and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent
the Official Committee of Unsecured Creditors. As of Sept. 30,
2007, the Debtors had total assets of $164,231,012, total
liabilities of $168,126,294, and a stockholders' deficit of
$3,895,282.
Former CEO Edward H. Okun is in federal prison at Northern Neck
Regional Jail in Warsaw, Virginia, after being convicted of mail
fraud and other charges. Mr. Okun allegedly engaged in several
misappropriations of funds of 1031 Tax Group and other entities.
The funds were used for Mr. Okun's lavish lifestyle including
acquiring properties and luxury asset.
2122 24TH: Case Summary & 6 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: 2122 24th Place, LLC
1905 14th Street, NW
Washington, DC 20009
Bankruptcy Case No.: 10-00846
Chapter 11 Petition Date: August 28, 2010
Court: United States Bankruptcy Court
District of Columbia (Washington, D.C.)
Judge: S. Martin Teel, Jr.
Debtor's Counsel: Craig A. Butler, Esq.
THE BUTLER LAW GROUP, PLLC
1425 K Street, NW, Suite 350
Washington, DC 20005
Tel: (202) 587-2773
Fax: (202) 591-1727
E-mail: cab.esq@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's six largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/dcb10-00846.pdf
The petition was signed by Kavoos Rad, director.
A-ACCESS SELF: Case Summary & 7 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: A-Access Self Storage, LLC
4070 E 29th St.
Tucson, AZ 85711
Bankruptcy Case No.: 10-27330
Chapter 11 Petition Date: August 27, 2010
Court: United States Bankruptcy Court
District of Arizona (Tucson)
Judge: Eileen W. Hollowell
Debtor's Counsel: Eric Slocum Sparks, Esq.
ERIC SLOCUM SPARKS PC
110 S Church Ave. #2270
Tucson, AZ 85701
Tel: (520) 623-8330
Fax: (520) 623-9157
E-mail: eric@ericslocumsparkspc.com
Scheduled Assets: $1,294,807
Scheduled Debts: $1,041,208
A list of the Company's seven largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/azb10-27330.pdf
The petition was signed by David Paquette, manager.
ABITIBIBOWATER INC: Proposes Deloitte as Consulting Svc. Providers
------------------------------------------------------------------
AbitibiBowater Inc. and its units seek the U.S. Bankruptcy Court's
authority to hire Deloitte Consulting LLP as their consulting
service providers nunc pro tunc to July 5, 2010, in connection
with their anticipated emergence from Chapter 11.
The Debtors have selected Deloitte Consulting in light of the
firm's vast experience in bankruptcy-related services and the
firm's familiarity with their operations and restructuring
strategy.
As consulting service providers, Deloitte Consulting is expected
to:
(a) organize formation and staffing of planning process which
will serve to increase the Debtors' effectiveness as they
emerge from Chapter 11;
(b) manage Program Management Office reporting and issue
tracking;
(c) identify issues and risks that may cause delays in Day 1
readiness and inform the Debtors and other relevant
stakeholders of risks that arise;
(d) advise on development of blueprints for functional areas
required to support the Reorganized Debtors;
(e) advise on preparation for Day 1 including readiness
testing and identifying interdependencies;
(f) advise on preparation for the smooth functioning of key
departments (Finance, Treasury, HR, Payroll, etc.) post-
emergence;
(g) advise on development and delivery of informative pre-Day
1, Day 1 and post-Day 1 communications to employees,
retirees, vendors, suppliers and other stakeholders;
(h) advise work-stream owners on Plan optimization and
contingency planning; and
(i) provide other related services as may be requested in
writing by the Debtors and agreed to by the firm.
The Debtors aver that they will take every effort to ensure that
the service Deloitte Consulting will provide will not duplicate or
overlap with services provided by other retained advisors or
Deloitte's affiliates.
The Firm intends to charge the Debtors for the contemplated
services based on these hourly rates:
Partner, Principal or Director $620
Senior Manager $520
Manager $445
Senior Consultant $330
Staff Consultant/Business Analyst $260
The Firm also intends to charge necessary expenses incurred in
connection with its retention.
Deloitte Consulting's engagement letter with the Debtors provides
that the Debtors will indemnify the firm under certain
circumstances.
Michael J. Puleo, a director at Deloitte Consulting, assures the
Court that his firm does not hold any interest adverse to the
Debtors with respect to matters for which the firm is to be
retained.
About AbitibiBowater Inc.
AbitibiBowater (OTC: ABWTQ) produces newsprint, commercial
printing papers, market pulp and wood products. It is the eighth
largest publicly traded pulp and paper manufacturer in the world.
AbitibiBowater owns or operates 22 pulp and paper facilities and
26 wood products facilities located in the United States, Canada
and South Korea. The Company also recycles old newspapers and
magazines.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). The Company and its
Canadian affiliates commenced parallel restructuring proceedings
under the Companies' Creditors Arrangement Act before the Quebec
Superior Court Commercial Division the next day. Alex F. Morrison
at Ernst & Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Pauline K. Morgan,
Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt &
Taylor, in Wilmington, represent the Chapter 15 Debtors.
U.S. Bankruptcy Judge Kevin Carey handles the Chapter 11 cases of
AbitibiBowater Inc. and its U.S. affiliates and the Chapter 15
case of ACI, et al.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ABITIBIBOWATER INC: Proposes Settlement With USW, Other Unions
--------------------------------------------------------------
AbitibiBowater Inc. and its units ask the Court to approve a
stipulation with the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers
International Union; the International Brotherhood of Electrical
Workers; the International Association of Machinists; and the
United Association of Journeymen and Apprentices of the Plumbing
and Pipefitting Industry of the United States and Canada.
The Stipulation is essentially between the Debtors and their
unionized employees at their U.S. facilities, which implements a
master agreement between the parties.
Among other things, the Master Agreement modifies and amends
AbitibiBowater's existing master agreement and its various
collective agreements at its U.S. facilities in Tennessee, South
Carolina, Alabama, and Georgia. The Master Agreement supersedes
and replaces any language in the prior master agreement or the
CBAs relating to the affected provisions.
The key terms of the Master Agreement include:
* Wages. The Master Agreement includes a 3% across the board
wage reduction, subject to adjustment ranging from 0% to 2%
annually and a performance-based incentive plan tied to the
Company's annual EBITDA. The new performance-based
incentive plan replaces existing guaranteed wage increases.
* Performance Incentive Plan. Per employee, the performance-
based pay-outs range from $500 annually for an EBITDA of
$550 million to $2,000 annually for an EBITDA of
$850 million.
* Benefits. The Master Agreement provides for, inter alia,
holidays and holiday pay, medical and dental plans, short-
term disability and commitments to hold health and safety
conferences.
* Pension. The Master Agreement provides for the continued
maintenance of certain pension plans for eligible employees.
* Effective Date. The Master Agreement by its terms becomes
effective upon (i) ratification by a simple majority of the
Union members voting at the covered locations; and (ii) the
consummation of a plan of reorganization incorporating the
terms of the Master Agreement. In addition, the
successorship provisions of the Master Agreement become
effective immediately upon the Union members' ratification
of the Master Agreement.
* Term. The Master Agreement expires on April 27, 2014.
The Master Agreement contains a successorship provision, which
obligates AbitibiBowater to inform any purchaser, lessee,
transferee or assignee of a facility covered by the CBAs of the
Master Agreement's existence.
The Successorship Clause also obligates AbitibiBowater to make the
sale, transfer, or assignment of that facility conditional upon
the purchaser, lessee, transferee or assignee assuming all the
obligations of the Master Agreement until its expiration date and
treating the affected employees in accordance with the terms of
the Master Agreement.
Pursuant to the Master Agreement, the Debtors have agreed to
assume in full all of the CBAs, as modified, pursuant to their
Chapter 11 Plan of Reorganization.
In addition, the Master Agreement provides that AbitibiBowater:
-- will pay in the ordinary course all obligations that
accrued under the CBAs prior to assumption including accrued
vacation, accrued sick leave, unpaid medical and other
benefits, unpaid obligations owing to any pension and
welfare plan, and union dues and other monies withheld from
employee payroll; and
-- will process through the grievance and arbitration
procedure of the applicable CBA any grievance that is
either pending as of the date of the assumption of the CBA
or that involves an alleged breach of the CBA that occurred
prior to the assumption of the CBA, and will pay in the
ordinary course and comply with any settlement entered by
the parties or remedy ordered by an arbitrator acting
pursuant to the CBA.
Unions' Claims
The USW filed proofs of claim on November 2009 and April 2010:
Filing
Claim No. Date Asserted Debtor
--------- -------- ---------------
3442 11/11/09 Bowater Newsprint South Operations LLC
3443 11/11/09 AbitibiBowater Inc.
3444 11/11/09 Bowater Inc.
6931 Amended 04/06/10 Bowater Newsprint South Operations LLC
6932 Amended 04/06/10 Bowater Inc.
6933 Amended 04/06/10 AbitibiBowater Inc.
The Union Claims assert liquidated and unliquidated claims against
the Debtors alleging amounts more than $108 million for claims
arising from grievances, accrued liabilities relating to other
post-retirement benefits, miscellaneous benefits, severance and
gain sharing.
The Master Agreement provides for the continuation of, as
modified, the pension and retiree benefits. Accordingly, upon the
effectiveness of the Master Agreement, the Unions have agreed to
withdraw their proofs of claims without prejudice to:
(1) AbitibiBowater's obligations under the Master Agreement
and the order approving the Debtors' Motion;
(2) the Unions' pursuit of grievances and arbitrations in the
ordinary course;
(3) the right of the Unions or the Company to apply to the
Court for the resolution of any dispute over the priority,
or the treatment under any plan of reorganization, to be
accorded to any grievance settlement entered by the
parties or remedy ordered by an arbitrator acting pursuant
to the CBA; and
(4) the Unions' right to reinstate and file proofs of claim if
a plan of reorganization incorporating the Master
Agreement is not consummated.
Full-text copies of the Unions Stipulation and Master Agreement
are available for free at:
http://bankrupt.com/misc/ABH_UnionsStip.pdf
About AbitibiBowater Inc.
AbitibiBowater (OTC: ABWTQ) produces newsprint, commercial
printing papers, market pulp and wood products. It is the eighth
largest publicly traded pulp and paper manufacturer in the world.
AbitibiBowater owns or operates 22 pulp and paper facilities and
26 wood products facilities located in the United States, Canada
and South Korea. The Company also recycles old newspapers and
magazines.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). The Company and its
Canadian affiliates commenced parallel restructuring proceedings
under the Companies' Creditors Arrangement Act before the Quebec
Superior Court Commercial Division the next day. Alex F. Morrison
at Ernst & Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Pauline K. Morgan,
Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt &
Taylor, in Wilmington, represent the Chapter 15 Debtors.
U.S. Bankruptcy Judge Kevin Carey handles the Chapter 11 cases of
AbitibiBowater Inc. and its U.S. affiliates and the Chapter 15
case of ACI, et al.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ABITIBIBOWATER INC: Reduces Woodbridge Claim to $9 Million
----------------------------------------------------------
AbitibiBowater Inc. and its units ask the Court to temporarily
reduce the amount of Claim No. 4370 filed by The Woodbridge
Company Limited, Woodbridge International Holdings Limited and
Woodbridge International Holdings S.A. to $9 million solely for
the purposes of voting on the Second Amended Joint Plan of
Reorganization.
The Woodbridge Parties filed Claim No. 4370 against Debtor Abitibi
Consolidated Sales Corporation for $213.75 million based allegedly
on damages arising from the rejection of a certain call agreement.
ACSC owns 52.5% of the Augusta Newsprint Company, while Augusta
Newsprint Inc., a subsidiary of the Woodbridge Entities, owns the
remaining 47.5%. The Court entered an order in October 2009,
authorizing ACSC to reject a call agreement between the Woodbridge
Parties and the Debtors, which required ACSC to either buy out its
partner at a disproportionately high price, or alternatively,
relinquish to WIHL and WIHSA a far greater percentage of proceeds
from a third party sale than ANI's 47.5% interest in the
Partnership.
Although unclear from the attachments of Claim No. 4370, the
$213.7 million claim amount presumably represents the Woodbridge
Parties' alleged entitlement to damages in the approximate amount
of the "Alternative Transaction Price," since the rejection of the
Call Agreement prevented the Woodbridge Parties from obtaining the
purchase price from ACSC or the Alternative Transaction Price from
another buyer of the Partnership, Sean T. Greecher, Esq., at Young
Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, points
out.
Mr. Greecher argues that the Claim is grossly overstated. At the
outset, he clarifies, ACSC was "not required" to exercise its
buyout option and pay the purchase price.
More importantly, Mr. Greecher says, rejection of the Call
Agreement could never result in damages equal to the Alternative
Rejection Price of $215 million. The Call Agreement only entitled
the Woodbridge Parties to receive the amount that a third-party
buyer would have been willing to pay for the Partnership, up to a
maximum of $215 million, he notes.
Mr. Greecher maintains that the amount of the Woodbridge Claim
based on the fair market value of the Partnership, adjusted for
the Woodbridge Parties' ownership interest in the Partnership and
to reflect actual damages sustained from the forced sale, is
estimated at $9 million:
-- Mr. Greecher says a forced sale would have yielded anything
close to the entire Alternative Transaction Price. The
Monitor appointed in the Canadian Debtors' cases estimates
that the sale price that ultimately could have been
obtained would have been approximately $90 million -- the
Forced Sale Amount -- not $213 million.
-- Any damages sustained by the Woodbridge Parties, Mr.
Greecher adds, must be offset by the value of ANI's
percentage interest in the going-concern Partnership.
Thus, to properly calculate the amount of the Claim, the
Forced Sale Amount should be reduced in an amount equal to
the estimated value of ANI's interest in the Partnership as
a going concern. The Debtors' financial advisors estimate
the total value of the Partnership as a going concern at
$170 million as of March 30, 2009. Thus, the Woodbridge
Parties' share of the Partnership value at 47.5% is
approximately $81 million.
Parties Stipulate
The Debtors relate that subsequent to the filing of their
objection, they worked with the Woodbridge Parties with respect to
informal concerns raised by the Woodbridge Parties.
As a result of the negotiations, the parties stipulate that the
Debtors' objection to Woodbridge's Claim is resolved and the Claim
is temporarily reduced to $100 solely for purposes of voting on
the Plan.
Judge Kevin J. Carey approves the parties' stipulation.
About AbitibiBowater Inc.
AbitibiBowater (OTC: ABWTQ) produces newsprint, commercial
printing papers, market pulp and wood products. It is the eighth
largest publicly traded pulp and paper manufacturer in the world.
AbitibiBowater owns or operates 22 pulp and paper facilities and
26 wood products facilities located in the United States, Canada
and South Korea. The Company also recycles old newspapers and
magazines.
The Company and several of its affiliates filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on April 16, 2009
(Bankr. D. Del. Lead Case No. 09-11296). The Company and its
Canadian affiliates commenced parallel restructuring proceedings
under the Companies' Creditors Arrangement Act before the Quebec
Superior Court Commercial Division the next day. Alex F. Morrison
at Ernst & Young, Inc., was appointed CCAA monitor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as the
Debtors' U.S. bankruptcy counsel. Stikeman Elliot LLP, acts as
the Debtors' CCAA counsel. Young, Conaway, Stargatt & Taylor, in
Wilmington, Delaware, serves as the Debtors' co-counsel, while
Troutman Sanders LLP in New York, serves as the Debtors' conflicts
counsel in the Chapter 11 proceedings. The Debtors' financial
advisors are Advisory Services LP, and their noticing and claims
agent is Epiq Bankruptcy Solutions LLC. The CCAA Monitor's
counsel is Thornton, Grout & Finnigan LLP, in Toronto, Ontario.
Abitibi-Consolidated Inc. and various Canadian subsidiaries filed
for protection under Chapter 15 of the U.S. Bankruptcy Code on
April 17, 2009 (Bankr. D. Del. 09-11348). Pauline K. Morgan,
Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt &
Taylor, in Wilmington, represent the Chapter 15 Debtors.
U.S. Bankruptcy Judge Kevin Carey handles the Chapter 11 cases of
AbitibiBowater Inc. and its U.S. affiliates and the Chapter 15
case of ACI, et al.
As of Sept. 30, 2008, the Company had $9,937,000,000 in total
assets and $8,783,000,000 in total debts.
Bankruptcy Creditors' Service, Inc., publishes AbitibiBowater
Bankruptcy News. The newsletter provides gavel-to-gavel coverage
of the Chapter 11 proceedings and parallel proceedings under the
Companies' Creditors Arrangement Act in Canada undertaken by
Abitibibowater Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AGUA CALIENTE: Fitch Downgrades Issuer Default Rating to 'BB'
-------------------------------------------------------------
Fitch Ratings has downgraded the Agua Caliente Band of Cahuilla
Indians' ratings:
-- Issuer rating to 'BB' from 'BB+';
-- Revenue bonds, series 2003 to 'BB+' from 'BBB-';
-- Senior secured notes, series 2006, 2007, and 2008 to 'BB+'
from 'BBB-'.
The Rating Outlook remains Negative.
The downgrade reflects the continued poor operating performance at
Agua's two casino properties in the Palm Springs, CA region, which
has exceeded Fitch's prior expectations. Through the first nine
months of fiscal 2010 (fiscal year ends Sept. 30) EBITDA declined
by 10% compared to the same period last year. The primary credit
strength supporting Agua's 'BB' issuer rating is the credit's
solid albeit deteriorating liquidity profile. Despite the poor
operating trends, both properties generate strong free cash flow
in excess of the gaming division's fixed expenses, there are no
significant near-term debt maturities, and no capital project
development risk.
Southern California Gaming Market Remains Weak:
When Fitch downgraded Agua's issuer rating to 'BB+' in December
2009, Fitch indicated that maintaining the 'BB+' rating was
predicated on the expected stabilization of operating trends (i.e.
fewer bad trends) and that continued significant operating
declines would likely lead to further rating pressure. Agua's
EBITDA fell during its peak season by 18% and 16% in May and June,
respectively, an acceleration from the more moderate declines seen
in the first seven months of the fiscal year. There was no room
in the previous rating for the sequential deterioration, which
primarily drove the rating downgrade. With unemployment rate
lingering around 14%-15% in the Riverside-San Bernardino MSA and
more than 4% of the households in the area filing for foreclosure
in the first half of 2010 (RealtyTrac.com), a meaningful recovery
in demand seems unlikely in the near term.
Adequate Liquidity and Solid Free Cash Profile Offset Weak
Operating Trend:
The 'BB' issuer rating is supported by the tribe's still ample
financial flexibility. Fitch believes that the casino cash flows
at current levels provide significant cushion after debt service,
maintenance capex and the tribe's basic governmental needs are
met. Further, liquidity needs are minimal as the tribe's debt is
amortizing and there are no major capital projects on the horizon.
Sources of cash include only cash flow of the gaming division and
cash on the balance sheet, as the credit does not maintain access
to a committed source of external liquidity. Mitigating risk
related to lack of access to external capital, the casinos
generate ample free cash flow. Even in a Fitch stress case
scenario assuming a significant EBITDA decline in Agua's fiscal
2010 before a moderation in the operating trend in fiscal 2011,
the credit maintains more than 2.0 times coverage of its maximum
annual debt service requirement.
Guidelines for Further Rating Actions
The Negative Outlook indicates that another downgrade is possible
in the near-to-intermediate term if there is no stabilization in
the operating trends. Fitch expects EBITDA declines to moderate
over the next three to six months and flat growth for fiscal 2011.
These assumptions are contingent on conditions in Agua's market
having bottomed out in calendar 2010 and beginning to marginally
improve by 2011.
Fitch notes the 2.0x MADS coverage bond covenant, which would be
an event of default if breached. Agua would trigger the covenant
if EBITDA was to decline by 11% from latest 12-months EBITDA
through June 30, 2010. As of the most recent quarter, Fitch
calculates Agua's LTM coverage of MADS was 2.3x, although coverage
of actual debt service was more comfortable at 2.5x. While Fitch
beleives it unlikely that the bondholders will elect to accelerate
the principal in case of a breach, and relatively amicable
waivers/forbearances or a covenant amendment would likely ensue,
the uncertainty as to how these events would unfold is a concern.
A downgrade of Agua's ratings resulting from a potential covenant
breach would likely be capped at one or two notches given the
still strong financial flexibility at around the 2.0x threshold.
Fitch estimates Agua's LTM debt/EBITDA leverage is slightly more
than 3x as of June 30, 2010. Current ratings anticipate a
leverage outlook in the 3x range through fiscal 2011, while there
would be downward rating pressure if the leverage outlook
approached the mid-3x range.
Factored into the rating is Agua's recent use of its governmental
reserves to supplement its governmental expenditures including per
capita distributions, compensating for the declining cash flows at
the tribe's casinos. The government has maintained solid
financial flexibility due to its conservative financial policy of
building cash reserves in the event of a drop in the casino cash
flow distributed to the government. Historically, the tribe's
practice has been to transfer essentially all cash generated by
the casinos (before debt service) to the government and then
allocate funds for per capita distributions, general governmental
services and Economic Development, which has been the functional
component for debt service. As the cash flows shrunk, the amounts
allocated for Economic Development per the set allocation formula
have been insufficient to cover full debt service requirements,
prompting the tribe to make up the shortfalls using its
governmental reserves. This allowed the tribe to keep the per
capital distribution allocation percentage intact. Agua used
significant amount of reserves to make up shortfalls when making
its October 2009 principal payment and intends to do the same for
the October 2010 payment. While the casino management has
expressed that the tribe would likely reduce the per capita
distribution allocation at some point to maintain the reserves,
the continued use of reserves for debt service is a credit concern
and is another consideration in the downgrade to 'BB' and the
Negative Outlook. It should be noted that the bondholders do have
priority in the casino cash flows over the tribe, and that daily
sweeps of cash flows to bond trustee would be activated if debt
service coverage were to decline below 2.0x should the tribe fail
to cure the covenant violation within the prescribed time frame.
Transaction Ratings Downgraded to 'BB+'
The bonds and notes rank pari passu with respect to bondholders'
security interest in the cash flows of the tribe's casino gaming
operations. A 'BB+' rating is assigned to debt secured by a lien
on the gaming enterprise cash flows. The transactions are rated
one notch above the issuer rating of 'BB' due to credit
enhancement provided by security covenants included in the legal
documents associated with the transactions. The 2003 bonds and
2006, 2007 and 2008 notes have term maturities in 2015, 2016 and
2021. Principal payments on the notes began in 2008 and will ramp
up through 2010.
ALL AMERICAN: Financing Constraints Pose Challenges
---------------------------------------------------
All American Group Inc. said in an update to shareholders that it
recorded net sales from continuing operations of $19.6 million for
the second quarter of 2010 compared to $17.7 million reported for
the same period in 2009, an increase of 10.8%. The Company said
this comparison is even more favorable when looking at the first 6
months, with total revenues almost 42% higher than in 2009,
totaling $41.1 million vs. $29.0 million last year. Nevertheless,
the increased revenues and improved year-to-date operating results
were insufficient to prevent a bottom-line loss for the quarter.
Non-cash charges due to the accounting of the HIG All American,
LLC convertible debt and warrants greatly impacted reported
bottom-line losses. The accounting for this debt and these
warrants must be re-evaluated quarterly in accordance with GAAP.
Of the $15.3 million in reported losses for the first half of
2010, $7.3 million is a non-cash debt extinguishment charge
related to the First Amendment to the HIG loan agreement.
In addition, $2.3 million of the total interest expense of $3.0
million are also non-cash charges related to the HIG debt. These
charges do not impact the operating results or the cash flow of
the Company. The Company said, "Therefore, we believe the
appropriate financial metrics to focus on as proxies for Company
performance are revenues, operating profits and cash flow."
According to the Company, "A major challenge to our bottom line is
covering the fixed costs of manufacturing plants experiencing very
low capacity utilization. This is directly tied to revenues,
which have lagged because of the disparity in major project
activity year over year, and because of continuing depressed
housing market conditions. The well-known difficulties in
obtaining financing for home sales spread to financing of
commercial projects. The timing of large projects has become
almost entirely dependent upon when banks release funding to our
customers. This unexpectedly delayed revenues from projects that
were under contract. For example, due solely to financing
constraints faced by our customers, construction of a large
apartment complex stalled mid-project, and a hotel resort project
has been postponed several times this year."
A full-text copy of the Shareholder Update is available for free
at http://ResearchArchives.com/t/s?6a80
About All American Group
Elkhart, Indiana-based All American Group, Inc., formerly Coachmen
Industries, Inc., (OTC:COHM.PK) says it is one of America's
premier systems-built construction companies under the ALL
AMERICAN BUILDING SYSTEMS(R), ALL AMERICAN HOMES(R), and MOD-U-
KRAF(R) brands, as well as a manufacturer of specialty vehicles.
At June 30, 2010, the Company had total assets of $81.310 million,
total liabilities of $48.104 million, and shareholders' equity of
$33.206 million.
During the first quarter of 2010, the Company failed to meet
certain financial covenants of the credit agreement with H.I.G.
All American LLC. H.I.G. did not declare the Company to be in
default of any covenant and on April 5, 2010, the Company and
H.I.G. entered into the First Amendment to the Loan Agreement.
H.I.G. waived specified Events of Default that had occurred under
the Loan Agreement dated October 27, 2009 between the Company and
H.I.G. prior to April 5, 2010.
The Company said in its Form 10-Q report for the second quarter of
2010, that operating results for the six month period ended June
30, 2010, failed to meet the revised debt covenants set with
H.I.G. in the First Amendment to the Loan Agreement. H.I.G. has
waived the covenant defaults through July 31, 2010 in exchange for
a waiver fee and expenses of $800,000 representing the value of
the penalties prescribed in the First Amendment, plus expenses,
and the issuance on August 24, 2010 of the Second Amended and
Restated Tranche B Note. The Second Amendment provides that the
waiver fee and expenses, plus accrued interest on the convertible
debt thru August 24, 2010 of $800,000, be added to the principal
amount of the convertible note. As a result of the Second
Amendment, the Tranche B Note has a face value of $12.5 million.
The Board of Directors and H.I.G. are currently in discussions to
work out mutually acceptable agreements for the long-term. Since
the Company cannot be assured it will be in compliance with the
existing covenants after July 31, 2010 and discussions with H.I.G.
regarding revised covenants are continuing.
* * *
McGladrey & Pullen LLP, in Elkhart, Indiana, expressed substantial
doubt about the Company's ability to continue as a going concern
following the Company's 2009 results. The auditors noted that
Coachmen has suffered recurring losses from operations and
continues to operate in an industry where economic recovery has
been very slow.
AMBAC FIN'L: Harrisburg to Skip $3MM Bond Payment Due in 2 Weeks
----------------------------------------------------------------
Dow Jones Newswires' Romy Varghese reports the city of Harrisburg,
Pennsylvania, said it will skip a $3.29 million municipal-bond
payment due in two weeks, marking the second-largest general-
obligation municipal-bond default this year.
Dow Jones says the city's inability to make the payment, which is
expected to be covered by its bond insurer, may feed worries about
parts of the $2.8 trillion municipal-bond market, particularly
bonds issued by smaller entities that may have fewer resources
than states or larger governments.
According to Dow Jones, Ambac Assurance has insured two general-
obligation bond series of 1997 that Harrisburg said this week it
would default on. Those securities have a face value of $51.5
million and mature in 2022. Ambac officials didn't return calls
for comment, Dow Jones says.
Dow Jones relates the city's interim chief of staff and business
administrator, Robert Kroboth, broke the news of the default in a
letter dated Aug. 30 to the paying agent, BNY Mellon.
"Unfortunately," he wrote, "the City's current financial situation
precludes us from making any transfer to fund for these debt
service payments at this time."
According to Dow Jones, Harrisburg mayor Linda Thompson recently
picked a financial adviser to help the city repair its finances.
But its contract has yet to be finalized, said her spokesman Chuck
Ardo, and the team isn't being paid as it does "outreach."
As reported by the Troubled Company Reporter on August 19,
Harrisburg hired Scott Balice Strategies to help plot a financial
recovery plan.
Incinerator Project
Dow Jones relates that Harrisburg's default is a sign its
financial problems are growing beyond a failed incinerator project
that led some city officials earlier this year to raise the idea
of filing for a rare municipal bankruptcy. Dow Jones notes the
city hasn't formally pursued that option, and Gov. Ed Rendell, a
Democrat, has publicly discouraged the idea. But Harrisburg
officials haven't budgeted $68 million in payments due later this
year for the $288 million debt on the incinerator project. They
did include payments for the general-obligation debt this year,
but still fell short. In a report as of June 30, Harrisburg
officials projected a $4.3 million general-fund deficit at the end
of the year.
A spokesman for the mayor, speaking about the city's fiscal
situation, said the city is "working feverishly to address the
issue, and hopefully it will find a way to meet that challenge."
The incinerator is owned by a municipal entity, the Harrisburg
Authority, that is separate from the city, but the city is the
first guarantor of the debt. Dow Jones relates this year's
incinerator payments have been covered by reserves; by Dauphin
County, which is the guarantor behind the city on almost half of
the debt; and by bond insurer Assured Guaranty Municipal, a unit
of Assured Guaranty Ltd. that has guaranteed $196 million of the
debt.
About Harrisburg, PA
The city of Harrisburg is coping with debt related to a failed
revamp of an incinerator. The outstanding principal on the
Incinerator debt is $288 million. Total principal and interest on
this debt would amount to approximately $458 million. Debt
service payments on the total incinerator debt are $20 million per
year. Of this total, Dauphin County, Pennsylvania, is responsible
for roughly $10 million and Harrisburg is responsible for the
other $10 million. The city is guarantor on 100% of the $288
million Incinerator debt.
About Ambac Assurance
Ambac Assurance Corporation is the principal operating subsidiary
of Ambac Financial Group, Inc.
In March 2010, the Office of the Commissioner of Insurance of the
State of Wisconsin commenced rehabilitation proceedings with
respect to $35 billion in policies written by Ambac Assurance.
Those policies primarily cover principal and interest payments on
souring mortgage securities. The regulator also negotiated a
potential settlement to roughly $17 billion in contracts on
complex financial products with a group of banks. The products --
collateralized-debt obligations -- are pools of securities that
have sharply deteriorated in value.
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.
KPMG LLP, in New York, expressed substantial doubt about the
Company's ability to continue as a going concern, following the
Company's 2009 financial results. The independent auditors noted
of the significant deterioration of Ambac's 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 of the Company's limited liquidity.
Ambac Financial noted in its Form 10-Q for the quarter ended
June 30, 2010 that its liquidity and solvency are largely
dependent on dividends principal financial guarantee operating
subsidiary, Ambac Assurance Corporation, and on the value of the
subsidiary. Ambac Financial said that Ambac Assurance is "highly
unlikely" to be able to make dividend payments to Ambac for the
foreseeable future. Ambac Financial said it is currently pursuing
raising additional capital and is also pursuing a restructuring of
its outstanding debt through a prepackaged bankruptcy proceeding.
The Company's balance sheet at June 30, 2010, showed
$30.05 billion in total assets, $31.47 billion in total
liabilities, and $1.42 billion in total stockholders' deficit.
Ambac once boasted top triple-A credit ratings. In November 2009,
Ambac warned it could have problems paying off debt that comes due
in 2011. Before the financial crisis, Ambac was the second-
biggest bond insurer behind MBIA Inc.
BANK OF AMERICA: Must Face Lawsuits in Merrill Merger
-----------------------------------------------------
American Bankruptcy Institute reports that a U.S. District Judge
ruled on Friday that Bank of America Corp. must defend lawsuit
claims it concealed bonuses and losses at Merrill Lynch & Co after
it agreed to acquire the brokerage firm.
About Bank of America
Based in Charlotte, North Carolina, Bank of America --
http://www.bankofamerica.com/-- is one of the world's largest
financial institutions. The Company serves more than 59 million
consumer and small business relationships with more than 6,100
retail banking offices, nearly 18,700 ATMs and online banking with
nearly 29 million active users. Following the acquisition of
Merrill Lynch in January 2009, BofA is among the world's leading
wealth management companies and is a global leader in corporate
and investment banking and trading across a broad range of asset
classes serving corporations, governments, institutions and
individuals around the world. Bank of America offers support to
more than 4 million small business owners. The Company serves
clients in more than 150 countries. Bank of America Corporation
stock is a component of the Dow Jones Industrial Average and is
listed on the New York Stock Exchange.
BofA sought government backing in completing its acquisition of
Merrill Lynch. Merrill Lynch & Co. Inc. -- http://www.ml.com/--
is a wealth management, capital markets and advisory companies
with offices in 40 countries and territories.
* * *
BofA has received US$45 billion in government bailout money since
the economic collapse in 2008.
BEAR ISLAND: Sixth Avenue Submits Bid to Buy Assets
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Sixth Avenue Investment Co LLC submitted a proposal
to serve as the stalking horse in place of the holders of 65% of
the first lien debt in the bidding for assets of Bear Island Paper
Co. LLC and its Canadian parent White Birch Paper Co.
According to Mr. Rochelle, Sixth Avenue says it will raise the
cash portion of the purchase price to $100 million, compared with
$90 million cash being offered by BD White Birch Investment LLC,
the group the company intends on having make the first bid at
auction. Sixth Avenue is willing to forgo the $10.6 million
breakup fee sought by the BD White Birch group, receive only
$1.5 million in expense reimbursement, sign a contract with no
financing condition, and complete the sale with no further
financial investigation. Otherwise, Sixth Avenue says it is
willing to sign a contract on the same terms as BD White Birch.
Sixth Avenue will also provide replacement financing for the
Chapter 11 case.
BD White Birch includes affiliates of Black Diamond Capital
Management LLC, Credit Suisse Group AG and Caspian Capital
Advisors LLC.
Sixth Avenue is a group that includes Blue Mountain Capital
Management LLC, Lombard General Insurance Co. of Canada, and
Macquarie Bank Ltd.
About White Birch & Bear Island
Canada-based White Birch Paper Company is the second-largest
newsprint producer in North America. As of December 31, 2009, the
White Birch Group held a 12% share of the North American newsprint
market and employed roughly 1,300 individuals (the majority of
which reside in Canada). Bear Island Paper Company, L.L.C., is a
U.S.-based unit of White Birch.
Bear Island filed a voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Case No. 10-31202) on
February 24, 2010. Bear Island estimated assets of $100 million
to $500 million and debts of $500 million to $1 billion in its
Chapter 11 petition.
White Birch filed for bankruptcy protection under Canada's
Companies' Creditors Arrangement Act, before the Superior Court
for the Province of Quebec, Commercial Division, Judicial District
of Montreal, Canada. White Birch and five other affiliates --
F.F. Soucy Limited Partnership; F.F. Soucy, Inc. & Partners,
Limited Partnership; Papier Masson Ltee; Stadacona Limited
Partnership; and Stadacona General Partner, Inc. -- also sought
bankruptcy protection under Chapter 15 of the U.S. Bankruptcy Code
(Bankr. E.D. Va. Case No. 10-31234).
Jonathan L. Hauser, Esq., at Troutman Sanders LLP, in Virginia
Beach, Virginia; and Richard M. Cieri, Esq., Christopher J.
Marcus, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, serve as counsel to White Birch, as Foreign
Representative. Kirkland & Ellis and Troutman Sanders also serve
as Chapter 11 counsel to Bear Island. AlixPartners LLP serves as
financial and restructuring advisors to Bear Island, and Lazard
Freres & Co., serves as investment banker. Chief Judge Douglas O.
Tice, Jr., handles the Chapter 11 and Chapter 15 cases.
BIO-KEY INT'L: Files Amended 10-Q; Earns $234,800 in June 30 Qtr.
-----------------------------------------------------------------
BIO-Key International, Inc., filed on August 24, 2010, an amended
quarterly report on Form 10-Q/A to correct certain typographical
errors contained in the original report which was filed on
August 16, 2010.
Specifically, the Company's consolidated statements of operations
contained in the original report incorrectly listed the Income
(loss) available to common stockholders at the three months ended
June 30, 2010, as "$83,317", which should have been "$74,267", at
the three months ended June 30, 2009, as "($1,256,043)", which
should have been "($225,866)", and at the six months ended
June 30, 2010, as "$489,821", which should have been "$916,090",
and at the six months ended June 30, 2010, as "($2,407,474)",
which should have been "($365,435)".
The Company reported net income of $234,766 on $1.4 million of
revenue for the three months ended June 30, 2010, compared with
net income of $139,770 on $280,685 of revenue for the same period
of 2009.
The Company has incurred significant losses to date, and at
June 30, 2010, it had an accumulated deficit of $48.9 million.
The Company's balance sheet at June 30, 2010, showed $6.9 million
in total assets, $1.9 million in total liabilities, $2.9 million
in Series D redeemable convertible preferred stock, and
stockholders' equity of $2.1 million.
As reported in the Troubled Company Reporter on March 30, 2010,
CCR LLP, in Westborough, Mass., expressed substantial doubt about
the Company's ability to continue as a going concern, following
its 2009 results. The independent auditors noted of the Company's
substantial net losses in recent years and accumulated deficit at
December 31, 2009.
A full-text copy of the Form 10-Q/A is available for free at:
http://researcharchives.com/t/s?6a0e
Wall, N.J.-based BIO-key International, Inc. (OTC Bulletin Board:
BKYI) -- http://www.bio-key.com/-- develops and delivers advanced
identification solutions to commercial and government enterprises,
integrators, and custom application developers.
BRIDGEVIEW AEROSOL: Gets 8th Interim OK to Use Well Fargo's Cash
----------------------------------------------------------------
The Hon. Pamela S. Hollis of the U.S. Bankruptcy Court for the
Northern District of Illinois entered an interim order, for the
eight time, allowing Bridgeview Aerosol, LLC, Aeronuevo, LLC, and
USAerosols, LLC, to use the cash collateral of Well Fargo Bank,
National Association.
The Debtors may use the cash collateral until mid-September to
operate their businesses and to facilitate the reorganization of
their balance sheets and business. The Debtors may also use the
excess cash for raw materials purchases and factory labor.
A hearing on the Debtors' further use of the cash collateral will
be held on September 14, at 10:30 a.m., Central Time. Objections,
if any, are due on September 7.
As reported in the Troubled Company Reporter on March 26, the
Debtors owe Wells Fargo $12,000,000 on a secured loan. Wells
Fargo has consented to Debtors' use of cash collateral, subject to
a budget.
The Debtors will make provisional interest payments to Wells Fargo
as adequate protection for any diminution in value of its
collateral:
(a) $36,251 per month for their use of the cash collateral,
plus
(b) $13,901 per month for the Debtors' use of the property in
Bridgeview, Illinois, that AeroNuevo owns.
The Debtors will also grant Wells Fargo Bank liens of the highest
available priority upon any asset that the Debtors acquire
postpetition and any proceeds generated from the property; and
adequate protection liens, which will be subject only to prior
perfected and unavoidable liens in property of the Debtors' estate
as of the Petition Date. In case the adequate protection liens
and provisional interest payments are inadequate, Wells Fargo will
have an allowed claim against the Debtors' estates that will be
superior to any claim, whether an administrative of priority
claim, against the Debtors' estates.
About Bridgeview Aerosol
Bridgeview, Illinois-based Bridgeview Aerosol, LLC, provides
manufactures, packages and distributes household cleaning and
automotive aerosol products. Affiliate AeroNuevo owns the real
property on which BVA operates. USAerosols is the parent company
of BVA and AeroNuevo.
Bridgeview Aerosol and its affiliates filed for Chapter 11
protection on October 30, 2009 (Bankr. N.D. Ill. Lead Case No. 09-
41021). Steven B. Towbin, Esq., at Shaw Gussis et al., assists
the Debtors in their restructuring efforts. Bridgeview Aerosol
estimated $10 million to $50 million in assets and debts as of the
Petition Date.
BROWN PUBLISHING: Asks for Plan Extension, Sees Sale to PNC Friday
------------------------------------------------------------------
Brown Publishing Company and its units ask the U.S. Bankruptcy
Court for the Eastern District of New York to extend their
exclusive periods to file and solicit acceptances for a Chapter 11
plan until October 29, 2010; and December 28, respectively.
