/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/101025.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, October 25, 2010, Vol. 14, No. 296 Headlines 6611 SOUTHPOINT: Files for Chapter 11 in Jacksonville AGL LIFE: S&P Raises Rating to 'BB', Gives Stable Outlook ASIA SUPERMARKET: Voluntary Chapter 11 Case Summary AXIS BANK: Moody's Assigns Ratings to Senior Unsecured Bonds BANCA MONTE: Moody's Downgrades Preferred Stock Rating to Ba3 BERLIN & DENMAR: Embezzlement, Defection Cause Ch. 11 Collapse BERNARD MADOFF: Judge Defers Ruling on Feeder Clients' Claims BLOCKBUSTER INC: CEO, Icahn Manipulated Ch. 11 Filing, Says Sandhu BLOCKBUSTER INC: Lyme Regis Wants Cooley Banned as Panel's Counsel BLOCKBUSTER INC: Proposes to Hire Korn/Ferry for CEO Search BLUE GEM: Posts $311,600 Net Loss in August 31 Quarter CAREFREE WILLOWS: Case Summary & 20 Largest Unsecured Creditors CCGI HOLDING: Moody's Upgrades Ratings on Senior Loan to 'B2' CEK HOLDINGS: Voluntary Chapter 11 Case Summary CHAMPIONS BIOTECHNOLOGY: Posts $591,000 Net Loss in July 31 Qtr. CHRYSLER FINANCIAL: Moody's Upgrades Corp. Family Rating to 'Caa1' CLEVIUS CURRY: Case Summary & 7 Largest Unsecured Creditors CODESSA TERRELL: Case Summary & 7 Largest Unsecured Creditors COLUMBIAN CHEMICALS: S&P Assigns 'BB-' Corporate Credit Rating CONQUEST PETROLEUM: Posts $8.1 Million Net Loss in June 30 Quarter CORNER HOME CARE: Drug Supplier Not a "Critical Vendor" DANIEL M BADE: Case Summary & 10 Largest Unsecured Creditors DELTA AIR: Fitch Gives Positive Outlook DENMAN TIRE: PBGC Assumes Underfunded Pension Plan DEVON ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors DIGITAL BRIDGE: Involuntary Chapter 11 Case Summary DONALD HAMILTON: Case Summary & 20 Largest Unsecured Creditors DOUGLAS HOLDING: Case Summary & 11 Largest Unsecured Creditors EMIVEST AEROSPACE: Files for Ch. 11, Has $4MM of Financing ENCORIUM GROUP: Delisted by NASDAQ as Equity Under $2.5MM EVRAZ INC: S&P Affirms & Withdraws B Long-Term Corp. Credit Rating FEY 240: Hearing on Plan Outline Continued Until October 27 FLORAMO PARTNERS: Case Summary & 19 Largest Unsecured Creditors FORD MOTOR: Moody's Reviews Ratings on Various Tranches GENERAL MOTORS: Asbestos Panel Proposes EPIQ as Claims Agent GENERAL MOTORS: New GM Amends Prospectus on IPO GENERAL MOTORS: Old GM Wins Conditional Nod of Plan Outline GENERAL MOTORS: Old GM Settles Environmental Claims for $773MM GENERAL MOTORS: Committee Plea on Term Loan Litigation Denied GENOA HEALTHCARE: Moody's Gives Stable Outlook, Puts 'Ba3' Rating GEORGIA-PACIFIC LLC: S&P Raises Corporate Credit Rating From 'BB+' GERMANTOWN SETTLEMENT: Withdraws Plan Amid Objections GINA TCHIKOVANI: Voluntary Chapter 11 Case Summary GLICK REALTY: Voluntary Chapter 11 Case Summary GRACEWAY PHARMACEUTICALS: S&P Keeps Developing Watch on CC Rating GREEN MOUNTAIN: Moody's Assigns 'Ba3' Corporate Family Rating GREENFIELD SOUTH: S&P Withdraws 'BB-' Rating on Senior Loan HARLEQUIN ENTERTAINMENT: Voluntary Chapter 11 Case Summary HOST HOTELS: Fitch Assigns 'BB-' Rating to $500 Mil. Notes IMAGE ENTERTAINMENT: June 30 Balance Sheet Upside-Down by $826,000 J RAY MCDERMOTT: S&P Withdraws 'BB' Corporate Credit Rating JERRY COIL: Case Summary & 6 Largest Unsecured Creditors JERRY TOPOLOS: Case Summary & 20 Largest Unsecured Creditors JETBLUE AIRWAYS: Fitch Gives Positive Outlook KAR AUCTION: Moody's Gives Positive Outlook, Affirms 'B2' Rating KINETIC CONCEPTS: Patent Ruling Won't Affect Moody's 'Ba2' Rating LERMA PATTUGALAN: Voluntary Chapter 11 Case Summary LINCOLN HOLDINGS: S&P Puts 'B' Rating on CreditWatch Positive LOGAN CIRCLE: Files for Chapter 11 Bankruptcy Protection MARHABA PARTNERS: Plan Confirmation Hearing Resumes October 26 MARK IV: Cleanup Obligations Not Discharged Under Plan MDC PARTNERS: S&P Raises Issue-Level Rating on Debt to 'BB-' MEADOWCRAFT INC: Lenders Sue Samuel Blount et al. for Fraud MICHAEL MENA: Voluntary Chapter 11 Case Summary MILLENNIUM DEVELOPMENT: Owes $600,000 to Genesis Financial MIN KANG: Case Summary & 15 Largest Unsecured Creditors MOLECULAR INSIGHT: Gets Nov. 3 Waiver Extension from Bondholders MORGAN-WIGHTMAN SUPPLY: Case Summary & Creditors List MT3 PARTNERS: Case Summary & 20 Largest Unsecured Creditors NATIONAL CONSOLIDATED: Case Summary & Largest Unsecured Creditor NORTEL NETWORKS: Proposes L. Phillips as Mediator NORTEL NETWORKS: Withdraws Plan to Probe Verizon NORTEL NETWORKS: Proposes Demel Settlement Agreement NORTEL NETWORKS: Wins Nod of Claims Settlement Protocol PETRA FUND: Updated Case Summary & Creditors' Lists PETROLEUM & FRANCHISE: Plans to Pay Creditors in Installments POINT BLANK: Rosenbloom to Be Creditors' Board Observer POINT PLEASANT: Voluntary Chapter 11 Case Summary POWER EFFICIENCY: Board Names Raphael Diamond as Director PREMIUM DEVELOPMENTS: IRS Wants Case Converted to Chapter 7 PREMIUM WELL: Voluntary Chapter 11 Case Summary QUEENS PLAZA: Proofs of Claims Due Tomorrow QWEST COMMS: To Redeem All 3.5% Conv. Senior Notes on November 18 RANDALL DARDENELLE: Case Summary & 6 Largest Unsecured Creditors REDHAWK LANDING: Case Summary & Largest Unsecured Creditor RICHARD PEACOCK: Case Summary & 15 Largest Unsecured Creditors RURAL/METRO CORPORATION: Moody's Raises Corp. Family Rating to B1 SEDA FRANCE: Voluntary Chapter 11 Case Summary SINCLAIR TELEVISION: Holders of 78% of Notes Agree to Buyback SOUTH BAY: Sues San Diego County in Tax Dispute SOUTHPLACE LLP: Voluntary Chapter 11 Case Summary SPHERIS INC: Plan Paying 23% of Unsecured Creditors' Claims STEPHANIE REAM: Case Summary & 3 Largest Unsecured Creditors STONERIDGE INC: S&P Assigns 'B+' Rating to $175 Mil. Notes SUNBELT CRANES: Case Summary & 20 Largest Unsecured Creditors SUNCAL COMPANIES: Lehman Says Stay Won't Make Plan Confirmable SUNSET VILLAGE: Meeting of Creditors Scheduled for Nov. 15 TACO DEL MAR: Franchise Brands to Pay $3.25MM for Business TAMARACK RESORTS: Federal Judge Denies $2 Million Loan TAYLOR BEAN: Wants to Sell Jumbolair Mortgage Note for $2 Million TELECONNECT INC: Completes Acquisition of Hollandsche Exploitatie TERREL REID: Plan Confirmation Hearing Set for November 3 TERREL REID: Says Case Dismissal Means More Funds for Unsecureds TERRESTAR NETWORKS: Proposes to Assume Restructuring Support Deal TERRESTAR NETWORKS: Wins Interim Nod of $75MM DIP Financing TERRESTAR NETWORKS: Access to Cash Collateral Approved on Interim TERRESTAR NETWORKS: Judge OKs TSN as Foreign Representative TOMKINS FINANCE: S&P Downgrades Rating on Senior Debt to 'B' TOWNE INC: Bankruptcy Court Won't Hear Owners' Spat With BMW FS TRIBUNE COMPANY: CEO Michaels Steps Down; Executive Council Formed TRIBUNE COMPANY: Files Plan of Reorganization UNIVISION COMMUNICATIONS: Moody's Puts B2 Rating on $750MM Notes US AIRWAYS: Fitch Gives Positive Outlook US FIDELIS: Missouri Attorney General Protests Settlement UNITED CONTINENTAL: Fitch Gives Positive Outlook UNITED RENTALS: Moody's Upgrades Corporate Family Rating to 'B2' UNITED RENTALS: S&P Assigns 'CCC+' Rating to $500 Mil. Notes UNIVISION COMMUNICATIONS: S&P Keeps 'B-' on CreditWatch Positive UPPER MARKET: Files for Chapter 11 to Stop Foreclosure WINALTA INC: Emerges From CCAA Protection as Oilfield Service Firm WORKFLOW MANAGEMENT: Opens Production Facility in New Jersey * Alger & Associates to Join Grant Thornton LLP * McKool Smith's Sam Baxter Honored as Best Lawyers 2011 * BOND PRICING -- For Week From October 18 to 22, 2010 ********* 6611 SOUTHPOINT: Files for Chapter 11 in Jacksonville ----------------------------------------------------- Jacksonville, Florida-based 6611 Southpoint Parkway, LLC, doing business as Jacksonville Self Storage, filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 10-09093) on October 19, 2010, in its hometown. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million in its Chapter 11 petition. Bradley R. Markey, Esq., at Stutsman, Thames & Markey P.A., serves as counsel to the Debtor. AGL LIFE: S&P Raises Rating to 'BB', Gives Stable Outlook --------------------------------------------------------- Standard & Poor's Ratings Services said it raised its ratings on AGL Life Assurance Co. to 'BB' from 'BB-', revised its outlook on the ratings to stable from CreditWatch Developing, and subsequently withdrew the ratings. During second quarter of 2010, The Phoenix Companies executed the sales agreement to transfer ownership of PFG Holdings Inc., including its subsidiaries, Philadelphia Financial Group Inc. and AGL Life Assurance Co., to Tiptree Financial Partners LP, and the transaction closed in June 2010. "Based on S&P's opinion that AGL was a core entity to PNX, AGL's ratings and outlook were fully aligned with that of PNX's core insurance operating companies," said Standard & Poor's credit analyst Ferris Joanis. "AGL's revised ratings and outlook reflect S&P's opinion regarding its stand-alone financial strength and do not reflect any support from its new parent holding company." ASIA SUPERMARKET: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Asia Supermarket, Inc. 6763 Wilson Boulevard Falls Church, VA 22044 Bankruptcy Case No.: 10-18859 Chapter 11 Petition Date: October 19, 2010 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: Michael Lawrence Eisner, Esq. NORTHERN VIRGINIA LAW GROUP, PLLC P.O. Box 199 McLean, VA 22101 Tel: (703) 903-6989 E-mail: Michael.Eisner1@gmail.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Duyen T. Truong, president. AXIS BANK: Moody's Assigns Ratings to Senior Unsecured Bonds ------------------------------------------------------------ Moody's Investors Service has assigned provisional Baa2 rating to the US$ senior unsecured bonds shortly to be issued by Axis Bank Ltd under its recently updated EUR2 billion Medium-Term Note program. The bonds will be issued through the bank's Dubai International Financial Centre branch; the exact amount and maturity of the issuance have yet to be decided. The bonds will be governed by English law and are expected to be listed on the Singapore stock exchange. Its proceeds will be used for Axis Bank's overseas operations and for general corporate purposes. This debt issuance is rated at the same level as India's foreign currency debt ceiling of Baa2 with a stable outlook. "The rating is derived from Axis Bank's C- bank financial strength rating, which incorporates the bank's stand-alone financial strength, and is mainly based on its strong financial fundamentals as well as its good and rapidly growing domestic franchise as the third largest private-sector bank in India," says Nondas Nicolaides, a Moody's Vice President -- Senior Analyst. "The rating also reflects the bank's comfortable liquidity position, strong capitalisation levels and its satisfactory recurring profitability," adds Nicolaides, also Moody's Lead Analyst for the bank. In addition, the rating takes into consideration the challenges Axis Bank faces in maintaining its strong capital levels while growing its loan book quite rapidly, and further reducing the volume of its restructured loans. The last rating action on Axis Bank was taken on January 27, 2010, when the bank's junior subordinated (Upper Tier 2) rating of Baa3 under its MTN program was downgraded to Ba1, while its perpetual hybrid Tier 1 rating of Ba1, also under its MTN program, was downgraded to Ba2. These rating actions were triggered by Moody's reassessment of systemic support assumptions on hybrid securities affecting all rated Indian banks. Headquartered in Mumbai, Axis Bank Ltd reported total unconsolidated assets of INR1,998 billion (US$45.1 billion) at the end of September 2010. BANCA MONTE: Moody's Downgrades Preferred Stock Rating to Ba3 ------------------------------------------------------------- Moody's Investors Services has downgraded the long-term deposit rating of Banca Monte dei Paschi di Siena to A2 from A1 and its bank financial strength rating to D+ from C- (equivalent to a Baa3 on the long-term rating scale, down from Baa2). The Prime-1 short-term deposit rating has been affirmed. All ratings now carry a stable outlook. These ratings were downgraded: Banca Monte Dei Paschi Di Siena -- Long-term debt and deposit ratings to A2 from A1 -- Bank financial strength rating to D+ from C- -- Subordinated debt to A3 from A2 -- Tier III medium-term notes to P(Baa1) from P(A3) -- Junior subordinated debt to Ba1 from Baa3 -- Preferred stock to Ba3 from Ba2 MPS Capital Services had these changes: -- Long-term deposit ratings downgraded to A3 from A2 -- Short-term deposit rating downgraded to Prime-2 from Prime-1 -- Bank financial strength rating lowered within the D+ category, now translating to a Ba1 from previously Baa3 on the long-term rating scale Ratings Rationale Moody's said that the downgrade of MPS's ratings reflects the sizeable challenges for the bank stemming in particular from (i) its deteriorating asset quality; combined with (ii) its relatively modest capitalisation which is affected by (iii) very low internal capital generation and (iv) Moody's opinion of challenges in raising capital externally. The rating agency recognises the progress made in integrating Antonveneta since its acquisition in 2008, but actual results -- both in terms of asset quality and profitability - remain modest and below those of its C- rated peers. Problem loans, as adjusted by Moody's, increased to 9.4% in June 2010, well above the Italian peer average, and are likely to further increase in coming quarters. Moreover, underlying profitability, excluding non- operating items, has been poor over the last two years (net income was just 0.1% of risk-weighted assets in 2009) and, despite some evidence of improvement so far in 2010, is unlikely in Moody's opinion to reach acceptable levels before 2012 given the fragile economic recovery that Moody's expect in Italy. The bank's efficiency also compares unfavourably to most peers, with a cost to income ratio of 73% in 2009 (68% in June 2010), although the now well advanced integration of Antonveneta should provide scope for further increased cost-efficiency. The bank's Tier 1 ratio of 7.8% (expected 8.2% in September 2010) and its Core Tier 1 ratio of 7.3% in June 2010 were modest in light of the amount of problem loans. The bank is taking measures to strengthen its capital adequacy through asset disposals, and these measures could result in a Tier 1 ratio during 2011 significantly above current levels. However there is also the possibility that next year the bank may wish to repay the costly government hybrid -- Tremonti Bonds -- which were taken out in 2009, a move which would reduce the Tier 1 ratio by about 160 bp. Moody's said that the evolution of capital adequacy is a key driver for MPS's rating, even more so given the constraints on internal and external capital generation. The downgrade of MPS's deposit ratings by one notch incorporates the continuing significant uplift due to systemic support that is incorporated in the bank's ratings: four notches from the Baa3 standalone rating, the highest in Italy with Banco Popolare. The key factors supporting the current ratings and its stable outlook remain (i) the bank's sound franchise as the third largest Italian bank, with a market share in deposits and loans of about 8%; (ii) a sound liquidity and retail banking profile, in line with the Italian banking system and (iii) Moody's expectations of improvement in the bank's financial profile over a medium-term time horizon. MPS's BFSR could be upgraded if the bank demonstrates that it can achieve a further significant strengthening in its financial profile, including (i) a Core Tier 1 ratio notably and sustainably above 7.5%, excluding the government hybrid; (ii) a cost-to-income ratio below 65%; (iii) net income above 1% of risk-weighted assets and (iv) problem loans below 6.5% of loans. The BFSR is however unlikely to improve to such an extent to cause a corresponding upgrade of the long-term debt and deposit ratings, but would rather need to strengthen by more than one notch to have some impact on the debt/deposit ratings. MPS's BFSR could become more weakly positioned in the D+ category if improvements are lower than anticipated by Moody's, with in particular a Core Tier 1, excluding the government hybrid, below 7%. Should the earnings continue to trend downwards throughout 2011 this would also add some concern. This, or a lower expectation of systemic support, could result in a downgrade of the deposit ratings. The key factual elements underpinning the rating action are the bank's Tier 1, problem loans and net income as stated in its audited financial statements as at December 2009 and June 2010. MPS Capital Services Moody's has also downgraded the long-term deposit rating of MPS Capital Services to A3 from A2 and its short-term deposit rating to Prime-2 from Prime-1. The BFSR has been affirmed at D+ but lowered within the D+ category to Ba1 from Baa3. MPS Capital Services is the group's capital markets and corporate banking arm. The rating action primarily reflects the bank's deteriorating asset quality, with adjusted problem loans of 15% of loans in 2009. The key factors supporting the current rating are the bank's very close integration as a division of the Montepaschi Group, resulting in significant support from the parent. The BFSR could become more strongly positioned in the D+ category in the event that MPS Capital Services significantly reduces its key bad loans to loans ratio below 6.5%. Given the current four- notch uplift from support, an upgrade of the deposit rating is unlikely at present, unless the parent is upgraded. Evidence of the bank losing ground in medium-term lending while exhibiting an increased risk profile from its capital markets activities could exert downward pressure on the BFSR. The long- term deposit rating could be downgraded in the event of a downgrade of the long-term deposit rating of MPS. The last rating action on Banca Monte dei Paschi di Siena was implemented on 5 March 2010, when a bank's junior subordinated security was corrected to Baa3 from A2. Banca Monte dei Paschi di Siena is headquartered in Siena, Italy. At June 30, 2010, it had total assets of EUR248 billion. BERLIN & DENMAR: Embezzlement, Defection Cause Ch. 11 Collapse -------------------------------------------------------------- Berlin & Denmar Distributors, Inc., filed for Chapter 11 protection on October 21, 2010 (Bankr. S.D.N.Y. Case No. 10- 15519). Lisa Fickenscher, writing for Crain's New York Business, reports that Berline & Denmar cited "multiple independent events" that made it impossible for the 30-year firm to pay its bills. According to Crain's, the Company said in a court filing those events include employee embezzlement and the buyout of two former shareholders for $1.1 million. Those partners then formed their own companies to compete with Berlin & Denmar, and took some of the company's most profitable customers. Crain's notes the Company is also in arbitration proceedings with Local 342 involving pension fund contributions. Crain's relates Norman Milekowski, the Company's vice president, said he is confident the Company will "pull through." "We had a cash flow" problem, Crain's quotes Mr. Milekowski as saying. "My assets are my receivables and as they come in I'm able to reorganize." Berline & Denmar Distributors is a meat and cheese supplier at the Hunts Point Cooperative Market in Bronx. It estimated $1 million to $10 million in both assets and debts. Arnold Mitchell Greene, Esq., and Robinson Brog Leinwand Greene, Esq., at Genovese & Gluck, P.C., in New York, serves as counsel to the Debtor. The Debtor disclosed assets of $4.39 million and debts of $3.97 million in its Schedules of Asset and Liabilities. BERNARD MADOFF: Judge Defers Ruling on Feeder Clients' Claims ------------------------------------------------------------- Carla Main at Bloomberg News reports that U.S. Bankruptcy Judge Burton Lifland, who is overseeing the liquidation of Bernard L. Madoff's investment firm, deferred a ruling on whether investors who lost money in feeder funds will receive payments from the Madoff bankruptcy court trustee. Judge Lifland on October 19 said he will rule later on the request by trustee Irving Picard to deny the claims of investors who weren't direct customers of Bernard L. Madoff Investment Securities LLC. Bloomberg recounts that Mr. Picard said in December the feeder fund claims were rejected because they weren't from direct Madoff accounts. The trustee filed a motion in June to obtain the judge's approval of that action and to allow objectors to be heard. Mr. Picard, Bloomberg relates, said in a motion that investors in 19 accounts with 16 feeder funds were denied reimbursement of their claims. The feeder funds included Fairfield Greenwich Group, J. Ezra Merkin's Gabriel Capital Corp. and Kingate Global Fund. An initial review showed that 17 of the 19 feeder accounts were "net losers," according to court papers. According to Bloomberg, lawyers representing some of the 1,700 objectors to the motion argued that their clients met the law's definition of a customer. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On December 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of August 13, 2010, a total of US$5.58 billion in claims by investors has been allowed, with US$715.6 million to be paid by the SIPC. Investors are expected to receive additional distributions from money recovered by Mr. Picard. Mr. Picard has recovered a number of assets and liquidated some of those assets for the benefit of customers, totaling US$1.18 billion as of November 2009. The Securities Investor Protection Corp., the agency overseeing the distribution of funds, said in September 2010 that claims by victims of Mr. Madoff's Ponzi scheme exceeded the money available to reimburse them. BLOCKBUSTER INC: CEO, Icahn Manipulated Ch. 11 Filing, Says Sandhu ------------------------------------------------------------------ In a letter addressed to the U.S. Bankruptcy Court for the Southern District of New York., Jasbir Sandhu, a Blockbuster shareholder in Fremont, California, alleges that Carl Icahn and Jim Keyes are "two undisputed winners in this whole multi-year Blockbuster Drama." Mr. Icahn is a major shareholder of Blockbuster Inc., while Mr. Keyes is the company's incumbent chief executive officer. As of October 11, 2010, Mr. Sandhu has gathered 208 signatures for his shareholder petition, which asks for: (1) full disclosure of Blockbuster's recapitalization effort and Mr. Icahn's influence; (2) full disclosure and review of all relevant events of Blockbuster's board of directors for the past two years; (3) review of all information revealed and withheld from the last annual shareholders' meeting, addressing voting and misleading communications; and (4) full disclosure of the Debtors' DIP financing & forbearance agreement. A copy of Mr. Sandhu's "Blockbuster Shareholder Petition" and the list of signatures are available for free at: http://bankrupt.com/misc/BBI_Signatures_10112010.pdf In his letter, Mr. Sandhu said the timing and actions of Messrs. Keyes and Icahn raise doubts about Blockbuster's recapitalization efforts because it seems the recapitalization was more geared towards increasing the return on investment for Mr. Icahn and other key stakeholders. He asserts that the effort raises questions about the credibility and sincerity of Mr. Keyes. "Jim Keyes and Carl Icahn may have already known the exact date and outcome of chapter 11 filing," asserts Mr. Sandhu. "Jim Keyes continued to create a bankruptcy fear to support Icahn's plan. Carl Icahn on the other hand continued to reduce his shareholding position to drag the prices of the bond down," he alleges. Mr. Sandhu asserts that in the process of dumping shares and dragging the bond prices low, Mr. Icahn successfully converted his equity into bonds. "It would not be surprising to find that Jim Keyes and Carl Icahn may have played a major role in failing the Reverse Split and Class Conversion measures," Mr. Sandhu contends. "SEC investigation, if initiated might shed some light into this multi- year Blockbuster bankruptcy drama," he adds. Mr. Sandhu also alleges that Mr. Keyes managed to manipulate the Blockbuster Chapter 11 process by multiple pre-planned processes: -- Keeping Blockbuster Express out of the Chapter 11 by giving NCR Corporation some legal projection; -- Securing Blockbuster Canadian assets by giving protection to the major studios; and -- Separating Blockbuster's international assets. In this whole process, Mr. Sandhu asserts, the actual losers are the common shareholders. "It's interesting to see how a multi- year drama, security fraud and manipulation wipe out the common shareholders," he continues. Mr. Sandhu further alleges that it is possible that since the last few years/quarters, the Debtors may have not been reporting revenues from few international regions to drive the stock price down to the level of bankruptcy. He explains that shareholders equity should represent the entire Blockbuster Enterprise, but the company filed for Chapter 11 Bankruptcy protection in the United States of America without including international Assets. Selling few international assets would have avoided Chapter 11, but Mr. Keyes followed the path that was more favorable to Mr. Icahn, Mr. Sandhu continues. With Chapter 11 filing, the company intends to wipe out all common shareholders and give substantial equity to Mr. Icahn, who bought the debt just few days before bankruptcy filing, he points out. Mr. Sandhu also notes that he sent an e-mail to Blockbuster Investor Relations & Blockbuster Ethics Committee, but unfortunately no one has responded to it yet. He explains that as shareholders, they need to have some investigation done over Blockbuster's recapitalization effort for they need reasons and justifications why the only beneficiaries of recapitalization are the senior noteholders, especially Mr. Icahn, and the failed management. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster said it had assets of $1,017,035,832 and debts of $1,464,939,759 as of August 1, 2010. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Lyme Regis Wants Cooley Banned as Panel's Counsel ------------------------------------------------------------------ Creditor Lyme Regis Partners, LLC, filed with the U.S. Bankruptcy Court a preliminary objection to Cooley LLP's appointment as counsel for the Official Committee of Unsecured Creditors of Blockbuster Inc., pursuant to Section 1103 of the Bankruptcy Code. The Creditors Committee has not yet filed an application to retain Cooley as counsel. Scott A. McMillan, Esq., at The McMillan Law Firm, APC, in La Mesa, California, relates that the objection is made on the ground that Cooley should not be appointed as counsel for the Creditors Committee because of two conflicts-of-interests (i) between the Debtors and Unsecured Creditors, and (ii) between the Secured Creditors and Unsecured Creditors. The Preliminary Objection is based on the Notice of Appearance and Request for Service of Documents filed by Cooley LLP on October 4, 2010, as the proposed counsel for the Creditors Committee. Mr. McMillan notes that prior to that Notice, the Debtors filed a request to pay prepetition claims, naming Sony Pictures Entertainment as one of their major secured creditors. Sony Pictures Entertainment is one of Cooley's Digital Media & Entertainment clients, Mr. McMillan discloses. He notes that the attorneys listed in the Notice include Jay R. Indyke, Esq., Richard S. Kanowitz, Esq., Jeffery L. Cohen, Esq., and Seth Van Aalten, Esq. The attorneys formerly made up a large part of the Bankruptcy and Restructuring practice at the law firm Kronish Lieb Weiner and Hellman LLP. He asserts that Kronish Lieb once touted Blockbuster as one of their top clients. In disregard for their past representation of the Debtors and present representation of one of Debtors' major secured creditors, the attorneys have filed with the Court their intention to be counsel for the Creditors Committee, Mr. McMillan contends. He insists that approving Cooley as Committee counsel would frustrate the purpose of the Creditors Committee, creating distrust and hindering the public's confidence in the judicial system. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster said it had assets of $1,017,035,832 and debts of $1,464,939,759 as of August 1, 2010. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLOCKBUSTER INC: Proposes to Hire Korn/Ferry for CEO Search ----------------------------------------------------------- Blockbuster Inc. and its units seek the U.S. Bankruptcy Court's permission to employ Korn/Ferry International as their executive search consultant in connection with their search for a new chief executive officer. The Debtors make the request in furtherance of their efforts to emerge from Chapter 11, and specifically, in connection with the plan support agreement, dated September 22, 2010, among the Debtors and the consenting noteholders of those 11.75% senior secured notes due 2014, Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, tells Judge Lifland. The Plan Support Agreement requires the Debtors to employ a CEO, who is acceptable to, and whose terms of employment and compensation have been approved by, 75% of the Sponsoring Noteholders, on or before December 31, 2010. Mr. Karotkin says that the Sponsoring Noteholders support the retention of Korn/Ferry to help them retain a New CEO. As search consultant, Korn/Ferry will: -- ensure the search project is kept strictly confidential; -- arrange regular sessions in person or by phone during which time, updates and progress of the assignment will be provided; -- schedule interviews promptly with candidates; -- collect information on candidates identified from other sources or from within the organization; and -- develop a communication strategy to discuss the progress of the search. As ultimate selection of a CEO must be approved by a Supermajority of Sponsoring Noteholders, the Debtors are working with a subcommittee of the Sponsoring Noteholders to review candidates and assist in the selection of a New CEO. The Debtors will also work with the Official Committee of Unsecured Creditors to keep them and their constituency informed of the progress of retaining a New CEO. Pursuant to the terms of the parties' Engagement Letter, Korn/Ferry's compensation will be equal to a fixed fee of $400,000, with the first $100,000 due upon the commencement of the assignment and the remaining $300,000 due and payable in one installment within 30 days of the successful completion date on which a final, binding employment agreement in writing is entered into between the Debtors and the candidate, provided that if any internal candidates from within Blockbuster's current management or any external candidates identified from a major studio is named CEO or if the agreement is terminated before the Successful Completion Date, Korn/Ferry has agreed to forfeit the Final Payment. In addition to its fees, Korn/Ferry will also be reimbursed for all actual and necessary expenses incurred on these bases: (i) for search-related administrative expenses related to administrative support, search assessment and research services, provided those expenses will not exceed $18,000; and (ii) for direct, out-of-pocket expenses, including candidate and consultant travel, lodging and videoconferencing, for which Korn/Ferry will bill the Debtors on a monthly basis. Because the Debtors are not seeking to retain Korn/Ferry under Section 327 of the Bankruptcy Code, it is not necessary for Korn/Ferry to be "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code, relates Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York. Notwithstanding, the Debtors are not aware of any facts that would render Korn/Ferry not disinterested under Section 101(14), he assures the Court. The Court will convene a hearing on November 10, 2010, to consider the application. Objections are due on November 2. About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster said it had assets of $1,017,035,832 and debts of $1,464,939,759 as of August 1, 2010. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan on September 23, 2010 (Bankr. S.D.N.Y. Case No. 10-14997). Martin A Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. Bankruptcy Creditors' Service, Inc., publishes BLOCKBUSTER BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Blockbuster Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) BLUE GEM: Posts $311,600 Net Loss in August 31 Quarter ------------------------------------------------------ Blue Gem Enterprise, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $311,559 on $718,932 of revenue for the three months ended August 31, 2010, compared with a net loss of $6,759 on $0 revenue for the same period ended August 31, 2009. The Company had total working capital of $688,413 and a total accumulated deficit of $542,033 as of August 31, 2010. On August 13, 2010, the Company, Title Beverage Distribution, and the stockholders of Title entered into a Share Exchange Agreement. Pursuant to the Exchange, the majority stockholders of Title agreed to exchange all of their shares of Title on a one-for-one basis for shares of common stock of the Company. The closing of the Exchange occurred upon the completion of the audit of Title, which the Company finalized on September 14, 2010. As a result of the Exchange, Title became a wholly-owned subsidiary of the Company. Prior to the closing of the Exchange, the Company was related by common ownership to Title. The Company's balance sheet at August 31, 2010, showed $1.1 million in total assets, $425,871 in total liabilities, and stockholders' equity of $696,554. The Company's balance sheet as of August 31, 2010, does not include the assets or liabilities of Title, as the Exchange did not close until September 14, 2010. Friedman, Cohen, Taubman & Company, LLC, in Plantation, Florida, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended May 31, 2010. The independent auditors noted that the Company incurred a net loss of $175,292 and has used, rather than provided, cash in its operations for the year ended May 31, 2010. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6cce Based in Opa-locka, Florida, Blue Gem Enterprise, Inc., was incorporated in the State of Nevada on November 28, 2006, and re-domiciled in April 2010 to a Florida corporation (changing its then name from Blue Gem Enterprise to Blue Gem Enterprise, Inc., to be consistent with Florida law). The Company originally operated as a mineral exploration company. Pursuant to a stock purchase agreement dated October 15, 2009, a change of control of the Company occurred, and the Company changed its operations and became a full service Direct Store Beverage Distribution company. The Company plans to manage and distribute select allied brands on an exclusive basis pursuant to exclusive agreements with manufacturers of non-alcoholic beverages. The Company was previously in the development stage and became an operating company during the year ended May 31, 2010, since the Company began earning revenues in May 2010. CAREFREE WILLOWS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Carefree Willows LLC 3311 S. Rainbow Boulevard, Suite 225 Las Vegas, NV 89146 Bankruptcy Case No.: 10-29932 Chapter 11 Petition Date: October 22, 2010 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Mike K. Nakagawa Debtor's Counsel: Lenard E. Schwartzer, Esq. SCHWARTZER & MCPHERSON LAW FIRM 850 S. Jones Boulevard, Suite 1 Las Vegas, NV 89146 Tel: (702) 228-7590 Fax: (702) 892-0122 E-mail: bkfilings@s-mlaw.com Scheduled Assets: $30,604,014 Scheduled Debts: $36,531,244 The petition was signed by Kenneth Templeton, manager of general partner, its manager. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ PSACP Investments, LLC Trade Debt $4,654,150 10001 Park Run Drive Las Vegas NV 89145 Union Bank Deed of Trust $1,536,647 P.O. Box 30115 Los Angeles CA 90030 Paher, Stanley Note Payable $150,000 4135 Badger Circle Reno NV 89519 Thssenkrupp Elevator Corp Trade Debt $6,956 Blue Green Services LLC Trade Debt $3,075 Hill, Ginny Security Deposit $1,917 Smith, Roy Security Deposit $1,622 Lauckner, Bert Security Deposit $859 Nevada Contract Carpet Trade Debt $852 Career Strategies Temp Inc Trade Debt $783 Kinchen, Thelma Security Deposit $750 Hardiman, Barbara Security Deposit $500 Silex, Humberto Security Deposit $500 Copeland, Frances Security Deposit $325 Greenberg, Elaine Security Deposit $300 Battles, Virginia Security Deposit $300 Spooner, Marianne & Bob Security Deposit $300 Burling-Zahn, Gloria Security Deposit $275 Galsky, Eva Security Deposit $275 Johnson, Molly Security Deposit $275 CCGI HOLDING: Moody's Upgrades Ratings on Senior Loan to 'B2' ------------------------------------------------------------- Moody's Investors Service has upgraded CCGI Holding Corporation's senior secured facilities to B2 from B3 due to a change in the company's capital structure, which now will include about $93 million of subordinated notes at CCGI. These subordinated notes are the remaining portion of the $149 million amount held by the company's primary sponsor, following the exchange of a portion of the subordinated notes into equity in the company's restructuring and merger of Covad Communications Group, Inc., with MegaPath, Inc., and acquisition of Speakeasy Broadband Services LLP. Ratings Rationale CCGI has also changed the terms of the senior secured term loan and revolving credit facilities that are jointly held by Covad and MegaPath, Inc., wholly-owned subsidiaries of CCGI, by lowering the previously contemplated $250 million senior secured term loan to $150 million, and reducing the tenor of the term loan from six years to five years. The tenor of the $25 million revolver remains five years. The company expects the revolver to remain undrawn at closing. As a result, under Moody's Loss Given Default methodology the ratings of the senior secured credit facilities have been upgraded due to structural seniority and the recovery cushion provided by the subordinated debt at CCGI. The senior and subordinated term loans, along with a portion of the approximately $45 million of existing cash, will be used to repay existing debt at the predecessor entities, with the combined company doing business as MegaPath. As part of the rating action, Moody's affirmed CCGI's B3 corporate family rating and the B3 probability of default rating. The outlook is stable. Moody's has taken these rating actions: Upgrades: Issuer: Covad Communications Group, Inc. and MegaPath, Inc. -- $25Mln Senior Secured Revolving Credit Facility, B2 (LGD3- 33%), from B3 (LGD4-50%) -- $150Mln Senior Secured Term Loan, B2 (LGD3-33%), from B3 (LGD4-50%) CCGI's B3 corporate family rating partly reflects Moody's concerns about the Company's fundamental business model and the increased execution risk associated with the simultaneous integration of three companies. In addition, high competition in CCGI's markets and the Company's reliance on accessing incumbent telcos' networks are also major considerations in CCGI's rating assignment. The ratings are supported by the company's good liquidity and expected free cash flow generation. Moody's expects CCGI's Moody's adjusted EBITDA margin for 2010 to be about 14.5% (incorporating pro-forma merged operations and year one cost savings from the merger transaction). Moody's expects CCGI's pro-forma adjusted Debt/EBITDA leverage to be under 4.0x at closing (Moody's adjusted, post-synergies), potentially improving over the next several years driven by EBITDA growth and debt reduction due to mandatory amortization and excess cash sweep in the credit facility. This de-leveraging is however dependent on the successful integration of the three companies and success of the revamped sales force to grow revenues. Over the long term, Moody's believes that CCGI will face increasing financial risk due to its challenging business model. Moody's views this model, centered on serving small business customers over a primarily leased network from the local telecom incumbents, to generate significantly lower margins when compared to services offered over owned facilities. Moody's