The Debtors explain that they were unable to close the sale of
their assets to Brown Media Corporation because BMC confirmed that
it lacked the financial ability to close at this time. The
Debtors commenced discussions with PNC Bank, N.A., the next
highest bidder for the assets, and PNC informed the Debtors that,
while it hopes to close sooner, it expects a closing to occur no
later than September 3.
The Debtors relate that they are in the process of completing an
initial draft of a plan of liquidation, which will provide for the
distribution of the net proceeds of the asset sales, including any
sales that may be closed in the coming days; the liquidation of
any remaining assets, including causes of action; and the
distribution of all resulting proceeds to the Debtors' creditors
in accordance with their relative priorities.
The Debtors filed their extension motion before the exclusive plan
proposal period was set to expire on August 30.
About Brown Publishing
Headquartered in Cincinnati, Ohio, The Brown Publishing Company
owns business publications in Ohio, Utah, Texas, South Carolina,
New York, and Iowa. Brown publishes 15 daily, 32 weekly, 11
business and 41 free publications. There are also 51 websites.
Seventy-eight of the publications are in Ohio. Brown publishes
Dan's Papers, the weekly newspaper with the largest circulation in
the area of eastern Long Island, New York, known as the Hamptons.
Brown also publishes the Montauk Pioneer, which it calls the
official newspaper of Montauk, New York.
The Company filed for Chapter 11 bankruptcy protection on
April 30, 2010 (Bankr. E.D.N.Y. Case No. 10-73295). Edward M.
Fox, Esq., at K&L Gates LLP, assists the Company in its
restructuring effort. The Company estimated $10 million to
$50 million in assets and debts in its Chapter 11 petition.
BROWNIE'S MARINE: June 30 Balance Sheet Upside-Down by $303,309
---------------------------------------------------------------
Brownie's Marine Group, Inc., had total assets of $1,949,671,
total liabilities of $2,160,980, and a stockholders' deficit of
$303,309 as of June 30, 2010.
The Company posted a net loss of $291,740 for the three months
ended June 30, 2010, from a net loss of $48,290 for the same
period a year ago. The Company posted a net loss of $359,894 for
the six months ended June 30, 2010, from a net loss of $217,884
for the same period a year ago.
Total net revenues were $658,065 for the three months ended
June 30, 2010, from $569,849 for the same period a year ago.
Total net revenues were $1,122,248 for the six months ended
June 30, 2010, from $1,081,153 for the same period a year ago.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a7b
Based in Ft. Lauderdale, Florida, Brownie's Marine Group, Inc.,
designs, tests, manufactures and distributes recreational hookah
diving, yacht based scuba air compressor and Nitrox Generation
Systems, and scuba and water safety products through its wholly
owned subsidiary Trebor Industries, Inc. The Company sells its
products both on a wholesale and retail basis, and does so from
its headquarters and manufacturing facility in Fort Lauderdale,
Florida. The Company does business as Brownie's Third Lung, the
dba name of Trebor Industries, Inc. The Company's common stock is
quoted on the OTCBB under the symbol "BWMG".
BUTTERMILK TOWNE: Can Access BofA's Cash Until December 10
----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky
authorized Buttermilk Towne Center, LLC, to use cash that may be
subject to liens of Bank of America, N.A.
The Court's order provides that the Debtor can use the cash
collateral to fund its Chapter 11 case, pay suppliers and other
parties until December 10, 2010.
As adequate protection for any diminution in value of the lenders'
collateral, the Debtors will grant BofA a replacement lien upon
all property of the Debtor of the same type and description as the
prepetition collateral. As additional adequate protection, the
Debtor will make the adequate protection payments to BofA.
About Buttermilk Towne Center
Cincinnati, Ohio-based Buttermilk Towne Center LLC, owns and
operates a commercial real estate development, known as Buttermilk
Towne Center, located in Crescent Springs, Kenton County,
Kentucky.
The Company filed for Chapter 11 bankruptcy protection on
April 28, 2010 (Bankr. E.D. Ky. Case No. 10-21162). Paige Leigh
Ellerman, Esq., who has an office in Cincinnati, Ohio, assists the
Company in its restructuring effort. The Company disclosed
$28,999,954 in assets and $41,085,856 in liabilities as of the
Petition Date.
BUTTERMILK TOWNE: Plan Contemplates Full Payment to All Creditors
-----------------------------------------------------------------
Buttermilk Towne Center, LLC, submitted to the U.S. Bankruptcy
Court for the Eastern District of Kentucky a proposed Plan of
Reorganization and an explanatory Disclosure Statement.
According to the Disclosure Statement, the Debtor intends to
reorganize its business for the benefit of itself, its creditors
and its equity holders. In addition, the Plan contemplates
promoting equality of treatment for similarly situated creditors
and similarly situated equity interest holders with respect to the
distribution of the Debtor's assets.
Treatment of Claims and Interests
Class of Claim/Interest Estimated Recovery
----------------------- ------------------
2 - Bank of America, N.A. 100%
3 - L.A. Fitness International, LLC Claim 100%
4 - PILOT Claims 100%
5 - General Unsecured Claims 100%
6 - Equity Interests Not Applicable
Holders of equity interests will retain the equity interests in
the Debtor and the Reorganized Debtor and will cause to be
contributed to the Debtor or the Reorganized Debtor on or after
the Effective Date an amount not to exceed $________ to the extent
funds are necessary to make the distributions under the Plan.
The Debtor is represented by:
Timothy J. Hurley, Esq.
Paige Leigh Ellerman, Esq.
Beth A. Silvers, Esq.
TAFT STETTINIUS & HOLLISTER LLP
425 Walnut Street, Suite 1800
Cincinnati, OH 45202
Tel: (513) 381-2838
Fax: (513) 381-0205
and
1717 Dixie Highway, Suite 910
Covington, KY 41011-4704
Tel: (859) 331-2838
E-mail: hurley@taftlaw.com
ellerman@taftlaw.com
silvers@taftlaw.com
About Buttermilk Towne Center LLC
Cincinnati, Ohio-based Buttermilk Towne Center LLC, owns and
operates a commercial real estate development, known as Buttermilk
Towne Center, located in Crescent Springs, Kenton County,
Kentucky.
The Company filed for Chapter 11 bankruptcy protection on
April 28, 2010 (Bankr. E.D. Ky. Case No. 10-21162). Paige Leigh
Ellerman, Esq., who has an office in Cincinnati, Ohio, assists the
Company in its restructuring effort. The Company disclosed
$28,999,954 in assets and $41,085,856 in liabilities as of the
Petition Date.
CARE INVESTMENT: Trading Suspended at New York Stock Exchange
-------------------------------------------------------------
Care Investment Trust Inc. received a letter dated August 27,
2010, from the New York Stock Exchange stating that the common
stock of the Company was suspended from the NYSE as of market
close on August 26, 2010, and an application by the NYSE to the
Securities and Exchange Commission to delist the issue is pending
completion of applicable NYSE procedures, which includes the
Company's right to appeal the NYSE Staff's decision. The letter
also stated that the NYSE decision was made after having received
the final results on the completion of the Company's self tender
offer, which confirmed that fewer than 600,000 shares of the
Company's common stock remained publicly held.
The Company intends to appeal the NYSE Staff's decision and to
promptly take steps to cure the deficiency related to the minimum
number of publicly held shares. However, there can be no
assurance that it will be successful in doing so. The review
process by NYSE requires a minimum of 25 business days from
receipt of the Company's notice of appeal.
The actions being considered to address the deficiency related to
the minimum number of publicly held shares include the possible
declaration of a stock split to be effected in the form of a stock
dividend, subject to, among other things, the review and approval
of the Board of Directors of the Company. The Company will update
stockholders regarding this issue in a future press release.
In order to facilitate trading in its stock during the pendency of
the NYSE appeal process, the Company intends to apply for listing
on the OTCQX listing platform. There can be no assurance that
such application will be granted by the OTCQX or that there will
continue to be an active trading market for the Company's common
stock. The Company will update stockholders of the acceptance or
denial of the OTCQX application through the issuance of a future
press release.
Prior to the completion of the OTCQX application process,
stockholders may trade the Company's stock through their brokers
on the OTCQB.
About Care Investment Trust
Care Investment Trust Inc. is a real estate investment and finance
company investing in healthcare-related real estate and commercial
mortgage debt.
CHEMTURA CORP: Canadian Unit Files Schedules & Statement
--------------------------------------------------------
A. Real Property $27,233,699
See http://bankrupt.com/misc/ChemCanadaReal.pdf
B. Personal Property
B.2 Financial accounts
Royal Bank of Canada
Acct # 01362-000-002-6 1,366,273
Acct # 01362-400-202-8 5,435,392
B.9 Interests in Insurance Policies Undetermined
B.13 Stocks and Interests
Chemtura Korea, Inc. 4,377,823
Unimers India Ltd. Undetermined
Crompton Holdings B.V. 376,662,671
Crompton LLC 51,737,384
B.14 Joint Ventures
Crompton Specialties Limited (Thailand) 11,321,997
B.16 Accounts Receivable 55,833,877
See http://bankrupt.com/misc/ChemCanadaAR.pdf
B.18 Other Liquidated Debts
Receiver General for Canada 973,033
The Minister of Finance 18,539
- Alberta Tax and Revenue Administration
B.22 Patents & Copyrights Undetermined
See http://bankrupt.com/misc/ChemCan_B22.pdf
B.25 Automobiles & Trucks 34,167
B.28 Office Equipment 163,504
B.29 Machinery 31,072,524
See http://bankrupt.com/misc/ChemCan_B29.pdf
B.30 Inventory
Raw Materials 8,501,815
MRO (Stores) 1,902,345
WIP 6,124,669
Finished Goods 14,265,469
B.35 Other Personal Property 14,738,010
See http://bankrupt.com/misc/ChemCan_B35.pdf
TOTAL SCHEDULED ASSETS $584,529,499
========================================================
C. Property Claimed as Exempt Not applicable
D. Secured Unknown
E. Unsecured Priority Claims 637,069
See http://bankrupt.com/misc/ChemCanadaUnsecCreds.pdf
F. Unsecured Non-priority Claims 48,040
See http://bankrupt.com/misc/ChemCanadaUnsecNPCreds.pdf
TOTAL SCHEDULED LIABILITIES $1,119,201,052
========================================================
Statement of Financial Affairs
Noel Blake, assistant secretary of Chemtura Canada Co./Cie,
relates that the Company earned income from operation of its
business within two years prior to the Petition Date:
Year Amount Earned
---- -------------
Jan. to July 2010 $130,526,461
Year 2009 199,301,202
Year 2008 269,753,169
Chemtura Canada also earned income other than operation of its
business within two years before filing for bankruptcy:
Year Amount Earned
---- -------------
Jan. to July 2010 $92,746
Year 2009 48,378,244
Year 2008 1,796,091
The Company paid various creditors within 90 days before it filed
for bankruptcy protection. A redacted list of the creditor
payments is available for free at:
http://bankrupt.com/misc/ChemCan3b.pdf
Within one year immediately preceding the Petition Date, Chemtura
Canada paid two insiders, Dimitri Makres and Noel Blake. A
redacted list of the insider payments is available for free at:
http://bankrupt.com/misc/ChemCan3c.pdf
Mr. Blake tells the Court that Chemtura Canada is a party to more
than 35 lawsuits, 12 of which were closed prior to the Petition
Date while the rest are still pending. A list of the lawsuits is
available for free at http://bankrupt.com/misc/ChemCan4a.pdf
Within one year before the Petition Date, the Company gave gifts,
aggregating more than $50,000, to various charitable
institutions, like Alzheimer Society, Canadian Diabetes, and
Royal Canadian Legion. A list of the gifts is available for free
at http://bankrupt.com/misc/ChemCan7.pdf
Chemtura Canada also disbursed $494,392 to Goodmans LLP with
respect to consultation concerning debt consolidation, relief
under the bankruptcy law or preparation of a petition within one
year before the Petition Date.
The Company also made transfers other than transfers made in the
ordinary course of business to Chemtura Corporation, Receiver
General for Canada, and The Ministers of Finance of Alberta and
Ontario. A list of the transfers is available for free at:
http://bankrupt.com/misc/ChemCan10a.pdf
Chemtura Canada received notice from governmental units that it
may be liable or potentially liable under or in violation of an
Environmental Law on certain sites. A list indicating the
governmental unit, the date of the notice, and the Environmental
Law is available for free at:
http://bankrupt.com/misc/ChemCan17a.pdf
Within six years immediately preceding the Petition
Date, these officers kept the Company's books of accounts and
records:
Officer Period
------- ------
David Bonczek 2 years before filing
Asst. Corporate Controller
James T. Bagley 2 years before filing
Controller, Western Hemisphere
Kevin V. Mahoney 2 years before filing
SVP & Controller
Michael C. Paul 2 years before filing
Controller, Western Hemisphere to Feb. 2009
Noel Blake 2 years before filing
Controller, Canada & Latin America
Portion of Schedules Sealed
The Debtors have sought the Court's authority to file under seal
certain portions of Chemtura Canada Co./Cie's schedules of assets
and liabilities and statements of financial affairs.
As part of its preparation of the Schedules and Statements,
Chemtura Canada identified certain sensitive information that,
absent specific relief to the contrary, will be required to be
made publicly known on its Schedules and Statements, Richard M.
Cieri, Esq., at Kirkland & Ellis LLP, in New York, says.
Chemtura Canada specifically seeks to file under seal versions of
the Schedules and Statements that contain information related to
employee compensation data. Accordingly, Chemtura Canada
proposes to file redacted versions of the Schedules and
Statements that provide a more limited set of information, but
stop short of revealing Confidential Information, including the
precise amounts of the transfers or claims.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC. As of
December 31, 2008, the Debtors had total assets of $3.06 billion
and total debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Proposes Chartis Buybank Agreement
-------------------------------------------------
Chemtura Corp. and its units ask the U.S. Bankruptcy Court for
authority to enter into a settlement, release, and buyback
agreement with certain insurers referred to as "the Chartis
Insurers" and sell portions of certain insurance policies.
The Chartis Insurers are AIU Insurance Company, American Home
Assurance Company, Chartis Specialty Insurance Company, Granite
State Insurance Company, Illinois National Insurance Company, The
Insurance Company of the State of Pennsylvania, Lexington
Insurance Company, and National Union Fire Insurance Company of
Pittsburgh, PA, and their parents and subsidiaries.
The Chartis Insurers' obligation to provide insurance coverage
for diacetyl-related liability is currently the subject of two
pending lawsuits. In February 2010, the Chartis Insurers
commenced an action against Chemtura Canada Co./Cie. In turn,
Chemtura Corp. and Chemtura Canada commenced an action against
the Chartis Insurers. Both actions seek a declaration of
coverage for diacetyl-related claims.
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,
reveals that the Chartis Agreement:
-- resolves the coverage litigation pending among Chemtura
Corp. and Chemtura Canada and the Chartis Insurers; and
-- guarantees access to insurance coverage up to a certain
amount to defend and indemnify present and future
diacetyl-related claims.
The salient terms of the Chartis Agreement are:
(a) Coverage Buyback. Chemtura Corp. and Chemtura Canada will
sell to the Chartis Insurers all coverage under the
policies for diacetyl claims in return for the Chartis
Insurers' agreement to pay the total settlement amount.
(b) Settlement Effective Date. The Agreement becomes
effective on the first business day after the
satisfaction of several conditions, including the
Parties' execution of the Agreement and the Bankruptcy
Court' approval.
(c) Payment of the Present Diacetyl Claim Settlement Amount.
The Chartis Insurers will pay up to $35,000,000 for the
resolution of the Present Diacetyl Claims.
Up to $25,000,000 of the Present Diacetyl Claim
Settlement Amount will be used to pay directly or
reimburse half of the settlement amount under a
settlement the Debtors entered into with Humphrey
Farrington & McClaim P.C., on behalf of the firm's
diacetyl-related clients.
In addition, the Chartis Insurers will pay half of the
indemnity cost, up to an amount aggregating $10,000,000,
of any other Present Diacetyl Claim resolved by
settlement or litigation either to Chemtura or directly
to the counsel for the holder of the claim. The amounts
will be paid within 30 days of receipt of claim notice
letters and executed releases.
Lastly, the Chartis Insurers will pay half of the defense
costs incurred after the execution of the Agreement of
any litigated Present Diacetyl Claim.
(d) Payment of Future Costs. The Chartis Insurers will pay
up to a certain amount of the Debtors' future defense and
indemnity costs related to any claim or lawsuit alleging
injuries arising out of exposure to butter flavorings
containing diacetyl, or a claim for contribution or
indemnity. The Chartis Insurers will be allowed to
participate in the administration and defense of any
Future Diacetyl Claims. All payments for future defense
and indemnity costs will not be subject to any
deductibles, charge backs, retrospective premium
adjustments, or any deductions.
(e) Self-Insured Retentions. The Parties agree that the
Debtors' payments to resolve the Present Diacetyl Claims
-- to the extent the payments meet or exceed $35,000,000,
including the portion of its payment into an escrow
account that is not reimbursed by the Chartis Insurers
under the Agreement, its settlement payments in certain
cases, and any applicable unreimbursed defense costs --
will satisfy and exhaust certain self-insured retentions
that may be applicable to certain claims under certain
Insurance Policies.
(f) Releases and Indemnity. In consideration of the promises
in the Agreement, the Debtors and the Chartis Insurers
fully release, acquit, and forever discharge each other
from any and all claims arising from or relating to
Diacetyl Claims.
(g) Additional Releases. Chemtura Corp. and Chemtura Canada
will obtain and deliver to the Chartis Insurers a release
from each HFM Diacetyl Claimant, as well as a release
from any other individual or corporate holder of a
Diacetyl Claim with whom the Debtors settles the
individual holder's Present Diacetyl Claim. Furthermore,
Chemtura Corp. and Chemtura Canada will obtain and
deliver or have delivered to the Chartis Insurers a
release from each individual and corporate holder of a
Future Diacetyl Claim with whom the Debtors settles the
individual Holder's Future Diacetyl Claim and for which
the Chartis Insurers directly pays or reimburses Chemtura
Corp. and Chemtura Canada for Future Defense Costs.
(h) Dismissal of Coverage Actions and Withdrawal of Proofs of
Claim. As soon as practicable and no later than 10
business days after the Settlement Effective Date, the
Parties will file Stipulated Dismissals in the Coverage
Actions dismissing without prejudice and without costs to
the other Party all claims and causes of action against
the other Party in the Coverage Actions. The Chartis
Insurers further agree that the Agreement resolves the
Proofs of Claim to the extent they involve or are based
on Diacetyl Claims without any further action of the
Parties.
The Debtors filed a redacted version of the Chartis Agreement.
The redacted document does not disclose the specific coverage of
diacetyl claims that may be asserted against the Debtors in the
future. The Debtors seek the Court's authority to file an
unredacted version of the Agreement under seal.
"While the Debtors have no objection to disclosure of the
settlement amount relating to the Present Diacetyl Claims, both
the Chartis Insurers and the Debtors agree that the Future
Diacetyl Claims Settlement Amount is highly sensitive,
confidential business information," Mr. Cieri tells the Court.
He avers that "disclosure of this information may place Chemtura,
Chemtura Canada, and the Chartis Insurers at a disadvantage in
the context of settlement discussions related to any future
diacetyl claims."
A copy of the redacted Chartis Agreement is available for free
at http://bankrupt.com/misc/Chemtura_ChartisInsurersBuybackPact.pdf
The Debtors also ask U.S. Bankruptcy Judge Robert Gerber to hear
their request on September 8, 2010, and set the deadline for the
filing of objections to their request for September 2, 2010.
About Chemtura Corp.
Based in Middlebury, Connecticut, Chemtura Corporation (CEM) --
http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a
global manufacturer and marketer of specialty chemicals, crop
protection products, and pool, spa and home care products.
Chemtura Corporation and 26 of its U.S. affiliates filed voluntary
petitions for relief under Chapter 11 on March 18, 2009 (Bankr.
S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at
Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel.
Wolfblock LLP serves as the Debtors' special counsel. The
Debtors' auditors and accountant are KPMG LLP; their investment
bankers are Lazard Freres & Co.; their strategic communications
advisors are Joele Frank, Wilkinson Brimmer Katcher; their
business advisors are Alvarez & Marsal LLC and Ray Dombrowski
serves as their chief restructuring officer; and their claims and
noticing agent is Kurtzman Carson Consultants LLC. As of December
31, 2008, the Debtors had total assets of $3.06 billion and total
debts of $1.02 billion.
Bankruptcy Creditors' Service, Inc., publishes Chemtura Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Chemtura Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CHEMTURA CORP: Wins OK for Contract Interest Rate Procedures
------------------------------------------------------------
Chemtura Corporation and its debtor affiliates received approval
from the U.S. Bankruptcy Court for uniform contract interest rate
procedures to be implemented in connection with their Chapter 11
Plan of Reorganization.
Section 3.3(n)(i) of the Plan provides that:
"to the extent that the Plan provides for payment of interest
to holders of Allowed Unsecured Claims, such interest shall be
paid in the same form of consideration as the underlying
Allowed Unsecured Claim, and the amount of Allowed interest
shall be calculated between the later of the date such
Allowed Claim (A) became due in the ordinary course of
business or (B) was invoiced to the applicable Debtor, on the
one hand, and the Effective Date, on the other hand, with
such interest to be payable at the federal judgment rate as of
the Petition Date or at the contract rate to the extent
allowable under applicable law and in accordance with the
Contract Interest Rate Procedures."
Section 1.1.38 of the Plan defines the Contract Interest Rate
Procedures as "certain procedures by which any holder of an
Unsecured Claim may substantiate the existence of any existing
contract that specifies the payment of interest, in substantially
the form approved by the Bankruptcy Court before the Confirmation
Hearing."
Proposed Contract Interest Rate Procedures
The Debtors intend to mail a notice describing the Notice of
Contract Interest Rate Procedures to all holders of General
Unsecured Claims and Convenience Claims entitled to payment of
postpetition interest and to which the Contract Interest Rate
Procedures apply under the terms of the Plan.
Any holder of a General Unsecured Claim or Convenience Claim
entitled to payment of interest under the Plan who wishes to
substantiate the existence of an existing contract, invoice
or other agreement that specifies the payment of interest must
submit a "Notice of Contract Rate of Interest" to the Debtors'
Voting and Claims Agent by no later than September 9, 2010.
Any Notice of Contract Rate of Interest must:
(a) identify the Claim and the contractual rate of interest
applicable to the Claim;
(b) attach a copy of the contract, invoice or agreement
relating to the Claim; and
(c) be signed by the holder of the Claim or its authorized
representative under penalty of perjury.
A Notice of Contract Rate Interest does not need to be filed with
the Bankruptcy Court, but it must be received by the Debtors'
voting and claims agent at:
Chemtura Balloting Center
c/o Kurtzman Carson Consultants LLC
2335 Alaska Ave.
El Segundo, California 90245
Failure by a holder of a General Unsecured Claim, Convenience
Claim or its authorized representative to timely submit a
response will be deemed an admission that no contract rate of
interest exists with respect to the holder's General Unsecured
Claim or Convenience Claim, and the holder of the General
Unsecured Claim or Convenience Claim will receive interest at the
federal judgment rate as of the Petition Date.
The Contract Interest Rate Procedures also describe the extent to
which the Debtors, the Official Committee of Unsecured Creditors
or the Official Committee of Equity Security Holders may contest
a claimant's assertion of a contract rate of interest any time
before the Plan's effective date; and that upon an objection the
claimant has until 60 days after the Effective Date to request a
hearing to resolve the dispute concerning the amount of
postpetition interest due to the particular claimant.
A copy of the Proposed Contract Interest Rate Procedures is
available for free at:
http://bankrupt.com/misc/ChemCIRProc.pdf
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,
contends that the proposed Contract Interest Rate Procedures are
necessary to implement the Plan by facilitating the calculation
of distributions, bringing certainty with respect to the amount
of postpetition interest due individual creditors and result in
fewer disputes after the Effective Date concerning the
calculation of interest.
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. At 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)
CITIZENS DEV'T: Section 341(a) Meeting Scheduled for Oct. 5
-----------------------------------------------------------
The U.S. Trustee for Region 15 will convene a meeting of Citizens
Development Corp.'s creditors on October 5, 2010, at 9:30 a.m.
The meeting will be held at the Office of the U.S. Trustee, 402 W.
Broadway (use C Street Entrance), Suite 1360, Hearing Room B, San
Diego, CA 92101.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
San Marcos, California-based Citizens Development Corp. filed a
voluntary petition for relief under Chapter 11 (Bankr. S.D. Calif.
Case No. 10-15142) on August 26, 2010. Ron Bender, Esq., at
Levene, Neale, Bender, Yoo & Brill LLP, assists the Debtor in its
restructuring effort. The Debtor estimated its assets at $10
million to $50 million and debts at $10 million to $50 million.
Chapter 11 petitions were also filed by affiliates LSM Executive
Course, LLC (Bankr. S.D. Calif. Case No. 10-07480), and LSM Hotel,
LLC (Bankr. S.D. Calif. Case No. 10-13024).
CLIFFORD ROBINSON: Ch. 11 Trustee Has OK to Sell New York Property
------------------------------------------------------------------
The Hon. Randall L. Dunn of the U.S. Bankruptcy Court for the
District Oregon authorized Michael B. Batlan, Chapter 11 trustee
for the Chapter 11 cases of Clifford Ralph Robinson, et al., to
sell the property of the estate, commonly described as 34 Hunting
Road, Cheektowaga, New York, to George K. Goodman and Sonia L.
Goodman.
At closing, the trustee is authorized and directed to distribute
the proceeds and pay closing costs from the sale.
Franklin Lakes, New Jersey-based Clifford Ralph Robinson and
Heather Lynn Robinson, fka Lufkins, filed for Chapter 11
bankruptcy protection on November 2, 2009 (Bankr. D. Ore. Case No.
09-39160). William M. Parker, Esq., who has an office in Tigard,
Oregon, assists the Debtor in its restructuring effort. The
Company estimated assets and debts at $10 million to $50 million.
COATES INT'L: Inks Securities Purchase Deal With Asher & Dutchess
-----------------------------------------------------------------
Coates International Ltd. entered on Aug. 24, 2010, into a
securities purchase agreement with Asher Enterprises, Inc., a
Delaware corporation, for the sale of an 8% convertible promissory
note in the face amount of $78,500. The Note matures in May 2011
and provides for interest at the rate of 8% percent per annum.
The Note may be converted into unregistered shares of common
stock, par value $0.0001 per share.
On Aug. 23, 2010, the Company also entered into an investment
agreement with Dutchess Opportunity Fund, II, LP, a Delaware
limited partnership. Dutchess has agreed to commit to purchase up
to $10,000,000 of the Company's common stock over the course of 36
months.
On Aug 23, 2010, the Company also entered into a registration
rights agreement with Dutchess. Pursuant to the terms of the
Agreement, the Company is obligated to file a registration
statement with the Securities and Exchange Commission covering
17,000,000 shares of the Common Stock underlying the Investment
Agreement within 30 days after the closing date.
A full-text copy of the Securities Purchase Agreement is available
for free at http://ResearchArchives.com/t/s?6a81
A full-text copy of Convertible Promissory Note is available for
free at http://ResearchArchives.com/t/s?6a82
A full-text copy of the Investment Agreement is available for free
at http://ResearchArchives.com/t/s?6a83
A full-text copy of the Registration Rights Agreement is available
for free at http://ResearchArchives.com/t/s?6a84
About Coates International
Based in Wall Township, N.J., Coates International, Ltd.
(OTC BB: COTE) -- http://www.coatesengine.com/-- was incorporated
on August 31, 1988, for the purpose of researching, patenting and
manufacturing technology associated with a spherical rotary valve
system for internal combustion engines. This technology was
developed over a period of 15 years by Mr. George J. Coates, who
is the President and Chairman of the Board of the Company.
The Coates Spherical Rotary Valve System (CSRV) represents a
revolutionary departure from the conventional poppet valve. It
changes the means of delivering the air and fuel mixture to the
firing chamber of an internal combustion engine and of expelling
the exhaust produced when the mixture ignites.
The Company's balance sheet at June 30, 2010, showed $3.19 million
in total assets, $3.59 million in total liabilities, and a
$404,242 stockholders' deficit.
Going Concern
Meyler & Company, LLC, in Middletown, New Jersey, in its March 30,
2010, report expressed substantial doubt about the Company's
ability to continue as a going concern. The auditors noted that
Coates continues to have negative cash flows from operations,
recurring losses from operations, and has a stockholders'
deficiency. These conditions raise substantial doubt about its
ability to continue as a going concern.
COMPOSITE TECHNOLOGY: June 30 Balance Sheet Upside-Down by $20MM
----------------------------------------------------------------
Composite Technology Corporation had total assets of $35,319,000,
total liabilities of $55,509,000, and a stockholders' deficit of
$20,190,000 as of June 30, 2010.
The Company posted a net loss of $3,404,000 for the fiscal third
quarter ended June 30, 2010, from a net loss of $26,925,000 for
the same period in 2009. It posted a net loss of $14,340,000 for
the nine months ended June 30, 2010, from $45,915,000 for the same
period in 2009.
Revenues were $583,000 for the three months ended June 30, 2010,
from $3,562,000 for the same period in 2009. Revenues were
$7,536,000 for the nine months ended June 30, 2010, from
$14,124,000 for the same period in 2009.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a6c
Composite Technology Corporation is an Irvine, California-based
company that has operated in two segments, CTC Cable "Cable" and
DeWind "Wind". In September 2009, the Company sold substantially
all of its Wind segment, which sold wind turbines under the brand
name DeWind. The Cable segment sells high efficiency patented
composite core electricity conductors known as "ACCC(R) conductor"
for use in electric transmission and distribution lines.
CONSPIRACY ENTERTAINMENT: Earns $19,400 in June 30 Quarter
----------------------------------------------------------
Conspiracy Entertainment Holdings, Inc., filed its quarterly
report on Form 10-Q, reporting net income of $19,374 on $2.5
million of revenue for the three months ended June 30, 2010,
compared to a net loss of $1.7 million on $755,223 of revenue for
the same period of 2009.
As of June 30, 2010, the Company had an accumulated deficit of
$12.6 million and significant negative working capital.
The Company's balance sheet at June 30, 2010, showed $4.7 million
in total assets, $9.4 million in total liabilities, and a
stockholders' deficit of $4.7 million.
As reported in the Troubled Company Reporter on April 23, 2010,
Chisholm, Bierwolf, Nilson & Morrill LLC, in Bountiful, Utah,
expressed substantial doubt about the Company's ability to
continue as a going concern, following its 2009 results. The
independent auditors noted that the Company has a working capital
deficiency and continued losses from operations.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6a60
Conspiracy Entertainment Holdings, Inc. (OTC BB: CPYE) through its
wholly owned subsidiary, Conspiracy Entertainment Corporation, is
a developer, publisher and marketer of entertainment software in
North America and Western Europe. Conspiracy Entertainment was
founded in 1997 and is based in Santa Monica, California.
COZUMEL CARIBE: Note Servicer Disputes Chapter 15 Bid
-----------------------------------------------------
Dow Jones' DBR Small Cap reports that CT Investment Management
Co., the special servicer of $103 million in notes issued by
Cozumel Caribe SA, is taking another shot at the Mexican tourism-
services company, this time seeking to block Cozumel Caribe's bid
for recognition of its bankruptcy case in the U.S.
According to DBR, in court papers filed Monday with the U.S.
Bankruptcy Court in Manhattan, CT Investment invoked similar
sentiments, this time claiming the company was "trampling the
rights of its secured creditors" by seeking recognition of its
foreign proceedings under Chapter 15 of the U.S. Bankruptcy Code.
DBR notes CT Investment, which services secured notes held by a
group led by LaSalle Bank, has already proven itself to be a loud
voice in Cozumel Caribe's bankruptcy proceedings. Earlier this
summer, it took aim at the company's request to permit its Mexican
insolvency overseer to seize control of all current and future
funds in the company's U.S. accounts, a move CT Investment said
would be unfair to secured creditors.
Cozumel Caribe SA de CV, a Mexican provider of tourism services at
a beachfront hotel in Cozumel, filed for Chapter 15 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 10-13913) on July 20, 2010.
Cozumel Caribe reported more than $100 million in debts and assets
of more than $10 million in its bankruptcy petition.
DIVERSIFIED RESTAURANT: June 27 Balance Sheet Upside-Down by $779K
------------------------------------------------------------------
Diversified Restaurant Holdings, Inc., had total assets of
$18,253,660, total liabilities of $19,033,047, and a stockholders'
deficit of $779,387 as of June 27, 2010.
The Company posted a net loss of $109,531 for the three months
ended June 27, 2010, from net income of $70,323 for the same
period ended June 30, 2009. The Company posted net income of
$141,741 for the six months ended June 27, 2010, from net income
of $149,536 for the same period ended June 30, 2009.
Total revenues were $10,683,821 for the three months ended
June 27, 2010, from $4,747,052 for the same period in 2009. Total
revenues were $$19,491,708 for the six months ended June 30, 2009,
from $9,338,591 for the same period ended June 30, 2009.
The Company had total current assets of $1,195,181 and $3,998,381
total current liabilities at June 27, 2010. The Company said in
its Form 10-Q report that $2,233,716 become due this year,
$1,575,584 become due in 2011, and $1,777,900 become due in 2012.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a72
Diversified Restaurant Holdings, Inc., and its three wholly owned
subsidiaries, AMC Group, Inc., AMC Wings, Inc., and AMC Burgers,
Inc., develop, own, and operate, as well as render management and
advertising services for, Buffalo Wild Wings restaurants located
throughout Michigan and Florida and the Company's own restaurant
concept, Bagger Dave's Legendary Burgers and Fries.
DOLLAR THRIFTY: Now Expects $240MM to $260MM EBITDA for 2010
------------------------------------------------------------
Dollar Thrifty Automotive Group, Inc. provided an update on
Corporate Adjusted EBITDA and fleet cost expectations for the full
year of 2010. As part of the update, the Company noted that its
previously announced revenue guidance remains unchanged.
Based on solid operating performance in July and August, combined
with the Company's revised outlook for fleet costs for the balance
of 2010, the Company now expects Corporate Adjusted EBITDA,
excluding merger-related expenses, to be within a range of $240
million to $260 million for the full year of 2010, an increase of
$40 million from the Company's previously announced guidance
range. The Company noted that approximately half of the increase
is attributable to changes in expectations for fleet costs, with
the remainder resulting from continued strength in operations and
ongoing cost control efforts. The Company's 2009 Corporate
Adjusted EBITDA was $99.4 million.
The Company noted that it is lowering its estimate for vehicle
depreciation per unit per month to a range of $270 to $290 for the
third and fourth quarters of 2010, based on continued strength in
residual values and favorable trends in vehicle disposition
results. Accordingly the Company is also lowering its fleet cost
target for the full year of 2010 to a range of $230 to $240 per
unit per month.
Update of 2011 Projections
The Company noted today that it was reaffirming its previously
announced fleet cost estimate for 2011 of $300 to $310 per unit
per month. The Company noted that it expects solid fundamentals
in the used car market in 2011 as demand for used cars is expected
to be firm, while supply is expected to be somewhat constrained.
The Company noted, however, that it does expect the used car
market to be slightly less robust in 2011 than current market
conditions, and has based its estimated 2011 fleet cost on this
expectation.
The Company also noted that the 2011 projections previously made
public in May of 2010 through the filing of the preliminary
registration statement on Form S-4 (registration statement number
333-167085) that included a preliminary proxy statement of DTG and
constituted a preliminary prospectus of Hertz, were based on fleet
costs above these levels for 2011. The Corporate Adjusted EBITDA
projection previously set forth in the preliminary prospectus was
$173 million.
Adjusting the previously disclosed projections to give effect only
to the change in the 2011 fleet cost discussed above, Corporate
Adjusted EBITDA would range from $186 million to $198 million for
2011.
About Dollar Thrifty
Dollar Thrifty Automotive Group, Inc., is headquartered in Tulsa,
Oklahoma. Driven by the mission "Value Every Time," the Company's
brands, Dollar Rent A Car and Thrifty Car Rental, serve value-
conscious travelers in over 70 countries. Dollar and Thrifty have
over 600 corporate and franchised locations in the United States
and Canada, operating in virtually all of the top U.S. and
Canadian airport markets. The Company's approximately 6,400
employees are located mainly in North America, but global service
capabilities exist through an expanding international franchise
network.
At March 31, 2010, the Company had total assets of $2,470,879,000,
total liabilities of $2,047,769,000, and stockholders' equity of
$423,110,000.
* * *
As reported by the Troubled Company Reporter on May 5, 2010,
Dominion Bond Rating Service placed the ratings of Dollar Thrifty
Automotive Group, Inc., including its Issuer Rating of B (high),
Under Review with Positive Implications. This ratings action
follows the announcement that the Company has reached a definitive
agreement to be acquired by the higher-rated Hertz Corporation.
DBRS rates Hertz BB, at the issuer level.
In November 2009, Standard & Poor's Ratings Services raised its
corporate credit rating of Dollar Thrifty to 'B-' from 'CCC', in
light of the Company's improved operating and financial
performance that began in mid-2009. Moody's Investors Service
also upgraded Dollar Thrifty's Probability of Default Rating to
'B3' from 'Caa2' and Corporate Family Rating to 'B3' from 'Caa3'.
DBRS has commented that the ratings of Dollar Thrifty Automotive
Group, Inc., including its Issuer Rating of B (high) are
unaffected following the Company's announcement of 2Q10 earnings
results. All ratings remain Under Review Positive, where they
were placed on April 28, 2010.
DREIER LLP: Ch. 7 Trustee Wants to Disallow Clients' $6MM Claims
----------------------------------------------------------------
The Chapter 7 trustee for Marc Dreier, has asked the bankruptcy
court to disallow claims made by two former clients for
$6.3 million that Mr. Dreier allegedly stole after orchestrating a
bogus settlement between them and an investment manager,
Bankruptcy Law360 reports.
About Dreier LLP
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996.
On December 8, 2008, the U.S. Securities and Exchange Commission
filed a suit, alleging that Mr. Dreier made fraudulent offers and
sales of securities in several cities, selling fake promissory
notes to hedge and other private investment funds. The SEC
asserted that Mr. Dreier also distributed phony financial
statements and audit opinions, and recruited accomplices in
connection with that scheme. Mr. Dreier has been charged by the
U.S. government for conspiracy, securities fraud and wire fraud
(S.D.N.Y. Case No. 09-cr-00085-JSR).
Dreier LLP sought chapter 11 protection (Bankr. S.D.N.Y. Case No.
08-15051) on December 16, 2008. Stephen J. Shimshak, Esq., at
Paul, Weiss, Rifkind, Wharton & Garrison LLP, was tapped as
counsel. The Debtor estimated assets of $100 million to
$500 million, and debts between $10 million and $50 million in its
Chapter 11 petition.
Wachovia Bank National Association, Sheila M. Gowan as trustee for
Dreier LLP's Chapter 11 Estate, and Steven J. Reisman as post-
confirmation representative of the bankruptcy estate of
360networks (USA) Inc. signed a petition that put Mr. Dreier into
bankruptcy under Chapter 7 on January 26, 2009 (Bankr. S.D.N.Y.
Case No. 09-10371).
Mr. Dreier, 60, pleaded guilty to fraud and other charges in May
2009. The scheme to sell $700 million in fake notes unraveled in
late 2008. Mr. Dreier is serving a 20-year sentence in a federal
prison in Minneapolis.
ELOYALTY CORP: June 26 Balance Sheet Upside-Down by $962,000
------------------------------------------------------------
eLoyalty Corporation had total assets of $68,826,000, total
liabilities of $51,687,000, redeemable Series B Stock of
$18,101,000, and a stockholders' deficit of $962,000 as of
June 26, 2010.
The Company posted a wider net loss of $3,738,000 for the three
months ended June 26, 2010, from a net loss of $1,863,000 for the
same period ended June 27, 2009. The Company posted a wider net
loss of $8,804,000 for the six months ended June 26, 2010, from a
net loss of $5,669,000 for the same period ended June 27, 2009.
Total revenues were $21,977,000 for the three months ended
June 26, 2010, from $23,101,000 for the same period a year ago.
Total revenues were $41,937,000 for the six months ended June 27,
2010, from $54,909,000 for the same period a year ago.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a76
Based in Lake Forest, Illinois, eLoyalty Corporation is focused on
growing and developing its business through two primary Business
Units: the Behavioral Analytics(TM) Service and Integrated Contact
Solutions. Through these Business Units, the Company generates
three types of revenue: (1) Managed services revenue, which is
recurring, annuity revenue from long-term (generally one- to five-
year) contracts; (2) Consulting services revenue, which is
generally project-based and sold on a time-and-materials or fixed-
fee basis; and (3) Product revenue, which is generated through the
resale of third-party software and hardware.
EVANS & SUTHERLAND: July 2 Balance Sheet Upside-Down by $11MM
-------------------------------------------------------------
Evans & Sutherland Computer Corporation had total assets of
$28,914,000, total liabilities of $40,041,000, and a stockholders'
deficit of $11,127,000 as of July 2, 2010.
The Company posted a net loss of $2,592,000 for the three months
ended July 2, 2010, from a net loss of $2,349,000 for the three
months ended June 26, 2009. It posted a net loss of $5,142,000
for the six months ended July 2, 2010, from $6,282,000 for the six
months ended June 26, 2009.
Sales were $7,273,000 for the three months ended July 2, 2010,
from $6,074,000 for the three months ended June 26, 2009. Sales
were $11,673,000 for the six months ended July 2, 2010, from
$11,932,000 for the same period ended June 26, 2009.
The Company said in its Form 10-Q report that liquidity and
capital resources have been pressured by past results of
operations. The loss in the first six months continued the
negative impact on liquidity. The loss combined with effects of
non-cash charges and changes in working capital decreased cash by
$703,000 to a balance of $1,897,000 as of July 2, 2010; however,
all of this decrease occurred in the first quarter of 2010. Cash
increased slightly in the second quarter from $1,804,000 at
April 2, 2010 to $1,897,000 at July 2, 2010. This increase was
attributable to changes in working capital, mostly the timing of
customer payments, as there was still a loss before non-cash
charges in the amount of $886,000 for the quarter ended July 2,
2010. The $886,000 is an improvement over the $1,993,000 loss
before non-cash charges in the first quarter of 2010 and
demonstrates the positive effect of the Company's cost cutting
efforts. The loss included pension expense which is considered a
cash charge but cash payments to the pension trust will be
deferred this year.
"We will continue to record significant pension expenses in 2010
and we maintain a significant balance sheet obligation to our
pension plans; however, no cash payments to the pension trust are
expected to be due until late 2011. The amount of cash payments
required to the pension trusts in 2011 and beyond will depend on
investment returns and new guidance emerging form recent
legislation which provides funding relief for pension plans. The
adequacy of current liquidity sources to fund operations through
2010 will depend on a sufficient stream of new orders with
adequate customer progress payments and the ability of the
organization to support its operations after reducing its
resources. Beyond 2010, along with customer revenue levels, we
may also be dependent on the many factors that could affect the
funding of our pension plan obligations," the Company said.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a6e
About Evans & Sutherland
Based in Salt Lake City, Utah, Evans & Sutherland is the world's
first computer graphics company and has developed an advanced
computer graphics technology for almost four decades. Focusing
primarily on digital planetariums and digital cinemas worldwide,
E&S offers Digistar 3, the world's leading digital planetarium
system, full-dome movies and production services, premium-quality
projection domes, theater design services, and the E&S Laser
Projector, the world's highest resolution video projection system.
FIREBIRD INVESTMENT: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Firebird Investment Co.
3345 S. Val Vista Drive #110
Gilbert, AZ 85297
Bankruptcy Case No.: 10-27331
Chapter 11 Petition Date: August 27, 2010
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: Thomas C. Axelsen, Esq.
SHERMAN & HOWARD LLC
2800 N. Central Ave., #1100
Phoenix, AZ 85004-1043
Tel: (602) 240-3000
Fax: (602) 240-6600
E-mail: taxelsen@shermanhoward.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's three largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/azb10-27331.pdf
The petition was signed by Thomas J. Hatten, president, CEO,
secretary and treasurer.
FIRST METALS: Gets Forbearance from Bondholders Until Nov. 1
------------------------------------------------------------
First Metals Inc. has received a forbearance from the majority of
bond holders until November 1st, 2010 allowing debt restructuring
discussions to progress and continued discussions with Kaskattama
Inc.
An interest payment of $130,900 due August 31, 2010 will not be
made by the Corporation which will put the Corporation in default
under the indenture. The terms of the indenture provide that a 66
2/3 majority of the bondholders can forbear any action by the bond
holders. Based on the current majority of bond holders who have
signed forbearance resolutions, the Corporation is confident it
would be able to secure the 66 2/3 majority if a meeting is
required to be called in this respect.
In conjunction with the negotiation of a proposed transaction, the
Corporation is completing a review of its operations. Given the
state of the Corporation's finances, operations and capital
structure there is no certainty that the Corporation will be able
to continue as a going concern if a transaction is unable to be
completed and/or satisfactory arrangements cannot be made with
certain of the Corporation's stakeholders, including its bond
holders.
During this forbearance period, the Corporation expects to
continue to discuss with its bond holders various proposals being
exchanged between the bond holders and the Corporation which
generally contemplate, among other things, a deleveraging of the
Corporation through a debt for equity exchange. There are no
assurances, however, that such discussions will be successful.
In the event that the forbearance expires or terminates prior to
the successful conclusion of the Corporation's negotiations with
its bond holders regarding the restructuring of its outstanding
debt, the Corporation will be in default of its obligations under
the indenture and the bond holders will have an immediate right
without further default on the part of the Corporation and not
conditional on any other occurrence, to accelerate the debt
obligations under the indenture and demand immediate repayment in
full and seek to foreclose on the collateral supporting such
obligations. If the Corporation's debt obligations are
accelerated or are not restructured on acceptable terms, it is
likely the Corporation will be unable to repay such obligations
and may seek protection under the Bankruptcy and Insolvency Act or
similar relief.
About FMA
First Metals Inc. is a resource company with two main Zinc-Copper
deposits, Fabie Bay and Magusi River. Fabie Bay was producing
until December 2008 when production was suspended. The company
filed a proposal under Part III of the Bankruptcy and Insolvency
Act in April 2009. The company received approval for is proposal
under Part III of the Bankruptcy and Insolvency Act in June 2009.
Richard Williams and Jay Richardson who had held their respective
positions of President-CEO and Secretary-Treasurer since July 22nd
2008, were terminated by the board effective January 8th, 2010.
Michael Churchill was installed by the board January 8th, 2010 as
President and CEO with a specific mandate to assess and report on
the financial and operational status of FMA, formulate a new
operational and reorganization plan, and then implement the plan.
GENERAL NUTRITION: S&P Raises Corporate Credit Rating to 'B+'
-------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Pittsburgh-based General Nutrition Centers Inc.
to 'B+' from 'B' because of improved credit metrics and favorable
operating performance. S&P had stated in its earlier outlook that
if total debt to EBITDA declined to the 5x area, S&P would
consider an upgrade of the company. The outlook is stable.
At the same time, S&P raised the senior secured debt ratings to
'B+' (the same as the corporate credit rating) from 'B'. The '3'
recovery rating on the debt remains unchanged, indicating S&P's
expectations that the lenders would receive meaningful (50%-70%)
recovery in the event of a payment default. S&P also raised the
senior unsecured debt and subordinated debt ratings to 'B-' (two
notches below the corporate credit rating) from 'CCC+' and the '6'
recovery rating remains unchanged. The '6' recovery rating
indicates S&P's expectations that the noteholders would receive
negligible (0%-10%) recovery in the event of a payment default.
"The ratings on GNC reflect its continued good operating
performance and related improvement in credit protection measures,
including total debt to EBITDA of 5.1x as of June 30, 2010," said
Standard & Poor's credit analyst Jayne Ross, "despite a weak
economy and a fragile retail environment." It is S&P's opinion
that the financial risk profile is "aggressive," reflecting GNC's
highly leveraged capital structure and credit metrics that are
appropriate for the rating. In S&P's view, the company's business
risk profile is "weak," reflecting GNC's participation in the
highly competitive and fragmented nutritional supplement specialty
retail sector. A further upgrade is limited until S&P has a
better understanding of GNC's financial policies and anticipated
use of its cash balances, which were about $119 million at
June 30, 2010.
GENOIL INC: Incurs C$1.26 Million Net Loss in June 30 Quarter
-------------------------------------------------------------
Genoil Inc. incurred a net loss of C$1.26 million for the 2010
second quarter, compared to a net loss of C$1.41 million for the
same quarter of 2009.
The Company has not generated revenues from its technologies to
date and has funded its near term operations by way of capital
stock private placements and short-term loans.
The Company's balance sheet at June 30, 2010, showed
C$4.38 million in total assets, C$2.25 million in total
liabilities, and stockholders' equity of C$2.13 million.
As at June 30, 2010, the Company had incurred accumulated losses
of $71.15 million (December 31, 2009 - $68.04 million) since
inception. In the Notes to the consolidated financial statements
for the 2010 second quarter, the Company discloses that its
ability to continue as a going concern is in substantial doubt and
is dependent on achieving profitable operations, commercializing
its upgrader technology, and obtaining the necessary financing in
order to develop this technology further.
"The Company is not expected to be profitable during the ensuing
twelve months and therefore must rely on securing additional funds
from either issuance of debt or equity financing for cash
consideration."
A full-text copy of the unaudited interim consolidated financial
statements for the three months ended June 30, 2010, is available
for free at http://researcharchives.com/t/s?6a31
A full-text copy of the Management's Discussion and Analysis for
the three months ended June 30, 2010, is available at no charge
at http://researcharchives.com/t/s?6a64
About Genoil Inc.
Based in Calgary, Canada, Genoil Inc. was incorporated under the
Canada Business Corporations Act. The Company is a technology
development company focused on providing innovative solutions to
the oil and gas industry through the use of proprietary
technologies. The Company's business activities are primarily
directed to the development and commercialization of its upgrader
technology, which is designed to economically convert heavy crude
oil into light synthetic crude. The Company is listed on the TSX
Venture Exchange under the symbol GNO as well as the Nasdaq OTC
Bulletin Board using the symbol GNOLF.OB.
GEORGE W PARK: Ch. 11 Trustee Wants Plan Exclusivity Until Nov. 28
------------------------------------------------------------------
L. Stan Neely, as Chapter 11 Trustee for George W. Park Seed Co.
Inc., et al., asks the U.S. Bankruptcy Court for the District of
South Carolina to extend the exclusive periods to file a proposed
Chapter 11 Plan until November 28, 2010.
On August 23, the Court approved an 11 U.S.C. Sec. 363 sale of a
substantial portion of the Debtor's assets, with the Debtor
receiving total consideration of approximately $12,800,000.
The trustee related that he needs additional time to allocate
proceeds of the sale through a Disclosure Statement and Plan.
About George W. Park
Based in Greenwood, South Carolina, George W. Park Seed Co. Inc.,
along with four affiliates, filed for Chapter 11 protection on
April 2, 2010 (Bankr. D. S.C. Lead Case No. 10-02431). R.
Geoffrey Levy, Esq., represents the Company in its restructuring
effort. In its schedules, the Company disclosed $8.33 million in
assets and $44.79 million in liabilities.
GIOCONDA EGAN: Case Summary & 5 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Gioconda Maria Egan
1989 Beach Blvd.
Pacifica, CA 94044
Bankruptcy Case No.: 10-33326
Chapter 11 Petition Date: August 27, 2010
Court: United States Bankruptcy Court
Northern District of California (San Francisco)
Judge: Dennis Montali
Debtor's Counsel: Heather Wolnick, Esq.
TOUR-SARKISSIAN LAW OFFICES
211 Gough St. 3rd Floor
San Francisco, CA 94102
Tel: (415) 626-7744
E-mail: heather@tslo.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Debtor's five largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/canb10-33326.pdf
GLOBAL CONTAINER: Plan Confirmation Hearing Set for September 8
---------------------------------------------------------------
The Hon. Alan S. Trust of the U.S. Bankruptcy Court for the
Eastern District of New York will convene a hearing on
September 15, 2010, at 9:30 a.m., to consider the confirmation of
Global Container Lines Ltd.'s Plan of Reorganization. Objections,
if any, are due on September 8, at 4:00 p.m.
Written ballots accepting or rejecting the Plan are due on
September 8 at 4:00 p.m., and must be received by the Debtor's
balloting agent:
C. Nathan Dee, Esq.
CULLEN AND DYKMAN LLP
100 Quentin Roosevelt Boulevard
Garden City, NY 11530
As reported in the Troubled Company Reporter on July 14, the Plan
proposes to pay all administrative, fee and priority claims in
full on the effective date; to pay the NBP secured claim in
accordance with the negotiated terms; and to pay general unsecured
claim a percentage of the Debtor's available cash flow for a
period of six years, together with certain fixed payments. The
payments required under the Plan will be made from the Debtor's
operations and cash flow. A full-text copy of the Disclosure
Statement, as amended, is available for free at:
http://bankrupt.com/misc/GlobalContainer_2ndAmendedDS.pdf
About Global Container
Garden City, New York-based Global Container Lines Limited filed
for Chapter 11 bankruptcy protection on November 10, 2009 (Bankr.
E.D. N.Y. Case No. 09-78585). C. Nathan Dee, Esq., and Matthew G.
Roseman, Esq., at Cullen & Dykman, LLP, assists the Company in its
restructuring effort. The Company estimated assets and debts at
$10 million to $50 million.
GRANT STREET: Owes Money to IRS, First Bank of Denver
-----------------------------------------------------
The Denver Posts reports Grant Street Mansion LLC is in Chapter 11
with debt owed to First Bank of Denver and the Internal Revenue
Service as creditors.
Grant Mansion LLC is a limited liability company that owns the
Grant Street Mansion on Capitol Hill. The Company paid $1.8
million for the 19,129-square-foot building at 1121 Grant St. in
Denver in 2001.
Grant Street filed a voluntary petition for relief under Chapter
11 on August 19, 2010 (Bankr. D. Colo. Case No. 10-31094). It
estimated assets and debts of under $1 million in its Chapter 11
petition.
GREAT ATLANTIC: Names Tom O'Boyle as Executive Vice President
-------------------------------------------------------------
The Great Atlantic & Pacific Tea Company Inc. appointed Tom
O'Boyle to the new position of Executive Vice President, effective
immediately. In this role, Mr. O'Boyle will be responsible for
leading the Merchandising, Marketing, Supply & Logistics
departments to develop a cohesive synergy between these critical
functions, reporting to President and Chief Executive Officer Sam
Martin.
A&P President and CEO Sam Martin said, "[Mr. O'Boyle] is an expert
merchant with a proven track record of aligning merchandising
offers with exciting marketing programs to meet customers' needs.
His appointment completes my dynamic executive management team
which will lead our Company's turnaround initiative."
Mr. O'Boyle brings over 15 years of retail experience in
merchandising and marketing including management positions in
Jewel Food Stores and Albertson's. Prior to joining the A&P, he
was President and Senior Vice President, Food and Drug for Sears.
Before that, he was the Senior Vice President, Merchandising and
Marketing for Albertson's. He holds a B.S., and is a candidate
for an M.B.A., from Northern Illinois University.
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.
The Company's balance sheet at June 19, 2010, showed $2.6 billion
in total assets, $897.0 million in total current liabilities, $2.3
billion in total non-current liabilities, $135.0 million series A
redeemable preferred stock, and $659.0 million in stockholders'
deficit.
Great Atlantic carries 'Caa3' probability of default and corporate
family ratings from Moody's Investors Service and a 'CCC'
corporate credit rating from Standard & Poor's.
At the end of July 2010, when Moody's downgraded the SGL rating to
SGL-4 (reflecting weak liquidity), Moody's said, "A&P does have
sufficient liquidity to meet immediate operating needs, but
liquidity is strained over the next four quarters as a result of
the company's debt maturity in June 2011." S&P, in July 2010,
when it lowered the corporate rating to 'CCC' from 'CCC+', said it
"expects weak trends to continue and the company to be
significantly cash flow negative."
GSC GROUP: Files for Bankruptcy Protection in New York
------------------------------------------------------
GSC Group Inc. filed for Chapter 11 in Manhattan on August 31
(Bankr. S.D.N.Y. Case No. 10-14653), estimating assets of
$1 million to $10 million and debts of $100 million to
$500 million.
Based in a Florham Park, New Jersey, GSC Group Inc. is an
investment firm specializing in high-yield, high-risk debt. GSC,
founded in 1999 by former Goldman Sachs Group Inc. partner Alfred
Eckert, manages debt pools known as collateralized loan
obligations, and owns portfolio companies.
David McLaughlin at Bloomberg News reports that GSC Group Inc. has
plans to sell its assets. Peter R. Frank, a managing director,
said in an interview with Bloomberg that GSC will sell its assets
as part of a bankruptcy auction.
Mr. Frank blamed GSC's bankruptcy on the poor performance of the
CLOs and the inability to sell companies. GSC defaulted on more
than $200 million in senior secured debt.
"It was impossible to sell anything in late '08 and early '09,"
Mr. Frank said. The firm has about $9 billion in assets under
management, he said.
According to the Bloomberg report, Mr. Frank said GSC is providing
information to the U.S. Securities and Exchange Commission for the
regulator's investigation into asset-backed security transactions.
He said GSC isn't a target of the investigation.
Michael B. Solow, Esq., at Kaye Scholer LLP --
msolow@kayescholer.com -- in Chicago, Illinois, serves as
bankruptcy counsel.
GSC GROUP: Case Summary & 10 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: GSC Group, Inc.
500 Campus Drive, Suite 220
Florham Park, NJ
Bankruptcy Case No.: 10-14653
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
GSCP, LLC 10-14651
GSC Active Partners, Inc. 10-14658
GSCP (NJ), Inc. 10-14660
GSCP (NJ) Holdings, L.P. 10-14661
GSCP (NJ), L.P. 10-14652
GSC Secondary Interest Fund, LLC 10-14663
Type of Business: GSC Group, Inc., is a private equity firm
specializing in mezzanine and fund of fund
investments.
Website: http://www.gsc.com/
Chapter 11 Petition Date: August 31, 2010
Bankruptcy Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Bankruptcy Judge: Arthur J. Gonzalez
Debtor's Counsel: Michael B. Solow, Esq.
KAYE SCHOLER LLP
3 First National Plaza
Suite 4100
70 West Madison Street
Chicago, IL 60602-4231
Tel : (312) 583-2300
Fax : (312) 583-2360
E-mail: msolow@kayescholer.com
Debtors'
Financial Advisor: CAPSTONE ADVISORY GROUP, LLC
Debtors'
Claims Agent: EPIQ BANKRUPTCY SOLUTIONS, LLC
Estimated Assets: $1 million to $10 million
Estimated Debts: $100 million to $500 million
The petition was signed by Peter R. Frank, Senior Managing
Director.
Debtor's List of 10 Largest Unsecured Creditors:
Entity/Person Nature of Claim Claim Amount
------------- --------------- ------------
Avaya Financial Services Vendor $3,981
211 Mt. Airy Road
Basking Ridge, NJ 07920
Bombardier Aerospace Corp. Vendor $66,190
3400 Waterview Pkwy
Suite 400
Davis Polk & Wardwell Vendor $13,874
450 Lexington Avenue
New York, NY 10017
Derchert LLP Vendor $43,288
ICP Asset Management LLC Vendor $211,237
Manhattan Mechanical Vendor $856
Shareholder.com Vendor $918
Stroock & Stroock & Lavan Vendor $175,431
Vogel Taylor Engineers LLP Vendor $1,391
Vornado Realty Trust NY Rent $372,305
HARRISBURG, PA: Won't Make $3.29MM Bond Payment Due in 2 Weeks
--------------------------------------------------------------
Dow Jones Newswires' Romy Varghese reports the city of Harrisburg,
Pennsylvania, said it will skip a $3.29 million municipal-bond
payment due in two weeks, marking the second-largest general-
obligation municipal-bond default this year.
Dow Jones says the city's inability to make the payment, which is
expected to be covered by its bond insurer, may feed worries about
parts of the $2.8 trillion municipal-bond market, particularly
bonds issued by smaller entities that may have fewer resources
than states or larger governments.
According to Dow Jones, Ambac Assurance has insured two general-
obligation bond series of 1997 that Harrisburg said this week it
would default on. Those securities have a face value of $51.5
million and mature in 2022. Ambac officials didn't return calls
for comment, Dow Jones says.
Dow Jones relates the city's interim chief of staff and business
administrator, Robert Kroboth, broke the news of the default in a
letter dated Aug. 30 to the paying agent, BNY Mellon.
"Unfortunately," he wrote, "the City's current financial situation
precludes us from making any transfer to fund for these debt
service payments at this time."
According to Dow Jones, Harrisburg mayor Linda Thompson recently
picked a financial adviser to help the city repair its finances.
But its contract has yet to be finalized, said her spokesman Chuck
Ardo, and the team isn't being paid as it does "outreach."
As reported by the Troubled Company Reporter on August 19,
Harrisburg hired Scott Balice Strategies to help plot a financial
recovery plan.
Incinerator Project
Dow Jones relates that Harrisburg's default is a sign its
financial problems are growing beyond a failed incinerator project
that led some city officials earlier this year to raise the idea
of filing for a rare municipal bankruptcy. Dow Jones notes the
city hasn't formally pursued that option, and Gov. Ed Rendell, a
Democrat, has publicly discouraged the idea. But Harrisburg
officials haven't budgeted $68 million in payments due later this
year for the $288 million debt on the incinerator project. They
did include payments for the general-obligation debt this year,
but still fell short. In a report as of June 30, Harrisburg
officials projected a $4.3 million general-fund deficit at the end
of the year.
A spokesman for the mayor, speaking about the city's fiscal
situation, said the city is "working feverishly to address the
issue, and hopefully it will find a way to meet that challenge."
The incinerator is owned by a municipal entity, the Harrisburg
Authority, that is separate from the city, but the city is the
first guarantor of the debt. Dow Jones relates this year's
incinerator payments have been covered by reserves; by Dauphin
County, which is the guarantor behind the city on almost half of
the debt; and by bond insurer Assured Guaranty Municipal, a unit
of Assured Guaranty Ltd. that has guaranteed $196 million of the
debt.
About Harrisburg, PA
The city of Harrisburg is coping with debt related to a failed
revamp of an incinerator. The outstanding principal on the
Incinerator debt is $288 million. Total principal and interest on
this debt would amount to approximately $458 million. Debt
service payments on the total incinerator debt are $20 million per
year. Of this total, Dauphin County, Pennsylvania, is responsible
for roughly $10 million and Harrisburg is responsible for the
other $10 million. The city is guarantor on 100% of the
$288 million Incinerator debt.
HAWKS PRAIRIE: Chapter 11 Filing Halted Foreclosure
---------------------------------------------------
Rolf Boone at the Olympian reports that Hawks Prairie Investment
LLC filed a Chapter 11 petition on the day that South Sound Bank
was scheduled to foreclose on the firm's 10-building mixed-use
development project.
Olympia, Washington-based Hawks Prairie Investment LLC owns real
property in Thurston County, Washington. It filed for Chapter 11
bankruptcy protection on August 13, 2010 (Bankr. W.D. Wash. Case
No. 10-46635). Timothy W. Dore, Esq., at Ryan Swanson & Cleveland
PLLC, assists the Debtor in its restructuring effort. In its
schedules, the Company listed assets of $89 million and
$44.7 million in debts.
An affiliate, Pacific Investment Group LLC, filed a separate
Chapter 11 petition on October 22, 2009 (Bankr. W.D. Wash. Case
No. 09-47915).
HEALTH BENEFITS: June 30 Balance Sheet Upside-Down by $3.26MM
-------------------------------------------------------------
Health Benefits Direct Corporation had total assets of $4,571,972,
total current liabilities of $2,984,219 and total long-term
liabilities of $4,848,354, and a stockholders' deficit of
$3,260,601 as of June 30, 2010.
The Company posted a net loss of $1,764,936 for the three months
ended June 30, 2010, from a net loss of $3,581,779 for the same
period a year ago. The Company posted a net loss of $1,767,889
for the six months ended June 30, 2010, from a net loss of
$4,835,048 for the same period a year ago.
Revenues were $1,461,542 for the three months ended June 30, 2010,
from $1,488,503 for the same period a year ago. Revenues were
$2,711,177 for the six months ended June 30, 2010, from $3,171,214
for the same period a year ago.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a7c
The current operations of Radnor, Pa.-based Health Benefits Direct
Corporation consist of its InsPro Technologies, LLC subsidiary.
InsPro is a comprehensive, web-based insurance administration
software application. InsPro was introduced by Atiam
Technologies, L.P. -- now InsPro Technologies -- in 2004. InsPro
clients include health insurance carriers and third party
administrators. Health Benefits Direct markets InsPro as a
licensed software application.
HEMAGEN DIAGNOSTICS: June 30 Balance Sheet Upside-Down by $1.8MM
----------------------------------------------------------------
Hemagen Diagnostics, Inc., had total assets of $3,355,092, total
liabilities of $5,187,045, and a stockholders' deficit of
$1,831,953 as of June 30, 2010.
The Company posted a net loss of $8,013 for the fiscal third
quarter ended June 30, 2010, from a net loss of $239,404 for the
same period a year ago. The Company posted a net loss of $79,191
for the nine months ended June 30, 2010, from a net loss of
$610,775 for the same period a year ago.
Net sales were $1,317,712 for the three months ended June 30,
2010, from $1,386,660 for the same period a year ago. Net sales
were $3,890,879 for the six months ended June 30, 2010, from
$4,073,634 for the same period a year ago.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a79
Based in Columbia, Maryland, Hemagen Diagnostics, Inc. --
http://www.hemagen.com/-- is a biotechnology company that
develops, manufactures, and markets 68 FDA-cleared proprietary
medical diagnostic test kits. The Company also sells its products
on a private-label basis through multinational distributors.
HERON LAKE: Posts $173,000 Net Loss in July 31 Quarter
------------------------------------------------------
Heron Lake BioEnergy, LLC, filed its quarterly report on Form
10-Q, reporting a net loss of $173,026 on $23.6 million of
revenue for the three months ended July 31, 2010, compared with a
net loss of $3.8 million on $22.2 million of revenue for the same
period ended July 31, 2009.
The Company's balance sheet as of July 31, 2010, showed
$104.7 million in total assets, $60.0 million in total
liabilities, and members' equity of $44.7 million.
Boulay, Heutmaker, Zibell & Co. P.L.L.P., in Minneapolis,
Minnesota, expressed substantial doubt about the Company's ability
as a going concern, following its financial results for the fiscal
year ending October 31, 2009. The independent auditors noted that
the Company has incurred a loss of $11.3 million for fiscal 2009,
and that the Company was also out of compliance of its master loan
agreement with AgStar at October 31, 2009.
In its latest 10-Q, the Company discloses that the Company was in
compliance with covenants of its master loan agreement with AgStar
at July 31, 2010. "While the Company was in compliance with the
covenants of the master loan agreement at July 31, 2010, the
Company anticipates that one or more of the covenants will not be
met at October 31, 2010, and July 31, 2011, without an amendment
to the covenants, improved financial performance, or the addition
of significant working capital to the Company."
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6a65
About Heron Lake BioEnergy
Heron Lake, Minn.-based Heron Lake BioEnergy, LLC, is a Minnesota
limited liability company that was formed for the purpose of
constructing and operating a dry mill corn-based ethanol plant
near Heron Lake, Minnesota. The plant has a stated capacity to
produce 50 million gallons of denatured fuel grade ethanol and
160,000 tons of dried distillers' grains per year. Production of
ethanol and distillers' grains at the plant began in
September 2007.
INNATECH LLC: Court Decides Today on Case Dismissal or Conversion
-----------------------------------------------------------------
The Hon. Thomas J. Tucker of the U.S. Bankruptcy Court for the
Eastern District of Michigan entered an order directing Innatech
LLC to appear today, September 1, 2010, at 11:00 a.m., and show
cause why its Chapter 11 case must not be dismissed or converted.
netDockets reports that Judge Tucker's order is based upon
Innatech's failure to comply with deadlines set forth in an
April 29, 2010 court order. That earlier order required Innatech
to file its plan and disclosure statement by August 19 or, if it
was not going to be able to meet that deadline, to seek an
extension of that deadline by filing a motion to that effect no
later than July 20, the report relates.
The Debtor has not filed a plan and a disclosure statement, which
was due August 19, nor has Debtor filed a motion to extend the
August 19 deadline.
However, according to netDockets, on August 27, Innatech did file
a motion seeking a continuance of the September 1 hearing.
Innatech says a delay of the hearing to September 15 will not
prejudice creditors, as no additional administrative claims will
accrue.
About Innatech LLC
Headquartered in Rochester, Michigan, Innatech LLC, dba Dynamic,
manufactures and designs "highly-engineered injection molded
components and assemblies." Innatech's are sold to Tier I and
Tier II automotive suppliers and to customers in the packaging,
office furniture, appliances, household goods, toys, and personal
care markets. Innatech employs almost 150 people at three
facilities located in Michigan, Indiana and Ohio.
The Company filed for Chapter 11 bankruptcy protection on
March 23, 2010 (Bankr. E.D. Mich. Case No. 10-49380). Robert D.
Gordon, Esq., who has an office in Birmingham, Michigan, assists
the Company in its restructuring effort. The Company estimated
its assets and debts at $10,000,001 to $50,000,000.
Innatech has completed an 11 U.S.C. Sec. 363 sale of substantially
all of its assets. It finalized the sale of its assets May 28,
2010, including a Richmond, Michigan, location that specializes in
automotive parts, to Engineered Plastic Components.
INNOTRAC CORP: Trading Restrictions Extended Until Dec. 1
---------------------------------------------------------
Innotrac Corporation updated its previous announcement regarding
the restriction placed on the trading of Company stock in the IPOF
Fund, L.P. administered by the receiver appointed by the United
States District Court in Cleveland, Ohio. The Court has extended
the period during which financial institutions holding Company
stock owned by the IPOF Fund, or Dadante-related entities are
restricted from trading any of these shares as defined in the
Court's prior orders until December 1, 2010.
Innotrac Corporation (Nasdaq: INOC) -- http://www.innotrac.com/--
founded in 1984 and based in Atlanta, Georgia, is a full-service
fulfillment and logistics provider serving enterprise clients and
world-class brands. The Company employs order processing and
warehouse management technology and operates seven fulfillment
centers and one call center in six cities spanning all time zones
across the continental United States.
* * *
As reported in the Troubled Company Reporter on January 8, 2010,
Innotrac Corporation on January 4, 2010, received a letter from
The NASDAQ Stock Market providing notice that it had not
maintained the continued listing standard for the minimum market
value of publicly held shares of $5 million. MVPHS is the market
value of the Company's publicly held shares, which is calculated
by subtracting all shares held by officers, directors or
beneficial owners of 10% or more of the total shares outstanding.
Approximately 2.4 million, or 19% of Innotrac's total 12.6 million
outstanding shares are included in the MVPHS calculation for the
Company.
ISECURETRAC CORP: June 30 Balance Sheet Upside-Down by $24.5MM
--------------------------------------------------------------
iSECUREtrac Corp. had total assets of $8,885,356, total
liabilities of $18,264,366 and redeemable convertible Series C
preferred stock of $15,145,150, and a stockholders' deficit of
$24,524,160 as of June 30, 2010.
The Company posted a net loss of $174,223 for the three months
ended June 30, 2010, from a net loss of $399,775 for the same
period in 2009. It posted a net loss of $620,579 for the six
months ended June 30, 2010, from a net loss of $984,623 for the
same period in 2009.
Total revenues -- from equipment leasing; administrative, field &
support service revenues; equipment sales; and royalty revenues --
were $2,767,129 for the three months ended June 30, 2010, from
$3,191,555 for the same period in 2009. Total revenues were
$5,455,258 for the six months ended June 30, 2010, from $6,295,271
for the same period in 2009.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a70
Based in Omaha, Nebraska, iSECUREtrac develops, markets, leases
and services products that assist in "monitoring compliance and
modifying behavior" of individuals who are under the supervision
of the criminal justice system and social service agencies,
primarily in the United States.
JAPAN AIRLINES: Files Turnaround Plan, Sees Bigger Work Force Cut
-----------------------------------------------------------------
Japan Airlines Corp. filed with the Tokyo District Court, Civil
Department No. 8, a plan outlining its strategy to exit from
bankruptcy.
The turnaround plan, filed August 31, is an aggressive
restructuring plan that speeds up a major cut in its work force
and slashes unprofitable routes, Yoshio Takahashi at The Wall
Street Journal reported. The plan was filed seven months after
JAL filed for Japan's biggest non-financial bankruptcy protection
in January this year. The plan, according to the Journal, is
"tougher" than the turnaround plan JAL submitted when it sought
bankruptcy protection.
The outline of JAL's original plan was to seek a debt waiver
amounting to JPY730 billion while its state-back restructuring
promoter agreed to put up JPY300 billion to turn round the
airline's negative net worth of JPY870 billion. The original plan
also forecasted a fiscal year 2010 loss of JPY33.7 billion and an
operating profit of JPY49.7 billion for the fiscal year through
2012, according to Dow Jones.
In the current plan, JAL intends to refinance its current debt
load of about JPY300 billion by the end of March 2011, the Journal
said citing a person familiar with the matter, ensuring months of
protracted negotiations with its main lenders in months to come.
In June, people familiar with the JAL bankruptcy told Dow Jones
that the airline will probably seek JPY100 billion, or roughly
US$1.1 billion, more in financial assistance.
JAL's operating profit is expected to improve to JPY117.5 billion
in the fiscal year through March 2013 from an operating loss of
JPY133.7 billion in the last fiscal year ended March 2010, the
Journal related. However, its revenue is projected to decline 15%
to JPY1.273 trillion in the fiscal year to March 2013 from
JPY1.495 trillion in the last fiscal year, as it will reduce
flight services.
The Enterprise Turnaround Initiative Corp., which supports
JAL's restructuring, will inject JPY350 billion into JAL's
international flight service unit, larger than its earlier plan
of JPY300 billion, the Journal said. JAL, the newspaper added,
will ask for a debt waiver of JPY521.5 billion from its lenders.
The Journal noted that the new plan was short on details about how
JAL would increase its revenue in the coming years -- a crucial
factor amid increased competition from low-cost carriers and other
international airlines as both Narita International Airport and
Haneda Airport, the main gateways into Tokyo, expand their
capacity. The former flag carrier, the Journal related, said it
was considering launching a low-cost airline subsidiary, but
declined to elaborate.
Under the latest plan, JAL aims to cut its work force by about
16,000 staff to about 32,600 by March 31, 2011. In the initial
plan submitted in January, JAL aimed to cut 15,600 jobs over three
years.
In the new plan, JAL intends to scrap a combined 49 unprofitable
international and domestic routes and flights by the end of March
2013, which, according to the Journal, is a more drastic cut than
the reduction of 31 routes and flights reduction targeted in the
same time frame under its initial plan.
"This is the start of JAL's restructuring," the Journal quoted
Kazuo Inamori, JAL chairman, as saying at a news conference. "We
will work [on restructuring] hard so that we can post better
numbers than we are targeting."
Poor Management Led to JAL Bankruptcy
Mismanagement and a lack of risk awareness caused JAL to file for
bankruptcy protection in January, Kyodo News said on August 18
citing a draft report by a panel studying JAL's management
practices says. The five-member panel preparing the report,
however, said it is difficult to place criminal or civil liability
on former heads of the carrier, sources said. The report was to
be submitted soon to JAL's bankruptcy administrator.
The panel said management failed to detect that the airline was in
financial crisis because of the firm's compartmentalized
administrative structure in terms of corporate planning, sales and
marketing, and other operations, Kyodo News said, further citing
sources.
According to Kyodo News, JAL set up the compliance investigation
panel March 2 made up of third-party members who were tasked with
examining past management practices. The panel, Kyodo News
related, said JAL was tardy in implementing massive restructuring
efforts to improve its balance sheet when it was seeing a decline
in passengers due to the Sept. 11, 2001, terrorist attacks in the
United States and then the epidemic of severe acute respiratory
syndrome, or SARS.
The panel plans to report that JAL needs to change its corporate
culture and no longer act with the complacency that it was the
country's flag carrier, Kyodo News said.
JAL commenced a corporate reorganization process in the Tokyo
District Court on January 19, 2010, under the Corporation
Reorganization Act of Japan. In connection with the commencement
of the Japan proceeding, the Tokyo District Court appointed Eiji
Katayama of the Abe, Ikubo & Katayama law firm and the government-
backed Enterprise Turnaround Initiative Corporation of Japan as
JAL's trustees.
JAL filed parallel proceedings on the same day in the United
States under Chapter 15 of the U.S. Bankruptcy Code. Mr. Katayama
was appointed foreign representative. Ryan Blaine Bennett, Esq.,
and James H.M. Sprayregen, P.C., Esq., at Kirkland & Ellis LLP, in
New York, serve as counsel to the Foreign Representative.
JOSEPH CHRISTIANA: Oct. 1 Deadline to File Proofs of Claim
----------------------------------------------------------
The U.S. Bankruptcy Court has set Oct. 1, 2010, as the deadline
for creditors holding claims against Joseph W. Christiana, Jr.,
arising prior to June 22, 2010, to file their proofs of claim.
Notice of the bar date was published in the Daily Freeman on
Tues., Aug. 31, 2010. The notice indicates that copies of the
Debtor's Schedules of Assets and Liabilities may be obtained by
sending a written request to the debtors' counsel:
Andrea B. Malin, Esq.
GENOVA & MALIN
Hampton Business Center
1136 Route 9
Wappingers Falls, NY 12590
Tel: (845) 298-1600
Joseph W Christiana, Jr., sought chapter 11 protection (Bankr.
S.D.N.Y. Case No. 10-36848) on June 22, 2010, disclosing $807,095
in assets and $1,667,052 in liabilities at the time of the filing.
KENNETH ANDERSON: Case Summary & 19 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Kenneth Roderick Anderson
dba Pah Tempe Hot Springs Resort
Zion VRC Zip Tour LLC
aka Ken R. Anderson
dba The Roderick Family Trust
aka Kenneth R. Anderson
dba Kolob Mountain Ranch Resort
825 North 800 East
Hurricane, UT 84737
Bankruptcy Case No.: 10-31252
Chapter 11 Petition Date: August 18, 2010
Court: United States Bankruptcy Court
District of Utah (Salt Lake City)
Judge: William T. Thurman
Debtor's Counsel: Helga A. White, Esq.
310 Bridgeview Drive
Auburn, CA 95603-3234
Tel: (530) 885-4433
Fax: (530) 236-8866
E-mail: helgawh@gotsky.com
Scheduled Assets: $36,297,305
Scheduled Debts: $5,979,063
The petition was signed by the Debtor.
Debtor's List of 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Farel Campbell Engineer $64,962
332 West 400 S
Hurricane, UT 84737
Steven Spackman $37,000
3576 Pomegranet Way
St. George, UT 84790
Hannes Frischknecht $28,000
100 E. 480 South
La Verkin, UT 84745
Bank of America $21,000
Russell Gallian $15,826
Spec Industries Inc. $4,836
Road Runner Auto $3,173
La Verking City $2,874
Scholzens Products $2,848
Napa Auto Parts $2,416
Kubota Credit Corporation $1,291
Vacation Resorts International $1,211
Steamroller Copies $896
Lins Market $714
Ameri Gas $576
The Spectrum News $433
Washington County $350
Water Conservancy Dist
Bucks Ace Hardware $326
Farmers Market $213
KILEY RANCH: Section 341(a) Meeting Scheduled for Oct. 4
--------------------------------------------------------
The U.S. Trustee for Region 18 will convene a meeting of Kiley
Ranch Communities' creditors on October 4, 2010, at 2:00 p.m. The
meeting will be held at 300 Booth Street, Room 3024, Reno, NV
89509.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Reno, Nevada-based Kiley Ranch Communities filed for Chapter 11
protection on August 26, 2010 (Bankr. D. Nev. Case No. 10-53393).
Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd,
assists the Debtor in its restructuring effort. The Debtor
estimated its assets at $10 million to $50 million and debts at
$50 million to $100 million.