expects CCGI's EBITDA margins in 2011 to be in the mid- teens, largely reflecting realization of the annualized cost savings initiated in 2010 and some modest improvements in operating margins. CCGI expects to generate about $40 million in run-rate cost savings from the merger by mid-2011, primarily through network and G&A consolidation. At the same time, CCGI continues to face the intense competitive dynamics of its industry as it fends of better capitalized and much-larger incumbent telcos and cablecos, while attempting to increase sales in a weak economy requiring tighter credit policies. Moody's remains cautious as to the ability of the company to realize the full benefit of these savings in light of the complexity of the transaction and the tough operating environment. Moody's expects CCGI will have "good" liquidity over the next twelve months. Pro forma for FYE 2010, Moody's projects the company to have approximately $35 million in cash or equivalents and an undrawn $25 million revolving credit facility. CCGI's projected free cash flow is sufficient to meet its modest capex obligations. In the event of business weakness, capex would likely be lower as the majority of projected spending is success based and the network's footprint is essentially complete. The ratings for the debt instruments reflect both the overall probability of default for CCGI, to which Moody's has assigned a B3 PDR, and an average mean family loss given default assessment of 50%, in line with Moody's LGD Methodology. The term loan is secured by a first priority interest in and lien on substantially all CCGI's assets. The term loan, which comprises the bulk of the company's debt capital structure, is rated B2 (LGD3-33%), one notch above the B3 CFR. This rating is one notch lower than the LGD methodology-implied modeling template suggests, being on the cusp of a B2 instrument rating, due to Moody's subjective adjustments to the LGD framework in order to more appropriately reflect the perceived collateral coverage of these debt obligations relative to the overall waterfall of debts. Outlook The stable outlook reflects Moody's view that CCGI will retain a disciplined capital structure and that merger synergies will drive adjusted debt/EBITDA leverage below 4.0x range by the end of 2011. What Could Change the Rating -- Up Upward rating pressure could build if the Company maintains adjusted leverage in the low 3.0x range, which would likely result from the Company succeeding in growing its revenues through greater product expansion and maintaining solid cost controls at the combined entity. Maintenance of a good liquidity profile and strong free cash flow-to-debt are also assumed to be prerequisites to prospective positive rating action(s). What Could Change the Rating -- Down Downward rating pressure could develop if adjusted leverage remains above 4.0x on a sustainable basis, or if free cash flow- to-debt falls below 5%, which may result from revenue declines or the inability to merge the three entities in the transaction. The ratings could also come under pressure if heightened competition or churn further threatens the Company's sales growth. San Jose, CA, based CCGI is a competitive local exchange carrier. CEK HOLDINGS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: CEK Holdings I, LLC 436 27th Avenue E. Seattle, WA 98112 Bankruptcy Case No.: 10-22522 Chapter 11 Petition Date: October 19, 2010 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Marc Barreca Debtor's Counsel: David A. Nold, Esq. NOLD & ASSOCIATES PLLC 10500 NE 8th St Ste 930 Bellevue, WA 98004 Tel: (425) 289-5555 E-mail: dnold@washlaw.biz Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Charles Knox, managing member. CHAMPIONS BIOTECHNOLOGY: Posts $591,000 Net Loss in July 31 Qtr. ---------------------------------------------------------------- Champions Biotechnology, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $591,000 on $1.60 million of revenue for the three months ended July 31, 2010, compared with a net loss of $1.00 million on $962,000 of revenue for the same period ended July 31, 2009. The Company had an accumulated deficit of $13.27 million as of July 31, 2010. The Company's balance sheet at July 31, 2010, showed $3.34 million in total assets, $2.02 million in total liabilities, $42,000 in accrued stock purchase, and stockholders' equity of $1.27 million. As reported in the Troubled Company Reporter on August 4, 2010, Ernst & Young LLP, in Phoenix, Ariz., expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended April 30, 2010. The independent auditors noted that the Company has experienced recurring losses from operations while developing its service offerings and expanding its sales channels. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6cd2 About Champions Biotechnology Baltimore, Md.-based Champions Biotechnology, Inc. (OTC BB: CSBR) -- http://www.championsbiotechnology.com/-- is engaged in the development of advanced pre-clinical platforms and predictive tumor specific data to enhance and accelerate the value of oncology drugs. CHRYSLER FINANCIAL: Moody's Upgrades Corp. Family Rating to 'Caa1' ------------------------------------------------------------------ Moody's Investors Service upgraded the Corporate Family Rating of Chrysler Financial Services Americas LLC to Caa1 from Caa3. Moody's said that it intends to withdraw the rating, based upon the request of Chrysler Financial management. Ratings Rationale The rating upgrade is based upon Chrysler Financial's deleveraging through loan and lease portfolio runoff. The firm has repaid its first and second lien loans; remaining funding is comprised only of asset-backed securitizations. Additionally, improvement in used car values beginning in early 2009 has resulted in stronger lease residual realization and lower losses on retail installment loans, aiding Chrysler Financial's earnings and cash flows. "With the repayment of its rated debt and other financial obligations, Chrysler Financial has strengthened its capital position," said Moody's vice president Mark Wasden. "The firm is increasingly turning its attention to opportunities for generating new asset volumes, though its strategies have yet to be fully realized." Moody's said that Chrysler Financial's new initiatives to revive financing volumes include extending retail auto loans to non-prime borrowers and providing financing to mid-size commercial enterprises. However, Chrysler Financial's prospects for success are highly uncertain, which is a key constraint on the firm's rating. Though Chrysler Financial possesses a scalable lending and servicing platform, it is early in its efforts to attract new customer volumes and establish long-term funding sources. In its new business endeavors, Chrysler Financial faces significant competition from well-established banks and finance companies. In its last rating action on October 27, 2009, Moody's upgraded Chrysler Financial's corporate family rating to Caa3 from Ca and assigned a stable outlook. Chrysler Financial Services Americas LLC is a Farmington Hills, Michigan, based provider of auto financial services. CLEVIUS CURRY: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------------- Joint Debtors: Clevius Arnold Curry aka C. Arnold Curry Cara Jean Curry 10500 E. Lost Canyon Drive, Lot #8 Scottsdale, AZ 85255 Bankruptcy Case No.: 10-33531 Chapter 11 Petition Date: October 18, 2010 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Lawrence D. Hirsch, Esq. DeCONCINI McDONALD YETWIN & LACY, PC 7310 N 16th St #330 Phoenix, AZ 85020 Tel: (602) 282-0472 Fax: (602) 282-0520 E-mail: lhirsch@dmylphx.com Scheduled Assets: $4,022,175 Scheduled Debts: $6,033,564 A list of the Joint Debtors' seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/azb10-33531.pdf Debtor-affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Bell Business Associates 09-03998 07/01/10 Scottsdale Auto Salon 09-03998 07/01/10 CODESSA TERRELL: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Codessa M. Terrell 1090 Mi Casa Court Concord, CA 94518 Bankruptcy Case No.: 10-72077 Chapter 11 Petition Date: Court: United States Bankruptcy Court Northern District of California (Oakland) Judge: Randall J. Newsome Debtor's Counsel: Lawrence L. Szabo, Esq. LAW OFFICES OF LAWRENCE L. SZABO 3608 Grand Ave. #1 Oakland, CA 94610-2024 Tel: (510) 834-4893 E-mail: szabo@sbcglobal.net Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Codessa Terrell. Debtor's List of seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ National City Bank credit line $86,481 NE ER 1 Cascade Plaza Akron, OH 44305 Amex credit line $30,141 P.O. Box 297871 Fort Lauderdale, FL 33329 California American services $7,500 Exterminator P.O. Box 129 Boulder Creek, CA 95006 E. Tony Sanchez vinyl flooring $7,500 201 Emrick Ave San Pablo, CA 94803 Georgia Street appliances $5,000 Appliances Caltech Enviro Pest pest control $1,500 Management services Provident Protection security services $1,300 Group COLUMBIAN CHEMICALS: S&P Assigns 'BB-' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned a preliminary 'BB-' corporate credit rating to Marietta, Ga.-based Columbian Chemicals Acquisition LLC. The outlook is stable. At the same time, S&P assigned preliminary 'BB' issue-level ratings (one notch above the corporate credit rating) to Columbian Chemicals' proposed $375 million senior secured credit facilities due 2015. The preliminary recovery ratings are '2', indicating S&P's expectation of substantial recovery (70%-90%) in the event of a payment default. The company is using the proceeds primarily to refinance its existing debt and extend debt maturities, with a portion of the funds allocated for fees and expenses. The proposed senior facilities consist of a $75 million revolving credit facility and a $300 million term loan A. The ratings are based on preliminary terms and conditions. "The ratings on Columbian Chemicals reflect the company's aggressive financial risk profile as well as its fair business risk profile," said Standard & Poor's credit analyst Ket Gondha. Although Columbian Chemicals is the world's third-largest manufacturer of carbon black, it has a moderate sales base, narrow product focus, and substantial customer and end-market concentration related to sales to the automotive industry. In addition, the company is exposed to raw material price volatility, though it can typically pass through cost increases with a moderate time lag. One Equity Partners LLC, an affiliate of JPMorgan Chase & Co., is the private-equity sponsor for Columbian Chemicals. Given the aggressive financial policies associated with private equity ownership and expected credit measures, S&P view the company's financial risk profile as aggressive. CONQUEST PETROLEUM: Posts $8.1 Million Net Loss in June 30 Quarter ------------------------------------------------------------------ Conquest Petroleum Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $8.1 million on $313,816 of revenue for the three months ended June 30, 2010, compared with a net loss of $6.6 million on $196,663 of revenue for the same period last year. Current liabilities exceeded current assets by $23.2 million and the accumulated deficit is $129.0 million at June 30, 2010. The Company's balance sheet at June 30, 2010, showed $2.9 million in total assets, $25.4 million in total liabilities, and a stockholders' deficit of $22.5 million. As reported in the Troubled Company Reporter on August 5, 2010, M&K CPAS, PLLC, in Houston, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has insufficient working capital and recurring losses from operations. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6cd4 About Conquest Petroleum Spring, Tex.-based Conquest Petroleum Incorporated (OTC BB: CQPT) -- http://www.conquestpetroleum.com/-- is an independent oil and natural gas company engaged in the production, acquisition and exploitation of oil and natural gas properties geographically focused on the onshore United States. The Company's operational focus is the acquisition, through the most cost effective means possible, of production or near production of oil and natural gas field assets. The Company's areas of operation include Louisiana and Kentucky. CORNER HOME CARE: Drug Supplier Not a "Critical Vendor" ------------------------------------------------------- WestLaw reports that the supplier from which the Chapter 11 debtor purchased pharmaceuticals and durable medical equipment was not a critical vendor requiring exceptional treatment through postpetition, pre-plan payments on unsecured prepetition debt, a Kentucky bankruptcy court ruled. Although the supplier provided goods to the debtor at a lower cost and on better terms than other alternatives, there were other vendors that could provide the required goods. Even if the supplier were the only provider, the debtor failed to show that there were no alternative means of doing business with the supplier other than the extraordinary act of making pre-plan payments for prepetition debt. The supplier's purported unwillingness to continue to do business with the debtor under current terms did not mean that it would be unwilling to provide goods with appropriate assurances of payment. The debtor exercised poor business judgment in making unauthorized payments of $141,075.49 to the supplier without any obligation by the supplier to continue to do business with the debtor. Finally, the debtor failed to show a lack of prejudice to other creditors. In re Corner Home Care, Inc., --- B.R. ----, 2010 WL 4065392, slip op. http://is.gd/gcDiy(Bankr. W.D. Ky.) (Fulton, J.). Corner Home Care, Inc., dba The Pharmacy Corner, located in Princeton, Ky., sought chapter 11 protection (Bankr. W.D. Ky. Case No. 09-51451) on Dec. 28, 2009, and is represented by Todd A. Farmer, Esq., at Stout, Farmer & King, PLLC, in Paducah, Ky. The Debtor disclosed $2,906,667 in assets and $6,355,137 in liabilities in its Schedules of Assets and Liabilities. DANIEL M BADE: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Daniel M. Bade, DDS, P.C. a Corporation dba Smile Solutions, Inc. 8217 Wicker Avenue Saint John, IN 46373 Bankruptcy Case No.: 10-24898 Chapter 11 Petition Date: October 20, 2010 Court: U.S. Bankruptcy Court Northern District of Indiana (Hammond Division) Judge: J. Philip Klingeberger Debtor's Counsel: Daniel Freeland(EW), Esq. 9105 Indianapolis Boulevard Highland, IN 46322 Tel: (219) 922-0800 E-mail: dlf9601b@aol.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/innb10-24898.pdf The petition was signed by Daniel M. Bade, president. DELTA AIR: Fitch Gives Positive Outlook --------------------------------------- The credit quality and ratings outlook for the largest U.S. airlines remains positive this fall, according to Fitch Ratings' latest 'Airline Credit Navigator' report. More than a year into the cyclical demand recovery that began to drive improved operating results late in 2009, U.S. airlines are again poised to report solid operating and credit quality trends as third quarter 2010 (3Q'10) results roll out this month. Despite ever-present risks of external demand shocks and rising fuel costs, the largest carriers continue to report progress in their efforts to reduce leverage, generate strong free cash flow and bolster liquidity. 'Since M&A activity has picked up substantially with the United Airlines-Continental Airlines merger and Southwest Airlines' bid to acquire AirTran Holdings, there should be a more sustainable capacity growth path that will allow the U.S. industry to counter inevitable demand and fuel price shocks more resiliently through the next cycle,' said Bill Warlick, Senior Director at Fitch. According to the report, progress toward leverage reduction and more consistent cash flow generation has been significant over the last year, and all of the large carriers now have sufficient liquidity to fund upcoming cash obligations comfortably, absent a large external demand or fuel price shock. With the United- Continental merger now closed and the Southwest-AirTran deal expected to be approved, the industry has now consolidated dramatically from a position of fragmentation and persistent overcapacity just five years ago. Fitch says investors should be focused on any outlook language that points to an erosion of full-fare booking trends for the remainder of the year during the airlines' 3Q'10 earnings calls. More difficult revenue per available seat mile comparisons will inevitably reduce unit revenue growth moving into 2011, but Fitch continues to believe that modest industry revenue growth can be supported next year, mainly through diminished but still material gains in passenger yields. Assuming relatively stable fuel prices over the next year, most of the large U.S. carriers are well placed to report positive FCF, allowing them to direct more cash toward debt reduction and continuing the process of balance sheet repair at a point in the economic cycle when credit quality improvement is essential. Fitch's U.S. Airlines Ratings: -- United Continental Holdings, Inc.: IDR 'B-'; Positive Outlook -- Delta Air Lines, Inc.: IDR 'B-'; Stable Outlook -- AMR Corp./American Airlines, Inc.: IDR 'CCC' -- US Airways Group, Inc.: IDR 'CCC' -- Southwest Airlines Co.: IDR 'BBB'; Stable Outlook -- JetBlue Airways Corp.: IDR 'B-'; Stable Outlook DENMAN TIRE: PBGC Assumes Underfunded Pension Plan -------------------------------------------------- The Pension Benefit Guaranty Corporation assumed responsibility for the underfunded pension plan covering more than 600 former workers and retirees of Denman Tire LLC of Leavittsburg, Ohio. The PBGC stepped in because Denman Tire is liquidating in bankruptcy proceedings, and there will be no sponsor left to fund or administer the plan. Retirees will continue to receive their monthly benefit payments without interruption, and other workers will receive their pensions when they are eligible to retire. According to PBGC estimates, the Denman Tire Corporation Pension Plan is 46% funded, with assets of $15.1 million to cover $32.7 million in benefit liabilities. The PBGC expects to be responsible for $17 million of the $17.6 million shortfall. The PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan. The plan ended on March 17, 2010, and the agency assumed responsibility for the plan on Sept. 21, 2010. Within the next several weeks, the PBGC will send notification letters to all participants in the Denman Tire plan. Under provisions of the Pension Protection Act of 2006, the maximum guaranteed pension the PBGC can pay is determined by the legal limits in force on the date of the plan sponsor's bankruptcy. Therefore participants in the plan are subject to the limits in effect when Denman Tire filed for bankruptcy protection March 17, 2010, which set a maximum guaranteed amount of $54,000 per year for a 65-year-old. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the five years immediately before the March 17, 2010 bankruptcy date may not be fully guaranteed. Workers and retirees with questions may consult the PBGC Web site, http://www.pbgc.gov/or call toll-free at 1-800-400-7242. For TTY/TDD users, call the federal relay service toll-free at 1-800- 877-8339 and ask for 800-400-7242. Denman Tire retirees who draw a benefit from the PBGC may be eligible for the federal Health Coverage Tax Credit. Further information may be found on the PBGC Web site at http://www.pbgc.gov/workers-retirees/benefits- information/content/page13692.html Assumption of the plan's unfunded liabilities will increase the PBGC's claims and was not previously included in the agency's fiscal year 2009 financial statements. The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. About Denman Tire Denman Tire Corporation -- http://www.denmantire.com/-- was founded in 1919 and produced off-highway tires for tractors and earthmovers, as well as on-highway commercial tires. The company experienced a drop in sales due to the overall slump in the economy. Unable to find a buyer or secure financing or investors, the company filed for Chapter 7 liquidation on March 17, 2010 in the U.S. Bankruptcy Court in Youngstown, Ohio. The petition says the Company owes between $1 million and $10 million to more than 200 creditors. As reported by the Troubled Company Reporter on July 22, 2010, Titan Tire Corporation, a subsidiary of Titan International Inc., closed on the Denman Tire machinery and equipment purchase that was previously approved by the Bankruptcy Court. The machinery and equipment, including other inventory items, was purchased for $3 million. The purchase did not include any land or buildings. Titan International, Inc. -- http://www.titan-intl.com-- is a holding company, owns subsidiaries that supply wheels, tires and assemblies for off-highway equipment used in agricultural, earthmoving/construction and consumer (including all terrain vehicles) applications. DEVON ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Devon Enterprises, LLC aka Alliance Bus Charters 1819 Lacy Drive Fort Worth, TX 76117 Bankruptcy Case No.: 10-46792 Chapter 11 Petition Date: October 20, 2010 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS, P.C. 12770 Coit Rd., Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 E-mail: eric@ealpc.com Estimated Assets: $0 to $50,000 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/txnb10-46792.pdf The petition was signed by Richard Bastow, manager. DIGITAL BRIDGE: Involuntary Chapter 11 Case Summary --------------------------------------------------- Alleged Debtor: Digital Bridge Holdings, Inc aka Integrated Transactions, Inc dba Digital Bridge P.O. Box 971148 Orem, UT 84097 Bankruptcy Case No.: 10-34499 Involuntary Chapter 11 Petition Date: October 19, 2010 Court: U.S. Bankruptcy Court District of Utah (Salt Lake City) Petitioners' Counsel: Daniel W. Jackson, Esq. 2157 Lincoln Street Salt Lake City, UT 84106 Tel: (801) 596-8338 Fax: (801) 364-5645 E-mail: jackson525@hotmail.com Creditors who signed the Chapter 11 petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Phillip M. Adams Unsecured $82,000 PO Box 1360 Prom. Note Afton, WY 83110 Gregory D. Phillips Unsecured $82,000 560 E 200 S Suite 300 Prom. Note Salt Lake City, UT 84102 Kevin A Howard Unsecured $82,000 560 E 200 S Suite 300 Prom. Note Salt Lake City, UT 84102 DONALD HAMILTON: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Joint Debtors: Donald J. Hamilton Sharon L. Hamilton P.O. Box 5287 Santa Rosa, CA 95402 Bankruptcy Case No.: 10-14032 Chapter 11 Petition Date: October 20, 2010 Court: U.S. Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtors' Counsel: Jean Barnier, Esq. MACCONAGHY AND BARNIER 645 1st Street W #D Sonoma, CA 95476 Tel: (707) 935-3205 E-mail: jbarnier@macbarlaw.com Scheduled Assets: $3,321,766 Scheduled Debts: $3,919,978 A list of the Joint Debtors' 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb10-14032.pdf DOUGLAS HOLDING: Case Summary & 11 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Douglas Holding Co., Inc. 718 Partridge Drive Princeton, WV 24740 Bankruptcy Case No.: 10-10206 Chapter 11 Petition Date: October 18, 2010 Court: United States Bankruptcy Court Southern District of West Virginia (Bluefield) Judge: Ronald G. Pearson Debtor's Counsel: Joseph W. Caldwell, Esq. CALDWELL & RIFFEE P.O. Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 Fax: (304) 925-2193 E-mail: joecaldwell@verizon.net Scheduled Assets: $1,630,432 Scheduled Debts: $1,236,412 A list of the Company's 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wvsb10-10206.pdf The petition was signed by Marlin Douglas, owner. EMIVEST AEROSPACE: Files for Ch. 11, Has $4MM of Financing ---------------------------------------------------------- Emivest Aerospace Corporation filed for Chapter 11 protection on Oct. 20, 2010 (Bankr. D. Del. Case No. 10-13391). Business Recorder reports that Emivest is seeking approval for up to $4 million in debtor-in-possession financing to continue operations as it restructures. According to the report, the Company sought relief from creditors due to lack of working capital and lower demand for business jets. The macroeconomic difficulties have led the business jet customer base to reduce their travel budgets for business and private flights, and resulted in the cancellation or delay of many orders, the report quotes Chief Executive Anthony Power as stating. The Debtor estimated assets and debts between $50 million and $100 million. Taiwan's Yao-Hwa Glass Co Ltd., to which the company owes $15 million, was listed as the largest unsecured creditor. The Company was formed in June 2008 after Emirates Investment and Development Co PSC bought an 80% stake in San Antonio-based aircraft maker Sino Swearingen Aircraft Corporation. Emivest Aerospace Corporation -- http://www.sj30jet.com/-- is a U.S.-based aircraft manufacturing company and a subsidiary of Emirates Investment & Development PSC. Emivest Aerospace Corporation produces the SJ30 light jet. Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, serves as counsel to the Debtor. ENCORIUM GROUP: Delisted by NASDAQ as Equity Under $2.5MM --------------------------------------------------------- Encorium Group, Inc. received notification that a NASDAQ Listing Qualifications Panel has determined to delist the Company's securities from The NASDAQ Stock Market, effective with the open of business on October 22, 2010, as a result of the Company's non- compliance with the minimum $2.5 million stockholders' equity requirement. The Company has been advised by Pink OTC Markets Inc., which operates an electronic quotation service for securities traded over-the-counter, that its securities are immediately eligible for quotation on the OTCQB. The OTCQB is a market tier for OTC traded companies that are registered and reporting with the Securities and Exchange Commission. The Company has also been advised that its shares will continue to trade under the symbol ENCO. Board of Director Changes In addition, on October 15, 2010, Sari Laitinen and Petri Maninnen resigned from the Board of Directors with immediate effect. With these changes the Board of Directors currently consist of three directors, namely Shahab Fatheazam, Chairman, David Morra and Kai Lindevall, and remains composed of a majority of independent directors. About Encorium Group Encorium Group, Inc., is a global clinical research organization specializing in the design and management of complex clinical trials and Patient Registries for the pharmaceutical, biotechnology and medical device industries. The Company's mission is to provide its clients with high quality, full-service support for their biopharmaceutical and medical device development programs. Encorium offers therapeutic expertise, experienced team management and advanced technologies. The Company has drug and biologics development as well as clinical trial experience across a wide variety of therapeutic areas such as infectious diseases, cardiovascular, vaccines, oncology, diabetes endocrinology/metabolism, gene therapy, immunology, neurology, gastroenterology, dermatology, hepatology, women's health and respiratory medicine. Encorium believes that its expertise in the design of complex clinical trials, its therapeutic experience and commitment to excellence, and its application of innovative technologies, offer its clients a means to more quickly and cost effectively move products through the clinical development process. EVRAZ INC: S&P Affirms & Withdraws B Long-Term Corp. Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its 'B' long-term corporate credit and debt ratings on North America-based steel companies Evraz Inc. NA and Evraz Inc. NA Canada, both wholly-owned subsidiaries of Russia-headquartered international steel producer Evraz Group S.A. S&P subsequently withdrew the ratings at the request of Evraz Group, following the latter's decision not to proceed with a planned $650 million bond, which was to be jointly issued by EINA and EICA. At the time the ratings were withdrawn, the outlook on the corporate credit ratings was stable. Furthermore, the ratings on EINA and EICA reflected S&P's view of EINA's and EICA's combined weak business risk profile and highly leveraged financial risk profile. S&P evaluated EINA and EICA primarily as a combined economic entity for rating purposes, given their integrated operations and unified management team. S&P also regarded the parent-subsidiary relationship as strong. FEY 240: Hearing on Plan Outline Continued Until October 27 ----------------------------------------------------------- The Hon. Alan M. Ahart of the U.S. Bankruptcy Court for the Central District of California has continued until October 27, 2010, at 10:00 a.m., the hearing to consider adequacy of the Disclosure Statement explaining Fey 240 North Brand LLC's Plan of Reorganization. The Court previously denied the Debtors' Second Amended Disclosure Statement for various reasons, including: 1) The employment of Debtor's counsel has not been approved by the Court. Therefore, the Disclosure Statement has not been lawfully prepared by the Debtor; 2) The Disclosure Statement does not incorporate the recent value provided by the Debtor's appraiser; 3) There is insufficient information regarding how the 7.5% cap rate was determined; 4) There is insufficient information how the property could be refinanced at the end of the 5-year term; 5) There is insufficient information how the Debtor would treat Glendale Career School's claim if it is found to be secured; and 6) There is insufficient information regarding the claims and interests of the Debtor's insiders. The Debtors have filed a Third Amended Disclosure Statement , a copy of which is available for free at: http://bankrupt.com/misc/Fey240_DS.pdf According to the Disclosure Statement, the Plan provides for the completion of the tenant improvements. The Debtor proposes to pay creditors from the rental income, sale or refinancing proceeds of the property. Under the Plan, holders undisputed claims can expect payment of their claims. The Debtor is targeting a July 1, 2010 effective date for the Plan. About Fey 240 North Brand Pasadena, California-based Fey 240 North Brand LLC, filed for Chapter 11 on December 4, 2009 (Bankr. C.D. Calif. Case No. 09- 44228). John P. Schock, Esq. at Schock & Schock, alc, assists the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. FLORAMO PARTNERS: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Floramo Partners, Inc. 1804 Garnet Ct. New Lenox, IL 60451 Bankruptcy Case No.: 10-24886 Chapter 11 Petition Date: October 19, 2010 Court: United States Bankruptcy Court Northern District of Indiana (Hammond Division) Judge: J. Philip Klingeberger Debtor's Counsel: Catherine Molnar-Boncela, Esq. GORDON E. GOUVEIA & ASSOCIATES 433 West 84th Drive Merrillville, IN 46410 Tel: (219) 736-6020 E-mail: geglaw@gouveia.comcastbiz.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/innb10-24886.pdf The petition was signed by Anthony Floramo, president. FORD MOTOR: Moody's Reviews Ratings on Various Tranches ------------------------------------------------------- Moody's has placed on review for possible upgrade eleven tranches from five auto floorplan securitizations sponsored by Ford Motor Credit Company during 2006 and 2010. In addition, Moody's has also placed on review for possible upgrade Class B notes issued by Morgan Stanley Resecuritzation Trust 2010-F backed by Ford Credit Floorplan Master Owner Trust 2006-4 notes. Complete Rating Actions: Issuer: Ford Credit Floorplan Master Owner Trust 2006-4 -- Class A, A3(sf) placed under review for possible upgrade; previously on November 2, 2009, downgraded to A3(sf) from Aa2(sf) -- Class B, Ba2(sf) placed under review for possible upgrade; previously on November 2, 2009, downgraded to Ba2(sf) from Baa3(sf) Issuer: Ford Credit Floorplan Master Owner Trust 2010-1 -- Class B, Aa2(sf) placed under review for possible upgrade; previously on January 22, 2010, assigned Aa2(sf) -- Class C, A2(sf) placed under review for possible upgrade; previously on January 22, 2010, assigned A2(sf) Issuer: Ford Credit Floorplan Master Owner Trust 2010-2 -- Class B, Aa2(sf) placed under review for possible upgrade; previously on February 17, 2010, assigned Aa2(sf) -- Class C, A2(sf) placed under review for possible upgrade; previously on February 17, 2010, assigned A2(sf) Issuer: Ford Credit Floorplan Master Owner Trust 2010-3 -- Class B, Aa2(sf) placed under review for possible upgrade; previously on March 17, 2010, assigned Aa2(sf) -- Class C, A2(sf) placed under review for possible upgrade; previously on March 17, 2010, assigned A2(sf) Issuer: Ford Credit Floorplan Master Owner Trust 2010-5 -- Class B, Aa3(sf) placed under review for possible upgrade; previously on October 12, 2010, assigned Aa3(sf) -- Class C, A2(sf) placed under review for possible upgrade; previously on October 12, 2010, assigned A2(sf) -- Class D, Baa2(sf) placed under review for possible upgrade; previously on October 12, 2010, assigned Baa2(sf) Issuer: Morgan Stanley Resecuritization Trust 2010-F -- Class B, Baa2(sf) placed under review for possible upgrade; previously on January 22, 2010, assigned Baa2(sf) Ratings Rationale The actions were prompted by recent corporate ratings upgrades for both Ford Motor Company and Ford Motor Credit Company, as well as the improved U.S. auto industry fundamentals. On October 8, 2010, Moody's upgraded the corporate family ratings of both Ford and Ford Credit to Ba2 from B1 and Ba3, respectively. The upgrade of Ford reflects the company's much stronger-than- expected operating performance during the first half of 2010. Further, Moody's believes that the company is well positioned to continue generating strong earnings and cash flow through 2011, and to further strengthen its balance sheet. The upgrade of Ford Credit's ratings is based upon the upgrade of Ford's ratings. Ford's improved credit profile has positive implications for Ford Credit, in terms of its asset quality and profitability measures, and its access to funding. The upgrades have a positive effect on all Ford Credit auto floorplan transactions as it reduces the manufacturer bankruptcy risk and operational risk in the affected transactions. In-turn, the probability for highly stressed collateral recovery rates and dealer defaults associated with a distressed manufacturer for related transactions are less likely. These factors together with a much healthier US auto industry contribute directly to Moody's rating actions on these asset-backed securities. GENERAL MOTORS: Asbestos Panel Proposes EPIQ as Claims Agent ------------------------------------------------------------ The Official Committee of Unsecured Creditors Holding Asbestos- Related Claims for General Motors Corp. seeks the U.S. Bankruptcy Court's permission to retain Epiq Bankruptcy Solutions, LLC as its service agent, nunc pro tunc to March 5, 2010. As the Asbestos Committee's service agent, Epiq will: (a) create and maintain a Web site with general case information, key documents, claim search function, and mirror of ECF case docket; (b) provide state-of-the-art call center facility and Services; (c) provide confidential on-line workspace to facilitate permissions based and password protected simultaneous document sharing in connection with asset deal due diligence, contract and invoice review, or creation of contract repository, among other reasons; (d) prepare and serve required notices; (e) after service of a particular notice -- whether by regular mail, overnight or hand delivery, email or facsimile service -- file with the Clerk's office an affidavit of service that includes a copy of the notice involved, a list of persons to whom the notice was mailed and the date and manner of mailing; (f) update noticing database to reflect undeliverable or changed addresses; and (g) coordinate publication of notices in periodicals and other media. Epiq's professionals will be paid according to their customary hourly rates: Title Rate per Hour Average Rate ----- ------------- ------------ Clerk $40 to $60 $50 Case Manager (Level l) $125 to $175 $142.50 IT Programming Consultant $140 to $190 $165 Case Manager (Level 2) $185 to $220 $202.50 Senior Case Manager $225 to $275 $247.50 Senior Consultant $295 $295 The Debtors will also pay Epiq for expenses incurred. Daniel C. McElhinney, executive director of Epiq Bankruptcy Solutions LLC, maintains that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At June 30, 2010, GM had $131.899 billion in total assets, $101.00 billion in total liabilities, $6.998 billion in preferred stock, and $23.901 billion in stockholders' equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: New GM Amends Prospectus on IPO ----------------------------------------------- General Motors Company said it reserved up to 5% of the shares of common stock to be sold in the initial public offering to certain individuals residing in the U.S. and Canada, including directors, hourly and salaried employees and retirees and dealers of GM and GMCL and U.S. AC Delco distributors through a directed share program. GM disclosed the information in an October 14, 2010, amendment to the prospectus of its initial public stock offering filed with the Securities and Exchange Commission. In addition, GM disclosed that the number of shares of common stock available for sale to the general public will be reduced by the number of shares sold to those individuals. Any reserved shares not purchased by those individuals will be offered by the underwriters to the general public on the same basis as the other shares of common stock offered by this prospectus. To buy shares, those individuals are required to register by October 22, Detroit Free Press reports, citing an October 5 letter by GM to the stakeholders. The letter further noted that the minimum investment should be greater than $1,000, Free Press adds. Sources of the Free Press disclose that the IPO could have a total value of as low as $10 billion, and that the U.S. Department of the Treasury and other owners of GM have yet to decide how many shares to sell. While GM has not fixed the price for the offering, GM Chairman Ed Whitacre stated that the IPO's price will likely start at $20 to $25 per share, Free Press relates. In another report, GM shares would be priced on November 17 or November 18 and will begin trading the next day, Bloomberg News notes, citing people familiar with the matter, whose names are withheld because the plans are private. The people disclosed that GM and the Treasury do not want the offering to go beyond November 19 into the Thanksgiving holiday week. However, the schedule is not final and GM advisers have said the offering may benefit from a post-election stock market rally, the people related. According to the Bloomberg's sources, the IPO could not be lower than $6 billion and could exceed $13 billion. Meanwhile, SAIC Motor Corp. does not rule out the possibility of participating in the IPO, according to its chairman, The China Post reports. Reuters reported in September that SAIC reached out to GM to explore the prospect of taking a stake in the U.S. automaker, The China Post adds. The amendment also touched on a "Chevrolet Volt controversy," whereby Edmunds.com and Popular Mechanics, among others, earlier accused GM that it erroneously referred to the Volt as an extended-range electrical vehicle, the Free Press explains. The Free Press notes that the Volt has an onboard gasoline engine that serves as a generator, but never drives the wheels. GM thus clarified that the Volt always makes use of electric power within the drive unit at all times and at all speeds. A full-text copy of the amendment to the IPO prospectus is available for free at http://ResearchArchives.com/t/s?6c95 GM Reacts to Speculations on Public Offering GM clarified that an article published by Reuters on October 13, 2010, was not prepared or reviewed by the company or any other offering participant before the publication, according to a statement filed with the Securities and Exchange Commission on October 15, 2010. Mr. Whitacre spoke at a business event unrelated to the Company. In the October 13 article, Mr. Whitacre was asked what the price