KNOLOGY INC: June 30 Balance Sheet Upside-Down by $33.89MM
----------------------------------------------------------
Knology, Inc., had total assets of $646,901,000, total liabilities
of $680,793,000, and a stockholders' deficit of $33,892,000 as of
June 30, 2010.
The Company posted net income of $1,334,000 for the three months
ended June 30, 2010, from net income of $7,639,000 for the same
period a year ago. The Company posted a net loss of $940,000 for
the six months ended June 30, 2010, from net income of $6,824,000
for the same period a year ago.
Total operating revenues were $107,931,000 for the three months
ended June 30, 2010, from $112,987,000 for the same period a year
ago. Total operating revenues were $212,614,000 for the six
months ended June 30, 2010, from $223,105,000 for the same period
a year ago.
On August 3, 2010, the Company executed a definitive agreement to
acquire certain assets and assume certain liabilities of Sunflower
Broadband, a provider of video, voice and data services to
residential and business customers in Douglas County and Lawrence,
Kansas, for $165 million. Sunflower has roughly $35.8 million in
total assets and $50.0 million in annual total revenues. The
transaction is expected to close during the fourth quarter of
2010, subject to certain closing conditions, including regulatory
approvals.
"We expect to fund the proposed transaction by using a portion of
our cash on hand and by accessing the capital markets in a manner
which will allow us to manage the leverage profile of the
business, while maintaining the flexibility to continue to growth
the business with a disciplined approach," the Company said in a
Form 10-Q filing.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a74
Based in West Point, Georgia, Knology, Inc., owns and operates an
advanced interactive broadband network and provides residential
and business customers broadband communications services,
including analog and digital cable television, local and long-
distance telephone, high-speed Internet access, and broadband
carrier services to various markets in the Southeastern and
Midwestern United States.
LEHMAN BROTHERS: Gets Approval of TS Boston Release Agreement
-------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliate, Lehman
Commercial Paper Inc., received the U.S. Bankruptcy Court's
permission to enter into a Release and Termination of Loan
Agreement and Other Documents with TS Boston Core Holdings, L.P.;
125 High Junior Mezz, L.P.; One Federal Intermediate Mezz, L.P.;
One Federal Junior Mezz, L.P.; and other borrower affiliates.
In June 2006, LBHI, as a lender, made an acquisition loan of
$373,500,000 to certain of the One Fed Entities that was
collateralized by an office building known as One Federal Plaza
in downtown Boston, Massachusetts. The Acquisition Loan was
subsequently partitioned into a $262,000,000 securitized
mortgage, a $49,000,000 senior mezzanine loan, a $62,500,000
intermediate mezzanine loan -- Mezz B Loan, and a $25,000,000
unfunded junior mezzanine loan -- Junior Mezz Loan. The Mezz B
Loan was then subdivided into two parts, a $35,000,000 senior
note -- Mezz B Senior Note, and a $27,500,000 junior note -- Mezz
B Junior Note. In May 2010, the Mezz B Senior Note was sold to a
third party entity at a discount to its par value, while LCPI
remains the lender of record with respect to the Mezz B Junior
Note and, is the controlling lender with respect to the Mezz B
Loan.
In July 2006, LBHI, as a lender, made a $365,000,000 mortgage
loan, a $82,000,000 mezzanine A loan, a $82,000,000 mezzanine B
loan, and a $30,000,000 unfunded mezzanine C loan -- the "125
Mezz C Loan", to certain special purpose entities. Each loan was
secured by a property located at 125 High Street in downtown
Boston, Massachusetts. Subsequently, LBHI transferred its
interest in those loans, except its interest with respect to the
125 Mezz C Loan.
Moreover, the Restructured Asset Securities with Enhanced Returns
Series 2007-A Trust and 2007-7-MM Trust, special purpose
securitization vehicles, were established to issue securities to
finance a portfolio of corporate loans, mortgage loans and equity
interests. While LCPI remains the lender of record with respect
to the Mezz B Junior Note, it purportedly sold a 100%
participation interest in it to RACERS and, thus, LCPI's interest
in the Mezz B Junior Note may be legally or beneficially under
the purported indirect control of RACERS.
Pursuant to the Court's order authorizing a collateral
disposition agreement and certain related transactions, LBHI is
the current holder of all the RACERS securities, and believes
that it has the power to make decisions with respect to the
assets, including the release of any collateral securing an
obligation in which RACERS has a purported interest.
Release Agreement
Beginning in June 2010, TS Boston Core approached LBHI and LCPI
seeking to purchase LCPI's interest in the Mezz B Junior Note.
Following arm's-length and good faith negotiations, TS Boston,
the Borrowers, other Borrower Affiliates, LBHI, and LCPI entered
into the Release Agreement.
The salient terms of the Release Agreement are:
(1) LBHI and LCPI will, among others, release all of their
interest in the collateral securing the Mezz B Junior
Loan, the Junior Mezz Loan, and the 125 Mezz C Loan in
exchange for:
(i) a cash payment that is less than the balance owed on
the loan, or the "Payoff Amount;"
(ii) a release of any and all claims held by the
Borrowers and other Borrower Affiliates, including
claims relating to the unfunded Junior Mezz and 125
Mezz C Loans; and
(iii) withdrawal of unliquidated Claim Nos. 27387 and
27389 filed by 125 High Junior Mezz, L.P. and One
Federal Junior Mezz, L.P.
(2) LCPI will provide a limited indemnity solely for the
purposes of defending and holding harmless the Borrower
Affiliates from and against any and all loss, liabilities,
damages, claims, costs and expenses arising out of a claim
made by RACERS or any party with an interest in RACERS,
(i) asserting that a party holds or controls a direct or
indirect legal or beneficial interest in the Mezz B Junior
Note, (ii) challenging the authority or right of LCPI to
enter into the Release Agreement, perform any of its
obligations, or otherwise consummate the transactions
contemplated, or (iii) otherwise related to the Mezz B
Junior Note, this Release or the transactions
contemplated.
(3) The limited indemnity will not be effective unless all of
the transactions contemplated by the Release Agreement
occur on or before the Closing Date.
LBHI and LCPI relate that the Release Agreement contains a Payoff
Amount, which represents commercially sensitive information that
should be protected pursuant to Section 107(b) of the Bankruptcy
Code, and Rule 9018 of the Federal Rules of Bankruptcy Procedure.
The Debtors thus filed with the Court a redacted version of the
Release Agreement, available for free at:
http://bankrupt.com/misc/Lehman_TSBostonReleaseAgr.pdf
Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in
Houston, Texas, stresses that the Debtors believe that near-term
rollover of the lessees at One Fed may, potentially, create debt
service shortfalls that may require LCPI to either (i) purchase
the Mezz B Senior Note, or (ii) risk losing its status as
controlling lender. A loss in LCPI's status may lead to a
foreclosure the Mezz B Junior Note and a loss of LCPI's interest
in One Fed, he points out. Thus, the entry into the Release
Agreement presents a better alternative and is in the best
interests of LBHI and LCPI because it provides them, among
others, the Payoff Amount for the Mezz B Junior Note, a release
from funding approximately $55 million in unfunded loans, and a
withdrawal of the Proofs of Claim, he maintains.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Three Insurers to Pay Litigation Costs
-------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors won a
court order authorizing three insurance firms to pay the legal
fees of former top executives and employees.
The insurance policies provided by Continental Casualty Company,
Certain Underwriters at Lloyd's London and London Market Company,
and U.S. Specialty Insurance Company cover the defense costs for
LBHI's former executives and employees who are facing a number of
lawsuits, which stemmed from the bankruptcy of the company.
Continental Casualty's and Lloyd's insurance policies provide
$10 million each while that of U.S. Specialty provides up to
$15 million.
Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York,
says the proposed payment would ensure the personnel's continued
access to additional funding in case the $15 million provided by
another insurer, Federal Insurance Company (Chubb) is exhausted.
Chubb provides $15 million in coverage but it is expected to be
exhausted in the near future given the state of the lawsuits, Mr.
Krasnow tells the Court. Meanwhile, the $20 million in coverage
provided by LBHI's primary insurer, XL Specialty Insurance
Company, had already been used, he says.
Richard Fuld, former chief executive, and second-in-command Joe
Gregory, are among those named as defendants in securities
lawsuits currently pending in federal court in Manhattan. The
Justice Department and the U.S. Securities and Exchange
Commission have also launched formal investigations into LBHI's
bankruptcy filing, according to a July 29 report by The Wall
Street Journal.
Charlie Gasparino of Fox Business Network reported last month
that the SEC was focusing its investigation on the actions and
statements of Erin Callan, former chief financial officer. Mr.
Gasparino quoted sources saying the agency is looking at
statements and actions by the CFO ahead of LBHI's bankruptcy
filing in 2008.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Wins Approval to Finance Heritage Project
----------------------------------------------------------
Lehman Brothers Holdings Inc. received court approval to amend
what it calls a participation agreement so that it could provide
financing for the Heritage Fields Project, a 3,723-acre
masterplan development in California owned by Heritage Fields El
Toro LLC.
The proposed amendment would allow LBHI to buy up to $32 million
of participation interest in a loan that El Toro LLC provided to
Heritage in 2007. Under the current participation agreement with
El Toro, LBHI is only allowed to purchase up to $24.5 million.
The $32 million will be used to cover the costs of the Heritage
Fields project, which must be paid prior to court approval of
LBHI's settlement deal with Heritage, according to Alfredo Perez,
Esq., at Weil Gotshal & Manges LLP, in Houston, Texas.
LBHI earlier filed a motion to approve the settlement deal, under
which it will receive about $125 million from Heritage as payment
for assigning its debt interest in the project to State Street
Bank and Trust Company. If the settlement is approved, the
participation interests will be repaid.
Mr. Perez says they chose to structure the funding of the
project's costs through the proposed buyout because it provides
LBHI and its creditors with the most security.
"As a participation in El Toro's loan, the additional
participation interests are secured by a first priority security
interest in the project," he says, adding that they will be paid
prior to substantially any other interest in the Heritage Fields
project.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Wins Nod to Amend RACERS Transaction
-----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
issued an order authorizing Lehman Brothers Holdings Inc. to
amend the agreements related to the Restructured Asset Securities
with Enhanced Returns Series 2007-7-MM Trust.
In an eight-page order, Judge James Peck gave LBHI the go signal
to amend the agreements, allowing the company or its designee to
replace U.S. Bank N.A. as trustee of the RACERS MM Trust and the
RACERS A Trust.
Judge Peck also authorized the termination of the participation
agreement and the security and control agreement. Lehman
Commercial Paper Inc. will be deemed to be the owner of the real
estate loans and other illiquid assets being financed by the
trusts, the bankruptcy judge ruled.
The court order prohibits LBHI, LCPI, Lehman Brothers Inc. or
anyone from asserting or bringing claim against U.S. Bank, and
requires LBHI to pay the fees and expenses of the bank for its
services as former trustee. In return, U.S. Bank is required to
withdraw its prior objection.
The court order does not authorize the extension of the bar date
or permit the filing of any additional proofs of claim against
LBHI and its affiliated debtors.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Ex-CEO Fuld to Appear Before Fin'l Crisis Panel
----------------------------------------------------------------
The Wall Street Journal's John D. McKinnon reports that the
Financial Crisis Inquiry Commission wraps up its Washington
hearing schedule on Wednesday and Thursday, when it will take a
look at how the government decided which financial institutions
would live during the 2008 meltdown, and which ones would die.
The Journal says the commission is focusing on Lehman Brothers,
which sunk into bankruptcy in 2008, and Wachovia Corp., which bank
regulators were willing to help out. It eventually survived the
turmoil of 2008.
According to the Journal, Wednesday's witnesses will include
Robert Steel, a former Wachovia CEO and former top Treasury
official, and Richard Fuld, former Lehman CEO. On Thursday, the
panel will hear testimony from Federal Reserve Chairman Ben
Bernanke, and Sheila Bair, the chairman of the Federal Deposit
Insurance Corp.
The FCIC was formed by Congress last year to examine the causes of
the financial crisis. It's expected to complete its report in
December. While its Washington hearings are wrapping up, it also
plans a series of field hearings in California, Nevada and
Florida.
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)
LEVEL 3: Seven Directors Purchase 2 Million Shares on Aug. 25
-------------------------------------------------------------
Level 3 Communications Inc. said that, pursuant to a stock
purchase agreement dated Aug. 25, 2010, certain members of the
Company's Board of Directors or entities affiliated with the
member of the Board have purchased for cash, in a private
transaction, a total of 2,000,000 shares of the Company's common
stock, par value $.01 per share, from its chief executive officer,
James Q. Crowe.
The purchasers were:
Name Number of Shares
---- ----------------
Walter Scott, Jr. 1,575,000
R. Douglas Bradbury 50,000
Douglas C. Eby 25,000
Richard R. Jaros 100,000
Michael J. Mahoney 100,000
Arun Netravali 100,000
John T. Reed 50,000
The shares of the common stock were purchased at a price of $1.05
per share, which was the closing price of the Company's Common
Stock on the Nasdaq stock market on August 24, 2010.
After completion of this transaction, Mr. Crowe owns 6.3 million
shares of the Company's common stock and has been previously
awarded approximately 2.9 million restricted stock units.
About Level 3
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc., is a publicly traded international communications company
with one of the world's largest communications and Internet
backbones.
Level 3 Communications carries a 'Caa1' corporate family rating,
and 'Caa2' probability of default rating, with negative outlook
from Moody's, a 'B-' issuer default rating from Fitch, and 'B-'
long term issuer credit ratings from Standard & Poor's.
LIGHTING SCIENCE: June 30 Balance Sheet Upside-Down by $148MM
-------------------------------------------------------------
Lighting Science Group Corporation had total assets of
$49,607,368, total liabilities of $198,272,900, and a
stockholders' deficit of $148,665,532 as of June 30, 2010.
The Company posted a wider net loss of $102,379,261 for the three
months ended June 30, 2010, from a net loss of $12,854,514 for the
same period in 2009. It posted a net loss of $114,572,494 for the
six months ended June 30, 2010, from $27,951,555 for the same
period in 2009.
Revenues were $9,759,159 for the three months ended June 30, 2010,
from $5,922,866 for the same period in 2009. Revenues were
$15,193,103 for the six months ended June 30, 2010, from
$14,268,971 for the same period in 2009.
The Company said it has experienced significant net losses as well
as negative cash flows from operations since its inception.
Recent increases in backlog coupled with potential sales under
newly formed business relationships may significantly increase its
working capital needs during the remainder of 2010 and early 2011.
The Company is currently dependent on Pegasus Partners IV, L.P.
for its liquidity needs because the Company's other historical
sources of liquidity have been insufficient or unavailable to meet
the Company's anticipated working capital needs.
To provide the Company with adequate working capital, the Company
issued short-term notes payable to Pegasus IV, which together with
its affiliates, is the Company's controlling stockholder. As of
December 31, 2009, the Company had an outstanding Convertible Note
Agreement with Pegasus IV representing $32.8 million of principal.
Additionally, on August 27, 2009, in conjunction with the Release
Agreement between, among other parties, the Company and
Koninklijke Philips Electronics N.V., the Company entered into a
Convertible Note Agreement with Philips pursuant to which the
Company borrowed $5.0 million from Philips.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a6b
Based in Satellite Beach, Florida, Lighting Science Group
Corporation researches, designs, develops, manufactures and
markets a range of lighting devices and systems that use light-
emitting diodes as light source. LEDs are semiconductor devices
that emit light when electric currents are passed through them.
LONE TREE: Wins Approval of $1 Million DIP Financing
----------------------------------------------------
American Bankruptcy Institute reports that Lone Tree Investments
LLC is leaning on a $1 million postpetition credit line from
majority owner Flagstaff Acquisitions LLC while it works to craft
a reorganization plan.
Lone Tree Investments LLC is the owner of the Pine Canyon
development in Flagstaff, Arizona. The property consists of a
residential community, golf course, and related facilities. Pine
Canyon said in the court filing that property has been appraised
for more than $60 million. Lone Tree owes $24.3 million to the
secured construction lender Johnson Bank.
Lone Tree Investments LLC filed for Chapter 11 protection on
August 24, 2010 in Phoenix (Bankr. D. Ariz. Case No. 10-26776).
LONE TREE: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Lone Tree Investments LLC
c/o Patricia E. Nolan
1201 E. John Wesley Powell Blvd.
Flagstaff, AZ 86001
Bankruptcy Case No.: 10-26776
Chapter 11 Petition Date: August 24, 2010
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Judge Redfield T. Baum PCT Sr.
Debtor's Counsel: John J. Hebert, Esq.
POLSINELLI SHUGHART, P.C.
3636 N. Central Avenue, Suite 1200
Phoenix, AZ 85012
Tel: (602) 650-2011
Fax: (602) 391-2546
E-mail: jhebert@polsinelli.com
Estimated Assets: $50,000,001 to $100,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by, Patricia E. Nolan, president of
Central and Osborn Properties, Inc., member.
The Debtor did not file a list of its largest unsecured creditors
together with the petition.
MARCO COMMUNITY: Bank's Closing Cues Going Concern Qualification
----------------------------------------------------------------
Marco Community Bancorp, Inc., filed on August 24, 2010, its
annual report on Form 10-K for the fiscal year ended December 31,
2009.
Hacker, Johnson & Smith, P.A., in Tampa, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted of the closing of
Marco Community Bank in February 19, 2010.
The Company reported a net loss of $18.41 million on $3.57 million
of net interest income for 2009, compared to a net loss of
$5.38 million on $3.64 million of net interest income for 2008.
The Company's balance sheet at December 31, 2009, showed
$118.81 million in total assets, $117.44 million in total
liabilities, and stockholders' equity of $1.37 million.
A full-text copy of the Form 10-K is available for free at:
http://researcharchives.com/t/s?6a61
Marco Island, Fla.-based Marco Community Bancorp, Inc. was
incorporated under the laws of the State of Florida on January 28,
2003, for the purpose of organizing Marco Community Bank and
purchasing 100% of the to-be-issued capital stock of the Bank.
On February 19, 2010, the Bank was closed by the Florida Office of
Financial Regulation and the FDIC was appointed as receiver of the
Bank. Subsequent to the closure, Mutual of Omaha Bank, Omaha,
Nebraska, assumed all of the deposits of the Bank, and purchased
essentially all of the Bank's assets in a transaction facilitated
by the FDIC. On February 20, 2010, the one office of the Bank
reopened as a branch of Mutual of Omaha.
The Company's principal asset is the capital stock that it owns in
the Bank at February 19, 2010, and, as a result of the closure of
the Bank, the Company has minimal remaining tangible assets. The
Company did not realize any recovery following the closing of the
Bank and sale of its assets by the FDIC, nor is any recovery
expected. Since the closing of the Bank, the principal assets of
the Company are its office condominium, a participation in a loan
receivable, and cash.
The Company is exploring methods of winding down its operations.
Any ultimate distribution of assets will occur in accordance with
Florida law, the Company's Articles of Incorporation and the terms
of the Company's outstanding series of Preferred Stock.
MCINTOSH BANCSHARES: Incurs $1.1 Million Net Loss in June 30 Qtr.
-----------------------------------------------------------------
McIntosh Bancshares, Inc., filed its quarterly report on Form
10-Q, reporting a net loss of $1.1 million on $1.9 million of net
interest income for the three months ended June 30, 2010, compared
with a net loss of $1.7 million on $2.5 million of net interest
income for the same period ended June 30, 2009.
The Company has not shown a profit since the first quarter of
2008.
The Company's balance sheet as of June 30, 2010, showed
$379.2 million in total assets, $370.0 million in total
liabilities, and shareholders' equity of $9.2 million.
As reported in the Troubled Company Reporter on April 1,
2010, Porter Keadle Moore, LLP, in Atlanta, Ga., expressed
substantial doubt about the Company's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted that McIntosh State Bank has suffered recurring
losses, and that at December 31, 2009, the Bank's capital ratios
are below the required levels as established by regulation.
About McIntosh Bancshares
Jackson, Ga.-based McIntosh Bancshares, Inc. operates as the bank
holding company for McIntosh State Bank that provides commercial
banking products and services to individuals and corporate
customers in Georgia.
METROFINANCIERA SA: Seeks Bankruptcy Protection in U.S.
-------------------------------------------------------
Metrofinanciera, S.A.P.I. de C.V., Sociedad Financiera
de Objeto Multiple, E.N.R.. filed a Chapter 15 petition in Corpus
Christi, Texas on August 30 (Bankr. S.D. Tex. Case No. 10-20666).
The Debtor estimated assets and debts of $500 million to $1
billion in the Chapter 15 petition. Alan S. Gover, Esq., at White
& Case LLP, in New York, represents the Chapter 15 debtor.
Metrofinanciera SA de CV sought bankruptcy protection in the U.S.
so it can wrap up its reorganization proceedings in Mexico, Dawn
McCarty and David McLaughlin at Bloomberg News report. The
Company said it has negotiated a debt restructuring deal with
creditors and filed for bankruptcy in the U.S. to complete the
plan.
According to the report, without court protection in the U.S., the
Company said it faces "a substantial risk" that holders of
US$100 million in notes issued in 2006 could sue the Company in
New York. "Such actions will seriously disturb Metrofinanciera's
near-complete reorganization and force Metrofinanciera to litigate
such actions at great cost," the company said in court papers, the
report relates.
At a hearing, U.S. Bankruptcy Judge Richard Schmidt granted the
company's request for an order blocking collection actions by
creditors. Judge Schmidt scheduled a September 24 hearing to
consider Metrofinanciera's Chapter 15 petition, the report adds.
Mexico Proceedings
Metrofinanciera filed for bankruptcy in Mexico last year after
negotiating a restructuring with creditors. It was the first
prepackaged bankruptcy in Mexican history. The Plan was approved
by a Mexican court in June.
Metrofinanciera, Bloomberg News notes, needs approval of the
Chapter 15 petition in order to make its bankruptcy plan effective
in the U.S. and make distributions to the noteholders under the
Plan. The company's only U.S. creditors are holders of the notes,
according to court documents, the report relates.
About Metrofinanciera SA
Headquartered in Monterrey, Mexico, Metrofinanciera, S. A. de
C.V., Sociedad Financiera de Objeto Multiple, Entidad no Regulada
-- http://www.metrofinanciera.com.mx/-- specializes in real
estate credit and housing development in Mexico. Founded in 1996
in Monterrey, it offers financial services and consulting for all
phases of real estate projects: housing construction, advance
sales, public works and commercialization. The company also
offers products in life, damage and unemployment insurance.
MICHAELS STORES: Reports $1-Mil. Net Loss for July 31 Quarter
-------------------------------------------------------------
Michaels Stores Inc. filed its quarterly report on Form 10-Q,
reporting a net loss of $1 million for the quarter ended July 31,
2010, compared to net income of $2 million for the quarter ended
August 1, 2009. The Company had net sales of $831 million for the
quarter ended July 31, 2010 compared with $807 million during the
comparable period in 2009.
The Company's balance sheet at July 31, 2010, showed $1.58 billion
in total assets, $4.34 billion in total liabilities, and a
stockholders' deficit of $2.75 billion.
A full-text copy of the Earnings Release is available for free at
http://ResearchArchives.com/t/s?6a5d
A full-text copy of the quarterly report on Form 10-Q is available
for free at http://ResearchArchives.com/t/s?6a7f
About Michaels Stores
Headquartered in Irving, Texas, Michaels Stores, Inc., is the
largest arts and crafts specialty retailer in North America. As
of March 9, 2009, the Company operated 1,105 "Michaels" retail
stores in the United States and Canada and 161 Aaron Brothers
Stores.
Michaels Stores carries 'B3' corporate family and probability of
default ratings from Moody's Investors Service. Moody's updated
the ratings from 'Caa1' to 'B3' in June 2010 and said that the
upgrade in the company's ratings reflects recent improvement in
operating performance resulting from higher comparable store sales
and operating margin expansion and Moody's expectations this
improved performance can be sustained.
MILLENNIUM TRANSIT: Proofs of Claim Due 45 Days After Notice
------------------------------------------------------------
The Hon. James S. Starzynski of the U.S. Bankruptcy Court for the
District of New Mexico, in an August 13, 2010 order, has set 45
days after the date of service of notice, as the deadline for any
individual or entity to file proofs of claim against Millennium
Transit Services, LLC.
Proofs of claim must be filed with:
THUMA & WALKER, P.C.
David T. Thuma, Esq.
Merrie Chappell, Esq.
500 Marquette, N.W. Suite 650
Albuquerque, NM 87103
Tel: (505) 766-9272
Roswel, New Mexico-based Millennium Transit Services LLC is a bus
manufacturer. The Company filed for Chapter 11 relief on
August 29, 2008 (Bankr. D. N.M. Case No. 08-12848). David T.
Thuma, Esq., at Jacobvitz, Thuma & Walker, represents the Debtor
as counsel. George M. Moore, Esq., at Moore, Berkson &
Gandarilla, P.C., represents the official committee of unsecured
creditors as counsel. The Debtor estimated $10 million to
$50 million in assets and debts in its Chapter 11 petition.
MPG OFFICE: Inks Separation & Consulting Deal With SVP Goodwin
--------------------------------------------------------------
MPG Office Trust Inc. and MPG Office L.P. entered on Aug. 26,
2010, into a Separation and Consulting Agreement with Robert P.
Goodwin, the Company's Senior Vice President, Construction and
Development. Mr. Goodwin has agreed to provide consulting
services to the Company from September 1, 2010 through
February 28, 2011 at a rate of $10,000 per month. Either party
may terminate the consulting arrangement on 30 days' notice,
subject to certain conditions.
A full-text copy of the Separation and Consulting Agreement is
available for free at http://ResearchArchives.com/t/s?6a7e
About MPG Office Trust
MPG Office Trust Inc. is a self-administered and self-managed real
estate investment trust. It is the largest owner and operator of
Class A office properties in the Los Angeles Central Business
District and are primarily focused on owning and operating high-
quality office properties in the high-barrier-to-entry Southern
California market.
The Company's balance sheet at June 30, 2010, showed $3.37 billion
in total assets, $4.26 billion in total liabilities, and
a $778.95 million stockholders' deficit.
MPG Office reported a net loss available to common stockholders of
$53.5 million for the quarter ended June 30, 2010, compared to a
net loss available to common stockholders of $380.5 million for
the quarter ended June 30, 2009.
MT ZION: Hearing on Cash Collateral Use Continued until Sept. 14
----------------------------------------------------------------
The Hon. Pamela Hollis of the U.S. Bankruptcy Court for the
Northern District of Illinois, in a fourth interim order,
authorized Mt. Zion Limited Partnership to use the cash collateral
of PNC Bank, National Association until mid-September.
A final hearing on the Debtor's cash collateral use will be held
on September 14, 2010, at 11:00 a.m. Objections, if any, are due
September 11.
As reported in the Troubled Company Reporter on May 6, 2010, the
Bank asserts a senior position mortgage lien and claim against
the Debtor's residential apartment project in Florence, Kentucky,
known as Woodspring Apartments, which purportedly secures a
mortgage indebtedness of approximately $28,850,000. The bank
also asserts a security interest in and lien upon the rents being
generated at the property.
The Debtor would use the cash collateral to fund its Chapter 11
case, pay suppliers and other parties.
In exchange for using the cash collateral, the bank will be
allowed to inspect, upon reasonable hours, the Debtor's books and
records. The Debtor will maintain and pay premiums for insurance
to cover its assets from fire, theft and water damage. The Debtor
will, upon reasonable request, make available to the bank evidence
of that which purportedly constitutes their collateral or
proceeds. The Debtor will also property maintain the property in
good repair and properly manage the property.
About Mt. Zion Limited Partnership
Lake Forest, Illinois-based Mt. Zion Limited Partnership, dba
Woodspring Apartments, owns and operates a residential apartment
project located in Florence, Kentucky, known as Woodspring
Apartments. The Company filed for Chapter 11 protection on April
23, 2010 (Bankr. N.D. Ill. Case No. 10-18075). David K Welch,
Esq., at Crane Heyman Simon Welch & Clar, assists the Debtor in
its restructuring effort. The Company estimated its assets and
debts at $10 million to $50 million as of the Petition Date.
MT ZION: Hearing on Ch. 11 Trustee Continued Until September 14
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
has continued until September 14, 2010 at 10:30 a.m., the hearing
to consider PNC Bank, National Association's request for the
appointment of a Chapter 11 trustee in the case of Mt. Zion
Limited Partnership.
As reported in the Troubled Company Reporter on August 9, the
Debtor owes PNC Bank $29,825,110, secured by perfected liens
in substantially all the assets of the Debtor, including the
residential apartment project located in Florence, Kentucky, known
as Woodspring Apartments, and the rents derived from the property.
PNC requested for the appointment of a trustee, noting that the
Debtor:
a. failed to pay real estate taxes, requiring PNC to pay those
taxes to avoid the imposition of a tax lien;
b. withdrew funds from the security deposit accounts, in
violation of applicable law;
c. failed to make any payment whatsoever on account of its
indebtedness to PNC from February 1, through the petition
date; and
d. failed, as of December 31, 2009, to achieve an occupancy
rate greater than 64%, which is significantly lower than
occupancy rates for similar properties in the same market
area.
About Mt. Zion Limited Partnership
Lake Forest, Illinois-based Mt. Zion Limited Partnership, dba
Woodspring Apartments, owns and operates a residential apartment
project located in Florence, Kentucky, known as Woodspring
Apartments. The Company filed for Chapter 11 protection on April
23, 2010 (Bankr. N.D. Ill. Case No. 10-18075). David K Welch,
Esq., at Crane Heyman Simon Welch & Clar, assists the Debtor in
its restructuring effort. The Company estimated its assets and
debts at $10 million to $50 million as of the Petition Date.
MT ZION: Plan Promises Full Recovery for Unsecured Creditors
------------------------------------------------------------
Mt. Zion Limited Partnership submitted to the U.S. Bankruptcy
Court for the Northern District of Illinois a proposed Plan of
Reorganization and an explanatory Disclosure Statement.
According to the Disclosure Statement, the Plan provides for the
distributions to the holders of allowed claims from funds realized
from continued operation of the Debtor's business well as from
existing cash deposits and cash resources of the Debtor. To the
extent necessary, the balloon payment to PNC Bank, National
Association, as required by the Plan, may be paid from the
proceeds of the refinancing of the underlying mortgage
indebtedness due to PNC.
Treatment of Claims and Interests
1. Holders of Class 2 Secured Claims will receive or retain:
a) its lien on the real property owned by the Debtor, with the
same validity, enforceability, perfection and priority as it
had on the petition date, until the claims are paid in full;
and
b) payment of the entire unpaid balance of the allowed Class 2
claim, including any accrued statutory interest, will be
paid on the effective date.
2. Holders of Class 3 Allowed Claims of tenants at Woodspring
Apartments will be paid full in cash.
3. Holders of Class 4 Other Secured Creditors Claims will be paid
full in cash.
4. Holders of Class 5 General Unsecured Claims will receive 100%
of the allowed of the Class 5 claims plus interest.
5. Holders Class 6 interests of the general and unlimited partners
will retain their interests in the Debtor after confirmation of
the Plan.
A full-text copy of the Plan is available for free at:
http://bankrupt.com/misc/MtZion_Plan.pdf
The Debtor is represented by:
David K, Welch, Esq.
Arthur G. Simon, Esq.
Scott R. Clar, Esq.
Jeffrey C. Dan, Esq.
CRANE, HEYMAN, SIMON, WELCH & CLAR
135 South LaSalle Street, Suite 3705
Chicago, IL 60603
Tel: (312) 641-6777
Fax: (312) 641-7114
About Mt. Zion Limited Partnership
Lake Forest, Illinois-based Mt. Zion Limited Partnership, dba
Woodspring Apartments, owns and operates a residential apartment
project located in Florence, Kentucky, known as Woodspring
Apartments. The Company filed for Chapter 11 protection on April
23, 2010 (Bankr. N.D. Ill. Case No. 10-18075). David K Welch,
Esq., at Crane Heyman Simon Welch & Clar, assists the Debtor in
its restructuring effort. The Company estimated its assets and
debts at $10 million to $50 million as of the Petition Date.
NCOAT INC: Proposes Fort Ashford-Led Auction on September 16
------------------------------------------------------------
nCoat, Inc, et al., ask for authorization from the U.S. Bankruptcy
Court for the Middle District of North Carolina to sell
substantially all of their assets to Fort Ashford Funds, LLC, or
to any party submitting the highest and best bid, free and clear
of all claims, liens encumbrances and interests.
Before the Petition Date, the Debtors entered into an asset
purchase agreement, pursuant to which the Debtors will sell to
Fort Ashford certain assets and for certain executor contracts or
leases to be assumed and assigned to Fort Ashford at closing. A
copy of the Asset Purchase Agreement is available for free at:
http://bankrupt.com/misc/NCOAT_apa.pdf
The Debtors also filed their proposed sale procedures, a copy of
which is available for free at:
http://bankrupt.com/misc/NCOAT_sale_procedures.pdf
In the event that Fort Ashford isn't chosen as the winning bidder,
the Debtors will pay Fort Ashford a break-up fee of $150,000.
Those interested in purchasing the assets must submit an initial
overbid that provide for cash consideration to Debtor of at least
$250,000 more than the cash consideration to be provided by the
Buyer, and be accompanied by a deposit in the sum of $350,000 in
the form of a wire transfer or cashier's check payable to Debtor's
counsel and to be held in a non-interest bearing trust account by
Debtor's counsel pending completion of the Auction.
Each subsequent bid will be in increments of at least $100,000 in
aggregate consideration above the previous bid after taking into
account the Break-up Fee.
Upon the conclusion of the Auction, the Debtor will designate the
next highest or otherwise best bidder after the prevailing bidder
to serve as the back-up bidder.
The Debtors propose this schedule for the sale process:
a. September 13, 2010: deadline to submit initial overbid
b. September 13, 2010: deadline to submit statement of
defaults as to assumed contracts
c. September 16, 2010: Auction
d. September 17, 2010: deadline to file objection
e. September 21, 2010: sale hearing, subject to Court's
schedule
f. September 30, 2010: closing
About nCoat Inc.
Whitsett, North Carolina-based nCoat, Inc. (Other OTC: NCOA) and
its subsidiaries -- http://www.ncoat.com/-- research, license,
commercialize, distribute, and apply nano and multiple non-nano
surface coatings. The Company's coatings are used by, among
others, automotive, diesel engine, trucking, recreational vehicle,
motorcycle, aerospace, and oil and gas industries.
nCoat, Inc., filed for Chapter 11 protection on August 16, 2010
(Bankr. M.D. N.C. Case No. 10-11512). John A. Northen, Esq., and
Vicki L. Parrott, Esq., who have offices in Chapel Hill, North
Carolina, assist the Debtor in its restructuring effort. In its
schedules, the Debtor disclosed assets totaling $1,375,746 and
debts totaling $913,619,139.
Affiliates High Performance Coatings, Inc. (Bankr. M.D. N.C. Case
No. 10-11515); MCC, Inc., dba Jet Hot (Bankr. M.D. N.C. Case No.
10-11514); and nTech, Inc. (Bankr. M.D. N.C. Case No. 10-11513)
file separate Chapter 11 petitions on August 16, 2010.
NORTEL NETWORKS: Ex-Employees to File Claims if Benefits Ended
--------------------------------------------------------------
Former employees of Nortel Networks Inc. asked the U.S.
Bankruptcy Court for the Southern District of New York to allow
retirees to file claims in case the company terminates their
benefits.
In letters to Judge Kevin Gross, the former employees said the
termination of the benefits is unfair and unjust. "Once Nortel
terminates these benefits, most retirees will have to qualify for
benefits individually and such benefits could be prohibitively
expensive," they said.
The former employees also asked the Court to authorize the
appointment of a committee to protect retirees and their
beneficiaries.
NNI filed a motion two months ago to terminate three of their
benefit plans for retirees and employees with long-term
disability. The benefit plans include NNI's medical and life
insurance plans for retirees. About 4,019 individuals are
participants under the plans, consisting of 2,592 retirees.
NNI's move, however, drew flak from various groups, including the
U.S. Trustee who demanded that the company provide evidence at
trial to support its decision to terminate the benefit plans.
The U.S. Trustee questioned in particular NNI's assertion that it
cannot afford $2 million per month for the cost of the benefit
plans given the fact that it previously obtained Court approval
to pay $50 million to members of its senior management.
The Benefits Termination Motion largely drew opposition from
retirees and employees with long-term disability who flooded the
Court with letters and responses disapproving the proposed
termination.
NNI eventually withdrew its Motion but left open the possibility
that it could still modify or end those benefits in the future.
Canada-based Nortel Retirees Stand to
Lose One Third of Pension
Former employees of Nortel Networks Corp. in Canada stand to lose
one third of their monthly pension, according to an August 24,
2010 report by Toronto Sun.
NNC is set to liquidate its pension accounts at the end of next
month and the plan is only about 64% funded. When NNC filed for
creditor protection early last year, its pension fund deficit was
estimated to be between $2.5 billion to $2.8 billion.
Ken Lyons, the Quebec representative of the Nortel Retirees' and
Former Employees' Protection Committee, said that about 12,000
former employees in Alberta, Quebec, and Nova Scotia could find
themselves facing poverty, according to the Toronto Sun. "There
are people who will have to go on social assistance," the news
source quoted Mr. Lyons as saying.
The size of Canada's annuity market, according to the report,
poses a problem for Nortel pensions. It is too small to provide
a healthy return on a one-time dump of the company's pension
accounts as the market can only absorb $500 million a year, the
report notes.
Nevertheless, the Toronto Sun notes, the Ontario government
earlier guaranteed the first $1,000 of monthly payouts for each
of the 11,000 employees who worked in that province.
Meanwhile, Quebec said it is ready to offer partial pension
guarantees for Nortel workers in that province and that it would
take over the pensions of 3,000 current and former workers for a
period of five years and guarantee existing payments, Toronto Sun
relates.
About Nortel Networks
Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for the Company's customers. The
Company's next-generation technologies, for both service provider
and enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. The Nortel Companies related in
a press release that Nortel Networks UK Limited and certain
subsidiaries of the Nortel group incorporated in the EMEA region
have each obtained an administration order from the English High
Court of Justice under the Insolvency Act 1986. The applications
were made by the EMEA Subsidiaries under the provisions of the
European Union's Council Regulation (EC) No. 1346/2000 on
Insolvency Proceedings and on the basis that each EMEA
Subsidiary's centre of main interests is in England. Under the
terms of the orders, representatives of Ernst & Young LLP have
been appointed as administrators of each of the EMEA Companies and
will continue to manage the EMEA Companies and operate their
businesses under the jurisdiction of the English Court and in
accordance with the applicable provisions of the Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of US$11.6 billion and consolidated
liabilities of US$11.8 billion. The Nortel Companies' U.S.
businesses are primarily conducted through Nortel Networks Inc.,
which is the parent of majority of the U.S. Nortel Companies. As
of September 30, 2008, NNI had assets of about US$9 billion and
liabilities of US$3.2 billion, which do not include NNI's
guarantee of some or all of the Nortel Companies' about
US$4.2 billion of unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Proposes Sept. 24 Auction for Switch Business
--------------------------------------------------------------
Nortel Networks Corporation related on August 27, 2010, that it,
its principal operating subsidiary Nortel Networks Limited (NNL),
and certain of its other subsidiaries, including Nortel Networks
Inc. and Nortel Networks UK Limited (in administration), have
entered into two sale agreement for a purchase price of
US$39 million in cash:
(1) A "stalking horse" asset sale agreement with PSP Holding
LLC (PSP), a special purpose entity to be fully funded at
closing by Marlin Equity Partners (Marlin) and Samnite
Technologies Inc., a communications technology company
based in Ottawa, for the sale of substantially all of the
assets of Nortel's North America, Caribbean and Latin
America (CALA) and Asia Multi Service Switch (MSS)
business; and
(2) An asset sale agreement with Marlin for the sale of
substantially all of the assets of the Europe, Middle East
and Africa (EMEA) portion of its MSS business
The Sale Agreements include the planned sale of substantially all
assets of the MSS business globally, including the associated
Data Packet Network and Shasta product groups. These agreements
also include certain intellectual property related to the MSS
business.
Nortel's MSS Business provides data networking infrastructure
solutions to telecom service providers and large enterprise
customers throughout the world. These solutions allow customers
to integrate a variety of data, voice and video applications onto
a single network and connect users in multiple locations
securely, efficiently and seamlessly over a wide area network.
Nortel's MSS Business has a global footprint, with switches
located on every continent and in over 100 countries. There are
currently 250 employees employed by the MSS Business. They are
located in many countries, with the principal locations being
Australia, Canada, China, Spain and the United Kingdom.
Currently, subject to the terms of the Sale Agreements as well as
any changes that may occur through the stalking horse and sale
process, substantially all MSS employees would have the
opportunity to continue employment with PSP. This includes the
employees assigned to the MSS business in certain EMEA
jurisdictions who would transfer to PSP by operation of law.
Commenting on the announcement, John Luszczek, General Manager of
Nortel's MSS business said: "Today's announcement is welcome news
to all MSS customers, suppliers, partners and employees. The
proposed transaction represents a clear and positive step forward
and is a testament of our continued commitment to innovation and
customer support that resulted in the creation of the business
value evident by today's announcement. Throughout this process we
will remain focused on providing our customers with the highest
level of service, support and responsiveness that they have come
to expect."
In the 1990's, Nortel built some of the largest carrier and
enterprise data networks in the world, leading to the
establishment of this market segment category and Nortel MSS
becoming recognized as an industry leader.
Details of Sale Process
Nortel filed the stalking horse asset sale agreement with the
U.S. Bankruptcy Court for the District of Delaware along with a
motion seeking the establishment of bidding procedures for an
auction that allows other qualified bidders to submit higher or
otherwise better offers, as required under Section 363 of the
U.S. Bankruptcy Code, on August 27, 2010.
A similar motion for the approval of the bidding procedures will
be filed with the Ontario Superior Court of Justice. Following
completion of the bidding process, final approval of the U.S. and
Canadian courts will be required.
To facilitate and effectuate the sale of the Assets, Nortel seeks
authority to assume and assign to the Successful Bidder certain
prepetition executory contracts related to the Assets.
Moreover, Nortel seeks to file with the Bankruptcy Court
disclosure schedules and all exhibits and schedules to the
Stalking Horse Agreement as well as any subsequent sale agreement
with the Stalking Horse Purchaser or any Successful Bidder under
seal. The Company also seeks to file under seal the lists of
Customer Contracts to be assumed and assigned in relation to the
proposed sale transaction.
In relation to the EMEA entities to which they are appointed, the
UK Joint Administrators have the authority, without further court
approval, to enter into the EMEA asset sale agreement on behalf
of those relevant Nortel entities. In some EMEA jurisdictions,
this transaction is subject to information and consultation with
employee representatives and/or employees.
In addition to the processes and approvals outlined, consummation
of the transaction is subject to the satisfaction of regulatory
and other conditions and the receipt of various approvals. The
agreements are also subject to certain working capital and other
purchase price adjustments.
Full-text copies of the proposed Sale Agreements in relation to
Nortel's MSS Business are available for free at:
http://bankrupt.com/misc/NORTEL_PSPHldngsStalkingHorseAgrment.pdf
http://bankrupt.com/misc/NORTEL_RedactedMSSSideAgrmnt.pdf
As previously announced, Nortel does not expect that the
Company's common shareholders or the NNL preferred shareholders
will receive any value from the creditor protection proceedings
and expects that the proceedings will result in the cancellation
of these equity interests.
Bidding Procedures, Bid Protection
Each person who wishes to participate in the bidding process must
deliver to the Notice Parties a statement of its bona fide
interest in purchasing the Assets, a related confidentiality
agreement, and financial statements to support its ability to
consummate the transactions.
Nortel proposes that September 21, 2010, at 4:00 p.m. Eastern
Time be set as the deadline for the submission of bids for the
Assets.
It also proposes that September 22 be set as the deadline for all
general objections to the sale of the Assets, and September 29 be
set as the deadline for supplemental objections regarding
adequate assurance of future performance by qualified bidders
other than PSP Holding.
If Sellers receive one or more qualified bid, they propose to
conduct an auction of the Assets at 9:00 a.m., on September 24.
In recognition of the expenditure of time, energy and resources
spent, Nortel agrees to pay the Stalking Horse Purchaser a
$2,500,000 break-up fee in the event the Company closes the sale
transaction with a bidder other than the Stalking Horse
Purchaser.
The Company also agrees to pay the Stalking Horse Purchaser's
reasonable and documented out-of-pocket costs and expenses, of up
to $1,500,000, in relation to contemplated transactions upon the
termination of the Stalking Horse Agreement.
Nortel intends to seek Bankruptcy Court approval of the sale to
the successful bidder on September 30.
Expedited Hearing Request
Nortel asks the Bankruptcy Court to hear its bidding procedures
request on September 1, 2010, and allow the filing of objections
to the proposed procedures no later than August 31, 2010.
About Nortel Networks
Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for the Company's customers. The
Company's next-generation technologies, for both service provider
and enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. The Nortel Companies related in
a press release that Nortel Networks UK Limited and certain
subsidiaries of the Nortel group incorporated in the EMEA region
have each obtained an administration order from the English High
Court of Justice under the Insolvency Act 1986. The applications
were made by the EMEA Subsidiaries under the provisions of the
European Union's Council Regulation (EC) No. 1346/2000 on
Insolvency Proceedings and on the basis that each EMEA
Subsidiary's centre of main interests is in England. Under the
terms of the orders, representatives of Ernst & Young LLP have
been appointed as administrators of each of the EMEA Companies and
will continue to manage the EMEA Companies and operate their
businesses under the jurisdiction of the English Court and in
accordance with the applicable provisions of the Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of US$11.6 billion and consolidated
liabilities of US$11.8 billion. The Nortel Companies' U.S.
businesses are primarily conducted through Nortel Networks Inc.,
which is the parent of majority of the U.S. Nortel Companies. As
of September 30, 2008, NNI had assets of about US$9 billion and
liabilities of US$3.2 billion, which do not include NNI's
guarantee of some or all of the Nortel Companies' about
US$4.2 billion of unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTEL NETWORKS: Reports $1.504 Billion Net Loss for Q2
-------------------------------------------------------
Nortel Networks Corporation announced its results for the second
quarter 2010. Results were prepared in accordance with United
States generally accepted accounting principles (GAAP) in U.S.
dollars.
As previously announced, beginning with January 14, 2009 (being
the date that Nortel commenced its creditor protection
proceedings), Nortel accounted for the results of its Europe,
Middle East and Africa (EMEA) Subsidiaries by the equity method
of accounting in its consolidated results. As of May 31, 2010,
Nortel determined that it no longer had significant influence
over the operating and financial policies of the EMEA
Subsidiaries primarily due to the significance of the completed
business divestitures. As a result, Nortel accounted for the
EMEA Subsidiaries as an investment using the cost method as of
June 1, 2010. The fair value of the EMEA Subsidiaries investment
was determined to be nil, resulting in a charge in the second
quarter of approximately $760 million due the recognition in
income of pension charges previously deferred in shareholders'
equity and of intercompany payables offset by the write-off of
the net liabilities of the EMEA Subsidiaries. A related charge
of approximately $650 million was recorded to reflect Nortel's
guarantees of the U.K. pension funding. Commencing June 1, 2010,
the financial results of the EMEA Subsidiaries are no longer
included in Nortel's financial results.
As a result of the divestitures of: (1) the Code Division
Multiple Access (CDMA)/LTE Access and Enterprise Solutions (ES)
businesses in the fourth quarter of 2009; (2) the Optical
Networking and Carrier Ethernet, and Global System for Mobile
communications (GSM)/GSM for Railways (GSM-R) businesses in the
first quarter of 2010; and (3) the Carrier VoIP and Application
Solutions (CVAS) business in the second quarter of 2010, only the
residual contracts related to those businesses were included in
the respective reportable segments. The Metro Ethernet Networks
(MEN) reportable segment also continued to include the
multiservice switching products and related services (MSS)
business.
The ES and LGN businesses were presented as Discontinued
Operations while the other residual businesses were presented as
Continuing Operations. Except in the Segment Revenues section,
the discussion below relates to Results from Continuing
Operations under U.S. GAAP and excludes the financial results of
the EMEA Subsidiaries. Notwithstanding the change in accounting
for the EMEA Subsidiaries as an investment using the cost method,
Nortel continues to manage its business segments globally. The
financial information in the Segment Revenues section includes
the results of the EMEA Subsidiaries for the entire second
quarter within each segment, but does not include the results of
discontinued operations. Therefore, in order to reconcile the
financial information for the business segments discussed below
to Nortel's consolidated financial information, the net financial
results of the EMEA Subsidiaries must be removed.
Financial Summary
Nortel's overall financial performance in the second quarter of
2010 was impacted by the sale of the businesses.
* Revenues in the second quarter of $145 million, with
declines year over year in all segments and in all
regions. These revenues excluded second quarter revenues
related to the EMEA Subsidiaries of $65 million up to
May 31, 2010, and $93 million related to discontinued
operations.
* Gross margin of 4.1 percent in the second quarter, a
decrease of 42.4 percentage points from the year ago
quarter.
* SG&A expense in the second quarter of $135 million, flat
from the year ago quarter. SG&A expense in the second
quarter excluded $45 million up to May 31, 2010 related to
the EMEA Subsidiaries.
* R&D expense in the second quarter of $21 million, a
decrease of 88.3 percent from the year ago quarter. R&D
expense in the second quarter excluded $1 million up to
May 31, 2010, related to the EMEA Subsidiaries.
* Consolidated cash balance as of June 30, 2010, was
$1.7 billion, compared to $1.9 billion at March 31, 2010.
Consolidated cash balance excluded the EMEA Subsidiaries
cash of $829 million no longer included in Nortel's
consolidated balance sheet as of May 31, 2010.
Segment Revenues
Segment revenues from continuing operations were $237 million in
the second quarter of 2010 compared to $1.3 billion for the second
quarter of 2009, reflecting a reduction of 81.1 percent primarily
as a result of the business divestitures.
Segment Revenues B/(W)
Q2 2010 YoY
------- -----
Wireless Networks $47 (94%)
Carrier VoIP and Appl. Solutions 89 (45%)
Metro Ethernet Networks 97 (71%)
Other 4 33%
------- -----
Total Segment Revenues
from Continuing Operations $237 (81%)
Discontinued Operations $95 (87%)
Discontinued operations revenues in the second quarter of 2010
were $95 million, a decrease of 87 percent compared with the year
ago quarter. ES revenues were $7 million, a decrease of 99
percent as a result of the divestiture of the ES, NGS and
DiamondWare businesses in the fourth quarter of 2009. LGN
revenues were $88 million, a decrease of 56 percent compared with
the year ago quarter mainly related to volumes related to its 3G
wireless products in the second quarter of 2009 not repeated to
the same extent in 2010.
In the third quarter of 2010, Nortel's reportable segments will
be: WN, consisting of residual CDMA and GSM/GSM-R contracts; MEN,
consisting of the MSS business and residual contracts not included
in the sale to Ciena; and CVAS, consisting of residual contracts
not included in the sale to GENBAND.
Gross Margin
Gross margin declined to 4.1 percent of revenues in the second
quarter of 2010 compared to 46.5 percent for the second quarter of
2009, primarily as a result of the business divestitures. Gross
margin was also impacted by the ongoing costs related to delivery
of the transition services agreements, the recovery of which is
recorded in other operating income.
Operating Expenses
Operating Expenses B/(W)
Q2 2010 YoY
------- -----
SG&A $135 0%
R&D 21 88%
------- -----
Total Operating Expenses $156 51%
A focus on reducing costs, and the business divestitures resulted
in lower operating expenses compared to the year ago quarter.
Operating expenses were $156 million in the second quarter of 2010
compared to $316 million for the second quarter of 2009. Operating
expenses were also impacted by a change in methodology resulting
in ceasing of the allocation of certain SG&A expenses related to
corporate overhead costs to R&D expense and cost of revenues.
SG&A expense was $135 million in the second quarter of 2010,
compared to $135 million for the second quarter of 2009. SG&A
expense was flat primarily as a result of the change in allocation
methodology described above. SG&A expense in the second quarter
excluded $45 million of expense related to the EMEA Subsidiaries
(up to May 31, 2010).
R&D expense was $21 million in the second quarter of 2010,
compared to $181 million for the second quarter of 2009, which
reduction was a result of the reasons described above. R&D
expense in the second quarter excluded $1 million of expense
related to the EMEA Subsidiaries (up to May 31, 2010).
Net Loss
The Company reported a net loss in the second quarter of 2010 of
$1.5 billion compared to a net loss of $274 million in the second
quarter of 2009.
The net loss included reorganization costs of $1.4 billion,
interest expense of $75 million and other expense of $28 million,
partially offset by other operating income of $96 million
comprised primarily of billings under transition services
agreements, $41 million in income tax recovery and earnings from
discontinued operations of $35 million related primarily to a
gain on the divestiture of NNL's interest in LGN. The
$1.4 billion in reorganization costs primarily related to the
impact of accounting for the EMEA Subsidiaries as an investment
using the cost method of $763 million, guarantees related to the
funding of the U.K. defined benefit pension plan of $634 million
and asset impairments of $113 million, partially offset by gains
on the divestiture of the CVAS business of $196 million. Other
expense of $28 million was comprised primarily of a currency
exchange loss of $44 million partially offset by rental income of
$16 million.
The net loss in the second quarter of 2009 of $274 million
included a loss from discontinued operations of $119 million,
$167 million equity in net loss of the EMEA Subsidiaries, interest
expense of $74 million, and reorganization items of $58 million.
Cash
The consolidated cash balance as of June 30, 2010, was
$1.7 billion and restricted cash was $3.2 billion primarily
related to the business divestiture proceeds, compared to a
consolidated cash balance of $1.9 billion and restricted cash
of $2.7 billion primarily related to the divestiture proceeds
as of March 31, 2010. The decrease in the consolidated cash
balance was primarily due to cash used in operating activities
of $110 million, cash used in financing activities of $78 million
primarily related to dividends paid by subsidiaries to non
controlling interests, cash used in investing activities of
$53 million, which included proceeds from sales of businesses
largely offset by proceeds from those sales recorded as
restricted cash, and a net unfavorable foreign exchange impact
of $14 million. The consolidated cash balance excluded the EMEA
Subsidiaries' cash of $829 million no longer included in Nortel's
consolidated balance sheet as of
May 31, 2010.
As previously announced, Nortel does not expect that the Company's
common shareholders or the NNL preferred shareholders will receive
any value from the creditor protection proceedings and expects
that the proceedings will result in the cancellation of these
equity interests.
A full-text copy of Nortel Networks' Second Quarter 2010 Financial
Results filed in Form 10-Q with the U.S. Securities and Exchange
Commission is available at:
http://ResearchArchives.com/t/s?6a3e
NORTEL NETWORKS CORPORATION
Unaudited Condensed Consolidated Balance Sheets
As of June 30, 2010
ASSETS
Current assets
Cash and cash equivalents $1,668,000,000
Short-term investments -
Restricted cash and cash equivalents 186,000,000
Accounts receivable - net 254,000,000
Inventories - net 53,000,000
Deferred income taxes - net -
Other current assets 352,000,000
Assets held for sale 232,000,000
Assets of discontinued operations 37,000,000
---------------
Total current assets 2,782,000,000
Restricted cash 3,011,000,000
Investments -
Plant and equipment - net 203,000,000
Goodwill -
Intangible assets - net -
Deferred income taxes - net -
Other assets 147,000,000
---------------
Total assets $6,143,000,000
===============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
Trade and other accounts payable $170,000,000
Payroll and benefit-related liabilities 97,000,000
Contractual liabilities 83,000,000
Restructuring liabilities 7,000,000
Other accrued liabilities 227,000,000
Liabilities held for sale -
Liabilities of discontinued operations 38,000,000
---------------
Total current liabilities 622,000,000
Long-term liabilities
Long-term debt 41,000,000
Investment in net liabilities of
Equity Investees -
Deferred income taxes - net -
Other liabilities 64,000,000
---------------
Total long-term liabilities 105,000,000
Liabilities subject to compromise 8,589,000,000
Liabilities subject to compromise of
discontinued operations 117,000,000
---------------
Total liabilities 9,433,000,000
SHAREHOLDERS' DEFICIT
Common shares, without par value -
Authorized shares: unlimited; Issued and
outstanding shares: 498,206,366 as of
June 30, 2010 and December 31, 2009
respectively 35,604,000,000
Additional paid-in capital 3,596,000,000
Accumulated deficit (43,025,000,000)
Accumulated other comprehensive loss (79,000,000)
---------------
Total Nortel Networks Corporation
shareholders' deficit (3,904,000,000)
---------------
Noncontrolling interests 614,000,000
---------------
Total shareholders' deficit (3,290,000,000)
---------------
Total liabilities & shareholders' deficit $6,143,000,000
===============
NORTEL NETWORKS CORPORATION
Unaudited Condensed Consolidated Statements of Operations
For the Three Months Ended June 30, 2010
Revenues:
Products $116,000,000
Services 29,000,000
---------------
Total revenues 145,000,000
Cost of revenues:
Products 130,000,000
Services 9,000,000
---------------
Total cost of revenues 139,000,000
---------------
Gross profit 6,000,000
Selling, general and administrative expense 135,000,000
Research and development expense 21,000,000
Amortization of intangible assets -
Loss (gain) on sales of businesses and
sales and impairments of assets 1,000,000
Other operating expense (income) - net (96,000,000)
---------------
Operating earnings (loss) (55,000,000)
Other income (expense) - net (28,000,000)
Interest expense (contractual interest
expense for the three months ended
March 31, 2010 was $78,000,000)
Long-term debt (75,000,000)
Other -
---------------
Earnings {loss) from continuing operations
before reorganization items, income taxes
and equity in net loss of associated
companies and Equity Investees (158,000,000)
Reorganization items - net (1,387,000,000)
---------------
Earnings (loss) from continuing operations
before income taxes, and equity in net
loss of associated companies and
Equity Investees (1,545,000,000)
Income tax benefit (expense) 41,000,000
---------------
Earnings (loss) from continuing operations
before equity in net loss of associated
companies and Equity Investees (1,504,000,000)
Equity in net earnings (loss) of
associated companies - net of tax -
Equity in net loss of Equity Investees (30,000,000)
---------------
Net loss from continuing operations (1,534,000,000)
Net earnings (loss) from discontinued
operations - net of tax 35,000,000
---------------
Net loss (1,499,000,000)
---------------
Income attributable to
non-controlling interests (5,000,000)
---------------
Net loss attributable to
Nortel Networks Corporation ($1,504,000,000)
===============
NORTEL NETWORKS CORPORATION
Unaudited Condensed Consolidated Statements of Cash Flows
For the Three Months Ended June 30, 2010
Cash flows from (used in) operating activities:
Net loss attributable to
Nortel Networks Corporation ($1,504,000,000)
Net (earnings) loss from discontinued
operations - net of tax (35,000,000)
Adjustments to reconcile net loss from
continuing operations to net cash from
(used in) operating activities, net
of effects from acquisitions and
divestitures of businesses:
Amortization and depreciation 14,000,000
Non-cash portion of cost reduction activities -
Equity in net (earnings) loss of associated
companies - net of tax -
Equity in net (earnings) loss of Equity
Investees 30,000,000
Share-based compensation expense -
Deferred income taxes (11,000,000)
Pension and other accruals 23,000,000
Loss on sales of businesses and impairment
of assets - net -
Income (loss) attributable to noncontrolling
Interests - net of tax 5,000,000
Reorganization items - non cash 1,328,000,000
Other - net 347,000,000
Change in operating assets and liabilities:
Other (6,000,000)
---------------
Net cash from (used in) operating
activities - continuing operations 191,000,000
Net cash from (used in) operating
activities - discontinued operations (301,000,000)
---------------
Net cash from (used in) operating activities (110,000,000)
Cash flows from (used in) investing activities:
Expenditures for plant and equipment (2,000,000)
Proceeds on disposals of plant and equipment -
Change in restricted cash and cash
cash equivalents (408,000,000)
Decrease in short and long-term investments -
Acquisitions of investments and businesses
net of cash acquired (1,000,000)
Proceeds from sales of investments and
businesses and assets - net 216,000,000
---------------
Net cash from (used in) investing
activities - continuing operations (195,000,000)
Net cash from (used in) investing
activities - discontinued operations 142,000,000
---------------
Net cash from (used in) investing activities (53,000,000)
Cash flows from (used in) financing activities:
Dividends paid, including paid by
subsidiaries to noncontrolling interests -
Decrease in notes payable -
Repayment of capital leases (1,000,000)
---------------
Net cash from (used) in financing activities
of continuing operations (1,000,000)
Net cash from (used in) financing activities
of discontinued operations (77,000,000)
---------------
Net cash from (used in) financing activities (78,000,000)
Effect of foreign exchange rate changes
on cash and cash equivalents (14,000,000)
Reduction of cash and cash equivalents
of deconsolidated subsidiaries (2,000,000)
---------------
Net cash from (used in) continuing operations (21,000,000)
Net cash from (used in) discontinued
operations (236,000,000)
---------------
Net increase (decrease) in cash
and cash equivalents (257,000,000)
Cash and cash equivalents at beginning
of the period 1,925,000,000
Less cash and cash equivalents of
Equity Investees -
---------------
Adjusted cash & cash equivalents, beginning 1,925,000,000
---------------
Cash and cash equivalents, end 1,668,000,000
Less cash and cash equivalents of
discontinued operations, end -
---------------
Cash and cash equivalents of continuing
operations, end $1,668,000,000
===============
About Nortel Networks
Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/--
delivers communications capabilities that make the promise of
Business Made Simple a reality for the Company's customers. The
Company's next-generation technologies, for both service provider
and enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate the barriers to efficiency, speed and performance by
simplifying networks and connecting people to the information they
need, when they need it.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the U.S.
by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. The Nortel Companies related in
a press release that Nortel Networks UK Limited and certain
subsidiaries of the Nortel group incorporated in the EMEA region
have each obtained an administration order from the English High
Court of Justice under the Insolvency Act 1986. The applications
were made by the EMEA Subsidiaries under the provisions of the
European Union's Council Regulation (EC) No. 1346/2000 on
Insolvency Proceedings and on the basis that each EMEA
Subsidiary's centre of main interests is in England. Under the
terms of the orders, representatives of Ernst & Young LLP have
been appointed as administrators of each of the EMEA Companies and
will continue to manage the EMEA Companies and operate their
businesses under the jurisdiction of the English Court and in
accordance with the applicable provisions of the Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated have material operations and are not part of the
bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of US$11.6 billion and consolidated
liabilities of US$11.8 billion. The Nortel Companies' U.S.
businesses are primarily conducted through Nortel Networks Inc.,
which is the parent of majority of the U.S. Nortel Companies. As
of September 30, 2008, NNI had assets of about US$9 billion and
liabilities of US$3.2 billion, which do not include NNI's
guarantee of some or all of the Nortel Companies' about
US$4.2 billion of unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NYC OFF-TRACK: Workers' Union Willing to Negotiate
--------------------------------------------------
The Associated Press reports that Greg Rayburn, the president of
New York City Off-Track Betting Corp., told reporters Friday that
Tuesday -- August 31 -- was a critical deadline for the ailing
bookmaking agency's future, a claim dismissed by the agency's
major union, who said it would negotiate but wouldn't rush to meet
the timeline.
According to the AP, Mr. Rayburn said OTB needs a deal with its
unions representing 1,300 workers or it will void its labor
contracts. The AP notes that Tuesday was the deadline for
employees to sign up for an early retirement incentive, which
could go a long way toward reducing personnel costs. According to
the report, Mr. Rayburn said the reduction is necessary for OTB to
continue its operations under a new structure that relies more on
automated betting.
The AP relates that Local 2021 President Leonard Allen said the
Tuesday deadline doesn't seem critical because a half-dozen of his
members would qualify for the early retirement incentive. Local
2021 of AFSCME District Council 37 represents 1,000 OTB workers.
"I can't embrace his plan A and will not embrace it under the
threat that if we don't embrace it, he will go to another plan,"
Mr. Allen said, according to the AP. "I am willing to talk to
him. I am willing to work things out with him. But he can't tell
me to cut our own throat."
According to the AP, Mr. Rayburn said if his preferred plan that
he called "plan A" fails, OTB could has two options:
-- One of them would be restructure the work force by cutting
and reassigning without regard to the labor contracts.
That could include laying off full- and part-time workers,
but keeping per-diem workers who aren't paid benefits and
who could be assigned without the same regard for union
regulations.
-- The other option would be liquidation.
His preferred option would shed 400 jobs, many through early
retirement incentives, and no longer provided about $32 million a
year to the industry compared to last year.
About NYC OTB
New York City Off-Track Betting Corporation is a public benefit
corporation, which operates an off-track pari-mutuel betting
system on thoroughbred and harness horse races held at all 11 race
tracks located in New York State and certain race tracks located
outside of the State. Since NYC OTB's inception in 1971, it has
made payments of nearly $2 billion to the State horse racing
industry, more than $1.4 billion to New York City and nearly
$600 million to the State. In 2008 alone, NYC OTB made statutory
contributions in an aggregate amount of $128.6 million to the
State horse racing industry, the State, the City, and other local
municipalities. NYC OTB's operations are regulated by the State.
NYC OTB filed for bankruptcy under Chapter 9 of the Bankruptcy
Code on December 3, 2009 (Bankr. S.D.N.Y. Case No. 09-17121). OTB
is represented by Richard Levin, Esq., at Cravath, Swaine & Moore
LLP., in New York, and Michael S. Fox, Esq., Herbert C. Ross,
Esq., David Y. Wolnerman, Esq., at Olshan Grundman Frome
Rosenzweig & Wolosky LLP in New York.
At September 30, 2009, NYC OTB had $18,468,147 in total assets
against $74,912,742 in total current liabilities, $6,982,887 in
long-term liabilities, and $201,020,000 in long-term post
employment benefits.
OTC HOLDINGS: Gets OK to Hire Kurtzman Carson as Claims Agent
-------------------------------------------------------------
OTC Holdings Corporation, et al., sought and obtained
authorization from the Hon. Brendan L. Shannon of the U.S.
Bankruptcy Court for the District of Delaware to employ Kurtzman
Carson Consultants LLC as claims agent, nunc pro tunc to the
Petition Date.
KC will, among other things:
a. prepare and serve required notices in the Debtors' Chapter
11 cases;
b. receive, examine and maintain copies of proofs of claim
and proofs of interest filed in the Debtors' Chapter 11
cases;
c. maintain official claims registers in the Debtors' Chapter
11 cases by docketing proofs of claim and proofs of
interest in a claims database; and
d. maintain a separate claims register for each Debtor.
KCC will be compensated in accordance with the KCC fee structure.
The Debtor will pay the reasonable out of pocket expenses incurred
by KCC in connection with the services it provided. The Debtors
will pay KCC any fees and expenses related to, arising out of, or
as a result of any error or omission made by the Debtors. KCC
will submit its invoices to the Debtors monthly. Where total fees
and expenses would exceed $10,000 in any single month, KCC may
require advance payment from the Debtors due and payable upon
demand and prior to the performance of services hereunder. If any
undisputed amount is unpaid as of 30 days from the receipt of the
invoice, the Debtors will pay a late charge, calculated as 1-1/2%
of the total amount unpaid every 30 days. In the case of a
dispute in the invoice amount, the Debtors will give written
notice to KCC within 10 days of receipt of the invoice by the
Debtors. KCC will receive a retainer in the amount of $50,000.
Drake D. Foster, KCC's general counsel, assures the Court that the
firm is "disinterested" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About OTC Holdings
Omaha, Nebraska-based OTC Holdings Corporation filed for Chapter
11 protection on August 25, 2010 (Bankr. D. Del. Case No. 10-
12636).
Affiliates OTC Investors Corporation (Bankr. D. Del. Case No. 10-
12637), Oriental Trading Company, Inc. (Bankr. D. Del. Case No.
10-12638), Fun Express, Inc. (Bankr. D. Del. Case No. 10-12639),
and Oriental Trading Marketing, Inc. (Bankr. D. Del. Case No. 10-
12640), filed separate Chapter 11 petitions on August 25, 2010.
Richard Hahn, Esq., My Chi To, Esq., Jae-Sun Chung, Esq., Huyue
Angela Zhang, Esq., and Jessica Katz, Esq., at Debevoise &
Plimpton LLP, assist the Debtors in their restructuring efforts.
Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway,
Stargatt & Taylor, are the Debtors' local counsel. Jefferies &
Company, Inc., is the Debtors' financial advisor. Protiviti, Inc.,
is the Debtors' restructuring consultant.
The Debtors disclosed $463 million in total assets and $757
million in total liabilities as of the Petition Date.
OTC HOLDINGS: Organizational Meeting to Form Panel on September 8
-----------------------------------------------------------------
Roberta A. DeAngelis, Acting United States Trustee for Region 3,
will hold an organizational meeting on September 3, 2010, at
1:00 p.m. in the bankruptcy case of OTC Holdings Corporation, et
al. The meeting will be held at The DoubleTree Hotel, 700 King
Street, Wilmington, DE 19801.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
Omaha, Nebraska-based OTC Holdings Corporation filed for Chapter
11 protection on August 25, 2010 (Bankr. D. Del. Case No. 10-
12636). Affiliates OTC Investors Corporation (Bankr. D. Del. Case
No. 10-12637), Oriental Trading Company, Inc. (Bankr. D. Del. Case
No. 10-12638), Fun Express, Inc. (Bankr. D. Del. Case No. 10-
12639), and Oriental Trading Marketing, Inc. (Bankr. D. Del. Case
No. 10-12640), filed separate Chapter 11 petitions on August 25,
2010. The Debtors disclosed $463 million in total assets and
$757 million in total liabilities as of the Petition Date.
Richard Hahn, Esq., My Chi To, Esq., Jae-Sun Chung, Esq., Huyue
Angela Zhang, Esq., and Jessica Katz, Esq., at Debevoise &
Plimpton LLP, assist the Debtors in their restructuring efforts.
Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway,
Stargatt & Taylor, serve as the Debtors' local counsel. Jefferies
& Company, Inc., is the Debtors' financial advisor. Protiviti,
Inc., is the Debtors' restructuring consultant. Kurtzman Carson
Consultants LLC is the Debtors' claims agent.
OTTER TAIL: Has Until October 6 to Raise $12 Mil. Working Capital
-----------------------------------------------------------------
Kristen Daum at INFORUM reports Otter Tail Ag Enterprises has
until Oct. 6, 2010, to raise $12 million worth of capital or face
liquidation to resolve its debt problems. The Company raised 75%
of the total amount on the original August 18 deadline. The
Company in now seeking institutional investors in order to raise
capital and avoid having its production plant go up for auction.
About Otter Tail AG Enterprises
Based in Fergus Falls, Minnesota, Otter Tail AG Enterprises, LLC
-- http://www.ottertailethanol.com/-- owns and operates a
nameplate capacity 55 million gallon annual production plant of
undenatured ethanol in Fergus Falls, Minnesota. The Company
processes approximately 20 million bushels of corn into
approximately 55 million gallons of ethanol each year. In
addition, the Company sells distillers grains, a principal co-
product of the ethanol production process.
The Company filed for Chapter 11 protection on Oct. 30, 2009
(Bankr. D. Minn. Case No. 09-61250). In its schedules, the Debtor
listed assets of $66.4 million against $86 million in debt, nearly
all secured. The largest secured creditor is AgStar Financial
Services, owed $40.9 million.
PATRICK BARKER: Case Summary & 14 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Patrick Norman Barker
aka Patrick Barker, MD
60176 NE 15th Street
Pratt, KS 67124
Bankruptcy Case No.: 10-12926
Chapter 11 Petition Date: August 26, 2010
Court: United States Bankruptcy Court
District of Kansas (Wichita)
Judge: Robert E. Nugent
Debtor's Counsel: David P. Eron, Esq.
J Mark Meinhardt, Esq.
ERON LAW OFFICE, P.A.
229 E. William, Suite 100
Wichita, KS 67202
Tel: (316) 262-5500
Fax: (316) 262-5559
E-mail: david@eronlaw.net
meinhardtlaw@sbcglobal.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Debtor's 14 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/ksb10-12926.pdf
PETER LAY: Case Summary & 7 Largest Unsecured Creditors
-------------------------------------------------------
Joint Debtors: Peter Lay
Pauline Lay
54 Red Fir Ct.
Danville, CA 94506
Bankruptcy Case No.: 10-49828
Chapter 11 Petition Date: August 27, 2010
Court: United States Bankruptcy Court
Northern District of California (Oakland)
Judge: Edward D. Jellen
Debtor's Counsel: Chris D. Kuhner, Esq.
KORNFIELD, NYBERG, BENDES AND KUHNER
1999 Harrison St. #2675
Oakland, CA 94612
Tel: (510) 763-1000
E-mail: c.kuhner@kornfieldlaw.com
Scheduled Assets: $5,465,637
Scheduled Debts: $1,831,828
A list of the Joint Debtors' seven largest unsecured
creditors filed together with the petition is available for
free at http://bankrupt.com/misc/canb10-49828.pdf
PTC ALLIANCE: Consummates Sale of All Assets to Black Diamond
-------------------------------------------------------------
PTC Alliance Corp. has consummated the sale of substantially all
of the company's assets to funds managed by Black Diamond Capital
Management L.L.C.
The company, now known as PTC Alliance Holdings Corp., will
continue to be managed by the same executive team, including
Chairman, President and CEO Peter Whiting.
"PTC Alliance Holdings now has a financing structure appropriate
for the kind of cyclical industry we are in, combined with a
proven team of employees that can manage through even the most
difficult of times," Whiting said. "We've significantly reduced
our liabilities and our operating costs, will be debt free, and
are well positioned for future investment and growth.
"Our goal during this restructuring was to create a new,
revitalized entity with the resources to continue to provide the
highest quality products and services to our customers," Whiting
said. "I am pleased to report we have, without question, achieved
that goal."
As previously announced, PTC Alliance and its U.S. subsidiaries
filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code on October 1, 2009 in the U.S. Bankruptcy Court
for the District of Delaware.
The company entered into an agreement to sell substantially all of
its assets to funds managed by Black Diamond Capital Management
L.L.C. following a court-authorized auction process to ensure it
was maximizing the value of the company and best-positioning it
for future success. The funds managed by Black Diamond Capital
Management L.L.C. were selected as the winning bidders and the
sale was approved at a court hearing in April.
"Through the determination, talent, and commitment of our
employees, the company was able to operate business as usual
throughout this process and ensure our customers were properly
served and our business partners could depend on us," Whiting
said. "Those commitments remain the bedrock of PTC Alliance
Holdings Corp."
About PTC Alliance
Headquartered in Wexford, Pennsylvania, PTC Alliance Corp. makes
welded and cold drawn mechanical steel tubing and tubular shapes,
chrome-plated bar products and precision components. The Company
and its affiliates filed for Chapter 11 protection on October 1,
2009 (Bankr. D. Del. Lead Case No. 09-13395). The Debtors
selected Reed Smith LLP as their counsel. PTC Alliance listed
assets between $50 million and $100 million, and debts between
$100 million and $500 million in its petition.
PTC confirmed a prepackaged Chapter 11 plan in May 2006 that paid
unsecured creditors in full while existing first-lien debt was
converted to second-lien term notes, according to Bloomberg. The
subordinated debt became third-lien notes that paid interest with
more notes. Preferred shareholders received new common equity.'
QWEST COMMUNICATIONS: 11.6% of Notes Tendered for Purchase
----------------------------------------------------------
Qwest Communications International Inc. said its tender offer to
purchase for cash any and all of its outstanding 3.50% Convertible
Senior Notes due 2025 expired at 5:00 p.m., New York City time, on
Thursday, August 26, 2010.
As of the expiration of the Offer, approximately $147 million
aggregate principal amount of Convertible Notes, representing
approximately 11.6% of the aggregate outstanding principal amount
of Convertible Notes, were validly tendered and not validly
withdrawn. The Company accepted for purchase all Convertible
Notes that were validly tendered and not validly withdrawn.
The final purchase price per $1,000 principal amount of
Convertible Notes was $1,170.00. On Aug. 27, 2010, the Company
settled the Offer and paid an aggregate of approximately $174
million, including accrued and unpaid interest to, but excluding,
the settlement date, to purchase all Convertible Notes that were
validly tendered and not validly withdrawn.
About Qwest
Based in Denver, Colorado, Qwest Communications (NYSE: Q) --
http://www.qwest.com/-- offers residential customers a new
generation of fiber-optic Internet service, high-speed Internet
solutions, as well as digital home phone, wireless service
available through Verizon Wireless and DIRECTV services. Qwest is
also the choice of 95 percent of Fortune 500 companies, offering a
full suite of network, data and voice services for small
businesses, large businesses, government agencies and wholesale
customers. Additionally, Qwest participates in Networx, the
largest communications services contract in the world, and is
recognized as a leader in the network services market by leading
technology industry analyst firms.
Qwest carries a 'Ba1' corporate family and probability of default
ratings from Moody's and has 'BB' issuer credit ratings from
Standard & Poor's.
"Our high debt levels pose risks to our viability and may make us
more vulnerable to adverse economic and competitive conditions, as
well as other adverse developments," the Company said in its Form
10-K for the year ended Dec. 31, 2009. At Dec. 31, the Company's
consolidated debt was approximately $14.2 billion. Approximately
$5.8 billion of its debt obligations come due over the next three
years. This amount includes $1.265 billion of our 3.50%
Convertible Senior Notes due 2025, which it may elect to redeem at
any time on or after November 20, 2010 and holders may require the
Company to repurchase for cash on November 15, 2010.
The Company's balance sheet at June 30, 2010, showed
$18.95 billion in total assets, $20.20 billion in total
liabilities, and a stockholders' deficit of $1.24 billion.
REFCO INC: Court of Appeals Retains Ruling on Suit vs. Mayer Brown
------------------------------------------------------------------
The U.S. Court of Appeals for the Second Circuit has declined to
reconsider its recent decision affirming the dismissal of a
securities fraud action against the law firm of Mayer Brown LLP
and its alleged role in the collapse of Refco Inc., Orrick
Herrington & Sutcliffe LLP reports in its weekly auditor
bulletin.
Plaintiffs Pacific Investment Management Company LLC and RH
Capital Associates LLC alleged that Mayer Brown should be held
liable for securities fraud because it provided extensive
services to Refco and therefore it knew or should have known that
Refco had made false or misleading statements in its offering
memorandum and registration statements.
Judge Gerard Lynch of the U.S. District Court for the Southern
District of New York dismissed the plaintiffs' claim, and the
Second Circuit affirmed on the ground that secondary actors such
as Mayer Brown could be liable only for false statements that are
attributed to them at the time of dissemination.
The case is Pacific Investment Management Company LLC. v. Mayer
Brown, No. 09-1619-vc (2d Cir. July 26, 2010).
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/--
was a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries were members of
principal U.S. and international exchanges, and were among the
most active members of futures exchanges in Chicago, New York,
London and Singapore. Refco was also a major broker of cash
market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco was one of the largest global clearing firms for
derivatives. The Company had operations in Bermuda.
The Company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-
60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, represented the Debtors in their restructuring
efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors. Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006. That Plan became effective on Dec. 26,
2006. Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc., and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.
Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Refco Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
REFCO INC: Deal With Underwriters & THL Wins Interim Approval
-------------------------------------------------------------
Judge Jed S. Rakoff of the U.S. District Court for the Southern
District of New York granted on July 30, 2010, preliminary
approval to a settlement Lead Plaintiffs RH Capital Associates
LLC and Pacific Investment Management Company LLC in a
consolidated securities fraud class action, In re Refco Inc.
Securities Litigation, 05 Civ. 8626 (GEL) (S.D.N.Y.), reached
with certain audit committee defendants and certain THL Entities.
The Audit Committee/THL Settlement provides for a payment of
$130 million for the benefit of the settlement class, plus a
possible additional settlement payment of up to $10 million.
The Audit Committee Defendants are Ronald L. O'Kelley, Leo R.
Breitman and Nathan Gantcher. The THL Defendants are Thomas H.
Lee Equity Fund V, L.P.; Thomas H. Lee Parallel Fund V, L.P.;
Thomas H. Lee Equity (Cayman) Fund V, L.P.; Thomas H. Lee
Partners, L.P.; THL Equity Advisors V, LLC; Thomas H. Lee
Investors Limited Partnership; The 1997 Thomas H. Lee Nominee
Trust; Thomas H. Lee, David V. Harkins; Scott L. Jaeckel and
Scott A. Schoen.