of GM stock should be in the IPO to which he responded that the price could be in $20 to $25 range. Mr. Whitacre was also quoted by Reuters as saying, "I can't say how much we'll sell, but I can say we'll have a successful IPO sometime in November." For purposes of correction and clarification, GM notes: (1) The article attributes to Mr. Whitacre the statement that shares of the Company are likely to be priced between $20 and $25 in the initial public offering in November. The article also quotes Mr. Whitacre as saying that "It's a little too early to say, but it is going to be somewhere in the $20 range ... $20, $25, something like that would be my guess" and that "it's a little too early to tell, but somewhere in there." A price range for the Offering has not yet been determined and will be disclosed only after it has been determined. In addition, the Company cannot predict whether the Offering will be priced in November. (2) The article attributes to Mr. Whitacre the statement that the Offering would be successful in reducing the U.S. government's 61 percent stake in the top U.S. automaker. The article also quotes Mr. Whitacre as saying that "I can't say how much we'll sell, but I can say we'll have a successful IPO sometime in November" and that "it's going to work and it was absolutely the right thing to save this company." The Company cannot predict whether the Offering, if completed, will be successful or whether it will work. In addition, the Company cannot predict whether the Offering will occur in November. (3) The article quotes Mr. Whitacre as saying that "investors are going to buy the management of the company, as well as the cars they make." The Company cannot predict the basis on which any potential investors would determine whether or not to invest in the Company. "Parties should consider statements in the article only after carefully evaluating all of the information in the preliminary prospectus within the registration statement and the final prospectus to be filed," GM stated. GM continued, "Statements in the article that are not attributed directly to Mr. Whitacre represent the author's or others' opinions and are not endorsed or adopted by the company or any other offering participant. Statements in the article that are not attributed directly to Mr. Whitacre were not intended and should not be considered as offering material." About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At June 30, 2010, GM had $131.899 billion in total assets, $101.00 billion in total liabilities, $6.998 billion in preferred stock, and $23.901 billion in stockholders' equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Old GM Wins Conditional Nod of Plan Outline ----------------------------------------------------------- Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York approved the Disclosure Statement explaining the Joint Chapter 11 Plan of Reorganization filed by Motors Liquidation Company and its debtor affiliates, subject to modifications to be made to the Disclosure Statement, Tiffany Kary of Bloomberg News reported on October 21, 2010. "The disclosure statement is conditionally approved," Judge Gerber was quoted by Bloomberg as saying at an October 21, 2010 hearing. Judge Gerber overruled objections to the Disclosure Statement, pointing out that "this case cannot be run for the needs and concerns of any subset of GM's thousands of creditors," Ms. Kary noted. Prior to the hearing on the approval of the Disclosure Statement, the County of Onondaga, State of New York and certain pro se parties opposed the Disclosure Statement. The County renewed its objection to the Disclosure Statement, asserting arguments substantially similar to the opposition papers filed on October 13, 2010. In separate letters and pleadings, Tracy Woody; Marianne Lisenko; Steve Friedland; James E. Reese; Sylvester Shaw and Frances R. Campbell objected to the Disclosure Statement. Mr. Woody opposed the Disclosure Statement to the extent that his action is not yet resolved and will be able to submit his claim until final judgment is rendered. Mr. Woody also asked the Bankruptcy Court to lift the automatic stay to permit him to pursue its litigation in Wake County Courthouse District Court, Raleigh, North Carolina, to proceed with his claims against GM over product liability. Judge Gerber also denied the Official Committee of Unsecured Creditors' request to block the U.S. Department of the Treasury from asserting rights in connection to a potential $1.5 billion lawsuit proceeds and giving the Creditors' Committee exclusive rights to any of the recovery, Ms. Kary said. Judge Gerber, however, clarified that the ruling is without prejudice to underlying issues in the dispute between the creditors and the Treasury, Ms. Kary related. The Debtors and certain federal entities have agreed to a creation of an environmental response trust with a $773-million funding. The settlement agreement will be among the modifications to be incorporated in the Disclosure Statement and the Plan. A formal order reflecting the Bankruptcy Court's ruling is not yet available in the Court's public dockets. The Chapter 11 Plan Motors Liquidation Company, formerly General Motors Corporation; MLC of Harlem, Inc.; MLCS, LLC; MLCS Distribution Corporation; Remediation and Liability Management Company, Inc.; and Environmental Corporate Remediation Company, Inc., delivered on August 31 to Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York their Joint Chapter 11 Plan of Reorganization and a Disclosure Statement explaining the Plan. The Plan, provides a framework for the environmental remediation of the remaining "Old GM" properties and the distribution of "New GM" stock and warrants to unsecured creditors. If the Plan is confirmed, substantially all of the Debtors' assets and liabilities will be transferred to four trusts: (1) the Environmental Remediation Trust, or "ERT," that provides funds for the continuing environmental remediation of the Debtors' remaining properties; (2) the General Unsecured Creditors Trust, that will be responsible for resolving the outstanding claims of the Debtors' unsecured creditors and distributing the General Motors Company common stock and warrants owned by MLC to those unsecured creditors whose claims are allowed; (3) the Asbestos Trust that will handle both present and future asbestos-related claims against the Debtors; and (4) the Avoidance Action Trust that will deal with certain litigation-related claims of the Debtors. MLC presently owns 10% of General Motors' common stock, plus warrants that are exercisable for a further 15% of General Motors' common stock on a fully diluted basis. MLC will be issued up to an additional 2% of General Motors' common stock if the final estimated aggregate amount of the Debtors' unsecured claims exceeds certain thresholds. Additional key highlights of the Debtors' chapter 11 case to date include: -- Management of more than 70,000 claims, totaling more than $275 billion, with more than $150 billion in claims already eliminated or resolved. -- Management of more than 900,000 contracts covering more than 65,000 business partners. -- Announced asset-sales activities that include the sale of the Debtors' Wilmington (Del.) Assembly to Fisker Automotive Inc. (for the production of hybrid electric cars); the sale of Pontiac (Mich.) Centerpoint to Raleigh Studios Inc. (for the creation of a movie studio); and an agreement, subject to certain conditions, to sell Strasbourg (France) Powertrain to General Motors (which is expected to save 1,200 jobs). -- The establishment of a Web portal to facilitate communication with interested parties, which has had almost 32 million hits to date. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At June 30, 2010, GM had $131.899 billion in total assets, $101.00 billion in total liabilities, $6.998 billion in preferred stock, and $23.901 billion in stockholders' equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Old GM Settles Environmental Claims for $773MM -------------------------------------------------------------- Motors Liquidation Company and its debtor affiliates submitted to U.S. Bankruptcy Judge Robert Gerber for approval a $773-million environmental response trust consent decree and settlement agreement they entered with the United States Government and 15 other parties. The signing parties are the states of Delaware, Illinois, Indiana, Kansas, Michigan, Missouri, New Jersey, New York, Ohio, and Wisconsin; the Commonwealth of Virginia; the Louisiana Department of Environmental Quality; the Massachusetts Department of Environmental Protection; the Department of Environmental Protection of the Commonwealth of Pennsylvania, and the Saint Regis Mohawk Tribe. Under the Settlement Agreement, the Debtors will place certain properties and other assets of the Debtors into an environmental response trust to resolve disputes relating to the Properties, a schedule of which is available for free at: http://bankrupt.com/misc/gm_propertiessubjecttosettlemnt.pdf The Environmental Response Trust will: (1) conduct, manage or fund certain environmental actions with respect to certain of the Properties, including the migration of hazardous substances emanating from certain of the Properties, in accordance with the Settlement Agreement and the Trust Agreement; (2) reimburse the agency designated for each Property for Environmental Actions it conducts or has agreed to pay for with respect to the Properties; to own certain of the Properties, carry out administrative and property management functions related to the Properties and pay associated administrative costs; and (3) try to sell or transfer the Properties owned by the Environmental Response Trust with the objective that they be put to productive or beneficial use. The Debtors will make a payment of $641,434,945 to fund the Environmental Response Trust. The Debtors will also pay or cause to be paid to an expendable trust to be established pursuant to Section 6 of Chapter 6A of the Massachusetts General Laws $786,944, and a trust fund specified by Section 807 of the Illinois Administrative Code $102,390. The Environmental Response Trust funding amount consists of: (i) a Minimum Estimated Property Funding Account containing funding with respect to each Property totaling $295,036,131; (ii) a Reserve Property Funding Account containing funding with respect to each Property totaling $52,065,197; (iii) a Long Term OMM Property Funding Account containing funding for each Property totaling $84,099,794; (iv) a Cushion Funding Account totaling $68,233,823; (v) an Administrative Funding Account for $102,000,000; and (vi) an Administrative Funding Reserve Account totaling $40,000,000. A property in Massena, New York will receive the biggest funding for cleanup totaling $120,860,604. According to The Wall Street Journal, the property is designated as a Superfund site where GM disposed of polychlorinated biphenyls or PCBs, when it manufactured aluminum diecasting for 50 years. The Saint Regis Mohawk, which is a signatory to the Settlement Agreement, owned the property, the Journal notes. EPLET, LLC, is appointed as the trustee to administer the Environmental Response Trust in accordance with the Settlement Agreement and the Trust Agreement, a full-text copy of which is available for free at: http://bankrupt.com/misc/gm_environmentaltrustpact.pdf The Administrative Trustee will, among other things, manage the Cushion Funding Account. The Cushion Funding Account provides portfolio-wide backup funding with respect to any of the Properties where the Minimum Estimated Property Funding and Reserve Property Funding have been exhausted, or the Long Term OMM Property Funding has been exhausted, and additional funding is necessary to undertake or complete the Environmental Action. The Cushion Funding Account will also provide funding with respect to Properties where no funding is allocated and unforeseeable conditions are discovered or arise which require funding to undertake Environmental Action. The Governments have entered into the Settlement Agreement and the Trust Agreement in significant reliance on the availability of the Cushion Funding Account for any of the Properties. In order to preserve funding in the account, there will be a presumption against using Cushion Funding absent the compliance of certain steps. On the effective date of the Plan and simultaneously with the payments to the Environmental Response Trust, Debtors will transfer, assign and deliver to the Environmental Response Trust all of their rights, title, and interest in and to each of the Properties. After the establishment and funding of, and the conveyance of the Properties owned by Debtors to, the Trust, the Debtors and their successors will have no further role or residual interest with respect to the Trust or the Properties other than as expressly provided in the Settlement Agreement, nor will they have any further liability in connection with the matters resolved in the Settlement Agreement, including all environmental claims and other environmental liabilities asserted in any proof of claim filed by the Governments with respect to the Properties, other than as expressly reserved in the Settlement Agreement. The Settlement Agreement will be subject to a 30-day public comment period. If the U.S. or any State or Tribe taking public comment withdraws or withholds its consent to the Settlement Agreement before the Effective Date, the Settlement Agreement will be void and have no further force and effect. The St. Regis Mohawk Tribe has already filed a notice formally consenting to the Settlement Agreement. More importantly, the Debtors will incorporate the Settlement Agreement into the Plan and approval of the Settlement Agreement will be a condition precedent to confirmation of the Plan. A full-text copy of the Settlement Agreement is available for free at http://bankrupt.com/misc/gm_environmentlsettlementpact.pdf Lisa P. Jackson, the administrator of the Environmental Protection Agency, referred to the trust as the largest environmental trust in U.S. history, according to a public statement. "We are happy to have a path forward that addresses the needs of former auto communities," Ms. Jackson noted in the statement. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At June 30, 2010, GM had $131.899 billion in total assets, $101.00 billion in total liabilities, $6.998 billion in preferred stock, and $23.901 billion in stockholders' equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Committee Plea on Term Loan Litigation Denied ------------------------------------------------------------- The official committee of unsecured creditors formed in the Chapter 11 cases of Motors Liquidation, formerly General Motors Corp., filed with the U.S. Bankruptcy Court for the Southern District of New York a motion to enforce the bankruptcy judge's previous order approving a DIP financing and the wind-down process for Old GM. The Creditors Committee explains that on August 26, 2010 -- more than a year after the Committee sued for the return of $1.5 billion paid on account of an apparently voidable security interest ("Term Loan Litigation") -- the U.S. Treasury for the first time asserted that Treasury, not the unsecured creditors, owned the Term Loan Litigation. On August 31, 2010, the Debtors filed a Joint Chapter 11 Plan, which, at the Treasury's request, provided that ownership of the Term Loan Litigation would be determined by the Court or by negotiation between Treasury and the Committee. Judge Robert Gerber, however, denied the Official Committee of Unsecured Creditors' request, according to Bloomberg News. Judge Gerber however said that the ruling is without prejudice to underlying issues in the dispute between the creditors and the Treasury, Bloomberg adds. A formal ruling is not yet available in the Court's dockets. Export Development Canada, as one of the DIP Lenders, adopted the objection of the U.S. Department of the Treasury to the Official Committee of Unsecured Creditors' Motion to Enforce Final DIP Order. The U.S. Department of the Treasury asked the Bankruptcy Court to deny the Creditors Committee's request, citing that the request is jurisdictionally and procedurally improper, seeks relief that is contrary to the Bankruptcy Code, and rests on the asserted existence of a "deal" that is not reflected in governing documents. On behalf of the Treasury, David S. Jones, Esq., assistant U.S. attorney, in New York -- David.jones@usdoj.gov -- asserts that the Creditors' Committee fails to recognize that the very orders that it invokes grant the Treasury, as DIP lender, an allowed super-priority administrative expense claim under the DIP Credit Facility. Nonetheless, the Creditors' Committee asks the Court to decide, based on other provisions of orders and agreements that nowhere expunge or waive the Treasury's administrative claim, that only the Debtors' unsecured creditors are entitled to benefit from future potential proceeds of an action to avoid $1.5 billion in liens and transfers, he points out. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At June 30, 2010, GM had $131.899 billion in total assets, $101.00 billion in total liabilities, $6.998 billion in preferred stock, and $23.901 billion in stockholders' equity. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENOA HEALTHCARE: Moody's Gives Stable Outlook, Puts 'Ba3' Rating ----------------------------------------------------------------- Moody's Investors Service changed the outlook of Genoa Healthcare Group, LLC, to stable from negative as the company amended and extended its revolving credit facility's maturity date to 2012. Moody's assigned a Ba3 rating to the amended and extended revolving credit facility. Concurrently, Moody's affirmed the ratings of Genoa including the B2 corporate family and probability of default ratings and the Ba3 rating on the company's first lien term loan as well as the B3 rating on the second lien term loan. These rating actions were taken: -- Corporate family rating, affirmed at B2; -- Probability of default rating, affirmed at B2; -- $12 million, First Lien Revolving Credit Facility, due 2012, assigned Ba3 (LGD2, 23%); -- $100 million ($82.7 million outstanding) First Lien Term Loan, due 2012, affirmed at Ba3 (LGD2, 23%); -- $50 million Second Lien Term Loan, due 2013, affirmed at B3, LGD assessment changed to LGD4, 66% from LGD4, 64%; -- $20 million, First Lien Revolving Credit Facility, due 2010, rated Ba3 (LGD2, 23%), withdrawn. Ratings Rationale The B2 corporate family rating considers the company's moderate debt leverage and interest coverage for the B2 ratings category. Concurrently, the B2 corporate family rating remains constrained by Genoa's revenue concentration in Florida and reliance on Medicaid reimbursement. The stable outlook takes into consideration the expectation of good liquidity despite the reduction in the company's revolving credit facility size to $12 million from $20 million in conjunction with the recent amendment in August 2010. In addition, the stable outlook reflects reduced refinancing risk as the company has no substantial debt maturities prior to mid-2012 and considers expected near-term stability in the reimbursement environment as Medicaid rates have been set through June 2011. Given Genoa's high revenue concentration in Florida and the longer-term pressures expected on federal and state reimbursement, Moody's do not anticipate an upgrade in the near-term. The outlook could be changed to negative or the ratings could be downgraded if Florida implements material reductions to Medicaid reimbursement to skilled nursing facilities resulting in negative pressures to the company's financial performance. Further, if the company adopts an aggressive acquisition strategy that results in additional leverage, Moody's could downgrade the ratings. Headquartered in Tampa, FL, Genoa, through its subsidiaries, provides skilled nursing and specialty healthcare services in skilled nursing facilities throughout the state of Florida. The company also provides consulting and administrative services through contractual arrangements. The company operates the Florida facilities through leases with independent third parties and does not own any of the real property associated with the facilities. Revenues for fiscal 2009 were $662 million. GEORGIA-PACIFIC LLC: S&P Raises Corporate Credit Rating From 'BB+' ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit ratings on Atlanta-based Georgia-Pacific LLC and its subsidiaries to 'BBB' from 'BB+'. The rating outlook is positive. At the same time, S&P raised the issue-level rating on the company's senior secured credit facilities to 'BBB+' from 'BBB', the issue-level ratings on GP's guaranteed senior unsecured notes to 'BBB' from 'BB+', and the issue-level ratings on the senior unsecured notes (nonguaranteed) to 'BBB-' from 'BB'. S&P also withdrew the recovery ratings on GP's issues given the 'BBB' corporate credit rating, as Standard & Poor's typically does not assign recovery ratings on rated debt of companies with investment-grade ratings. The senior secured debt is rated one notch above the 'BBB' corporate credit rating to reflect S&P's view that lenders to the senior facilities continue to benefit from perfected security interests in the pledged collateral of the company. The ratings also incorporate S&P's expectations that GP will continue to reduce the amount of senior secured debt in its capital structure with internally generated cash flow or through the issuance of unsecured debt. The nonguaranteed senior unsecured notes are rated one notch below the corporate credit rating to reflect the sizable priority liabilities, including the secured credit facilities and guaranteed senior unsecured debt that currently rank ahead of these notes. "The upgrade recognizes the greater-than-expected progress GP has made in strengthening its credit measures through better cash flow and higher debt reduction, which has caused us to revise S&P's view of GP's financial risk profile to significant from aggressive," said Standard & Poor's credit analyst Pamela Rice. In S&P's view, the diversity of GP's business portfolio is sustaining its EBITDA at more than $3 billion per year despite having only modest earnings from its large building products business given challenging construction markets. Key drivers of the recent earnings improvement include higher-than-expected prices for packaging, wood products, pulp, and consumer products, and moderating raw material costs. Moreover, S&P believes the company will make substantial progress to address its large 2012 debt maturity in a timely manner, and that GP's financial policies should enable it to sustain an investment-grade rating. The rating action also reflects S&P's expectations for additional improvement in the company's financial risk profile as the U.S. economy and housing markets gradually recover over the intermediate term. In S&P's view, the company should be able to generate free cash flow of between $750 million and $1.5 billion in each of the next few years, which S&P believes it will continue to use to reduce debt. GP's adjusted debt was $13 billion at June 30, 2010, and adjusted debt to EBITDA was 3.6x, near the 3.5x leverage that S&P consider to be in line with the rating for GP given S&P's view of the company's business risk profile as strong. S&P could raise the ratings if the company strengthens its credit measures such that S&P believed adjusted leverage would be 3x or below and funds from operations to debt would be near 25%. Any upgrade would also consider GP's progress in addressing the $4.1 billion of debt that currently matures in the next two years, as well as S&P's view of its parent's potential support. GERMANTOWN SETTLEMENT: Withdraws Plan Amid Objections ----------------------------------------------------- Christopher K. Hepp at The Philadelphia Inquirer reports that Germantown Settlement has withdrawn its plans to come out of bankruptcy in the face of opposition from its key creditors. According to the report, one of those creditors, the city's Redevelopment Authority, notified Germantown Settlement that it intended to reclaim and sell the Germantown YWCA, which Settlement bought with a $1.3 million RDA loan. Kristen MacBeth at BankruptcyHome.com reports that Germantown Settlement faces continued opposition from creditors in the Company's effort to exit Chapter 11. The plan is being challenged by creditors including Pennsylvania's Redevelopment Authority (RDA), Nova Bank, and Parke Bank. The current bankruptcy plan would cost city taxpayers an estimated $1.8 million, according to BankruptcyHome. BankruptcyHome relates that under the Plan, in order to cover the debts, the non-profit intended to refinance its properties and obtain private donations to continue operations. The RDA accuses the Germantown Settlement of not having any financing and no means of funding the proposal, BankruptcyHome.com reports. The Redevelopment Authority plans to foreclose on the Debtor's Germantown YMCA, which was recently damaged by a fire, as well as the nearby Germantown Community Center. The creditors hope to use the property in order to recoup funds from the buildings $7.2 million mortgage, says Ms. MacBeth. About Germantown Settlement Germantown Settlement is a social-service provider funded by taxpayers in Philadelphia. Philadelphia, Pennsylvania-based Germantown Settlement, aka Germantown Community Center, filed for Chapter 11 protection (Bankr. E.D. Pa. Case No. 10-12615) on April 1, 2010. Its affiliate, Greater Germantown Housing Development Corporation, also filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-12614). Germantown Settlement estimated its assets and debts at $1 million to $10 million as of the petition date. Greater Germantown estimated its assets and debts at $10 million to $50 million. Judge Bruce I. Fox presides over the Chapter 11 cases. Albert A. Ciardi, III, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., serve as the Debtors' counsel. GINA TCHIKOVANI: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Gina Meneses Tchikovani 40 Buck Court Woodside, CA 94062 Bankruptcy Case No.: 10-34144 Chapter 11 Petition Date: October 20, 2010 Court: U.S. Bankruptcy Court Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Oxana Kozlov, Esq. LAW OFFICES OF OXANA KOZLOV 649 Dunholme Way Sunnyvale, CA 94087 Tel: (650) 814-7708 E-mail: okozlov@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of creditors together with its petition. GLICK REALTY: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Glick Realty Corp Provost & Colrick 201 Catherine St Elizabeth, NJ 07201 Bankruptcy Case No.: 10-42443 Chapter 11 Petition Date: October 20, 2010 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Donald H. Steckroth Debtor's Counsel: Edward F. Colrick, Esq. PROVOST & COLRICK, PA 77 Main Street Freehold, NJ 07728 Tel: (732) 462-6262 Fax: (732) 462-6538 E-mail: mpc6262@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Doris Glick, president. GRACEWAY PHARMACEUTICALS: S&P Keeps Developing Watch on CC Rating ----------------------------------------------------------------- Standard & Poor's said that its 'CC' issue-level rating on Graceway Pharmaceuticals LLC's first-lien debt remains on CreditWatch with developing implications, where it was placed on Sept. 17, 2010. The '4' recovery rating remains unchanged. The 'CC' issue-level rating remains on CreditWatch despite the amendment and covenant holiday the company received on its first- lien debt last Friday. Graceway continues to face a number of challenges, in particular a weak liquidity position, with significant near-term cash needs. Zyclara's PDUFA date for external genital wart indication is Dec. 15, 2010 and, if approved, the company will incur significant costs to launch for that indication. Moreover, under terms of the amendment, the company has to make amortization payments on the first-lien debt beginning November 2010 and ending March 2011. Separately, if an agreement with second-lien lenders cannot be reached prior to the expiration of the standstill period, at the end of February 2011, the second-lien lenders could push the company into bankruptcy. The 'SD' corporate credit rating remains unchanged. Ratings List Graceway Pharmaceuticals LLC Corporate Credit Rating SD/-- Ratings Remain On CreditWatch Graceway Pharmaceuticals LLC First-Lien Debt CC/Watch Dev Recovery Rating 4 GREEN MOUNTAIN: Moody's Assigns 'Ba3' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service assigned first-time ratings for Green Mountain Coffee Roasters, Inc., including a provisional (P)Ba3 Corporate Family Rating, (P)B1 Probability of Default Rating and SGL-3 Speculative Grade Liquidity Rating. Moody's also assigned a (P)Ba3 to $1.35 billion of proposed senior secured bank facilities. Moody's will assign definitive ratings after the company completes the proposed bank debt offering. The rating outlook is stable. Ratings Rationale The (P)Ba3 Corporate Family Rating reflects the expanding base and growing retail acceptance of GMCR's category-leading Keurig single-serve coffee brewers that in turn drive sales of its high- margin "K-Cup" coffee cartridges. The rating also reflects the company's aggressive growth strategy that has involved the rapid consolidation of K-Cup licensees over the past 18 months in four separate transactions valued at $1.4 billion, including the $890 million pending acquisition of Canada-based Van Houtte, Inc. The resulting leverage from these acquisitions is moderated by the high operating profit margins generated by these businesses and by the $637 million of equity raised to partially fund them. Moody's do not anticipate any major integration problems with any of the recent acquisitions based on their modest business complexity and similarity to GMCR's core K-Cup business. After GMCR has consolidated the last major K-Cup licensee that is Van Houtte, Moody's expect that GMCR will curtail its acquisition activity in the near-term. Of greater concern is the company's ability to manage its over 50% organic sales growth rate, which has intensified demands on its highly concentrated supply chain and distribution network. The company currently contracts with a single manufacturer in Hong Kong to make its brewers, and in turn distributes them through a single distributor in the United States-a material weakness in its operations and risk management policy, in Moody's view. In addition, although gross cash flows have grown rapidly, the incremental working capital and plant expansion required to keep up with rapid brewer and K-Cup demand has consumed substantially all of GMCR's operating cash flow generation. As a result, Moody's expect that negative free cash flow is likely to persist for the foreseeable future, and that GMCR could exhaust availability under its bank facilities within the next 18 to 24 months unless it raises additional financing. GMCR should be able to sustain reasonable access to the capital markets in the intermediate term based on its modestly leveraged credit profile, its recent successful raise of $250 million of equity from Italian coffee roaster Lavazza, and its current public equity capitalization of over $4 billion. "GMCR's heavy reliance on external financing raises liquidity concerns, but overall financial leverage should remain in an acceptable range for the Ba3 rating, based on Moody's expectation that wider adoption of the Keurig machines will drive operating profits from K-Cup sales at a rate faster than the company's debt incurrence," said Brian Weddington, Moody's senior credit officer. At closing of the Van Houtte acquisition, expected in late 2010, Moody's estimates proforma debt to EBITDA at 4.1 times, declining to below 3.25 times by the end of fiscal 2011. GMCR competes against the major coffee producers like Kraft and Sara Lee, many of which market their own brewing platforms in the single-serve coffee format. Moody's anticipates that eventually GMCR will also face direct competition in the manufacturing and marketing of Keurig-compatible coffee cartridges (i.e. K-Cups) from these companies as well as from smaller coffee roasters looking to develop new sales channels. "Competitive pressures are likely to intensify after 2012 when two of GMCR's key patents expire, which will likely lead to a gradual decline in the company's K-Cup market share and profit margins, " added Weddington. "For this reason, Moody's expects GMCR to strengthen its debt protection measures over the next 18 months and sustain them at levels that are stronger than typical for a Ba3 rated company." Finally, Moody's cautions that an ongoing SEC investigation into the company's revenue recognition practices could have consequences to GMCR's credit ratings if the outcome is significantly more negative than anticipated. The proceeds from the new bank facilities will be used to refinance approximately $275 million in existing debt and to fund the $890 million acquisition of Van Houtte, a transaction that was announced on September 14, 2010. At closing, Moody's expect approximately $575 to be drawn under the proposed $750 million revolving credit facility. Ratings assigned: Green Mountain Coffee Roasters, Inc. -- Corporate Family Rating at (P)Ba3; -- Probability of Default Rating at (P)B1; -- Speculative Grade Liquidity Rating at SGL-3; -- $750 million senior secured bank revolving credit facility due 2015 at (P)Ba3 (LGD-3, 30%); -- $250 million senior secured bank Term Loan A due 2015 at (P)Ba3 (LGD-3, 30%); -- $350 million senior secured bank Term Loan B due 2016 at (P)Ba3 (LGD-3, 30%). The proposed senior credit facilities will be secured by a first priority lien on substantially all the assets of GMCR and domestic subsidiaries and by 65% of the capital stock of GMCR's non-U.S. subsidiaries (principally, the Canadian operations). The domestic subsidiaries, which will be guarantors under the proposed agreement, on a proforma basis generate approximately 75% of total revenues and EBITDA. Material terms of the bank agreement have not been finalized, including financial covenants and pricing, thus, definitive ratings on the bank facilities are subject to Moody's review of final documentation. The SGL-3 rating is based on Moody's expectation that GMCR will have adequate liquidity over the next twelve months, but will be reliant on revolver borrowings to fund operations. Following the funding of the Van Houtte acquisition, Moody's expect the company to have $175 million of availability under its proposed 5-year $750 million revolving credit facility. The company will use this availability to fund working capital needs that typically peak in the fourth quarter as the company builds brewer inventory for the holiday season. Given the company's high demands for growth capital, Moody's does not anticipate positive free cash flow generation in the near-term. The bank debt instrument ratings reflect both the overall probability of default (as reflected in the (P)B1 PDR) and a below-average mean family loss given default assessment of 30% (or an above-average mean family recovery estimate of 65%), in line with Moody's LGD Methodology and typical treatment for an all- first-lien bank senior secured debt capital structure. Corporate Profile Green Mountain Coffee Roasters, Inc. based in Waterbury, Vermont, is a manufacturer of specialty coffee and other hot beverages, and single serve coffee brewing systems. The company's operations are managed through two business units. The Specialty Coffee business unit produces coffee, tea and hot cocoa from its family of brands, including Tully's Coffee(R), Green Mountain Coffee(R), Newman's Own(R) Organics coffee, Timothy's World Coffee(R) and Diedrich(R), Coffee People(R) and Gloria Jeans(R), a licensed trademark. The Keurig business unit manufactures gourmet single-cup brewing systems. GMCR produces the K-Cup(R) portion packs for Keurig(R) Single-Cup Brewers. Moody's estimates that fiscal 2010 sales totaled $1.3 billion. GREENFIELD SOUTH: S&P Withdraws 'BB-' Rating on Senior Loan ----------------------------------------------------------- Standard & Poor's Ratings Services said it withdrew its 'BB-' preliminary issue-level rating and '3' preliminary recovery rating on Greenfield South Power Corp.'s proposed US$335 million senior secured term loan facility due 2015. The loan was to finance the construction of a 293 megawatt combined-cycle gas turbine power plant in Mississauga, Ont. S&P withdrew the rating following the company's decision to postpone the issue. In the event Greenfield decides to relaunch it, S&P could reassign a rating, basing it on its assessment of the project economics at that time. HARLEQUIN ENTERTAINMENT: Voluntary Chapter 11 Case Summary ---------------------------------------------------------- Debtor: Harlequin Entertainment Group LLC dba Brownies 23 East 23 East Lancaster Avenue Ardmore, PA 19003 Bankruptcy Case No.: 10-19031 Chapter 11 Petition Date: October 19, 2010 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Magdeline D. Coleman Debtor's Counsel: Allen B. Dubroff, Esq. ALLEN B. DUBROFF ESQUIRE & ASSOCIATES, LLC 101 Greenwood Avenue, Fifth Floor Jenkintown, PA 19046 Tel: (215) 635-7200 Fax: (215) 635-7212 E-mail: allen@dubrofflawllc.