The securities action is filed on behalf of persons and entities
who purchased or acquired the securities of Refco, Inc. during
the period from July 1, 2004 through October 17, 2005.
Also on July 30, Judge Rakoff granted preliminary approval of the
settlement the Lead Plaintiffs reached with settling underwriter
defendants. The Settlement provides for payment of $49.5 million
for the benefit of the settlement class.
The Underwriters Settling Defendants are Credit Suisse Group
(USA) LLC; Bank of America Securities LC, Deutsche Bank
Securities Inc.; Goldman Sachs & Co.; Merrill Lynch, Pierce,
Fenner & Smith Incorporated; J.P. Morgan Securities Inc.; HSBC
Securities (USA) Inc.; William Blair Company, L.L.C.; BMO Capital
Markets Corp. fka Harris Nesbitt Corp.; Samuel A. Ramirez &
Company, Inc.; Muriel Siebert & Co., Inc.; and The Williams
Capital Group, L.P.
Judge Rakoff also preliminarily certified a settlement class for
(1) the Settlements and approved the distribution of notice to
class members concerning the Settlement settlements, and (2) a
settlement between Lead Plaintiffs and Sandler O'Neill & Partners
L.P., which provides for a payment of $3.5 million, that had
previously been preliminarily approved.
The action is continuing against the remaining defendants.
Judge Rakoff scheduled a hearing for October 27, 2010, at 4:00
p.m., at the United States Courthouse, at 500 Pearl Street, in
New York, NY 10007.
The purpose of the Settlement Hearing will be to determine, among
other things, whether the proposed settlements are fair,
reasonable and adequate and should be approved by the Court;
whether the proposed plan of allocation for the settlement
proceeds is fair and reasonable and should be approved; and
whether the plaintiffs' attorneys' application for an award of
attorneys' fees and reimbursement of litigation expenses should
be granted.
If an individual or entity purchased or otherwise acquired Refco
Group Ltd., LLC/Refco Finance Inc. 9% Senior Subordinated Notes
due 2012 (CUSIP Nos. 75866HAA5 and/or 75866HAC1) and/or common
stock of Refco (CUSIP No. 75866G109) during the period July 1,
2004 through and including October 17, 2005, that individual or
entity may be eligible to participate in the settlements and that
individual or entity's rights may be affected.
If an individual or entity wishes to participate, that party must
submit a Proof of Claim postmarked no later than November 9,
2010.
The District Court notes these key dates with respect to the
Settlements:
Deadline for Filing a Proof of Claim: November 9, 2010
Deadline for Requesting Exclusion: October 7, 2010
Deadline for Objections: October 7, 2010
Settlement Hearing: October 27, 2010
The Settlements are described in two separate notices; the Plan
of Allocation, which applies to all settlements is a separate
document; and the Proof of Claim form, which also applies to all
settlements is a separate document. A copy of the Notice Packet
is available for free at http://ResearchArchives.com/t/s?6a3a
Full-text copies of the Preliminary Court Approvals of the
Settlements are available for free at:
http://ResearchArchives.com/t/s?6a3b
http://ResearchArchives.com/t/s?6a3c
http://ResearchArchives.com/t/s?6a3d
The proceeds of the Settlements that will be considered at the
October 27, 2010, Settlement Hearing will be combined with
amounts recovered in a previously approved settlement and certain
restitution funds obtained by Lead Plaintiffs from the United
States government for the benefit of class members.
If all proposed settlements are approved, the Total Settlement
Amount is expected to be approximately $380.488 million, plus
interest.
After payment of taxes, the costs of providing notice and
administering the settlements, and the attorneys' fees and
expenses awarded by the Court, the remainder of the Total
Settlement Fund will be distributed to class members who submit
timely and valid Proof of Claim forms, pursuant to the terms of
the plan of allocation that is approved by the Court.
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/--
was a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries were members of
principal U.S. and international exchanges, and were among the
most active members of futures exchanges in Chicago, New York,
London and Singapore. Refco was also a major broker of cash
market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco was one of the largest global clearing firms for
derivatives. The Company had operations in Bermuda.
The Company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-
60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, represented the Debtors in their restructuring
efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors. Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006. That Plan became effective on Dec. 26,
2006. Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc., and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.
Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Refco Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
REFCO INC: Ex-CEO Sexton Forfeits $2MM+ to Settle Claims
--------------------------------------------------------
Preet Bharara, the United States Attorney for the Southern
District of New York, announced that William M. Sexton agreed to
forfeit a total of $2,050,000 to resolve civil forfeiture claims
alleging that he received funds traceable to proceeds of
securities fraud, wire fraud, bank fraud, and money laundering at
the defunct financial services company Refco.
As alleged in the Complaint filed in Manhattan federal court [on
August 19, 2010]:
Phillip R. Bennett, Tone N. Grant, Santo C. Maggio, Robert C
Trosten, and others were involved in hiding Refco
customer trading losses, concealing the firm's proprietary
trading activities, fraudulently shifting expenses off the
books of Refco, and artificially padding Refco's revenues in
order to fraudulently achieve the 2004 leveraged buyout
("LBO") of Refco and the 2005 initial public offering
("IPO") of Refco's stock.
Since the mid-1990s, Refco sustained hundreds of
millions of dollars of losses through, among other things,
its customers' trading. In order to hide the losses,
Mr. Bennett and others transferred many of the losses to
appear as a debt owed to Refco by Refco Group Holdings, Inc.
("RGHI") -- the holding company that controlled Refco and
was controlled by Messrs. Bennett, Grant, and, at certain
times, Thomas Dittmer.
From 1999 through 2005, Mr. Bennett and others repeatedly
hid the RGHI receivable from, among others, Refco's
auditors, by temporarily paying down the receivable from
RGHI over Refco's fiscal year-end (and, after February 2004,
Refco's quarter-ends) and replacing it with a receivable
from one or more other entities not related to RGHI. Thus,
at every fiscal year-end and, later, at every fiscal
quarter-end, Mr. Bennett and others directed transactions
that turned the debt owed to Refco from RGHI into a debt
owed to Refco by a Refco customer. Shortly after each
fiscal year-end or quarter-end, these transactions were
unwound, returning the debt to RGHI.
Mr. Sexton, 45, of Golden's Bridge, New York, served as
Executive Vice President and Chief Operating Officer of a
Refco subsidiary from July 2001 until August 2004. Mr.
Sexton served as Executive Vice President and Chief
Operating Officer of Refco beginning in August 2004.
In early August 2004, Thomas H. Lee Partners, L.P.,
purchased a majority interest in Refco for approximately
$1.9 billion through an LBO. In connection with that
transaction, Refco sold approximately $600 million of bonds
to the public and borrowed approximately $800 million from a
syndicate of banks.
Proceeds of Refco's fraudulent LBO were distributed to
Messrs. Bennett, Grant, Maggio, and Trosten, as well as to
Mr. Sexton and certain other former Refco insiders.
In August 2005, Refco conducted an IPO of its stock,
raising approximately $583 million from the public. Refco's
stock was then listed on the New York Stock Exchange.
On October 10, 2005, Refco announced that it had discovered
that it was owed approximately $430 million by an entity
controlled by Mr. Bennett. Following this announcement, the
market price of Refco stock plummeted, and Refco's stock was
subsequently delisted by the New York Stock Exchange.
Refco, Inc., and many of its subsidiaries filed petitions in
bankruptcy on October 17, 2005.
In October 2005, Mr. Sexton became CEO of Refco. He
resigned on November 11, 2005.
The $2,050,000 that Mr. Sexton agreed to forfeit was
traceable to the LBO proceeds that he received in August
2004. Mr. Sexton has not admitted to any liability in
settling the lawsuit, and agreed to forfeit the $2,050,000
on the understanding that the U.S. Attorney's Office for the
Southern District of New York will request that the
forfeited funds be made available to innocent victims of the
Refco fraud to compensate their losses.
This case was investigated by the Criminal Investigators of the
Securities and Commodities Fraud Task Force of the United States
Attorney's Office, along with the United States Postal Inspection
Service. Mr. Bharara praised the work of those investigators and
thanked the Securities and Exchange Commission and the Commodity
Futures Trading Commission for their assistance in the case.
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/--
was a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries were members of
principal U.S. and international exchanges, and were among the
most active members of futures exchanges in Chicago, New York,
London and Singapore. Refco was also a major broker of cash
market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco was one of the largest global clearing firms for
derivatives. The Company had operations in Bermuda.
The Company and 23 of its affiliates filed for Chapter 11
protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-
60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, represented the Debtors in their restructuring
efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the
Official Committee of Unsecured Creditors. Refco reported
US$16.5 billion in assets and US$16.8 billion in debts to the
Bankruptcy Court on the first day of its Chapter 11 cases.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on December 15, 2006. That Plan became effective on Dec. 26,
2006. Pursuant to the plan, RJM, LLC, was named plan
administrator to reorganized Refco, Inc., and its affiliates, and
Marc S. Kirschner as plan administrator to Refco Capital Markets,
Ltd.
Bankruptcy Creditors' Service, Inc., publishes Refco Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Refco Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
RESERVE MANAGEMENT: Moody's Reviews Ratings on Three Funds
----------------------------------------------------------
Moody's Investors Service has concluded the review of three funds
managed by Reserve Management Company Inc. that Moody's initiated
on September 23, 2008. All ratings will be withdrawn.
The ratings of these funds are affected:
* The Reserve Fund -- Primary Fund -- Caa rating confirmed.
* Reserve International Liquidity Fund (US$) Ltd. -- Caa/MR1+
rating confirmed.
* Reserve Yield Plus Fund -- fund rating downgraded to Caa from B,
market risk rating confirmed at MR3.
The ratings of The Reserve Fund -- Primary Fund and Reserve
International Liquidity Fund (US$) Ltd. were confirmed at Caa and
the fund rating of the Reserve Yield Plus Fund was downgraded to
Caa from B. Although final distributions are uncertain and
Moody's information imperfect, the ratings reflect Moody's
expectations that the ultimate losses resulting from the funds'
liquidations will be modest (less than 5%). The ratings also
capture the suspension of redemptions that was imposed on
investors since September 2008 and the loss of value to investors
since then. Based on these considerations, the expected loss of
the three funds is consistent with that of Caa rating. The
ratings will be withdrawn as Moody's understands that the funds
are being liquidated.
Further, Reserve Enhanced Cash Strategies Portfolio B/MR2 ratings
which were placed on review for downgrade on September, 23, 2008,
have been withdrawn as Moody's has insufficient or otherwise
inadequate information to support the maintenance of the rating.
These issuers did not participate in the rating process. The
Rating Committee was not provided, for purposes of the rating,
access to the books, records and other relevant internal documents
of the rated entities or related third parties.
Moody's adopts all necessary measures so that the information it
uses in assigning a rating is of sufficient quality and from
reliable sources; however, Moody's does not and cannot in every
instance independently verify, audit or validate information
received in the rating process.
RIVER 2 SEA: Files for Chapter 7 Liquidation
--------------------------------------------
Chris Mazzolini at StarNews Online reports that River 2 Sea LLC
filed for bankruptcy under Chapter 7 to liquidate assets to pay
creditors. The filing came before the Company was set to be sold
at an auction.
The filing gave the Company more time to find a buyer for its 10-
acre tract on Surry Srteet near the base of the Cape Fear Memorial
Bridge in downtown Wilmington. Wilmington Gateway LLC, a company
of local developer Ron Rickett, was named as buyer for the
property, according to the report.
River 2 Sea LLC owns land intended for the 11-story development in
downtown Wilmington. River 2 estimated assets between $10 million
and $50 million and debts between $1 million and $10 million in
its Chapter 7 petition.
SCO GROUP: Trustee to Sell Assets at October Auction
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Chapter 11 trustee for SCO Group Inc. received
approval to conduct an auction for SCO's assets on Oct. 25. Bids
are due Oct. 15. No buyer is yet under contract. The hearing for
approval of the sale will take place Nov. 8.
Mr. Rochelle relates that the bankruptcy judge called for a
Chapter 11 trustee in August 2009, about one month before the U.S.
Court of Appeals in Denver ruled in the company's favor after six
years of litigation with Waltham, Massachusetts-based Novell Inc.
The case went back to the district court, where the judge and jury
further clarified SCO's rights in certain Unix software
incorporated in software for network systems.
About SCO Group
The SCO Group (SCOXQ.PK) -- http://www.sco.com/-- is a provider
of UNIX software technology. Headquartered in Lindon, Utah, SCO
has a worldwide network of resellers and developers.
The Company and its affiliate, SCO Operations Inc., filed for
Chapter 11 protection on September 14, 2007 (Bankr. D. Del. Lead
Case No. 07-11337). Paul Steven Singerman, Esq., and Arthur
Spector, Esq., at Berger Singerman P.A., represent the Debtors in
their restructuring efforts. James O'Neill, Esq., and Laura Davis
Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the
Debtors' Delaware and conflicts counsel. Epiq Bankruptcy
Solutions LLC acts as the Debtors' claims and noticing agent.
As of January 31, 2009, the Company had $8.78 million in total
Assets, $13.30 million in total liabilities, and $4.52 million in
stockholders' deficit.
SKILLED HEALTHCARE: Judge Rejects Motion for Mistrial
-----------------------------------------------------
Matt Drange, writing for The Times-Standard, reports a Humboldt
County judge threw out a motion for a mistrial in the class action
lawsuit against Skilled Healthcare on Friday, signaling another
wild day for the company's stock.
The motion, filed earlier this month by defense attorneys, alleged
misconduct by one member of the jury that returned a $677 million
verdict against the company on July 6. Defense attorneys called
the amount, which remains the largest jury verdict in the United
States this year, "annihilating," and immediately took action to
have it overturned.
In response to the motion, plaintiffs' attorneys filed a handful
of declarations from other jury members dismissing the alleged
bias and serving as a basis for Judge Bruce Watson to deny the
motion. In his ruling, Watson stated that he found no evidence of
juror misconduct and no grounds for a mistrial, causing a flurry
of events on Wall Street, with shares dropping as low as $2.46,
down from $3.25 the day before.
The company -- one of the largest nursing home chains in the
country with 78 facilities and some 14,000 employees -- has seen
its stock decline since the lawsuit was brought to court last
November after documents showed the nursing facilities to be in
violation of statewide staffing requirements.
At the time, shares hovered around $7 apiece, and have since taken
numerous hits, including a single-day loss of more than 75 percent
the day the jury verdict was announced. SKH shares closed at
$2.77 on Friday.
Health care industry analyst Sheryl Skolnick said the news should
not come as a surprise when the recent declarations filed by other
jurors, all of which denied any potential bias, are taken into
consideration.
"Proving misconduct is a tough thing to get done in a case like
this," said Ms. Skolnick, an analyst with CRT Capital Group in
Connecticut, who has been following the case closely. "I'm not
surprised at all."
In addition to the denial of the motion, the court issued a
permanent injunction that orders all Skilled Healthcare facilities
to comply with the minimum staffing requirements mandated by
California statute. Effective immediately, each of the 22
facilities implicated in the suit is to maintain 3.2 nursing hours
per-patient, per-day.
A third party will be appointed to monitor that each facility
complies with the law, and any costs associated with that will be
paid by the defendants, according to court documents.
Plaintiffs' attorneys, based out of Eureka, would not comment on
the decision, except to say that it will not effect a scheduled
court date next week. Phone calls to the office of defense
attorney Kippy Wroten in Southern California were not returned
before deadline.
The two teams of lawyers were due back in court on Tuesday, when
the court will hear additional arguments on motions filed earlier
this month. Ms. Skolnick said that despite all the recent
filings, which include a motion to have Watson recused from the
case and a separate one seeking a new trial, the future for
Skilled Healthcare does not appear to look much different than it
did one month ago.
Parties in the case agreed to enter into mediation on July 15, and
will not say if a settlement has been reached. Many in the
investing world have predicted the company will file for
bankruptcy under Title 11 of the United States Bankruptcy Code,
which would leave the future of Skilled Healthcare nursing homes
in California and elsewhere in question.
"At this point, the case looks like it's going forward," Ms.
Skolnick said, adding that a final judgment could be looming if a
settlement cannot be reached. "Once that happens, there really is
no other choice than to file for bankruptcy."
The case is entitled VINNIE LAVENDER, by and through her
Conservator, WANDA BAKER, WALTER SIMON; JACQUELYN VILCHINSKY vs.
SKILLED HEALTHCARE GROUP, INC., et al, (and 22 individually-named
California nursing facilities receiving administrative services
from Skilled Healthcare, LLC).
About Skilled Healthcare Group
Skilled Healthcare Group, Inc. --
http://www.skilledhealthcaregroup.com/-- based in Foothill Ranch,
California, operates long-term care facilities and provides a
variety of post-acute care services. The Company operates skilled
nursing facilities, assisted living facilities, hospice and home
health locations. Further, the company provides ancillary
services such as physical, occupational and speech therapy in its
facilities and unaffiliated facilities and is a member of a joint
venture providing institutional pharmacy services in Texas.
Skilled Healthcare recognized revenues of approximately
$761 million for the trailing 12-month period ended March 31,
2010.
On July 7, 2010, the company announced that a jury in Humboldt
County, California returned a verdict against the company with
initial damages awarded to plaintiffs amounting to $671 million.
Reportedly, the $671 million is composed of $613 million in
statutory damages and $58 million in restitutionary damages. The
case related to a California statute that requires nursing homes
to maintain 3.2 nursing hours per patient per day. The total
damages were assessed at a rate of $500 per-patient per-day that
the 22 nursing facilities involved in the suit were in violation
of the law.
According to Bloomberg, the Company's revenue of $759.8 million in
2009 resulted in a net loss of $133.2 million. For the first
quarter of 2010, the Company's net income was $8.9 million on
revenue of $189.3 million.
The balance sheet at March 31 showed current assets of
$131.4 million among total assets of $859 million. Current
liabilities were $91.7 million. Total liabilities were
$574.7 million.
Following the verdict, S&P lowered the Company's corporate credit
rating to 'CCC' from 'B+'. The Company carries a 'B2' corporate
family rating, under review for downgrade, from Moody's Investors
Service.
SPHERIS INC: Wins Court Confirmation of Liquidating Plan
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Spheris Inc. won confirmation of a Chapter 11 plan in
which unsecured creditors and holders of senior subordinated notes
are to recover up to 23%.
Headquartered in Franklin, Tennessee, Spheris Inc. --
http://www.spheris.com/-- is a global provider of clinical
documentation technology and services.
Spheris Inc., along with five affiliates, filed for Chapter 11 on
Feb. 3, 2010 (Bankr. D. Del. Case No. 10-10352). Attorneys at
Young Conaway Stargatt & Taylor, LLP, and Willkie Farr & Gallagher
LLP represent the Debtors in their Chapter 11 effort. Jefferies &
Company serves as financial advisors to the Debtors. Attorneys at
Schulte Roth & Zabel LLP and Landis Rath & Cobb LLP serve as
counsel to the prepetition and DIP lenders. Garden City Group
Inc. is claims and notice agent. The petition says that assets
range from $50 million to $100 million while debts range from
$100 million to $500 million.
The estate of Spheris Inc. is now formally named SP Wind Down Inc.
after it sold the business in April. CBay Inc.'s MedQuist Inc.
purchased the domestic business of Spheris for $98.8 million.
ST. BERNARD SOFTWARE: June 30 Balance Sheet Upside-Down by $9.2MM
-----------------------------------------------------------------
St. Bernard Software, Inc., had total assets of $15,268,000, total
liabilities of $24,527,000, and a stockholders' deficit of
$9,259,000 as of June 30, 2010.
The Company posted a net loss of $432,000 for the three months
ended June 30, 2010, from a net loss of $52,000 for the same
period a year ago. The Company posted a net loss of $581,000 for
the six months ended June 30, 2010, from a net loss of $685,000
for the same period a year ago.
Total revenues were $4,342,000 for the three months ended June 30,
2010, from $4,754,000 for the same period a year ago. Revenues
were $8,730,000 for the six months ended June 30, 2010, from
$9,203,000 for the same period a year ago.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a7d
Based in San Diego, California, St. Bernard Software, Inc., is a
software development company that designs, develops, and markets
Secure Web Gateway appliances and policy compliance solutions to
small, medium, and enterprise class customers. The Company sells
its products through distributors, dealers, and original equipment
manufacturers, and directly to network managers and administrators
worldwide.
STATION CASINOS: Court Confirms Chapter 11 Plan
-----------------------------------------------
Judge Gregg W. Zive of the U.S. Bankruptcy Court for the District
of Nevada confirmed on August 27, 2010, the First Amended Joint
Chapter 11 Plan of Reorganization filed by Station Casinos Inc.
and its debtor affiliates.
After receiving evidence submitted by interested parties, hearing
the arguments of counsel, and weighing all the admitted evidence,
the Court determined that the Plan meets all of the requirements
for confirmation under Section 1129 of the Bankruptcy Code:
(a) The Plan complies with Section 1129(a)(1), Sections 1122
and 1123. In accordance with the requirements of Sections
1122(a) and 1123(a)(1), the Plan designates Classes of
Claims and Equity Interests, other than Administrative
Claims and Priority Tax Claims. Each Class of Claims and
Equity Interests contains only Claims or Equity Interests
that are substantially similar to the other Claims or
Equity Interests within that Class. The Plan designates
60 Classes of Claims and 18 Classes of Interests.
The Plan also specifies all Classes of Claims and Equity
Interests that are not impaired under the Plan and
specifies the treatment of all Classes of Claims and
Equity Interests that are impaired under the Plan.
(b) The Debtors have complied with Section 1129(a)(2). The
Court finds that adequate disclosures of the current
financial condition of the Debtors and their principal
non-Debtor subsidiaries, and of the terms and purposes of
the Restructuring Transactions made during the course of
the Chapter 11 Cases, the Sale Process, and the
solicitation of acceptances of the Plan, and in connection
with the Confirmation Hearing. The Court has also
previously determined that the Disclosure Statement
explaining the Plan contained adequate information, and
the Debtors provided Holders of Claims and Equity
interests with substantial additional disclosure materials
during the period between entry of the Disclosure
Statement Order and the commencement of the Confirmation
Hearing. The procedures by which the Ballots for
acceptance or rejection of the Plan were solicited and
tabulated were fair, properly conducted and in accordance
with the appropriate bankruptcy laws and statutes.
(c) In accordance with the requirements of Section 1129(a)(3),
the Debtors proposed the Plan in good faith and not by any
means forbidden by law. Based on the evidence presented
at the Confirmation Hearing, the Court finds and concludes
that the Plan has been proposed with the legitimate and
honest purpose of maximizing the returns available to
creditors of the Debtors through the marketing and sale of
the Opco Assets for the highest and best price and the
transfer of the New Propco Acquired Assets to the secured
creditors with the senior interests in those assets.
Moreover, the Plan itself and the arm's-length
negotiations among the Debtors, the Official Committee of
Creditors, the Opco Lenders and the Mortgage Lenders,
leading to the Plan's formulation and modification, and
the public support of the Plan by the Creditors'
Committee, provide independent evidence of the Debtors'
good faith in proposing the Plan.
(d) In accordance with the requirements of Section 1129(a)(4),
the Plan makes all payments on account of Professional Fee
Claims for services rendered on or prior to the Effective
Date subject to the requirements of Sections 327, 328,
330, 331, 503(b) and 1103, as applicable, by requiring
Professionals to file final fee applications with the
Court.
(e) The Plan complies with the requirements of Section
1129(a)(5) because, pursuant to the Plan, prior to the
Effective Date, the Debtors will propose an individual to
serve as the Plan Administrator, and that appointment will
be subject to prior Court approval. None of the entities
receiving estate assets under the Restructuring
Transactions is a successor to any Debtor or an affiliate
of any Debtor participating in a joint plan with the
Debtors. Therefore, Section 1129(a)(5) does not apply to
the transferees of the New Opco Acquired Assets and the
New Propco Acquired Assets. No insider is currently
proposed to be employed by the Debtors after the Effective
Date. If an insider of the Debtors is proposed to serve
as Plan Administrator or as an employee of the Plan
Administrator, any compensation arrangements will be
disclosed.
(f) The Debtors' current businesses do not involve the
establishment of rates over which any regulatory
commission has jurisdiction. Accordingly, Section
1129(a)(6) does not apply to the Plan.
(g) In accordance with the requirements of Section 1129(a)(7),
with respect to each impaired Class of Claims or Equity
Interests, each holder of a Claim or Interest in the
impaired Class has either (a) accepted or is deemed to
have accepted the Plan or, (b) as demonstrated by the
Liquidation Analysis will receive or retain under the Plan
on account of the Claim or Interest property of a value,
as of the Effective Date, that is not less than the amount
the holder would receive or retain if the Debtors were
liquidated on the Effective Date under Chapter 7 of the
Bankruptcy Code. The Court finds that the methodology
used by the Debtors and their financial advisors in
estimating the liquidation value of the Debtors is
reasonable. The Liquidation Analysis establishes that
each Holder of a Claim or Equity Interest that voted to
reject the Plan or was deemed to reject the Plan, will
receive or retain under the Plan on account of the Claim
or Interest property of a value, as of the Effective Date,
that is not less than the amount the holder would receive
or retain if the Debtors were liquidated on the Effective
Date under Chapter 7 of the Bankruptcy Code. Furthermore,
No Holder of a Claim or Equity Interest objected to
confirmation of the Plan on the basis that it was not
receiving or retaining under the Plan as much as it would
receive in a Chapter 7 liquidation of the Debtors.
(h) Each of the 17 Voting Classes, without exception,
voted to accept the Plan. However, the Plan does not
comply with the requirement of Section 1129(a)(8) because
certain Classes of Claims and Equity Interests were deemed
to have rejected the Plan. Nevertheless, the Plan is
confirmable because the Plan satisfies the cramdown
requirements of Section 1129(b) with respect to all
non-accepting Classes.
(i) In accordance with the requirements of Section 1129(a)(9),
the Plan provides that with respect to Administrative
Claims (subject to certain consensual exceptions for DIP
Facility Claims, Superpriority Claims and other adequate
protection claims), on the later of the Effective Date or
when an Administrative Claim becomes an Allowed
Administrative Claim, the Allowed Administrative Claim
will be paid in cash in the full unpaid Allowed amount of
the Claim, unless the Holder agrees to less favorable
treatment. In accordance with the requirements of Section
1129(a)(9), the Plan provides that the rights of the
Holders of Priority Tax Claims are unaltered under the
Plan. Under the Plan, Holders of Priority Tax Claims will
receive, at the election of the Debtors, (i) payment in
full in cash of the Allowed amount of the claim, (ii) less
favorable treatment if the Holder agrees, or (iii)
installment payments in accordance with the requirements
of Sections 1129(a)(9)(C) and (D). In accordance with the
requirements of Section 1129(a)(9), the Plan provides that
the rights of the Holders of Other Priority Claims are
unaltered under the Plan. Under the Plan, Holders of
Other Priority Claims will receive payment in full in cash
of the Allowed amount of the Claim.
(j) In accordance with the requirements of Section
1129(a)(10), at least one Class of Claims or Equity
Interests that is Impaired under the Plan voted to accept
the Plan. Seventeen Classes of Claims voted to accept the
Plan, in each case determined without including any
acceptance of the Plan by any insider. They are Classes
FHI.1, FP.1, VC.1, P.2, M5.2, M4.1, M3.1, M2.1, M1.1, S.2,
S.3, S.4, S.5, S.6, S.7, RC.2 and TS.2.
(k) The Plan is a liquidating Plan. The record of these
Chapter 11 Cases evidences that the parties to the
Restructuring Transactions have the financial wherewithal
and desire to close on the Restructuring Transactions,
including the transfer of the New Opco Acquired Assets and
New Propco Acquired Assets to the applicable transferees
pursuant to the Plan. Thus, the liquidating Plan is
feasible. Based on declarations supporting the Plan, the
aggregate transaction value for the acquisitions of the
New Propco Acquired Assets and the New Opco Acquired
Assets is $2.572 billion, and, after deducting the amount
of debt issued by New Propco and New Opco, the equity
value of New Propco is $326 million; and the Confirmation
Order will so provide.
(l) Under the Plan, certain general unsecured creditors will
receive NPH Warrants. Lazard Freres & Co. LLC
analyzed the value of the NPH Warrants using the
traditional Black-Scholes model, which, when analyzing
non-dividend paying stock, is based on an analysis of five
principal factors: stock price, exercise price, volatility
of the common stock, term and risk free rate. Applying
the Black Scholes model to the NPH Warrants and an equity
value of $326 million for New Propco, it was determined
that the value of the NPH Warrants is between $0.4 million
and $2.3 million; and the Confirmation Order will so
provide.
(m) In accordance with the requirements of Section
1129(a)(12), the Plan provides that Administrative Claims
for fees payable pursuant to Section 1930 of Title 28 of
the U.S. Code will be paid in Cash on the Effective Date.
After the Effective Date, the Reorganized Debtors will pay
all required fees pursuant to Section 1930 or any other
statutory requirement, and comply with all statutory
reporting requirements.
(n) The Debtors are liquidating and after the Effective Date
will have no obligations regarding any retiree benefits of
the kind referred to in Section 1114. Therefore, Section
1129(a)(13) does not apply to the Plan.
(o) Sections 1129(a)(14), (15) and (16) address domestic
support obligations, individual debtors, and non-moneyed
businesses, and do not apply to the Debtors.
Any objections, responses to and reservations of right regarding
confirmation of the Plan or any terms of the Plan, whether filed
on the docket or stated orally in court, and whenever filed or
stated, other than those withdrawn with prejudice in their
entirety prior to, or on the record at the Confirmation Hearing,
are overruled on the merits.
For all purposes arising in connection with the Plan and the
transactions contemplated by the Plan: (a) the aggregate
transaction value for the acquisitions of the New Propco Acquired
Assets and the New Opco Acquired Assets is $2.572 billion, and the
equity value of New Propco is $326 million (which equity value may
be adjusted based upon actual borrowings and cash on hand on the
Effective Date); and (b) the value of the NPH Warrants is between
$0.4 million and $2.3 million.
The stipulations extending the time for the Debtors to decide
whether to assume or reject certain leases are approved, and the
Debtors' time to assume, assign or reject the leases that are the
subject of the Lease Stipulations will be the Effective Date (with
the exception of the Wild Wild West Tiberti lease, as to which the
deadline will be the earlier of September 30, 2010, or the date
that the non-debtor lessee breaches the lease).
A full-text copy of the Plan Confirmation Order is available for
free at http://bankrupt.com/misc/sciplanord.pdf
SCI Creditors Unanimously Vote to Accept Plan
Joseph Morrow IV, senior consultant of Kurtzman Carson Consultants
LLC, submitted with the Court a ballot summary declaration in
support of the First Amended Plan. KCC serves as the Debtors'
notice, claims and solicitation agent.
According to Mr. Morrow, the Plan was accepted by creditors in
each of the Voting Classes entitled to vote on the Plan and whose
ballots were counted in accordance with the Disclosure Statement
Order that hold at least two-thirds in amount and more than one-
half in number of the allowed claims of each that Class. No
Voting Class rejected the Plan, he adds.
A detailed report showing all Ballots tabulated is available for
free at http://bankrupt.com/misc/SCI_BallotsIncluded.pdf
A detailed report showing Ballots not included in the tabulation
is available for free at:
http://bankrupt.com/misc/SCI_BallotsExcluded.pdf
Mr. Morrow says the rejected Ballots are either:
(i) Ballots that are properly completed, executed and timely
filed, but (a) do not indicate acceptance or rejection of
the Plan, (b) indicate both an acceptance and rejection of
the Plan, or (c) partially accept and partially reject the
Plan; and
(ii) Beneficial Holder Ballots that were sent directly to KCC,
because KCC has no independent way to determine whether
those Ballots were also sent to the respective Nominee for
processing and voting on a Master Ballot.
Plan Modifications
Prior to the hearing on the confirmation of the Plan, the Debtors
sought approval from the Court of further modifications to the
First Amended Plan. The modifications included:
(a) additional released and exculpated parties;
(b) additional condition precedent to occurrence of Effective
Date;
(c) modification of deadline for assuming, assigning
and rejecting executory contracts and unexpired leases;
and
(d) change in timetable for dissolution of the Debtors.
The definitions of "Exculpated Parties" and "Released Parties" are
modified to include the Settling Lenders and Mezzco Lenders.
"Mezzco Lenders" means the lenders to the Mezzco Debtors.
"Settling Lenders" means the Prepetition Opco Secured Lenders.
The Debtors amended the Plan by adding this condition precedent to
Effective Date and Consummation of the Plan:
"All documentation relating to the issuance of the NPH
Warrants, NPH Investment Rights and NPH Post-Effective
Investment Rights, and all documentation and other matters
relating to the exemption of such issuances from any
registration requirements imposed under any federal or state
securities laws, shall be acceptable in all respects to the
Debtors, FG and the Mortgage Lenders"
Pursuant to the Amended Plan, the Debtors will have until
December 1, 2010, to file and serve motions to assume, assume and
assign, or reject Executory Contracts and Unexpired Leases. If
the Debtors reject an Executory Contract or Unexpired Lease, the
non-debtor party will have 30 days from entry of the order
approving the rejection to file a Proof of Claim for rejection
damages.
The Plan currently provides for the dissolution of the Debtors
on the Effective Date. The Plan was modified to provide that
the Debtors will be dissolved as soon as practicable after the
Effective Date, but in no event later than the closing of
the Chapter 11 cases. After the Effective Date, the Plan
Administrator will act as the sole officer or manager, as the
case may be, of each of the Debtors.
The Plan Modifications did not alter the classification and
treatment of Claims and Equity Interests, and do not otherwise
make the Plan unconfirmable.
The Debtors also delivered to the Court exhibits to the Plan:
(a) A list of the terminated existing liens, claims and equity
interests is available for free at:
http://bankrupt.com/misc/SCI_TerminatedLiens.pdf
(b) A list of the liens that survive the occurrence of the
Effective Date and the transfer of the New Opco Acquired
Assets and New Propco Acquired Assets to the applicable
transferees is available for free at:
http://bankrupt.com/misc/SCI_SurvivingLiens.pdf
(c) A full-text copy of the legal descriptions of certain real
property being transferred pursuant to the Plan is
available for free at:
http://bankrupt.com/misc/SCI_RealProperty.pdf
F. Neufeld's Declaration
Fred Neufeld, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los
Angeles, California, related to the Court, prior to the
Confirmation Hearing, that he has worked with counsel for certain
key creditor constituencies in the Debtors' Chapter 11 cases to
reach agreement on the form of the Plan Confirmation Order.
According to Mr. Neufeld, these creditor constituencies have
confirmed that they support entry of the Confirmation Order and
the Findings of Facts and Conclusions of Law:
(a) the Official Committee of Unsecured Creditors;
(b) the Mortgage Lenders;
(c) the agent for the Prepetition Opco Secured Lenders;
(d) the Steering Committee of Prepetition Opco Secured Lenders;
(e) the Independent Lenders; and
(f) the Put Parties
The Debtors have received comments from various parties-in-
interest regarding the form of both the Confirmation Order and the
Findings of Fact and Conclusions of Law, and have made revisions
to both documents accordingly.
(A) Valuation of New Propco and NPH Warrants.
For all purposes arising in connection with the Plan and the
transactions contemplated by the Plan: (a) the aggregate
transaction value for the acquisitions of the New Propco Acquired
Assets and the New Opco Acquired Assets is $2.572 billion, and the
equity value of New Propco is $326 million and (b) the value of
the NPH Warrants is between $0.4 million and $2.3 million.
(B) Dissolution of Special Litigation Committee:
On the Confirmation Date, the SLC will be terminated, dissolved
and discharged from any further duties and responsibilities, and
the members of the SLC and their agents will be released and
discharged from any Claims of any Person or Entity arising from
any acts or omissions related to the prepetition and post-petition
activities of the SLC. The SLC, its members and agents will be
included in the Plan definitions of Released Parties and
Exculpated Parties.
(C) Appeals
The reversal or modification on appeal of the authorization to
implement the Restructuring Transactions will not affect the
validity of any debt incurred or the priority of any Lien granted
pursuant to the Restructuring Transactions, including with respect
to the New Opco Credit Agreement.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No.
09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal
counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck,
LLP, as regulatory counsel; and Lewis and Roca LLP is local
counsel. Lazard Freres & Co. LLC is investment banker and
financial advisor. Kurtzman Carson Consultants LLC is the claims
and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Creditors Committee Down to Four Members
---------------------------------------------------------
Nicholas Strozza, assistant U.S. Trustee for Region 17, amended
the list of members in the Official Committee of Unsecured
Creditors in the Chapter 11 cases of Station Casinos, Inc., and
its debtor affiliates, to remove Serengeti Asset Management, LP.
The Creditors' Committee is now composed of:
(1) Law Debenture Trust Company of New York, as Trustee
400 Madison Avenue #4
New York, NY 10017
Represented by:
Richard Hiersteiner
Edwards Angell Palmer & Dodge, LLP
111 Huntington Avenue
Boston, MA 02199
(2) Wilmington Trust Company
Steven Cimalore
1100 North Market Street, Rodney Square North
Wilmington, DE 19890
Represented by:
Kristophor M. Hansen, Esq.
Stroock & Stroock & Lavan
180 Malden Lane
New York NY 10038
(3) Western Asset Management Company
Represented by:
Chris Jacobs
385 E. Colorado Blvd.
Pasadena, CA 91101
(4) Fidelity Management & Research Company
Represented by:
Nate Van Duzer
82 Devonshire Street, V13H
Boston, MA 02109
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No.
09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal
counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck,
LLP, as regulatory counsel; and Lewis and Roca LLP is local
counsel. Lazard Freres & Co. LLC is investment banker and
financial advisor. Kurtzman Carson Consultants LLC is the claims
and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: Reports $69,615,000 Loss for June 30 Quarter
-------------------------------------------------------------
Station Casinos, Inc., announced the results of its operations for
the second quarter ended June 30, 2010.
Results of Operations
The Company's net revenues for the second quarter ending June 30,
2010, were approximately $233.6 million, a decrease of 12.6%
compared to the prior year's second quarter. The Company reported
Adjusted EBITDA for the quarter of $61.4 million, a decrease of
22.5% compared to the prior year's second quarter. For the second
quarter, the Company reported a net loss of $69.6 million as
compared to a net loss of $65.3 million in the prior year's second
quarter.
In connection with the Chapter 11 cases, the Company recorded net
reorganization items of $37.9 million in the second quarter.
These reorganization items represent professional fees and other
costs incurred as a direct result of the Chapter 11 cases of
$31.2 million, and adjustments of swap carrying values of
$6.8 million.
The Company also incurred $1.8 million in development and
preopening expenses including preopening expenses of its joint
ventures, $2.6 million of expense related to equity-based awards
and a loss of $1.0 million related to its deferred compensation
plan.
The Company's second quarter earnings from its Green Valley Ranch
joint venture were $3.2 million representing 50% of Green Valley
Ranch's operating income. For the second quarter, Green Valley
Ranch generated Adjusted EBITDA before management fees of
$11.9 million, a decrease of 21.4% compared to the same period in
the prior year. Green Valley Ranch reported a net loss of
$5.4 million for the second quarter as compared to a net loss of
$3.8 million in the same period in the prior year.
Las Vegas Market Results
For the second quarter, net revenues from the Major Las Vegas
Operations, excluding Green Valley Ranch and Aliante Station, were
$214.7 million, a 12.7% decrease compared to the prior year's
second quarter, while Adjusted EBITDA from those operations
decreased 16.6% to $59.2 million from $71 million in the same
period in the prior year. The Major Las Vegas Operations reported
a net loss of $19.2 million for the second quarter as compared to
a net loss of $15.6 million in the same period in the prior year.
Adjusted EBITDA is not a generally accepted accounting principle
measurement and is presented solely as a supplemental disclosure
because the Company believes that it is a widely used measure of
operating performance in the gaming industry and is a principal
basis for the valuation of gaming companies.
Balance Sheet and Capital Expenditures
Long-term debt was $5.9 billion as of June 30, 2010, of which
$5.7 billion was classified as liabilities subject to compromise.
Total capital expenditures were $9.7 million for the second
quarter which consisted primarily of maintenance capital purchases
and other projects. Equity contributions to joint ventures during
the second quarter were $2.1 million.
A full-text copy of Station Casinos' Second Quarter Results on
Form 10-Q filed with the U.S. Securities and Exchange Commission
at http://ResearchArchives.com/t/s?697e
Station Casinos, Inc.
Condensed Consolidated Balance Sheet
As of June 30, 2010
ASSETS
Current Assets:
Cash and cash equivalents $221,814,000
Restricted Cash 195,126,000
Receivables, net 24,999,000
Inventories 6,966,000
Prepaid gaming tax 18,633,000
Prepaid expenses 14,315,000
--------------
Total current assets 481,853,000
Property and equipment, net 2,675,896,000
Goodwill 184,699,000
Intangible assets, net 277,627,000
Land held for development 305,541,000
Investments in joint ventures 25,725,000
Native American development costs 225,993,000
Other assets, net 100,190,000
--------------
Total assets $4,277,524,000
==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt $245,871,000
Accounts payable 12,200,000
Construction contracts payable 1,524,000
Accrued interest payable 12,322,000
Accrued expenses and other current liabilities 110,787,000
--------------
Total current liabilities 382,704,000
Long-term debt, less current portion 5,590,000
Deferred income tax, net 134,238,000
Investments in joint ventures, deficit 196,877,000
Other long-term liabilities, net 6,617,000
--------------
Total liabilities not subject to compromise 726,026,000
Liabilities subject to compromise 6,001,255,000
--------------
Total liabilities 6,727,281,000
Stockholders' deficit:
Common stock 0
Non-voting common stock 417,000
Additional paid-in capital 2,957,957,000
Accumulated other comprehensive income(loss) 931,000
Accumulated deficit (5,409,062,000)
--------------
Total stockholders' deficit (2,449,757,000)
--------------
Total liabilities and stockholders' deficit $4,277,524,000
==============
Station Casinos, Inc.
Condensed Consolidated Statement of Operations
For Three Months Ended June 30, 2010
Operating revenues:
Casino $167,100,000
Food and beverage 41,119,000
Room 18,666,000
Other 14,734,000
Management fees 9,612,000
--------------
Gross revenues 251,231,000
Promotional allowances (17,656,000)
--------------
Net revenues 233,575,000
--------------
Operating costs and expenses:
Casino 69,001,000
Food and beverage 26,870,000
Room 7,981,000
Other 4,599,000
Selling, general and administrative 57,054,000
Corporate 10,396,000
Development and preopening 1,818,000
Depreciation and amortization 40,266,000
Write-downs and other charges, net 107,000
--------------
218,092,000
--------------
Operating income 15,483,000
Earnings from joint ventures 542,000
--------------
Operating income and earnings from joint ventures 16,025,000
--------------
Other (expense) income:
Interest expense, net (25,171,000)
Interest and other expense from joint ventures (10,311,000)
Change in fair value of derivative instruments (1,000)
Gain on early retirement of debt 0
--------------
(35,483,000)
--------------
Loss before reorganization items & income taxes (19,458,000)
Reorganization items (37,943,000)
--------------
Loss before income taxes (57,401,000)
Income tax (provision) benefit (12,214,000)
--------------
Net loss ($69,615,000)
==============
Station Casinos, Inc.
Condensed Consolidated Statement of Cash Flows
For Six Months Ended June 30, 2010
Cash flows from operating activities:
Net loss ($123,148,000)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 84,332,000
Change in fair value of derivative instruments 42,000
Gain on early retirement of debt 0
Write-downs and other charges, net 119,000
Amortization of debt discount and issuance costs 978,000
Share-based compensation 6,808,000
Loss from joint ventures 42,411,000
Reorganization items 57,194,000
Changes in assets and liabilities:
Restricted cash (20,765,000)
Receivables, net 24,879,000
Inventories and prepaid expenses 76,000
Deferred income tax 14,005,000
Accounts payable (2,716,000)
Accrued interest 11,944,000
Accrued expenses and other current liabilities 14,750,000
Other, net 1,468,000
--------------
Total adjustments 235,525,000
--------------
Net cash provided (used in) operating activities
before reorganization items 112,377,000
--------------
Net cash used for reorganization items (35,501,000)
--------------
Net cash provided by(used in)operating activities 76,876,000
--------------
Cash flows from investing activities:
Capital expenditures (19,174,000)
Proceeds from sale of land, property and equipment 246,000
Investments in joint ventures (2,109,000)
Distributions in excess of earnings from joint
ventures 1,480,000
Construction contracts payable 783,000
Native American development costs (12,483,000)
Other, net (7,516,000)
--------------
Net cash used in investing activities (38,773,000)
--------------
Cash flows from financing activities:
Payments under Term Loan with maturity dates
greater than three months, net (1,250,000)
Payments on financing costs 0
Redemption of senior subordinated notes 0
Other, net (232,000)
--------------
Net cash used in financing activities (1,482,000)
--------------
Cash and cash equivalents:
Increase (decrease) in cash and cash equivalents 36,621,000
Balance, beginning period 185,193,000
--------------
Balance, end of period $221,814,000
==============
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No.
09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal
counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck,
LLP, as regulatory counsel; and Lewis and Roca LLP is local
counsel. Lazard Freres & Co. LLC is investment banker and
financial advisor. Kurtzman Carson Consultants LLC is the claims
and noticing agent.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STUDIO FRAMES: To Liquidate Assets Under Chapter 7
--------------------------------------------------
Lisa Sorg Indyweek.com reports the Chapter 11 bankruptcy case of
Studio Frames Ltd, doing business as Somerhill Gallery was
converted to Chapter 7 liquidation proceeding.
Based in Durham, North Carolina, Studio Frames Ltd. dba Somerhill
Gallery filed for Chapter 11 protection on May 10, 2010 (Bankr. D.
N.C. Case No.10-80827). Richard M. Hutson, II, Esq., represents
the Debtor. The Company estimated assets of less than $50,000 and
debts of between $1 million and $10 million in its Chapter 11
petition.
TITAN PHARMA: June 30 Balance Sheet Upside-Down by $2.14MM
----------------------------------------------------------
Titan Pharmaceuticals, Inc., had total assets of $2,086,000, total
liabilities of $4,233,000, and a stockholders' deficit of
$2,147,000 as of June 30, 2010.
The Company posted a net loss of $1,846,000 for the three months
ended June 30, 2010, from a net loss of $1,735,000 for the same
period a year ago. The Company posted a net loss of $2,151,000
for the six months ended June 30, 2010, from a net loss of
$2,825,000 for the same period a year ago.
Total revenues were $1,342,000 for the three months ended June 30,
2010, from $29,000 for the same period a year ago. Total revenues
were $3,767,000 for the six months ended June 30, 2010, from
$52,000 for the same period a year ago.
A full-text copy of the Company's Form 10-Q is available at no
charge at http://ResearchArchives.com/t/s?6a7a
Based in San Francisco, Calif., Titan Pharmaceuticals, Inc., is a
biopharmaceutical company developing proprietary therapeutics
primarily for the treatment of central nervous system disorders.
TRAI THIEN: Posts $537,304 Net Loss in June 30 Quarter
------------------------------------------------------
Trai Thien USA Inc., formerly known as Develocap, Inc., filed its
quarterly report on Form 10-Q, reporting a net loss of $537,304 on
$3.6 million of revenue for the three months ended June 30, 2010,
compared with net income of $220,234 on $2.2 million of revenue
for the same period of 2009.
As of June 30, 2010, the Company has $736,680 available cash and
cash equivalents and suffers from negative working capital of
$11.0 million and overdue borrowings of $6.7 million.
The Company's balance sheet at June 30, 2010, showed
$29.0 million in total assets, $17.8 million in total
liabilities, and stockholders' equity of $11.2 million.
ZYCPA Company Limited, in Hong Kong, China, expressed substantial
doubt about the Company's ability to continue as a going concern,
following its 2009 results. The independent auditors noted that
the Company has committed and contracted for the construction of 8
vessels in Vietnam with a combined carrying capacity of 54,200
deadweight tons in the aggregate value of approximately
$73 million (equivalent to VND1.356 trillion), which are expected
to be delivered between 2010 and 2011, and that as of
December 31, 2009, the Company has available $102,484 cash and
cash equivalents and suffered from negative working capital of
$6.4 million and negative operating cash flow of $2.0 million.
The independent auditors said that the Company may not have
sufficient working capital to meet with these capital commitments.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6a69
Based in Ho Chi Minh City, Vietnam, Trai Thien USA Inc. (formerly
known as Develocap, Inc.) was incorporated under the laws of the
State of Nevada on January 23, 2004. The Company operates its
chartered and owned vessels in the ocean transportation in
Vietnam, through its variable interest entity, Trai Thien, which
is registered as a joint stock company under the Enterprise Law of
the Socialist Republic of Vietnam on June 11, 2007, which
primarily charters vessels from the ship-owners and operates the
vessels in the ocean transportation of a broad range of major and
minor bulk cargoes including iron ore, coal, grain, cement and
fertilizer, along Asian shipping routes.
TRICO MARINE: Organizational Meeting to Form Panel on September 7
-----------------------------------------------------------------
Roberta A. DeAngelis, Acting United States Trustee for Region 3,
will hold an organizational meeting on September 3, 2010, at
1:00 p.m. in the bankruptcy case of Trico Marine Services, Inc.,
et al. The meeting will be held at J. Caleb Boggs Federal
Building, 844 King Street, Room 5209, Wilmington, DE 19801.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
Texas-based Trico Marine Services, Inc. --
http://www.tricomarine.com-- provides subsea services, subsea
trenching and protection services, and towing and supply vessels.
Trico Marine filed for Chapter 11 protection on August 25, 2010
(Bankr. D. Del. Case No. 10-12653). John E. Mitchell, Esq., and
Angela B. Degeyter, Esq., at Vinson & Elkins LLP, assists the
Debtor in its restructuring effort. Robert J. Dehney, Esq., at
Morris, Nichols, Arsht & Tunnell LLP, is the Debtor's Delaware
counsel. Cahill Gordon & Reindell LLP is the Debtor's special
counsel. Alix Partners Services, LLC, is the Debtor's Chief
Restructuring Officer. Epiq Bankruptcy Solutions is the Debtor's
claims and notice agent. The Debtor disclosed US$30,562,681 in
total assets and US$353,606,467 in total liabilities as of the
Petition Date.
Affiliates Trico Marine Assets, Inc. (Bankr. D. Del. Case No. 10-
12648), Trico Marine Operators, Inc. (Bankr. D. Del. Case No. 10-
12649), Trico Marine International, Inc. (Bankr. D. Del. Case No.
10-12650), Trico Marine Cayman, L.P. (Bankr. D. Del. Case No. 10-
12651), and Trico Holdco, LLC (Bankr. D. Del. Case No. 10-12652),
filed for Chapter 11 protection.
TROPICANA ENT: Casino Dealers in Atlantic City Agree on CBA
-----------------------------------------------------------
Workers at the Tropicana Casino and Resort in Atlantic City voted
in favor of a tentative agreement for the casino's dealers by a
91% majority. This collective bargaining agreement is the first
contract for Atlantic City dealers after workers at several
casinos organized with the United Auto Workers (UAW) in August
2007. The Tropicana is one of four casinos in Atlantic City
where thousands of workers organized with the UAW, and is the
first to reach a tentative contract. Dealers at the Tropicana
voted by an overwhelming majority to join the union in 2007, with
80% of workers supporting the union.
"We are overjoyed about reaching this agreement and moving forward
to help workers at the other Atlantic City casinos win a fair
contract and the respect they deserve," said Scott Adams, UAW
Region 9 director.
In March 2010, the Tropicana was acquired out of bankruptcy by a
group of investors headed by Carl C. Icahn, and bargaining
progressed since the takeover by new owners.
"We are very happy that we have reached this historic achievement
where all constituencies will benefit," said Mr. Icahn, Chairman
of the Board of Tropicana Entertainment Inc., which owns the
Tropicana.
"We are very pleased to enter into a long term partnership with
the United Auto Workers," said Scott Butera, President and Chief
Executive Officer of Tropicana Entertainment Inc., which owns the
Tropicana. "This collective bargaining agreement will offer our
table games dealers a rewarding work environment as they continue
to provide our guests with high quality gaming and entertainment
experiences."
"We look forward to a productive relationship with Scott Butera,
Mark Giannantonio and the rest of the casino's management team,
and to working together to make the Tropicana a great place for
customers, workers and investors," said UAW Vice President Joe
Ashton, who directs the union's Gaming Department.
Details of the contract were explained at informational meetings
for Tropicana workers on August 18 and August 19. Voting took
place following the meetings. The contract is five-year agreement
and contains an 18% wage increase over the length of the contract.
The UAW, one of the nation's largest and most diverse labor
unions, represents more than 8,800 gaming employees in Detroit,
Atlantic City, Rhode Island, Connecticut and Indiana.
About Tropicana Entertainment
Tropicana Entertainment LLC and its units owned eleven casino
properties in eight distinct gaming markets with premier
properties in Las Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC and certain affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-
10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor. Stroock & Stroock & Lavan LLP and Morris
Nichols Arsht & Tunnell LLP represent the Official Committee of
Unsecured Creditors in this case. Capstone Advisory Group LLC is
financial advisor to the Creditors' Committee.
The OpCo Debtors, a group of Tropicana entities owning casinos and
resorts in Atlantic City, New Jersey and Evansville, Indiana
obtained confirmation from the Bankruptcy Court of a
reorganization plan. On April 29, 2009, non-debtor units of the
OpCo Debtors, designated as the New Jersey Debtors -- Adamar of
New Jersey, Inc., and its affiliate, Manchester Mall, Inc. --
filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to
effectuate a sale of the Atlantic City Resort and Casino to a
group of Investors-led by Carl Icahn. Judge Judith H. Wizmur
presides over the cases. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
Effective March 8, Tropicana Entertainment successfully emerged
from the Chapter 11 reorganization process as an Carl Icahn-owned
entity.
A group of Tropicana entities, known as the LandCo Debtors, which
own Tropicana casino property in Las Vegas, have obtained approval
of a separate Chapter 11 plan.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represented
the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as
their claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have
merged into Adamar of NJ In Liquidation, LLC. The merger and name
change is in accordance with an Amended and Restated Purchase
Agreement, which governs the sale and transfer of the operations
of the Tropicana Casino and Resort - Atlantic City, including
substantially all of the New Jersey Debtors' assets, to Tropicana
Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana
AC Sub Corp., free and clear of any and all liens, claims and
encumbrances.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment LLC
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
TROPICANA ENT: Fee Auditor Submits Final Report on Applications
---------------------------------------------------------------
Warren H. Smith & Associates, P.C., the Court-appointed fee
auditor in the Debtors' cases, delivered to the Court its final
reports on the sixth, seventh, eighth interim and final fee
applications of certain bankruptcy professionals retained in
these cases.
Pursuant to the findings in its report, the Fee Auditor
recommends the approval of these fees and expenses:
Requested Recommended
--------------------- ---------------------
Professional Fees Expenses Fees Expenses
------------ ----------- -------- ----------- ---------
KPMG LLP $873,076 $0 $528,069 $0
Debtors' valuation
consultant
Period:
03/10/09-03/07/10
Richards, Layton & 43,683 3,020 43,683 3,020
Finger P.A.
Debtors' Counsel
Period:
07/01/09-09/30/09
Richards, Layton & 19,503 1,683 19,503 1,600
Finger P.A.
Debtors' Counsel
Period:
10/01/09-12/31/09
Richards, Layton & 14,256 1,286 14,256 1,286
Finger P.A.
Debtors' Counsel
Period:
01/01/10-03/08/10
Richards, Layton & 483,893 136,921 77,442 5,906
Finger P.A.
Debtors' Counsel
Period:
05/05/08-03/08/10
Proskauer Rose LLP 35,793 - 35,793 -
Debtors' Trademark
Litigation Counsel
Period:
09/01/09-09/30/09
Proskauer Rose LLP 294,310 10,248 294,310 n/a
Debtors' Trademark
Litigation Counsel
Period:
10/01/09-12/31/09
Proskauer Rose LLP 269,671 5,014 269,671 n/a
Debtors' Trademark
Litigation Counsel
Period:
01/01/10-03/07/10
Proskauer Rose LLP 599,775 15,263 599,775 n/a
Debtors' Trademark
Litigation Counsel
Period:
07/01/09-03/07/10
The Fee Auditor further notes that it has filed a final report
for KPMG's prior application, which includes the period from
March 10, 2009, through April 30, 2009, and wherein the Fee
Auditor recommended the final approval of fees totaling $344,584.
The Court has not yet ruled on that application.
The Fee Auditor also points out that included in Richard Layton's
final application are fees totaling $407,709 and expenses
totaling $131,340 incurred through the June 30, 2009 LandCo
Effective Date, for which the firm has already sought final
approval and to which the Fee Auditor has already filed a report
with the Court. Thus, the current Fee Auditor report only those
fees in the amount $77,442 and expenses of $5,990 requested for
the period from July 1, 2009, through the March 8, 2010 OpCo
Effective Date.
Proskauer Rose LLP was retained as trademark litigation counsel
to the Debtors nunc pro tunc to July 30, 2009. The current Fee
Auditor Report covers the firm's sixth, seventh, eighth interim
and final fee applications.
The Fee Auditor notes that pursuant to the OCP Order, any
payments to an ordinary course professional in excess of the
monthly fee cap of $35,000 on average over a rolling three-month
period are subject to Court approval. The Fee Auditor makes no
recommendations concerning the expenses requested by Proskauer.
About Tropicana Entertainment
Tropicana Entertainment LLC and its units owned eleven casino
properties in eight distinct gaming markets with premier
properties in Las Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC and certain affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-
10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor. Stroock & Stroock & Lavan LLP and Morris
Nichols Arsht & Tunnell LLP represent the Official Committee of
Unsecured Creditors in this case. Capstone Advisory Group LLC is
financial advisor to the Creditors' Committee.
The OpCo Debtors, a group of Tropicana entities owning casinos and
resorts in Atlantic City, New Jersey and Evansville, Indiana
obtained confirmation from the Bankruptcy Court of a
reorganization plan. On April 29, 2009, non-debtor units of the
OpCo Debtors, designated as the New Jersey Debtors -- Adamar of
New Jersey, Inc., and its affiliate, Manchester Mall, Inc. --
filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to
effectuate a sale of the Atlantic City Resort and Casino to a
group of Investors-led by Carl Icahn. Judge Judith H. Wizmur
presides over the cases. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
Effective March 8, Tropicana Entertainment successfully emerged
from the Chapter 11 reorganization process as an Carl Icahn-owned
entity.
A group of Tropicana entities, known as the LandCo Debtors, which
own Tropicana casino property in Las Vegas, have obtained approval
of a separate Chapter 11 plan.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represented
the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as
their claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have
merged into Adamar of NJ In Liquidation, LLC. The merger and name
change is in accordance with an Amended and Restated Purchase
Agreement, which governs the sale and transfer of the operations
of the Tropicana Casino and Resort - Atlantic City, including
substantially all of the New Jersey Debtors' assets, to Tropicana
Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana
AC Sub Corp., free and clear of any and all liens, claims and
encumbrances.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment LLC
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
TROPICANA ENT: Icahn Sues Las Vegas Entities Over Trademarks
------------------------------------------------------------
Icahn Agency Services LLC, as the administrative and collateral
agent for the lenders under the December 29, 2009 OpCo Exit
Facility; Icahn Partners LP; Icahn Partners Master Fund LP; Icahn
Partners Master Fund II LP; Icahn Partners Master Fund III LP;
Tropicana Entertainment Inc.; and New Tropicana Holdings, Inc.
commenced an adversary complaint on August 10, 2010, in the U.S.
Bankruptcy Court for the District of Delaware against Tropicana
Las Vegas, Inc., and Hotel Ramada of Nevada, LLC, to:
(a) enforce prior orders of the Bankruptcy Court; and
(b) enjoin the Defendants' alleged wrongful efforts to assert
in a Nevada state court action that they, and not
Plaintiff New Tropicana Holdings, are the owners of the
"TROPICANA" and "TROP" trademarks and service marks.
The Icahn Plaintiffs particularly take issue of the Defendants'
alleged right to use the Tropicana Trademark on a royalty free
basis in connection with their Las Vegas operations as they had
when the LandCo Debtors were wholly owned by the OpCo Debtors.
The Tropicana Debtors fall into two groups: (1) The LandCo
Debtors, which comprise of entities previously involved in the
ownership and operation of the Tropicana Hotel and Casino in Las
Vegas, Nevada, including Hotel Ramada of Nevada, and (2) The OpCo
Debtors, which comprise of entities previously involved in the
operation of the Tropicana Casino & Resort Atlantic City in New
Jersey, the Tropicana Express in Laughlin, Nevada, and other
casinos.
Tropicana Las Vegas was formerly part of Tropicana Entertainment
LLC. Tropicana Entertainment, LLC, an OpCo Debtor, is the former
parent company of certain of the other Debtors.
Icahn has since then acquired the Tropicana parent. Tropicana
Las Vegas, on the other hand, was spun off to certain investors,
which include Onex Corporation and its affiliates.
The Icahn-owned Tropicana entity is now called Tropicana
Entertainment Inc.
Representing the Icahn Plaintiffs, Daniel J. DeFranceschi, Esq.,
at Richards, Layton & Finger, P.A., in Wilmington, Delaware,
avers that for more than 30 years, the OpCo and LandCo Debtors
represented to the world that the Tropicana Trademarks were owned
by Tropicana Entertainment, LLC.
Among other things, billions of dollars of acquisitions, sales
and loans were made based on those representations, according to
Mr. DeFranceschi. He specifically notes that certain Icahn
Entities believed an OpCo Debtor is the owner of the Tropicana
Trademarks when they loaned money prepetition to OpCo and LandCo.
Even the Bankruptcy Court entered orders approving the LandCo and
OpCo Plans and granting the OpCo Exit Facility Lenders liens on
the Tropicana Trademarks free and clear of all liens, claims and
encumbrances, Mr. DeFranceschi points out. These orders refers
to the May 30, 2008 Cash Collateral Order and the May 5, 2009
Plan Confirmation Order.
However, the Defendants are now seeking a declaration in the
Nevada state court action entitled "Tropicana Las Vegas, Inc., et
al. v. Aztar Corporation, et al.," Case No. A09595469-B (Nev. D.
Ct., Clark County), that they actually "own" the Tropicana
Trademarks based upon a document that they describe as a newly
discovered agreement from 30 years ago. The Defendants assert
that a certain "1980 Trade Name Agreement" is a basis upon which
to change everything.
In particular, as a predicate to the Defendants' claim in the
Nevada Action, the LandCo Debtors submitted supplemental
bankruptcy schedules -- months after the effective date of the
LandCo Plan -- to include the 1980 Trade Name Agreement.
The Defendants' current assertions are contrary to prior
assurances they made to the Bankruptcy Court that they would not
seek any property in the Nevada Action, the Icahn Plaintiffs
complain.
Mr. DeFranceschi argues that the Defendants' claim that the
subject document is "newly discovered" offers no justification to
revisit the Bankruptcy Court's prior orders. The LandCo Entities
had as much access to the 1980 Trade Name Agreement as the OpCo
Entities during the bankruptcy proceedings, he points out.
All parties-in-interest, including the lenders under the LandCo
Credit Facility, could have challenged the Bankruptcy Court's
findings in the May 30, 2008 Cash Collateral Order during the 90-
day challenge period, Mr. DeFranceschi notes, but none of them
did so because all of them knew that Tropicana Entertainment LLC
owned the Tropicana Trademarks, and all of them had acted in
reliance on that knowledge.
Mr. DeFranceschi adds that that the 1980 Trade Name Agreement has
long since been extinguished -- if not by 2002 when Aztar
Corporation became the beneficial owner of all the equity in the
entity alleged to have contingent reversionary interest, then by
operation of law subsequently by the failure to record the
agreement with the U.S. Patent & Trademark Office before the
transfer of title to the Tropicana Trademarks to Tropicana
Entertainment, LLC in 2007.
The Tropicana Trademarks had an appraised value of almost
$200,000,000 in 2007. The Icahn Plaintiffs contend that if
indeed the Defendants actually owned the Tropicana Trademarks --
which they do not -- then this would create an immediate event of
default under the OpCo Exit Facility to the detriment of the
Reorganized OpCo Debtors.
Accordingly, as a result of the Defendants' wrongful attack on
the Bankruptcy Court's prior orders and the Nevada state court's
need for clarity on the impact of those orders, the Icahn
Plaintiffs aver that they are compelled to file the Complaint to
enforce the Bankruptcy Court's prior orders and to seek a
declaratory judgment that:
(a) New Tropicana Holdings, Inc., is the sole owner of the
Tropicana Trademarks, as these were the property of
Tropicana Entertainment LLC's estate and collateral for
the OpCo Lenders;
(b) Icahn Agency Services LLC has a valid and perfected
security interest in the Tropicana Trademarks for the
benefit of the OpCo Exit Facility Lenders regardless of
who owns the Tropicana Trademarks;
(c) The LandCo Debtors' supplemental bankruptcy schedules are
null and void; and
(d) The Defendants in the Nevada Action violated the automatic
stay to the extent they sought to acquire ownership of the
Tropicana Trademarks, as opposed to merely the right to
use those marks in connection with their Las Vegas
operations.
The Icahn Plaintiffs also seek permanent injunction prohibiting
the Defendants or their affiliates from litigating any alleged
ownership interests in the Tropicana Trademarks in the Nevada
Action or in any other proceeding in any jurisdiction.
A full-text copy of the 43-page Icahn Complaint is available for
free at:
http://bankrupt.com/misc/TROPICANA_IcahnVTropiLVComplaint_aug10.pd
f
About Tropicana Entertainment
Tropicana Entertainment LLC and its units owned eleven casino
properties in eight distinct gaming markets with premier
properties in Las Vegas, Nevada, and Atlantic City, New Jersey.
Tropicana Entertainment LLC and certain affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-
10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor. Stroock & Stroock & Lavan LLP and Morris
Nichols Arsht & Tunnell LLP represent the Official Committee of
Unsecured Creditors in this case. Capstone Advisory Group LLC is
financial advisor to the Creditors' Committee.
The OpCo Debtors, a group of Tropicana entities owning casinos and
resorts in Atlantic City, New Jersey and Evansville, Indiana
obtained confirmation from the Bankruptcy Court of a
reorganization plan. On April 29, 2009, non-debtor units of the
OpCo Debtors, designated as the New Jersey Debtors -- Adamar of
New Jersey, Inc., and its affiliate, Manchester Mall, Inc. --
filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to
effectuate a sale of the Atlantic City Resort and Casino to a
group of Investors-led by Carl Icahn. Judge Judith H. Wizmur
presides over the cases. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
Effective March 8, Tropicana Entertainment successfully emerged
from the Chapter 11 reorganization process as an Carl Icahn-owned
entity.
A group of Tropicana entities, known as the LandCo Debtors, which
own Tropicana casino property in Las Vegas, have obtained approval
of a separate Chapter 11 plan.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represented
the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as
their claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have
merged into Adamar of NJ In Liquidation, LLC. The merger and name
change is in accordance with an Amended and Restated Purchase
Agreement, which governs the sale and transfer of the operations
of the Tropicana Casino and Resort - Atlantic City, including
substantially all of the New Jersey Debtors' assets, to Tropicana
Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana
AC Sub Corp., free and clear of any and all liens, claims and
encumbrances.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the chapter 11
restructuring proceedings commenced by Tropicana Entertainment LLC
and its affiliates. (http://bankrupt.com/newsstand/or
215/945-7000).
TRUVO USA: AllianceBernstein Challenges Bankruptcy Plan
-------------------------------------------------------
AllianceBernstein LP and other Truvo USA LLC creditors objected to
the directory publisher's bankruptcy plan, saying that it is based
on a "collusive arrangement" with senior lenders, American
Bankruptcy Institute reports.
About Truvo USA
TRUVO USA: Disclosure Statement Hearing on Today
------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing on September 1 to consider approval of the
disclosure statement explaining the Chapter 11 plan for Truvo USA
LLC and its affiliates.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Chapter 11 cases for units of Belgium-based Truvo
Luxemburg Sarl may test whether a U.S. bankruptcy court can or
should eliminate debt on European companies that aren't in
bankruptcy in the U.S. or abroad.
Mr. Rochelle recounts that Truvo missed a June 1 interest payment
on two issues of second-priority notes. Some non-operating
subsidiaries sought Chapter 11 protection in July with a
reorganization plan negotiated with holders of 80% of the EUR778
million ($993 million) of first-priority senior debt and holders
of 15% of the second-priority debt.
According to Mr. Rochelle, the Chapter 11 case's outcome will turn
on whether the bankruptcy court finds that the plan properly
carries out a so-called enforcement sale under an intercreditor
agreement governed by English law. The agreement provides that if
there is a default on the first-lien debt, the senior creditors
may sell the stock of the subsidiaries for cash at a public
auction or at fair market value determined by an internationally
recognized investment bank. If the sale is properly invoked,
liens on the assets of the operating subsidiaries are canceled
along with liens on the stock of the subsidiaries.
The Official Committee of Unsecured Creditors is opposing the
Plan. According to Mr. Rochelle, the Committee contends that the
Chapter 11 case isn't properly carrying out an enforcement sale.
The Committee points out that the non-bankrupt affiliates hold all
the assets and businesses. The Companies in Chapter 11, the
committee says, have no operations, employees, trade creditors or
"hard assets." The Committee contends that the Plan violates the
intercreditor agreement in several respects. Among other things,
the Committee complains that the transaction isn't a sale for
EUR600 million cash, because the cash would be repaid by the end
of the day when the Plan is consummated.
The Committee comprises two holders of the second-lien debt and
their indenture trustee. The members are AllianceBernstein LP,
Normandy Hill Capital LP and Bank of New York Mellon-London Branch
as indenture trustee.
Under the Plan, the senior lenders under are to receive the new
equity plus EUR600 million new debt. In return for the EUR595
million on two issues of second-priority notes, the holders are to
be given EUR15 million and warrants for 14% of the stock at a
EUR150 million price. If the second lien lenders vote against the
plan, they are to receive nothing. For the EUR174 million on pay-
in- kind third-priority notes, holders will receive warrants for 1
percent of the stock. If the class votes against the plan, they
are to receive nothing. The new debt for the senior lenders is to
consist of EUR350 million in first-lien debt, EUR100 million in
second-lien debt, and EUR150 million in pay-in-kind debt.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/TruvoUSA_DS.pdf
About Truvo USA
Wilmington, Delaware-based Truvo USA LLC is a non-operating
subsidiary of Belgium-based Truvo Luxembourg S.a.r.l, which
publishes print and online directories through its operating
subsidiaries.
Truvo USA and other non-operating affiliates filed for Chapter 11
bankruptcy protection on July 1, 2010 (Bankr. S.D.N.Y. Lead Case
No. 10-13513). The Company estimated $500 million to $1 billion in
assets and more than $1 billion in debts in its Chapter 11
petition.
Sean A. O'Neal, Esq., and Thomas J. Moloney, Esq., at Cleary
Gottlieb Steen & Hamilton, LLP, and Vincent Edward Lazar, Esq., at
Jenner & Block LLP, assist the Company in its restructuring
effort. Jenner & Block LLP and Simpson Thacher & Bartlett LLP are
the Company's special counsel. Houlihan Lokey Howard & Zukin
(Europe), Limited, is the Company's restructuring and financial
advisor.
Truvo Luxembourg and its operating subsidiaries have not sought
protection under Chapter 11 protection or any other insolvency
regime.
U.S. CONCRETE: Emerges from Chapter 11 Reorganization
-----------------------------------------------------
U.S. Concrete, Inc. has met the requirements of its Plan of
Reorganization and emerged from chapter 11 proceedings just four
months after commencing the reorganization of its balance sheet.
"We are very pleased to have concluded this comprehensive
financial restructuring that significantly reduced the total debt
on our balance sheet and left the Company in very solid financial
condition," said Michael W. Harlan, President and Chief Executive
Officer of U.S. Concrete. "We look forward to putting this
process permanently behind us and renewing our focus on managing
the business and serving our customers."
Concurrent with its emergence, the Company converted approximately
$272.6 million of principal amount of 8.375% Senior Subordinated
Notes due 2014 into equity of the reorganized company. Warrants
to purchase up to 15% of equity of the reorganized company will be
issued to holders of the old common stock in the upcoming weeks.
Shares of the reorganized company will trade over the counter.
The Company also announced it entered into a $75 million revolving
secured credit facility with a group of banks led by JPMorgan
Chase and issued $55 million of 9.5% convertible secured notes due
2015.
"The new credit facility provides us with adequate liquidity to
fund our working capital needs and capital expenditure program as
we move forward," stated Mr. Harlan. "Our improved capital
structure and financial condition should provide reassurance to
our customers, suppliers and employees about the stability of the
Company and our commitment to our operating strategy."
Information about the restructuring is available at the Company's
website, www.us-concrete.com or via the Company's restructuring
line at (888) 369-8931.
About U.S. Concrete
Houston, Texas-based U.S. Concrete, Inc. -- http://www.us-
concrete.com/ -- is a major producer of ready-mixed concrete,
precast concrete products and concrete-related products in select
markets in the United States. The Company has 125 fixed and 11
portable ready-mixed concrete plants, seven precast concrete
plants and seven producing aggregates facilities.
The Company filed for Chapter 11 bankruptcy protection on
April 29, 2010 (Bankr. D. Del. Case No. 10-11407). Patrick J.
Nash Jr., Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis
LLP, assist the Company in its restructuring effort as bankruptcy
counsel. James E. O'Neill, Esq., Laura Davis Jones, Esq., and
Mark M. Billion, Esq., at Pachulski Stang Ziehl & Jones LLP, is
the Company's co-counsel. Epiq Bankruptcy Solutions is the
Company's claims agent.
The Company scheduled assets of $389,160,000 and debts of
$399,351,000 as of the Petition Date.
The Debtor's affiliates, Alberta Investments, Inc., et al., filed
separate Chapter 11 petitions on April 29, 2010.
The Company's balance sheet as of June 30, 2010, showed
$403.2 million in total assets, $451.7 million in total
liabilities, and a stockholders' deficit of $48.5 million.
As reported in the Troubled Company Reporter on August 2, 2010,
the Bankruptcy Court has confirmed the Company's Plan of
Reorganization. As previously announced, the Company's Plan
provides for the conversion of approximately $285 million of
principal amount of 8.375% Senior Subordinated Notes due 2014 into
equity of the reorganized company. Trade creditors are currently
being paid in full in the ordinary course and are unaffected by
the restructuring. The Company currently expects to emerge from
Chapter 11 by the end of August 2010.
VASSALLO INDUSTRIES: Scales Back Under New Corporation
------------------------------------------------------
Vassallo Industries President Rafael Vassallo Collazo said that
the company will scale back operations through a newly created
corporation, Vassallo International Group, under its Chapter 11
bankruptcy reorganization plan, caribbeanbusinesspr.com reports.
The report relates Mr. Collazo said that the new corporation would
utilize roughly half of the space that the company has operated in
for the past decades in the Cotto Laurel sector of Ponce.
According to the report, Mr. Collazo said that the new corporation
would continue to export plastic products and would start
operations on November 1 after securing financing from Banco
Popular and the island government's Economic Development Bank.
The report notes that the company's old administrative offices are
being remodeled and will be leased to National College &
University. The report relates Mr. Collazo said that scaling back
the footprint will result in lower costs for power, insurance and
maintenance among, other expenses.
Mr. Collazo said that the company would do everything possible to
keep its current staff of 145 at the Ponce plant, the report adds.
Headquartered in Puerto Rico, Vassallo Industries Inc. is a
private company that pioneers in the manufacture and distribution
of plastic pipe and its accessories for sanitary and electrical
applications. The company has diversified into resin furniture
and accessories for household uses, honoring the excellence that
has distinguished them since the beginning.
VISTEON CORP: Court Confirms Plan of Reorganization
---------------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court in
Wilmington, Del., entered an order confirming the joint plan of
reorganization filed Visteon Corporation and certain of its
affiliates.
Visteon's plan of reorganization was overwhelmingly supported by
all creditor and shareholder classes. The plan will become
effective and Visteon will emerge from Chapter 11 upon completion
of necessary closing conditions, which Visteon expects to occur by
Oct. 1.
"Thanks to the extraordinary efforts of our employees and the
tremendous support we received from our customers, suppliers,
secured lenders, bondholders, equity holders and many others, we
are now positioned for a successful emergence," said Donald J.
Stebbins, chairman and CEO of Visteon. "The difficult and
necessary actions undertaken during this reorganization will allow
Visteon to emerge as an extremely competitive automotive supplier.
"Upon consummation of the reorganization plan, we will have
dramatically realigned our capital structure," Stebbins added.
"Our substantially reduced debt level, in combination with the
extensive operational restructuring we executed over the last
several years, positions Visteon for long-term growth and
profitability."
Visteon and certain of its affiliates filed voluntary petitions
for reorganization under Chapter 11 of the U.S. Bankruptcy Code on
May 28, 2009. Court filings, including the plan and related
disclosure statement, are available at
http://www.kccllc.net/visteon/
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. 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
disclosed 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
effort. 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 begin_of_the_skype_highlighting
215/945-7000 end_of_the_skype_highlighting).
VISTEON CORP: Claim Transfers in July Total $1.9 Million
--------------------------------------------------------
Creditors notified U.S. Bankruptcy Judge Christopher Sontchi of
their intention to transfer claims, totaling $1,900,000, to
various parties in July 2010.
The Creditors and their corresponding claims are:
Claim
Transferor Transferee Amount
---------- ---------- ----------
Chapter Capital Management Ariba Inc. $1,406,075
Genera Corporation TRC Optimum Fund LLC 26,497
Genera Corporation TRC Optimum Fund LLC 26,366
Florida Production
Engineering Inc. USDR V, LP 350,261
Trelleborg Sealing
Solutions US inc USDR V, LP 64,181
Trelleborg Sealing
Solutions US Inc USDR V, LP 12,184
Meda Limited Argo Partners 11,880
Universal Bearings, Inc. Sierra Liquidity Fund 2,944
Metro Mechanical Services Sierra Liquidity Fund 1,615
Metro Mechanical Sierra Liquidity Fund 4,738
SMT Detergent Corp Sierra Liquidity Fund 1,540
Delta Products Corp Fair Harbor Capital, LLC -
Factoria Industrial SA CV Sierra Liquidity Fund, LLC 8,964
Factoria Industrial SA CV Sierra Liquidity Fund, LLC 10,543
M A-Com Fair Harbor Capital, LLC 6,930
Wurth Elektronik GMBH Fair Harbor Capital, LLC 5,227
Hisco Fair Harbor Capital, LLC 5,218
RF Monolithics Inc ASM Capital III, L.P. 14,154
The amount of the claims that changed hands in June 2010 aggregate
approximately $126,996.
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. 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
disclosed 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
effort. 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: Goldman Sachs Continues to Have 3.90% Equity Stake
----------------------------------------------------------------
The Goldman Sachs Group, Inc., and Goldman, Sachs & Co. filed on
August 12, 2010, Amendment No. 3 to their Schedule 13D with the
U.S. Securities and Exchange Commission.
Under their Schedule 13D Amendment No. 3, the Goldman Entities
disclosed that on August 9, 2010, Visteon Corp., certain
investors and additional purchasers entered into a third
amendment to the Equity Commitment Agreement related to Visteon's
Chapter 11 Plan.
The Goldman Sachs Entities are among the investors that entered
into the ECA.
The ECA Third Amendment modifies, among other things:
(i) Section 3.1(a) to include the agreement of certain
additional purchasers to subscribe for and purchase
144,456 shares of Visteon Common Stock;
(ii) Section 3.1(a) to commensurately reduce the Investors'
commitment to purchase shares of Visteon Common Stock
from 10,834,800 shares of the Common Stock and any shares
not purchased in connection with the rights offering to
10,690,344 shares of the Common Stock and any shares not
purchased in the rights offering;
(iii) Section 3.3 to provide the Investors with a right to
purchase some or all of the shares held by Additional
Purchasers upon a default by those Additional Purchasers;
(iv) Section 3.6 to provide the Additional Purchasers with
limited assignment rights with respect to any interest or
participation in the Common Stock they are to purchase;
(v) Section 4.3 to allow the Additional Purchasers to be
reimbursed for actual, documented out-of-pocket costs and
expenses incurred by them on or prior to the date of the
Third Amendment; provided that such reimbursement does
not exceed $4,250,000 in the aggregate for all Additional
Purchasers;
(vi) Article VI and Article VII, pursuant to which the
Additional Purchasers have made certain representations
and warranties to Visteon and have agreed to comply with
certain covenants, respectively, including Section 7.16,
whereby the Additional Purchasers have agreed to
generally support the Plan and withdraw with prejudice
their appeal of the Bankruptcy Court's June 17, 2010
order authorizing the Debtors to enter into a Plan
Support Agreement, an Equity Commitment Agreement, and a
Cash Recovery Backstop Agreement;
(vii) Section 9.1(b) to include the obligations of the
Additional Purchasers to indemnify various parties; and
(viii) Section 11.9 to allow Additional Purchasers to bring
actions for equitable relief for breaches by Visteon of
the ECA Third Amendment and to limit the remedies Visteon
may have against the Additional Purchasers.
In a Form 4 filing with the SEC on August 19, 2010, the Goldman
Sachs Entities disclosed that they beneficially own 5,079,455
shares of Visteon Corp., representing 3.90% of the Company's
shares outstanding. As of July 30, 2010, Visteon had outstanding
130,245,880 shares of common stock.
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. 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
disclosed 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
effort. 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: Kempner, et al., Have 8.87% Equity Stake
------------------------------------------------------
The Davidson Kempner Filing Persons, the Brigade Filing Persons
and the Plainfield Filing Persons filed with the U.S. Securities
and Exchange Commission on August 12, 2010, an amended Schedule
13D to reflect these changes:
Shares
Beneficially Equity
Entity Owned Stake
------ ----------- ------
Davidson Kempner Distressed Opportunities
International Ltd. 5,659,503 4.35%
DK Management Partners LP 5,659,503 4.35%
DK Stillwater GP LLC 5,659,503 4.35%
Thomas L. Kempner, Jr. 11,550,000 8.87%
Stephen M. Dowicz 11,550,000 8.87%
Scott E. Davidson 11,550,000 8.87%
Timothy I. Levart 11,550,000 8.87%
Robert J. Brivio, Jr. 11,550,000 8.87%
Eric P. Epstein 11,550,000 8.87%
Anthony A. Yoseloff 11,550,000 8.87%
Avram Z. Friedman 11,550,000 8.87%
Conor Bastable 11,550,000 8.87%
Plainfield Asset Management LLC 2,012,375 1.55%
Max Holmes 2,015,001 1.55%
The Reporting Parties comprise an ad hoc committee of Visteon
Corp.'s stockholders.
The Reporting Parties' equity stake in Visteon are based on
130,245,880 shares of the Company's common stock outstanding as
of July 30, 2010, as reported by the Company in its Quarterly
Report on Form 10-Q filed with the SEC on August 9, 2010.
The Amended Schedule 13D filing also discloses that the Ad Hoc
Equity Committee, on August 9, 2010, entered into a third
amendment to an equity commitment agreement with Visteon and
certain investors. The original ECA provided, among other
things, for the purchase by the Investors of shares of the common
stock of reorganized Visteon through a direct purchase
commitment.
Pursuant to the Amended ECA, the Ad Hoc Equity Committee has
agreed to, among other things, support and vote in favor of
Visteon's Chapter 11 plan and withdraw its legal challenge to the
Plan in exchange for the right to participate in the direct
purchase commitment for 144,456 shares of reorganized Visteon at
a per share purchase price of $27.69 and the payment by Visteon,
on the date of Visteon's exit from bankruptcy, of up to
$4.25 million of certain costs and expenses of the members of the
Ad Equity Hoc Committee and their respective advisors.
Under certain circumstances, pursuant to the Amended ECA, the
members of the Ad Hoc Equity Committee can later withdraw their
support for, and object to, the Plan, including the re-initiation
of discovery.
Upon entering into the Amended ECA, the Reporting Persons and the
Investors may be deemed to have formed a "group" pursuant to
Section 13(d)(3) of the Exchange Act. Each Reporting Person
disclaims membership in a group with any of the Investors or
other participants in the Ad Hoc Equity Committee, and disclaims
beneficial ownership of any Shares held by those other persons.
Plainfield Files Form 4
In a Form 4 filing with the SEC dated August 2, 2010, Plainfield
Asset Management LLC disclosed that:
(1) Plainfield Liquid Strategies Master Fund Limited disposed
of 45,125 shares of Visteon Corporation common stock on
July 29, 2010; and
(2) Max Holmes, a shareholder of Liquid Strategies Fund,
acquired 2,626 shares of Visteon Common Stock on July 29,
2010.
Plainfield Asset Management is deemed to have indirect beneficial
ownership of the Visteon stock disposed of and acquired.
Upon the consummation of the transactions, Plainfield Asset
Management is deemed to beneficially own 2,015,001 shares of
Visteon common stock.
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. 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
disclosed 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
effort. 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: Patrick LI Has 4.50% Equity Stake
-----------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission dated July 2, 2010, Patrick Li disclosed that he is
deemed to beneficially own 5,993,675 shares of Visteon Corp.
common stock.
The shares directly owned by Mr. Li constitute approximately 4.5%
of the outstanding Visteon shares issued to date.
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. 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
disclosed 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
effort. 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: UBS AG Still Has 0.12% Equity Stake
-------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission dated August 12, 2010, UBS AG disclosed that
it is deemed to beneficially own 156,073 shares of Visteon Corp.
common stock. The UBS shares constitute 0.12% of Visteon's
130,245,880 outstanding shares as of July 30, 2010.
The latest SEC report of UBS is Amendment No. 3 to its Schedule
13D filing.
UBS' Schedule 13D Amendment No. 3 discloses that on August 9,
2010, Visteon Corp., certain investors and additional purchasers
entered into a third amendment to an Equity Commitment Agreement
related to Visteon's Chapter 11 Plan. UBS is one of the
investors that entered into the ECA.
The Third Amendment to the Equity Commitment Agreement amends,
among other things:
(i) Section 3.1(a) to include the agreement of certain
additional purchasers to subscribe for and purchase
certain shares of new Common Stock originally intended to
be purchased by the Investors;
(ii) Section 3.3 to provide the Investors with a right to
purchase some or all of the shares held by Additional
Purchasers upon a default by such Additional Purchasers;
(iii) Section 3.6 to provide the Additional Purchasers with
limited assignment rights with respect to any interest or
participation in the Shares they are to purchase;
(iv) Section 4.3 to allow Additional Purchasers to be
reimbursed for actual, documented out-of-pocket costs and
expenses incurred by them on or prior to the date of the
Third Amendment; provided, that the reimbursement does not
exceed $4,250,000 in the aggregate for all Additional
Purchasers;
(v) Article VI and Article VII, pursuant to which the
Additional Purchasers have made certain representations
and warranties to the Issuer and have agreed to comply
with certain covenants, respectively, including Section
7.16 whereby the Additional Purchasers have agreed to
generally support the Plan and withdraw with prejudice
their appeal of the Bankruptcy Court's June 17, 2010 order
authorizing the Debtors to enter into a Plan Support
Agreement, an Equity Commitment Agreement, and a Cash
Recovery Backstop Agreement;
(vi) Section 9.1(b) to include the obligations of the
Additional Purchasers to indemnify various parties; and
(vii) Section 11.9 to allow Additional Purchasers to bring
actions for equitable relief for breaches by the Issuer of
the Third Amendment to the Equity Commitment Agreement and
to limit the remedies the Issuer may have against the
Additional Purchasers.
A full-text copy of the Third Amendment to the Equity Commitment
Agreement is available for free at:
http://ResearchArchives.com/t/s?69bd
About Visteon Corp
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for automakers. 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
disclosed 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
effort. 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).
VITRO SAB: Bond Rally Shows Creditors See Sweetened Offer
---------------------------------------------------------
Thomas Black at Bloomberg News reports that Vitro, S.A.B. de
C.V.'s defaulted bonds have climbed to a 23-month high on
speculation that the company will sweeten an offer to restructure
US$1.2 billion in debt that was rejected by creditors last month.
According to the report, Vitro SAB's 9.125% bonds maturing in 2017
have more than doubled in price to 50 cents on August 30, 2010, on
the dollar from a low of 21.25 cents on March 11, 2009. The
report relates that they reached 51 cents on Aug. 2, the highest
since Oct. 3, 2008.
As reported in the Troubled Company Reporter-Latin America on
August 25, 2010, The Financial Online said that Vitro SAB
postponed the launch of an application consent, previously
disclosed to be launched in early August, in relation to its bonds
with a rate of 8.625% interest due 2012, 11.75% in 2013 and 9.125%
in 2017. According to the report, the company postponed the
launch of the application for consent until September 2010 because
it is in discussions with relevant creditors in both ends with the
revision of the terms and conditions of the same application. The
report related Vitro SAB said that it remains committed to deliver
a package, which includes cash and new tools, representing a
significant increase in the recovery of the creditors of the level
of historical price of the bonds.
Meanwhile, the report notes, Vitro's creditors said that they
hired a Mexican law firm after saying two weeks earlier they may
"be forced to exercise remedies against Vitro."
"Pushing the company into bankruptcy is still an option that is
being considered, and that's why they went out and hired these
litigators," the report quoted Alexander Monroy, a debt analyst
with Barclays Capital Inc., as saying.
About Vitro SAB
Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global
glass producer, serving the construction and automotive glass
markets and glass containers needs of the food, beverage, wine,
liquor, cosmetics and pharmaceutical industries.
* * *
In June 2010, Fitch Ratings withdrew all ratings of Vitro, S.A.B.
de C.V., given the lack of information following the company's
default on Feb. 2, 2009, and consistent with Fitch's policies.
Fitch will no longer provide ratings or credit research on the
Company. Andres R. Martinez at Bloomberg News said in June that
Vitro was suspended from trading in Mexico City after failing to
file its fourth-quarter earnings report. The company missed the
June 2 deadline for the results, Mexico's stock exchange said in
an e-mailed statement obtained by the news agency. Vitro plans to
file the report once its debt restructuring is complete or if
ordered by a judge. Vitro said that the suspension won't affect
company operations.
On June 30, 2009, Galaz, Yamazaki, Ruiz Urquiza, S.C., member of
Deloitte Touche Tohmatsu and C.P.C. Jorge Alberto Villarreal in
Monterrey, N.L., Mexico raised substantial doubt about the
Company's ability to continue as a going concern after auditing
financial results for the period ended Dec. 31, 2007, and 2008.
The auditors pointed out to the Company's net loss and its non-
compliance with covenants related to its long-term debt
obligations.
VIVAKOR INC: Posts $663,700 Net Loss in June 30 Quarter
-------------------------------------------------------
Vivakor, Inc., filed its quarterly report on Form 10-Q, reporting
a net loss of $663,693 on $25,659 of revenue for the three months
ended June 30, 2010, compared to a net loss of $310,480 on $88,764
of revenue for the same period of 2009.
The Company's balance sheet at June 30, 2010, showed $3.0 million
in total assets, $2.7 million in total liabilities, and
stockholders' equity of $292,386.
As reported in the Troubled Company Reporter on April 9, 2010,
McGladrey & Pullen, LLP, in Cedar Rapids, Iowa, expressed
substantial doubt about the Company's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted that the Company's ability to become a profitable
operating company is dependent upon obtaining financing adequate
to fulfill its research and market introduction activities, and
achieving a level of revenues adequate to support the Company's
cost structure.
In its latest 10-Q, the Company discloses that it does not have
sufficient cash on hand to fund its administrative and other
operating expenses or its proposed research and development and
sales and marketing programs for the next twelve months.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6a62
About Vivakor Inc.
Coralville, Iowa-based Vivakor, Inc., is a transdisciplinary
research company that develops products in the fields of molecular
medicine, electro-optics, biological handling and natural and
formulary compounds.
WARREN ZIDE: Files for Chapter 7 Bankruptcy Protection
------------------------------------------------------
Eric Morath at Dow Jones' Daily Bankruptcy Review reports that
film producer Warren Zide has certified to the U.S. Bankruptcy
Court in Los Angles that he has completed credit counseling and
received notice that he needs to take a course in financial
management, court papers show.
Mr. Zide's work includes the "American Pie" and "Final
Destination" movies. Mr. Zide filed for Chapter 7 bankruptcy on
August 18.
The Detroit News reported that the Southfield, Michigan native
owes the state of California $518,630 in back taxes. Detroit News
said the Chapter 7 filing was incomplete, but he listed estimated
assets and liabilities between $1 million and $10 million.
WASHINGTON MUTUAL: Preferreds Wants Docs. From WaMu & JPMCC
-----------------------------------------------------------
A consortium of holders of trust preferred securities of
Washington Mutual, Inc., subject to treatment under Class 19 of
the Debtors' Chapter 11 Plan of Reorganization asks Judge Mary F.
Walrath of the U.S. Bankruptcy Court for the District of Delaware
to direct WaMu and JPMorgan Chase, National Association to
produce and organize all responsive documents corresponding to
the TPS Consortium's requests by September 1, 2010.
As previously reported, the TPS Consortium complained that since
the announcement of the purported Global Settlement Agreement
that forms the basis of the Debtors' Chapter 11 Plan of
Reorganization, as amended, the Debtors have chosen to "engage in
delay tactics" aimed at furthering their efforts to achieve
confirmation of the Plan so as to deliver significant benefits or
valuable releases to JPMorgan Chase insiders and other select
parties.
As a result, the TPS Consortium filed with the Court separate
requests for the Debtors and JPMorgan Chase's production of
documents for discovery.
In an affidavit filed with the Court, the TPS Consortium asked
the Debtors to comply with their obligations under the Federal
Rules of Bankruptcy Procedure. Counsel to the TPS Consortium,
Kathleen Campbell Davis, Esq., at Campbell & Levine LLC, in
Wilmington, Delaware, relates that at the hearing held on
August 10, 2010, the Court directed that, with respect to the TPS
Consortium's document requests, the Producing Parties "[s]hould
be able to organize the documents that are responsive to the
discovery requests or [they] should provide metadata for all
those documents so that the plaintiffs can do it without making
the plaintiffs pay for it."
However, Ms. Davis says, there remain significant disputes about
the Debtors' and JPMorgan Chase's failure to comply with their
discovery obligations.
"During a teleconference on August 16, Debtors stated that in
addition to providing certain metadata, they will provide some
form of guidance to search for documents. However, the form of
that guidance remains undisclosed, as is the timing for its
provision," Ms. Davis complains.
The Debtors' counsel has stated that it will be at least another
week before any progress will be made, and maybe several weeks
beyond that for a substantive response. In other words, more
delay in responding to requests that are already more than two
months old, Ms. Davis says.
JPMorgan Chase has stated that it will provide only metadata --
consisting primarily of information related to date, author,
recipient, among others -- which "is insufficient to satisfy
[JPMorgan]'s discovery obligations and will not be a useful tool
in determining what, or even whether, responsive documents have
been produced," Ms. Davis tells the Court.
Ms. Davis recalls that at an August 20 conference call, the TPS
Consortium confirmed that JPMorgan does not intend to provide any
other information. In other words, JPMorgan will continue to
hide the ball with respect to its responses, or rather, the lack
of it.
The obligation to organize documents is placed on the Producing
Party because they are familiar with the documents that exist,
with the documents that have been produced, and with the
documents that have been withheld, Ms. Davis emphasizes.
Providing a search function or metadata cannot help the recipient
determine those facts, she maintains.
Debtors React
The TPS Consortium misconstrues the Court's ruling and ignores
the Debtors' extensive efforts to provide the Consortium with the
requested discovery in a user-friendly format, Mark D. Collins,
Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware, contends on the Debtors' behalf.
The Court's August 10 ruling noted that the Debtors "can either
organize the documents produced so they correspond to the
requests or provide the metadata to the TPS Consortium in
response to their discovery requests," with which the Debtors
have more than complied, Mr. Collins says.
The Court's ruling leaves no doubt as to what the Debtors must do
to comply with their discovery obligations and the Debtors
promptly spelled out for the TPS Consortium exactly what they
would do to comply. Apparently re-thinking its own request for
access to metadata for the depository, the TPS Consortium now
suggests that this Court may be "confused" by the issues of
organization and format relating to metadata under the Federal
Rules of Civil Procedure, Mr. Collins avers.
Mr. Collins explains that the Debtors have agreed to provide
metadata for the documents in the Depository, which will give the
TPS Consortium access to a fully-searchable, litigation-style
database. Moreover, the Debtors have gone one step further and
also agreed to identify for the TPS Consortium specific
documents, categories of documents and individuals with relevant
documents, that are responsive to the Document Requests, he tells
the Court.
Mr. Collins further relates that the Debtors explained the
process required to process the image files and metadata and
specified to the TPS Consortium. The Debtors informed the
Consortium that the production "would be available by
September 1, 2010, [which] is one week less than the Debtors'
initial three-week estimate," Mr. Collins notes.
In this regard, the Debtors are complying fully with the Court's
ruling. However, rather than cooperate in the Debtors' good
faith efforts to achieve a consensual resolution of the Discovery
issues, the TPS Consortium seeks immediate relief.
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 estimated assets of
$500,000,000 to $1,000,000,000 with zero debts.
Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel
Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with
responsibility for the litigation. Brian Rosen, Esq., at Weil,
Gotshal & Manges LLP served as legal counsel to WMI with
responsibility for the Chapter 11 case.
Bankruptcy Creditors' Service Inc. publishes Washington Mutual
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Washington Mutual Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
WASHINGTON MUTUAL: Proposes Buss Class Action Settlement
--------------------------------------------------------
The Washington Mutual, Inc. Pension Plan is an employee pension
benefit plan pursuant to Section 3(2)(A of the United States
Labor Code and Section 1002(2)(A) of the Employee Retirement
Income Security Act of 1974, as amended, and a "defined benefit
plan" within the meaning of 29 Section 1002(35) of the Labor Code
and Section 3(35) of the ERISA. The WaMu Pension Plan is
intended to satisfy the tax requirements of Section 401 of the
Internal Revenue Code, and is sponsored by WaMu.
The proposed Global Settlement Agreement embodied in the Debtors'
Chapter Plan of Reorganization contemplates that as of the plan
effective date, JPMorgan Chase will assume sponsorship of the
WaMu Pension Plan.
In June 2007, certain participants in the WaMu Pension Plan
commenced litigation against the WaMu Pension Plan and the
Washington Mutual Pension Plan Administration Committee, styled
Buus, et. al. v. WaMu Pension Plan, et al., in the United States
District Court for the Western District of Washington.
The Named Plaintiffs in the Buus Action alleged that the WaMu
Pension Plan's cash balance formula for calculating pension
benefits violates ERISA, and that the WaMu Pension Plan failed to
comply with ERISA's age discrimination, notice and disclosure
provisions. The District Court certified, in July 2008, four
subclasses pursuant to Rule 23 of the Federal Rules of Civil
Procedure.
In light of the commencement of the Debtors' Chapter 11 cases,
the District Court stayed the Buus Action for 30 days.
Subsequently, the Named Plaintiffs and the Named Defendants filed
status reports informing the District Court of, among other
things, the status of the Debtors' Chapter 11 cases and the
corresponding litigation between the Debtors, JPMorgan Chase, and
the Federal Deposit Insurance Corporation relating to the
disposition of the WaMu Pension Plan and the ownership of the
Debtors' other significant assets. The Named Defendants and the
Named Plaintiffs disputed whether the Buus Action should continue
to be stayed in light of the Debtors' Chapter 11 Cases and the
litigation with JPMorgan Chase and the FDIC relating to the
Action.
The Named Plaintiffs sought to lift the automatic stay to
continue the Buus Action. In an effort to facilitate a
resolution of the Action, the Named Plaintiffs and the Debtors
agreed to adjourn the hearing to consider the Stay Relief Motion
pending the outcome of their settlement discussions.
In light of the Buus Action, the Named Plaintiffs also filed
proofs of claim against the Debtors. The Class Claims, in
undisclosed amounts, are:
Claim No. Claimant
--------- --------
1950 Thomas Schoenleber
1951 Bryan Buck
1952 Gary Buus, Sidney Flor, Kellie Plumb,
Thomas Schoenleber, and Margaret Weber
1957 Bryan Buck
1959 Margaret Weber
1972 Kellie Plumb
1973 Sidney Flor
2504 Gary Buus
2513 Audrey Schulman
In addition to the Class Claims, the Debtors are aware of Claim
No. 3239 filed by an individual, Adelle Comfort, asserting a
claim against WaMu for retirement benefits under ERISA, and
relating to the Buus Action.
Settlement Terms
Subsequently, to avoid a costly litigation, WaMu and the Named
Defendants, together with Named Plaintiffs have agreed to settle
the Buus Action. Pursuant to the Settlement, the Settling
Parties agree to these terms:
* The Settling Parties stipulate to the certification of two
additional subclasses, including all participants under the
(i) retirement plan maintained by H.F. Ahmanson & Company;
and (ii) the Great Western Retirement Plan, whose accrued
benefits or pension benefits are based in whole or in part
on the WaMu Pension Plan's cash balance formula from Jan. 1,
1998, to the present.
* Within 30 days after the Settlement Agreement becomes
effective, the sponsor of the WaMu Pension Plan and any
successor sponsor will adopt an amendment to the WaMu
Pension Plan "which will increase the liabilities of the
WaMu Pension Plan to those participants . . . who are
members of the Settlement Class . . . by the amount of
$20 million, less certain fees and expenses associated with
the implementation of the Settlement."
* Members of the Settlement Class will receive an increase in
their benefits equal to their per capita share of the
$20 million Net Settlement Amount. The increase in
liabilities of the WaMu Pension Plan will be in full and final
satisfaction of all claims asserted in the Buus Action. No
other payments or increases in liabilities will be made by
or incurred on behalf of WaMu, the Named Defendants or the
persons or entities to be released to the Settlement Class
in connection with the Settlement.
* The term "Released Claims" under the Settlement Agreement
will include any and all claims arising from or relating to
the Buus Action. The Released Claims, however, do not
include (i) unrelated claims for vested benefits, or (ii)
claims based on improper benefit calculations not related to
the Action.
* The Settling Parties agree to customary releases and
indemnification provisions.
* If the Settlement Agreement is terminated and rendered void,
(i) the Buus Action and the parties' claims and defenses
in the Chapter 11 cases will revert to their status as
of June 28, 2010, and the Class Claims will not be expunged
and; (ii) all Releases given under or pursuant to the
Settlement Agreement will be void.
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, informed Judge Mary F. Walrath that the
District Court will hold a fairness hearing on October 29, 2010,
at 9:00 a.m. Pacific Time to consider the entry of a final order:
(a) approving the Settlement Agreement and the Net Settlement
Amount;
(b) dismissing the Buus Action, with prejudice, and entering
final judgment; and
(c) permanently enjoining (i) the members of the Settlement
Class from bringing any Released Claim against any
Settling Defendant or Releasee; and (ii) any Person from
bringing any claims against the Releasees for indemnity or
contribution arising out of the Buus Action or any other
claims arising out of or related to the Released Claims.
Accordingly, the Debtors ask Judge Walrath to approve the Buus
Class Action Settlement Agreement and disallow the Class Claims
relating to the Buus Action.
In the event the Global Settlement Agreement is approved by the
Bankruptcy Court prior to the effective date of the Settlement
Agreement relating to the Buus Action, sponsorship of the WaMu
Pension Plan will be transferred from WaMu to JPMorgan Chase in
accordance with the Global Settlement Agreement.
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 estimated assets of
$500,000,000 to $1,000,000,000 with zero debts.
Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel
Urquhart Oliver & Hedges, LLP, served as legal counsel to WMI with
responsibility for the litigation. Brian Rosen, Esq., at Weil,
Gotshal & Manges LLP served as legal counsel to WMI with
responsibility for the Chapter 11 case.
Bankruptcy Creditors' Service Inc. publishes Washington Mutual
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Washington Mutual Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
WASHINGTON MUTUAL: Settles Wilmington Trust's $43MM Claims
----------------------------------------------------------
Wilmington Trust Company is the successor Indenture Trustee for
five of the seven series of junior subordinated debt securities,
in the aggregate original principal amount of $68,580,000,
assumed by Washington Mutual Bank in connection with its
acquisition of Commerce Capital Bancorp in 2006 and Hawthorne
Financial Corporation. The indentures relate to HFC Capital
Trust I, CCB Capital Trust IV, CCB Capital Trust V, CCB Capital
Trust VII, and CCB Capital Trust VIII.
Each series of the WMB/CCB Subordinated Notes was sold to a
separate special purpose Delaware statutory trust. Wilmington
Trust also serves as successor Guarantee Trustee for certain of
the WMB/CCB Subordinated Notes.
Wilmington Trust has been appointed by the U.S. Trustee to serve
as a member of the official unsecured creditors' committee for
holders of approximately $43 million of debt guaranteed by
Washington Mutual, Inc.
Representing the Debtors, Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A., in Wilmington, Delaware, relates that
Wilmington Trust, as Indenture Trustee, on behalf of itself and
other holders of debt issued pursuant to the Indentures, asserted
claims for unliquidated guarantee claims as of the Petition Date.
The Claims are:
Claim Indenture Interest Maturity Claimed Claimed
No. Date Rate Date Principal Interest
----- --------- -------- -------- ----------- ---------
2113 03/28/01 10.18% 2031 $9,300,000 $286,651
2116 09/25/10 Floating Rate 2033 $7,732,000 $98,999
2118 12/19/03 Floating Rate 2034 $10,310,000 $104,833
2120 05/27/04 Floating Rate 2034 $7,732,000 $75,120
2122 06/22/04 Floating Rate 2034 $7,732,000 $80,064
In addition to the Guarantee Claims, the Indenture Trustee Proofs
of Claims asserted claims for the continuing accrual of interest
and various other unliquidated amounts allegedly due and owing
under the Indentures for both prepetition and postpetition
periods, according to Mr. Collins.
Certain of the debt issued pursuant to the indentures relating to
HFC Capital Trust I, CCB Capital Trust IV, CCB Capital Trust V,
CCB Capital Trust VII, and CCB Capital Trust VIII was issued at a
discount to its face value, or with "original issue discount."
Unamortized original issue discount is treated as unmatured
interest pursuant to Section 502(b)(2) of the Bankruptcy Code
and, therefore, disallowed as a claim against a Chapter 11
debtor, Mr. Collins says, citing In re Chateaugay Corp., 961 F.2d
378, 380 (2nd Cir. 1992).
As part of the Debtors' ongoing claims reconciliation process,
the Debtors reviewed and analyzed the Indenture Trustee Claims
and determined that the Guarantee Claims should be allowed in
amounts that are different from the amounts that were asserted in
the Indenture Trustee Claims.
As a result of discussions, the Debtors and the Indenture Trustee
have agreed that the Guarantee Claims will be reduced and allowed
in these amounts, totaling $43,443,878:
Claim Indenture Interest Maturity Allowed
No. Date Rate Date Amount
----- --------- -------- -------- -------------
2113 March 28, 2011 10.18% 2031 $9,854,022
2116 Sept. 25, 2003 Floating Rate 2033 $7,829,778
2118 Dec. 19, 2003 Floating Rate 2034 $10,413,245
2120 May 27, 2004 Floating Rate 2034 $7,805,982
2122 June 22, 2004 Floating Rate 2034 $7,810,851
The Allowed Guarantee Claim Amounts, however, will be further
reduced, on a dollar-for-dollar basis by the amount, if any, of
distributions received by the Indenture Trustee from or on
account of the Receivership of WMB under the Federal Deposit
Insurance Corporation, according to Mr. Collins.
The Debtors and Wilmington Trust reserve their rights with
respect to the Additional Unliquidated Claims in the Indenture
Trustee Claims.
The Debtors ask the Court to approve the Wilmington Guarantee
Claims Settlement.
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 estimated 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).
WILLEMSEN DAIRY: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Willemsen Dairy LLC
6615 W 500 N.
Frankton, IN 46044-9619
Bankruptcy Case No.: 10-13036
Chapter 11 Petition Date: August 27, 2010
Court: United States Bankruptcy Court
Southern District of Indiana (Indianapolis)
Judge: James K. Coachys
Debtor's Counsel: Terry E. Hall, Esq.
BAKER & DANIELS
300 N Meridian St., Suite 2700
Indianapolis, IN 46204
Tel: (317) 237-0300
E-mail: terry.hall@bakerd.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/insb10-13036.pdf
The petition was signed by Teunis Jan Willemsen, member.
YELLOWSTONE CLUB: Ch. 11 Trustee Wants Founder to Pay $286MM
------------------------------------------------------------
Dow Jones' DBR Small Cap reports that the trustee of Yellowstone
Mountain Club LLC's bankruptcy estate says a court ruling pinning
the exclusive ski-and-golf community's plunge into financial ruin
on founder Timothy Blixseth should hold Mr. Blixseth liable for
$286.4 million in damages. According to DBR, Marc S. Kirschner,
trustee of the Yellowstone Club Liquidating Trust, is urging a
bankruptcy judge to tweak an Aug. 16 ruling to specify the amount
of damages Mr. Blixseth owes the club's creditors.
DBR notes the judge had ordered Mr. Blixseth to pay the trust
sufficient funds to cover the claims of the club's creditors but
didn't set a specific dollar amount. Mr. Kirschner, who as
trustee has been tasked for the past year with carrying out the
creditor payments set out under Yellowstone Club's reorganization
plan, says Mr. Blixseth should be held liable for the full amount
of the $286.4 million in loan proceeds he was found to have
improperly funneled away from the club, leading to its collapse
into bankruptcy in late 2008.
About Yellowstone Club
Located near Big Sky, Montana, Yellowstone Club --
http://www.theyellowstoneclub.com/-- is a private golf and ski
community with more than 350 members, including Bill Gates and Dan
Quayle. The Company was founded in 1999.
Yellowstone Mountain Club LLC and its affiliates filed for Chapter
11 on Nov. 10, 2008 (Bankr. D. Mont. Case No. 08-61570). The
Company's owner affiliate Edra D. Blixseth, filed for Chapter 11
on March 27, 2009 (Bankr. D. Mont. Case No. 09-60452).
In June 2009, the Bankruptcy Court entered an order confirming
Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor
Capital Partners, LLC, acquired equity ownership in the
reorganized club for $115 million.
Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green
PLLC, represented the Debtors. The Debtors hired FTI Consulting
Inc. and Ronald Greenspan as CRO. The official committee of
unsecured creditors were represented by Parsons, Behle and
Latimer, as counsel, and James H. Cossitt, Esq., at local counsel.
Credit Suisse, the prepetition first lien lender, was represented
by Skadden, Arps, Slate, Meagher & Flom.
* Benjamin Schrag Joins Kurtzman Carson Consultants
---------------------------------------------------
Kurtzman Carson Consultants (KCC), a Computershare company and a
leading claims and noticing agent, disclosed that Benjamin Schrag
joined the company as a director of corporate restructuring
services in its New York office. With a background in corporate
restructuring law, Schrag will actively support the company's
growth initiatives and will contribute to the administration of
key client engagements.
"We are pleased to have Ben join KCC, as we greatly value the
legal experience and in-depth knowledge of corporate restructuring
that he brings to our team," said Michael Frishberg, KCC vice
president, business development. "This addition exemplifies our
long-standing commitment to offer clients corporate restructuring
administration services with professional-level expertise."
Prior to joining KCC, Schrag was an associate in the Restructuring
Group at Kirkland & Ellis LLP in the firm's New York office. His
experience includes the representation of debtors involved in
complex Chapter 11 restructurings such as Stallion Oilfield
Services, Majestic Star Casinos, Masonite Corporation, Wellman,
Inc. and Solutia Inc. Admitted to practice law in New York, Schrag
earned his Juris Doctor from Fordham Law School. He graduated
magna cum laude with honors from Colgate University with a
Bachelor of Arts in History. S chrag is a current member of the
American Bankruptcy Institute and the Turnaround Management
Association.
About KCC
Kurtzman Carson Consultants LLC (KCC) http://www.kccllc.com/a
Computershare company, provides administrative-support services
that help legal professionals realize time and cost efficiencies.
With an integrated suite of corporate restructuring, class action
and legal document management solutions, KCC alleviates the
administrative challenges of today's legal processes and
procedures.
About Computershare Limited
Computershare is a global market leader in transfer agency and
share registration, employee equity plans, proxy solicitation and
stakeholder communications. It also specialize in corporate trust
services, tax voucher solutions, bankruptcy administration and a
range of other diversified financial and governance services.
Founded in 1978, Computershare is renowned for its expertise in
data management, high volume transaction processing, payments and
stakeholder engagement. Many of the world's leading organizations
use these core competencies to help maximize the value of
relationships with their investors, employees, creditors, members
and customers. Computershare is represented in all major
financial markets and has over 10,000 employees worldwide.
* Hughes Watters to Get Lender Processing Services Summit Award
---------------------------------------------------------------
For an unprecedented fourth consecutive year, Houston law firm
Hughes Watters Askanase L.L.P. (http://www.hwa.com/)received the
Lender Processing Services (LPS) Summit Award for attaining the
highest ratings in both bankruptcy and foreclosure among firms in
the LPS attorney network.
The LPS Summit Award recognizes law firms that achieve
consistently superior performance in bankruptcy and foreclosure
practice. This year, HWA is one of only two firms in the national
LPS attorney network to achieve this exceptional new distinction.
"The Summit Award is the direct result of the hard work,
cooperative spirit and commitment to excellence of each member of
our default servicing team," noted Carolyn Taylor, a partner with
HWA and leader of the firm's default services practice area.
"We have a wealth of resources that allow our attorneys to
leverage their experience with other practice groups in the firm,"
said Taylor. "As a result, we provide our clients with a well-
rounded, unique perspective on the myriad of complex issues and
challenges currently plaguing the residential and commercial
housing and mortgage industries."
HWA offers wide-ranging expertise and experience in 10
interrelated practice areas, including: banking representation;
business planning and strategy; business bankruptcy; commercial
finance; commercial litigation; consumer financial services;
credit union representation; default servicing; real estate and
finance; and wills and probate.
HWA participates in the Freddie Mac Designated Counsel Program for
Texas and the Fannie Mae Retained Attorney Network for Texas. The
firm also holds the "Angel" Designation in the Wingspan Preferred
Attorney Network.
About Carolyn Taylor
Taylor joined HWA as a partner in 1994, and she leads the firm's
award-winning default services practice area. She specializes in
legal issues surrounding mortgage banking, default servicing,
regulatory compliance, credit union law and creditors' rights.
Taylor routinely speaks and publishes on legal issues in mortgage
servicing and consumer finance at the local, regional and national
level.
About Hughes Watters Askanase
For more than 32 years, Hughes Watters Askanase, L.L.P. --
http://www.hwa.com/-- has helped business organizations,
financial institutions and individuals succeed with their business
endeavors. The firm's attorneys play a strategic role and support
clients through every stage of existence and operation, from
formation to liquidation. The firm's practice focuses on the
various interrelated areas that provide the greatest opportunities
and most challenging obstacles: Representation of commercial and
consumer lenders of all varieties, including banks and credit
unions; business bankruptcy; business planning and strategy;
default servicing; real estate and finance; commercial and
consumer financial services litigation; and wills and probate.
* Latham's Baker Among Law360's Most Admired Bankruptcy Attorneys
-----------------------------------------------------------------
Bankruptcy Law360 reports that Latham & Watkins LLP's Jan Baker is
adept at forging consensus in contentious restructurings, and his
ability to balance zealous advocacy with professionalism has
earned the respect of his peers. The pragmatic style that helps
him get results for clients also lands him on Law360's list of the
10 Most Admired Bankruptcy Attorneys.
New York-based D.J. "Jan" Baker, global co-chair of Latham &
Watkins' insolvency practice, has been a bankruptcy attorney for
more than three decades, according to Law360.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Sept. 14, 2010
AMERICAN BANKRUPTCY INSTITUTE
ABI/NYIC Golf and Tennis Fundraiser
Maplewood Golf Club, Maplewood, N.J.
Contact: 1-703-739-0800; http://www.abiworld.org/
Sept. 20, 2010 (tentative)
AMERICAN BANKRUPTCY INSTITUTE
Complex Financial Restructuring Program
Fordham Law School, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
Sept. 22-23, 2010 (tentative)
AMERICAN BANKRUPTCY INSTITUTE
ABI/NYU Bankruptcy and Business Reorganization Workshop
New York University School of Law, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
Sept. 23-25, 2010
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Four Seasons Las Vegas, Las Vegas, Nev.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 1, 2010
AMERICAN BANKRUPTCY INSTITUTE
ABI/UMKC Midwestern Bankruptcy Institute
Kansas City Marriott Downtown, Kansas City, Kan.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 1, 2010
AMERICAN BANKRUPTCY INSTITUTE
ABI/GULC "Views from the Bench"
Georgetown University Law Center, Washington, D.C.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 6-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Oct. 11, 2010
AMERICAN BANKRUPTCY INSTITUTE
Chicago Consumer Bankruptcy Conference
Standard Club, Chicago, Ill.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 15, 2010
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Hilton New Orleans Riverside, New Orleans, La.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 28, 2010
AMERICAN BANKRUPTCY INSTITUTE
Mid-Level Professional Development Program
Weil, Gotshal & Manges LLP, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 29, 2010 (tentative)
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
The Savoy, London, England
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. __, 2010
AMERICAN BANKRUPTCY INSTITUTE
Delaware Views from the Bench and Bankruptcy Bar
Hotel du Pont, Wilmington, Del.
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. 11, 2010
AMERICAN BANKRUPTCY INSTITUTE
Detroit Consumer Bankruptcy Conference
Hyatt Regency Dearborn, Dearborn, Mich.
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. 29, 2010
RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP, INC.
17th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York City
Contact: 1-903-595-3800;
http://www.renaissanceamerican.com/
Dec. 9-11, 2010
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Camelback Inn, a JW Marriott Resort & Spa,
Scottsdale, Ariz.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
22nd Annual Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
January 26-28, 2011
TURNAROUND MANAGEMENT ASSOCIATION
TMA Distressed Investing Conference
Aria Las Vegas
Contact: http://www.turnaround.org/
Jan. 27-28, 2011
AMERICAN BANKRUPTCY INSTITUTE
Rocky Mountain Bankruptcy Conference
Westin Tabor Center, Denver, Colo.
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 3-5, 2011
AMERICAN BANKRUPTCY INSTITUTE
Caribbean Insolvency Symposium
Westin Casuarina Resort & Spa, Grand Cayman Island
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 24-25, 2011
AMERICAN BANKRUPTCY INSTITUTE
Valcon
Four Seasons Las Vegas, Las Vegas, Nev.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 4, 2011
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Battleground West
Hyatt Regency Century Plaza, Los Angeles, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 7-9, 2011
AMERICAN BANKRUPTCY INSTITUTE
Conrad Duberstein Moot Court Competition
Duberstein U.S. Courthouse, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 10, 2011
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts - Florida
Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 10-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
SUCL/ Alexander L. Paskay Seminar on
Bankruptcy Law and Practice
Marriott Tampa Waterside, Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 17-19, 2011
AMERICAN BANKRUPTCY INSTITUTE
Byrne Judicial Clerkship Institute
Pepperdine University School of Law, Malibu, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 27-29, 2011
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott, Chicago, IL
Contact: http://www.turnaround.org/
May 5, 2011
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts - New York City
Association of the Bar of the City of New York,
New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
May 6, 2011
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Hilton New York, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 6, 2011
AMERICAN BANKRUPTCY INSTITUTE
Canadian-American Cross-Border Insolvency Symposium
Fairmont Royal York, Toronto, Ont.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Mich.
Contact: http://www.abiworld.org/
July 21-24, 2011
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 27-30, 2011
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Sanctuary at Kiawah Island, Kiawah Island, S.C.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 4-6, 2011
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 14, 2011
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Tampa Convention Center, Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. __, 2011
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
Dublin, Ireland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
Apr. 19-22, 2012
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2012
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 2-4, 2012
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. 29 - Dec. 2, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800; http://www.abiworld.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: August 16, 2010
*********
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.
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