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Anna C. Arena, sole managing member. HOST HOTELS: Fitch Assigns 'BB-' Rating to $500 Mil. Notes ---------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to the $500 million aggregate principal amount of 6% senior notes due 2020 proposed by Host Hotels & Resorts, L.P, the sole general partner of Host Hotels & Resorts, Inc. The Rating Outlook is Stable. Fitch currently rates Host: Host Hotels & Resorts, Inc. -- Issuer Default Rating 'BB-'. Host Hotels & Resorts, L.P. -- IDR 'BB-'; -- Bank credit facility 'BB-'; -- Senior notes 'BB-'; -- Exchangeable senior debentures 'BB-'. The net proceeds of the offering will be used to redeem $250 million or more of the company's 7 1/8% series K senior notes due November 2013 and for general corporate purposes, future acquisitions or additional debt repayment. Host's 'BB-' IDR reflects that the company's property-level results and leverage ratios have stabilized at levels consistent with the 'BB-' rating for a hotel real estate investment trust. Fitch anticipates mid single-digit revenue per available room growth in 2011, and thus incremental improvements in earnings over the medium term. The Stable Outlook centers on the steps taken by management to raise various sources of capital, which have improved Host's financial position. The company has accessed both the equity and debt capital markets and its cash balance and level of retained cash flow have provided ample liquidity for the existing ratings. In addition, the Stable Outlook reflects the quality of Host's portfolio and unencumbered asset coverage of senior obligations, which Fitch anticipates will improve over the next 12-24 months. Lodging demand has recovered from the recession more quickly than Fitch, and most industry observers, expected heading into 2010. As a result, in March 2010 Fitch revised the Rating Outlooks for lodging C-Corps and REITs to Stable from Negative. If demand trends continue to improve and macroeconomic trends do not deteriorate meaningfully lodging REITs and C-Corps could see positive rating momentum within the next six months. As indicated in 'The Penthouse View: Fitch's Cross-Sector Lodging and Timeshare Outlook,' dated Dec. 2, 2009, Fitch's initial demand recovery expectation called for a 3%-5% decline in 2010 industrywide RevPAR and low single-digit growth in 2011. Fitch updated that view multiple times in rating commentaries during March and April, and the improvement has been sustained over the past few months even as macroeconomic trends have softened. Fitch's current base case outlook now incorporates U.S. industrywide RevPAR growth in the mid-single digit range in 2010 and slightly better mid-single digit growth in 2011. In addition, the supply outlook is also improving, providing an attractive supply/demand backdrop for industry fundamentals over the next couple years. Hotel transaction volume has also picked up in recent months, which indicates that investors are becoming increasingly comfortable buying into a lodging recovery and that bid/ask spreads for hotel assets have narrowed. This bodes well for C- Corps that plan on strategically selling assets, such as Starwood and raises acquisition risk concerns for lodging REITs, such as Host. That concern is somewhat mitigated by Host's solid asset transaction track record and the likely distressed nature of potential acquisition targets amid the improving industrywide supply/demand outlook over the near to medium term. While the demand improvement is encouraging, Fitch notes that the improvement in year-over-year comparisons is relative to a very weak travel demand period, and it remains to be seen if the improvement will be sustained against more difficult comparisons and as global economic stimulus packages roll off in upcoming quarters. Given the large monetary and fiscal imbalances created in response to the credit crisis, Fitch expects the path back to steady-state global economic growth will be choppy and fragile, with uncertainty regarding the level of, or potential for additional economic stimulus programs. Although lodging issuers have positioned themselves well from an operating and financial standpoint, risks of a double-dip recession or disruptions in the capital markets remain very much intact, although Fitch believes the probability of a double-dip recession is low. Fitch's current economic forecast calls for annual U.S. GDP growth of 2.5%-2.7% from 2010-2012, with world economic growth slightly faster at 2.9%-3.2% over that time frame. If economic trends progress toward that slow growth scenario, lodging companies may shift financial policies in the near term and become more growth oriented and/or shareholder-friendly, in Fitch's view. Fitch will continue to review capital allocation policies when considering the potential for positive rating actions over the next six months. Headquartered in Bethesda, MD, Host Hotels & Resorts, Inc., owns 113 luxury and upscale hotel properties totaling 63,000 rooms, and is the largest lodging REIT in the National Association of Real Estate Investment Trust's composite index. As of Sept. 10, 2010, Host had $12.1 billion in total assets and shareholders' equity of $6.1 billion. IMAGE ENTERTAINMENT: June 30 Balance Sheet Upside-Down by $826,000 ------------------------------------------------------------------ Image Entertainment, Inc., filed its quarterly report on Form 10-Q, reporting a net loss applicable to common shareholders of $41,000 on $17.5 million of revenue for the three months ended June 30, 2010, compared with a net loss of $3.0 million on $23.7 million of revenue for the same period ended June 30, 2009. At June 30, 2010, the Company had a working capital deficit of $8.1 million compared to a working capital deficit of $6.3 million at March 31, 2010. The Company's balance sheet at June 30, 2010, showed $66.6 million in total assets, $50.5 million in total liabilities, $6.0 million in Series B convertible preferred stock, $10.9 million in Series C convertible preferred stock, and a stockholders' deficit of $826,000. A full-text copy of the Form 10-Q is available for free at: http://researcharchives.com/t/s?6cd3 About Image Entertainment Chatsworth, Calif.-based Image Entertainment, Inc. (Other OTC: DISK.PK) -- http://www.image-entertainment.com/-- is an independent licensee and distributor of entertainment programming in North America. J RAY MCDERMOTT: S&P Withdraws 'BB' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that it has withdrawn its 'BB' corporate credit rating on McDermott (J. Ray) S.A. (J. Ray) at the company's request. The outlook on the rating was stable prior to the withdrawal. J. Ray is a 100% wholly owned subsidiary of McDermott International Inc. (BB/Stable/--), the borrower under the company's revolving credit facility. JERRY COIL: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Jerry Dean Coil 8145 War Glory Place Pleasanton, CA 94566 Bankruptcy Case No.: 10-72082 Chapter 11 Petition Date: October 20, 2010 Court: U.S. Bankruptcy Court Northern District of California (Oakland) Judge: Edward D. Jellen Debtor's Counsel: Darya Sara Druch, Esq. LAW OFFICES OF DARYA SARA DRUCH 1 Kaiser Plaza, #480 Oakland, CA 94612 Tel: (510) 465-1788 E-mail: ecf@daryalaw.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 six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb10-72082.pdf JERRY TOPOLOS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Joint Debtors: Jerry James Topolos Christine Diane Topolos 1012 Chenery Street San Francisco, CA 94131 Bankruptcy Case No.: 10-34156 Chapter 11 Petition Date: October 20, 2010 Court: U.S. Bankruptcy Court Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtors' Counsel: James F. Beiden, Esq. LAW OFFICES OF JAMES F. BEIDEN 840 Hinckley Road, #245 Burlingame, CA 94010 Tel: (650) 697-6100 E-mail: attyjfb@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Joint Debtors' 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb10-34156.pdf JETBLUE AIRWAYS: Fitch Gives Positive Outlook --------------------------------------------- The credit quality and ratings outlook for the largest U.S. airlines remains positive this fall, according to Fitch Ratings' latest 'Airline Credit Navigator' report. More than a year into the cyclical demand recovery that began to drive improved operating results late in 2009, U.S. airlines are again poised to report solid operating and credit quality trends as third quarter 2010 (3Q'10) results roll out this month. Despite ever-present risks of external demand shocks and rising fuel costs, the largest carriers continue to report progress in their efforts to reduce leverage, generate strong free cash flow and bolster liquidity. 'Since M&A activity has picked up substantially with the United Airlines-Continental Airlines merger and Southwest Airlines' bid to acquire AirTran Holdings, there should be a more sustainable capacity growth path that will allow the U.S. industry to counter inevitable demand and fuel price shocks more resiliently through the next cycle,' said Bill Warlick, Senior Director at Fitch. According to the report, progress toward leverage reduction and more consistent cash flow generation has been significant over the last year, and all of the large carriers now have sufficient liquidity to fund upcoming cash obligations comfortably, absent a large external demand or fuel price shock. With the United- Continental merger now closed and the Southwest-AirTran deal expected to be approved, the industry has now consolidated dramatically from a position of fragmentation and persistent overcapacity just five years ago. Fitch says investors should be focused on any outlook language that points to an erosion of full-fare booking trends for the remainder of the year during the airlines' 3Q'10 earnings calls. More difficult revenue per available seat mile comparisons will inevitably reduce unit revenue growth moving into 2011, but Fitch continues to believe that modest industry revenue growth can be supported next year, mainly through diminished but still material gains in passenger yields. Assuming relatively stable fuel prices over the next year, most of the large U.S. carriers are well placed to report positive FCF, allowing them to direct more cash toward debt reduction and continuing the process of balance sheet repair at a point in the economic cycle when credit quality improvement is essential. Fitch's U.S. Airlines Ratings: -- United Continental Holdings, Inc.: IDR 'B-'; Positive Outlook -- Delta Air Lines, Inc.: IDR 'B-'; Stable Outlook -- AMR Corp./American Airlines, Inc.: IDR 'CCC' -- US Airways Group, Inc.: IDR 'CCC' -- Southwest Airlines Co.: IDR 'BBB'; Stable Outlook -- JetBlue Airways Corp.: IDR 'B-'; Stable Outlook KAR AUCTION: Moody's Gives Positive Outlook, Affirms 'B2' Rating ---------------------------------------------------------------- Moody's Investors Service raised KAR Auction Services, Inc.'s ratings outlook to positive from negative and upgraded the Speculative Grade Liquidity Rating to SGL-2 from SGL-3. Concurrently, all other ratings were affirmed, including KAR's B2 Corporate Family Rating. The change in outlook to positive from negative reflects considerable improvement in key credit metrics and Moody's expectation that KAR will continue to reduce debt over the near term. Since December 2008, KAR has permanently reduced outstanding debt by approximately $500 million while margin expansion has resulted in significant EBITDA growth. Including Moody's standard adjustments for items such as operating leases and receivable securitizations, financial leverage (total debt / EBITDA) has declined to 5.9 times as of June 30, 2010, from 7.3 times at the end of 2008. Over the same period, interest coverage has improved to 2 times from 1 time. The upgrade in the liquidity rating to SGL-2 from SGL-3 reflects KAR's good liquidity profile, characterized by strong cash flow generation and significant revolver availability. Additionally, as of June 30, 2010, KAR reported cash on hand of $289 million. The B2 CFR is constrained by high financial leverage, despite debt reductions, and Moody's expectation that the supply of used cars will remain weak and potentially worsen in 2011 and 2012. KAR's whole car auction revenues are largely volume-driven and the industry's supply of vehicles is projected to be negatively impacted in the near-term due to an expected shortage of off-lease vehicles. Because new lease originations plummeted in 2008 and 2009 during the credit crisis, the number of vehicles coming off- lease approximately 3-5 years later is estimated to drop significantly. Off-lease vehicles have historically represented a meaningful percentage of the whole car auction industry's supply. Partly mitigating this concern is the potential for a supply shortage to drive higher used car prices and thus higher revenues per transaction, though pricing strength may not fully offset volume weakness. The ratings continue to be supported by the recession-resistant nature of KAR's combined revenue streams, national scale, and relatively high margins. For further information, refer to the credit opinion to be posted on moodys.com. Moody's raised this rating: * Speculative Grade Liquidity rating, to SGL-2 from SGL-3 Moody's affirmed these ratings (and adjusted the LGD point estimates, as noted): * Corporate Family Rating -- B2 * Probability of Default Rating -- B2 * $250 (formerly $300) million senior secured revolving credit facility due 4/2013 - Ba3 (to LGD2, 26% from LGD2, 27%) * $1,220 (formerly $1,565) million senior secured term loan due 10/2013 - Ba3 (to LGD2, 26% from LGD2, 27%) * $150 million senior unsecured floating rate notes due 5/2014 -- B3 (to LGD5, 76% from LGD5, 74%) * $450 million senior unsecured 8.75% notes due 5/2014 -- B3 (to LGD5, 76% from LGD5, 74%) * $199 (formerly $425) million senior subordinated 10% notes due 5/2015 -- Caa1 (to LGD6, 94% from LGD6, 92%) The most recent rating action on KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) occurred on January 26, 2009, when Moody's affirmed the B2 CFR and changed the outlook to negative from stable. Headquartered in Carmel, IN, KAR is a leading provider of vehicle auction services in North America. The company provides whole car auction services (dba ADESA), salvage auction services (dba Insurance Auto Auctions, or IAAI), and floorplan financing (dba Automotive Finance Corporation, or AFC). In the twelve months ended June 30, 2010, KAR reported revenues of $1.8 billion. KINETIC CONCEPTS: Patent Ruling Won't Affect Moody's 'Ba2' Rating ----------------------------------------------------------------- Moody's commented that there is no impact to the Ba2 Corporate Family Rating or stable outlook of Kinetic Concepts following a patent ruling that found in favor of competitor Smith & Nephew. Kinetic Concepts, Inc., headquartered in San Antonio, Texas, is a global medical technology company with leadership positions in advanced wound care, regenerative medicine and therapeutic support systems (i.e., medical beds). The company's advanced wound care systems incorporate proprietary Vacuum Assisted Closure, or V.A.C. technology. KCI entered the regenerative medicine/soft tissue repair market with the acquisition of LifeCell in May 2008. KCI reported revenues of approximately $2.0 billion for the twelve months ended June 30, 2010. LERMA PATTUGALAN: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Lerma Pattugalan 707 Carriage House Drive Arcadia, CA 91006 Bankruptcy Case No.: 10-55153 Chapter 11 Petition Date: October 20, 2010 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Ernest M. Robles Debtor's Counsel: Philip E. Koebel, Esq. P.O. Box 94799 Pasadena, CA 91109 Tel: (626) 797-6342 Fax: (626) 410-1149 E-mail: lawofpek@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of creditors together with its petition. LINCOLN HOLDINGS: S&P Puts 'B' Rating on CreditWatch Positive ------------------------------------------------------------- Standard & Poor's Ratings Services said that it has placed its ratings on St. Louis-based Lincoln Holdings Enterprises Inc., including the 'B' corporate credit rating, on CreditWatch with positive implications. The action follows the announcement by SKF AB (A-/Stable/--) that it has agreed to acquire Lincoln Holdings for $1 billion in cash on a debt-free basis. Lincoln's ratings will benefit from SKF's higher credit quality, whose ratings are higher than Lincoln's current 'B' corporate credit rating. As of Sept. 30, 2010, Lincoln had about $427 million in debt outstanding. "S&P will monitor events as they occur," said Standard & Poor's credit analyst Helena Song. "Upon completion of the acquisition and full repayment of debt by Lincoln, S&P will likely withdraw the corporate credit rating." LOGAN CIRCLE: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------- Logan Circle Spectrum, LLC filed for Chapter 11 protection (Bankr. S.D. Fla. Case No. 10-41914) on October 20, 2010, in Miami, Florida. Logan Circle operates the Mova Lounge gay bar in Washington D.C. The Debtor estimated assets of $50,000 to $100,000 and $500,000 to $1,000,000. Logan Circle owner Babak Movahedi, who signed the petition, said he has no plans of closing the bar, Chris Geidner at MetroWeekly reports. In its schedules, Logan Circle Spectrum disclosed liabilities of more than $874,000 and assets of less than $75,000. The filing, MetroWeekly notes, lists more than $550,000 owed to PNC Bank -- $91,000 of which is a Small Business Administration loan and $130,000 owed to a person referred to as a family member of Mr. Movahedi and $79,000 apparently owed to Mr. Movahedi himself. Mr. Geidner, according to MetroWeekly, says nearly half of the assets include a $36,000 security deposit on its District property, which is located at 1435 P St. NW. The filing notes that more than twice the security deposit -- $77,745 -- is owed to the landlord, Harlet Enterprises Inc., which is run by David Lett. MARHABA PARTNERS: Plan Confirmation Hearing Resumes October 26 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas has continued until October 26, 2010, at 3:00 p.m., the hearing to consider confirmation of Marhaba Partners Limited Partnership's proposed Plan of Reorganization. As reported in the Troubled Company Reporter on June 9, 2010, according to the Disclosure Statement, the Plan provides that the Reorganized Debtor will continue owning all of the properties, the obligations to the secured Lenders will be satisfied by the sale or refinance of the properties, an equity infusion or consensual modification of the loan obligations. Distributions will be made holders of allowed claims using a combination of available cash on hand as of the effective date, allotted funds made available through any equity contribution, and income generated from sale, refinance or operations of the properties. As part of the Plan, the Debtor will dedicate $100,000 for pro rata distribution to holders of General Unsecured Claims commencing on March 31, 2011. Any claim attributable to any deficiency amount in the event any property is foreclosed upon by a secured lender will be an unsecured claim. The Plan provides for pro rata payment to all holders of Allowed General Unsecured Claims. However, during the pendency of these bankruptcy cases, several Claims in this Class have already received certain payments from the Debtor on account of utility deposits. Any postpetition amounts paid by the Debtor to holders of Allowed General Unsecured Claims will serve to offset the amounts the holders of Allowed General Unsecured Claims will receive under this Plan. A full-text copy of the amended Disclosure Statement is available for free at http://bankrupt.com/misc/MARHABAPARTNERS_AmendedDS.pdf The Debtor is represented by: John F. Higgins, Esq. Elizabeth C. Freeman, Esq. PORTER & HEDGES, L.L.P. 1000 Main Street, 36th Floor Houston, Texas 77002 Tel: (713) 226-6000 Fax: (713) 226-6231 About Marhaba Partners Houston, Texas-based Marhaba Partners Limited Partnership filed for Chapter 11 bankruptcy protection on January 5, 2010 (Bankr. S.D. Texas Case No. 10-30227). In its schedules, the Debtor disclosed $202,288,728 in assets and $70,486,867 in liabilities as of the petition date. MARK IV: Cleanup Obligations Not Discharged Under Plan ------------------------------------------------------ In Mark IV Industries, Inc., plaintiff, v. The New Mexico Environment Department, and Chant Family II Limited Partnership, Defendants/Counterplaintiffs, v. Mark IV Industries, Inc., Counterdefendant (Bankr. S.D.N.Y. Adv. Proc. No. 09-1507), Mark IV seeks to obtain a declaratory judgment pursuant to 28 U.S.C. Sec. 2201(a) that its environmental cleanup and remediation obligations to NMED constituted a claim that was discharged pursuant to the plan confirmation order and 11 U.S.C. Sec. 1141, and that any attempt by NMED to enforce those environmental obligations would violate 11 U.S.C. Sec. 362(a)(1). NMED contests the discharge. Chant and the United States Environmental Protection Agency intervened, and support NMED's position. Mark IV and NMED each moved for summary judgment. The Hon. Stuart M. Bernstein holds that Mark IV's equitable obligation to cleanup the property located at 14800 Central Avenue, SE in Albuquerque, New Mexico, is not a "claim." Hence, it was not discharged, and 11 U.S.C. Sec. 362(a)(1) does not apply. Accordingly, NMED's motion is granted and Mark IV's cross- motion is denied. A copy of Judge Bernstein's order dated October 21, 2010, is available at http://is.gd/gfryKfrom Leagle.com. About Mark IV Headquartered in Amherst, New York, Mark IV Industries, Inc., -- http://www.mark-iv.com/-- is a privately held leading global diversified manufacturer of highly engineered systems and components for vehicles, transportation infrastructure and equipment. The company's systems and components are designed to promote a cleaner and safer environment and include power transmission, air admission and cooling, advanced radio frequency, and information display technologies. The company has a geographically diverse innovation, marketing and manufacturing footprint, and employs 4,200 people across 18 manufacturing and 20 distribution/technical centers in 16 countries. Mark IV filed voluntary petitions for reorganization on April 30, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-12795). Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP, served as the Debtors' counsel. Personnel at Zolfo Cooper served as restructuring advisors. Houlihan Lokey served as Investment bankers and financial advisors and Sitrick and Company was tapped as public relations advisor. Steven M. Fuhrman, Esq., at Simpson Thacher & Bartlett LLP, represented JPMorgan Chase Bank, N.A., the First Lien Agent and the DIP Agent. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represented the Creditors' Committee. The Debtors disclosed $100 million to $500 million in assets and more than $1 billion in debts when they filed for bankruptcy. MDC PARTNERS: S&P Raises Issue-Level Rating on Debt to 'BB-' ------------------------------------------------------------ Standard & Poor's Ratings Services revised its recovery rating on the senior unsecured debt of Toronto, Canada-based marketing services company MDC Partners Inc. to '4' from '5'. The recovery rating of '4' indicates S&P's expectation of average (30% to 50%) recovery for debtholders in the event of a payment default. S&P also raised its issue-level rating on this debt to 'BB-' -- at the same level as its 'BB-' corporate credit rating on the company -- from 'B+', in accordance with its notching criteria for a recovery rating of '4'. The recovery rating revision reflects an increase in S&P's estimated enterprise value at the time of its simulated default. The corporate credit rating on MDC Partners is 'BB-' and the rating outlook is negative. The rating reflects S&P's expectation that the company will maintain adequate liquidity and achieve healthy revenue growth in 2010, but that fully adjusted leverage will remain above S&P's 4.25x threshold at the current rating level due to recent debt-financed acquisitions. Based on current operating trends, and barring further meaningful debt-financed acquisitions, S&P believes the company can reduce leverage below its threshold in 2011. Ratings List MDC Partners Inc. Corporate Credit Rating BB-/Negative/-- Ratings Revised MDC Partners Inc. To From -- ---- Senior Unsecured BB- B+ Recovery Rating 4 5 MEADOWCRAFT INC: Lenders Sue Samuel Blount et al. for Fraud ----------------------------------------------------------- Penny L. Pool at the Randolph Leader reports that Wells Fargo Bank and other lenders to Meadowcraft Inc. sued Samuel Blount and other former company officials for fraud in Jefferson County Circuit Court. Mr. Blount denied any involvement in the fraud. Former official named in the lawsuit include Larry Maynor, Jerry Camp, Walter Markle, Brandon Moore and William Echols were named defendants, according to the report. The report relates that the lawsuit alleges senior management altered the Company's financial statements to overstate earnings and later fabricated or altered records pertaining to inventory, sales and accounts receivables to obtain tens of millions of dollars of additional credit. The lenders were ultimately owed $64 million when the Company was forced into involuntary bankruptcy. The suit says 2008 net income was overstated by more than $12 million and assets by $20 million. Birmingham, Alabama-based Meadowcraft, Inc. -- http://www.meadowcraft.com/-- sells iron casual outdoor furniture, accessories, cushions, and umbrellas. Wells Fargo Bank, NA, RZB Finance LLC, and Burdale Financial Limited filed an involuntary petition for Chapter 11 bankruptcy for Meadowcraft on March 30, 2009 (Bankr. D. Del. Case No. 09-10988). The creditors claimed that the Company owed them almost $64 million. MICHAEL MENA: Voluntary Chapter 11 Case Summary ----------------------------------------------- Joint Debtors: Michael Christopher Mena Vasiliki Greanias Mena 432 Gentlemen's Ridge Signal Mountain, TN 37377 Bankruptcy Case No.: 10-16188 Chapter 11 Petition Date: October 19, 2010 Court: United States Bankruptcy Court Eastern District of Tennessee (Chattanooga) Judge: John C. Cook Debtor's Counsel: Harry R. Cash, Esq. GRANT, KONVALINKA AND HARRISON Suite 900, Republic Centre 633 Chestnut Street Chattanooga, TN 37450 Tel: (423) 756-8400 Fax: (423) 756-0643 E-mail: hcash@gkhpc.com Scheduled Assets: $824,400 Scheduled Debts: $1,118,714 The Joint Debtors did not file a list of its largest unsecured creditors together with its petition. MILLENNIUM DEVELOPMENT: Owes $600,000 to Genesis Financial ---------------------------------------------------------- Kim Crompton at the Spokane Journal of Business reports that Millennium Development LLC, a company owned by real estate investor and developer Rob Brewster Jr., filed for Chapter 11 reorganization, listing a $600,000 debt owed to Genesis Financial Corp., of Spokane Valley. Millennium Development LLC is a single-asset real estate owner. Millennium filed for Chapter 11 protection (Bankr. E.D. Wash. Case No. 10-05362) on Sept. 16, 2010 in Spokane. The Debtor estimated assets and debts of $500,000 to $1,000,000 in its Chapter 11 petition. Brett T. Sullivan, in Spokane, serves as counsel to the Debtor. MIN KANG: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------- Joint Debtors: Min Sik Kang Man Sun Kang 8537 Old Dominion Drive Mc Lean, VA 22102 Bankruptcy Case No.: 10-18839 Chapter 11 Petition Date: October 19, 2010 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: Linda Dianne Regenhardt, Esq. BAILEYGARY PC 8500 Leesburg Pike, Suite 7000 Vienna, VA 22182-2409 Tel: (703) 848-2828 Fax: (703) 893-9276 E-mail: lregenhardt@garyreg.com Scheduled Assets: $7,551,404 Scheduled Debts: $16,745,346 A list of the Joint Debtors' 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb10-18839.pdf The petition was signed by the Joint Debtors. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Wesleyan Kim Inc. 08-13577 02/27/09 MOLECULAR INSIGHT: Gets Nov. 3 Waiver Extension from Bondholders ---------------------------------------------------------------- Molecular Insight Pharmaceuticals, Inc., received a further extension of its waiver agreement with its Bond holders, allowing debt restructuring discussions to continue. Earlier this year, Molecular Insight executed the waiver agreement and subsequent amendments with holders of the Company's outstanding Senior Secured Bonds and the Bond Indenture trustee and announced ongoing discussions with the Bond holders concerning a restructuring of its outstanding debt. Under terms of the extension announced, the Bond holders and Bond Indenture trustee agreed to extend the waiver of a default arising from the inclusion of a going concern explanatory paragraph in the independent auditor's report on the Company's financial statements for the year ended December 31, 2009, any default arising from the Company's failure to comply with the minimum liquidity requirements set forth in the Bond Indenture, and other technical defaults under the Bond Indenture. The term of the waiver is extended until 11:59 PM Eastern Standard Time on November 3, 2010. During this waiver extension period, the Company will continue to discuss with its Bond holders various proposals. There are no assurances, however, that such discussions will be successful. The waiver continues to be subject to a number of terms and conditions. In the event that the waiver expires or terminates prior to the successful conclusion of the Company's negotiations with its Bond holders regarding the restructuring of its outstanding debt, the Company will be in default of its obligations under the Indenture and the Bond holders may choose 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 Company's debt obligations are accelerated or are not restructured on acceptable terms, it is likely the Company will be unable to repay such obligations and may seek protection under the U.S. Bankruptcy Code or similar relief. About Molecular Insight Cambridge, Mass.-based Molecular Insight Pharmaceuticals, Inc. (NASDAQ: MIPI) -- http://www.molecularinsight.com/-- is a clinical-stage biopharmaceutical company and pioneer in molecular medicine. The Company is focused on the discovery and development of targeted therapeutic and imaging radiopharmaceuticals for use in oncology. Molecular Insight has five clinical-stage candidates in development. Molecular Insight had assets of US$49.39 million against debts of US$193 million, mostly current, as of June 30, 2010. As reported in the Troubled Company Reporter on March 17, 2010, Deloitte & Touche LLP expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted of the Company's difficulties in meeting its bond indenture covenants and its recurring losses from operations. Molecular Insight inked with bondholders a waiver agreement that expires August 16, 2010. The bondholders agreed to waive a default arising from the inclusion of a going concern explanatory paragraph in the 2009 financial statements and other technical defaults under the bond indenture. The Company said that if its debt obligations are accelerated following termination of the waiver agreement or the debts are not restructured on acceptable terms, it is likely the Company will be unable to repay such obligations and may seek protection under the U.S. Bankruptcy Code or similar relief. MORGAN-WIGHTMAN SUPPLY: Case Summary & Creditors List ----------------------------------------------------- Debtor: Morgan-Wightman Supply Co. 739 Goddard Avenue Chesterfield, MO 63005 Bankruptcy Case No.: 10-52103 Chapter 11 Petition Date: October 20, 2010 Court: U.S. Bankruptcy Court Eastern District of Missouri (St. Louis) Judge: Charles E. Rendlen, III Debtor's Counsel: Robert E. Eggmann, Esq. LATHROP & GAGE 7701 Forsyth Boulevard, Suite 400 Clayton, MO 63105 Tel: (314) 613-2800 Fax: (314) 613-2801 E-mail: reggmann@lathropgage.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/moeb10-52103.pdf The petition was signed by Stuart P. Wells, CEO. MT3 PARTNERS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: MT3 Partners, LLC 2165 Canyon Mesa Court Reno, NV 89523 Bankruptcy Case No.: 10-54172 Chapter 11 Petition Date: October 22, 2010 Court: U.S. Bankruptcy Court District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Jeffrey L. Hartman, Esq. HARTMAN & HARTMAN 510 West Plumb Lane, Suite B Reno, NV 89509 Tel: (775) 324-2800 Fax: (775) 324-1818 E-mail: notices@bankruptcyreno.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Mark Kubinski, member/manager. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Nevada Security Bank -- $250,000 3490 S. Virginia Street Reno, NV 89502 Heritage Bank -- $250,000 1401 South Virginia Street Reno, NV 89501 SMC -- $200,000 290 Gentry Way, Suite 1 Reno, NV 89502 RHP -- $200,000 AJ Kirkwood & Associates -- $200,000 Martin Iron Works -- $100,000 Washoe County Tax Assessor -- $80,000 Ward Young -- $80,000 Aloiau Architects -- $71,280 Ferrari Shields -- $48,320 First Independent Bank -- $30,000 Aspen Mech -- $29,145 Pat Pinjuv -- $23,000 Ray Pezzonella -- $23,000 JP - Electric -- $21,880 Renown Hospital -- $15,000 Rec Civil -- $11,980 Aloiau Interiors -- $9,970 Ward Young - Landscape -- $6,420 Todd & Associates -- $6,125 NATIONAL CONSOLIDATED: Case Summary & Largest Unsecured Creditor ---------------------------------------------------------------- Debtor: National Consolidated Funding, LLC II Three Pickwick Plaza, Suite 400 Greenwich, CT 06830 Bankruptcy Case No.: 10-52524 Chapter 11 Petition Date: October 19, 2010 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Douglas J. Buncher, Esq. NELIGAN FOLEY LLP 325 N. St. Paul, Suite 3600 Dallas, TX 75201 Tel: (214) 840-5300 Fax: (214) 840-5301 E-mail: dbuncher@neliganlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ All Settled Partners $14,104 60 Long Ridge Road, Suite 205 Stamford, CT 06902 The petition was signed by Ralph H. Harrison, III, manager of sole member, SageCrest II, LLC. Debtor-affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Il Lugano, LLC 08-50811 08/29/08 SageCrest Dixon Inc. 08-50844 09/11/08 SageCrest Finance LLC 08-50755 08/17/08 SageCrest II, LLC 08-50754 08/17/08 NORTEL NETWORKS: Proposes L. Phillips as Mediator ------------------------------------------------- Nortel Networks Inc. and its affiliated debtors ask the U.S. Bankruptcy Court to appoint Layn Phillips as mediator in connection with the allocation of the proceeds from the sale of their assets. Alissa Gazze, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware, says the appointment is necessary to resolve issues concerning the distribution of the sale proceeds and settlement of the so-called "inter-estate claims." The Debtors earlier entered into several transactions to sell their businesses, including their Code Division Multiple Access and Long Term Evolution assets, Next Generation Packet Core, Enterprise Solutions, Optical Networking and Carrier Ethernet, Carrier VoIP and Application Solutions and Global System for Mobile businesses. Proceeds from the sale are held in escrow in accordance with the Interim Funding and Settlement Agreement, which also requires the Debtors to reach an agreement on the allocation of the proceeds. Mr. Phillips is a partner at Irell & Manella LLP, a law firm based in Los Angeles, and a former U.S. district judge. He is also a Fellow in the International Academy of Mediators. Mr. Phillips' appointment is governed by an engagement agreement by and among the Debtors, the Official Committee of Unsecured Creditors, the ad hoc group of bondholders and Irell & Manella. The engagement agreement is subject to the Court's approval. Pursuant to the Engagement Agreement, Irell & Manella will be paid a retained in the sum of $101,250. More than half of the retainer will be used for the mediation sessions while the rest will be used for their preparation and review of case materials, expenses for travel and lodging, among other things. Mr. Phillips will be paid an hourly rate of $1,000, and will be reimbursed of his actual and necessary expenses. The Debtors and certain parties to the Engagement Agreement are responsible for 100% of Mr. Phillips' fees and expense reimbursement. A full-text copy of the Engagement Agreement is available for free at: http://bankrupt.com/misc/Nortel_EngagementAgreementIrell.pdf Lora Noesen, case manager of Irell & Manella's Alternative Dispute Resolution Center, disclosed in court papers that Mr. Phillips has served as mediator in cases involving Ernst & Young Inc., the firm appointed to monitor the assets of NNI's Canada- based affiliates. She also disclosed that there are partners at Manella who "currently have matters adverse to Ernst & Young." "Judge Phillips does not believe these disclosures represent a conflict that would disqualify him from serving as the neutral mediator," Ms. Noesen said in court papers. Judge Kevin Gross will consider approval of the Debtors' request at the hearing scheduled for October 14, 2010. The filing of the Phillips Appointment Motion drew criticism from the trustee of Nortel's U.K. pension plan, saying the motion should have been filed earlier. Counsel to the Nortel Pension Plan Trustee, Charlene Davis, Esq., at Bayard P.A., in Wilmington, Delaware, complained creditors and other concerned parties were not given enough time to review and prepare responses to the Appointment Motion. "The Debtors' request to run roughshod over the procedural notice provisions under the Bankruptcy Rules and Local Bankruptcy Rules based on their failure to seek relief timely without adequate justification amounts to nothing short of an abuse," Ms. Davis said in court papers. Ms. Davis further says they will oppose the approval of the Motion to the extent it proposes to deny concerned parties from participating in or from being granted observer status. 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. NORTEL NETWORKS: Withdraws Plan to Probe Verizon ------------------------------------------------ Nortel Networks Inc. has withdrawn its requests to investigate and enforce the automatic stay against the affiliates of Verizon Communications Inc. NNI earlier filed a motion for an investigation of the Verizon entities to determine the basis for their $11.2 million claim. NNI filed a separate motion to enforce the automatic stay after the Verizon entities withheld the payment of over $10.3 million to it in light of the parties' dispute over the validity of the $11.2 million claim. The withdrawal of the Motions is part of a settlement between NNI and the Verizon entities, which required the latter to continue making payments to NNI. The deal also prohibits the Verizon entities from withholding payment on any additional invoices issued by NNI unless they are granted relief from the automatic stay by the Court. 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. NORTEL NETWORKS: Proposes Demel Settlement Agreement ---------------------------------------------------- Nortel Networks Inc. and its affiliated debtors seek the Court's authority to enter into a settlement of the claims asserted by Ernest Demel. Under the deal, Nortel agree to reduce and allow Mr. Demel's claim, designated as Claim No. 4643, for $125,000. In exchange, Mr. Demel agree to release all other claims he has against The Prudential Insurance Company of America and several other defendants of a lawsuit he filed before a district court to recover on his claims. Mr. Demel filed Claim No. 4643 to seek payment for his pension and disability benefits as a former employee of Northern Telecom Inc. The Settlement provides that the proposed allowed amount of Claim No. 4643 is only for Mr. Demel's entitlement to long-term disability benefits. It does not affect Mr. Demel's claim to seek payment for retirement benefits, which is purportedly the responsibility of the Pension Benefit Guaranty Corp. The parties' settlement is formalized in a 6-page stipulation, a full-text copy of which is available for free at: http://bankrupt.com/misc/Nortel_StipulationDemel.pdf 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. NORTEL NETWORKS: Wins Nod of Claims Settlement Protocol ------------------------------------------------------- Nortel Networks Inc. and its affiliated debtors sought and obtained U.S. Bankruptcy Court approval to implement a uniform process for the settlement of pre-bankruptcy claims. Ann Cordo, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, Delaware, says the Debtors would avoid incurring the costs and the "administrative burden" of seeking Court approval for each settlement if the Court approved the proposed settlement process. As of December 31, 2009, approximately 6,541 proofs of claim have been filed against the Debtors' estates. Under the proposed settlement process, the Debtors will not be required to provide prior notice for the settlement of disputed claims that were originally filed in an amount less than $250,000; or claims originally filed in an amount equal to or more than $250,000, and less than $500,000 and the claim difference is less than $50,000. The Debtors, however, will be required to notify the U.S. Trustee and attorneys of the Official Committee of Unsecured Creditors in writing of a proposed settlement if the claim was originally filed in an amount equal to or more than $250,000 and less than $500,000, and the claim difference is equal to or greater than $50,000; or if the claim was originally filed in an amount equal to or more than $500,000 and less than $1 million. If no one files a written objection within 10 days after receiving a Prepetition Claim Settlement Notice, the Debtors can proceed with the settlement. If an objection is filed and it cannot be resolved, the claim may be settled upon further Court order. However, no disputed claim that was originally filed in an amount equal to or greater than $1 million will be settled without further Court approval. Under the proposed settlement process, the Debtors will be authorized to exchange mutual releases as part of any settlement of a proof of claim. Employees or representatives of the Debtors who are responsible for negotiating or settling claims will be allowed to do their task without further hearing and notice to the Court or other concerned parties. The Debtors want to clarify that their entry into prepetition claims settlement, mediation or compromise negotiations does not constitute a waiver of the automatic stay applicable to judicial, administrative or other actions or proceedings against them. The settlement process will not apply to any settlement of claim where the creditor has filed multiple proofs of claim exceeding $1 million in the aggregate; where an "insider" is involved; and where the proof of claim was filed in a wholly unliquidated amount. 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. PETRA FUND: Updated Case Summary & Creditors' Lists --------------------------------------------------- Debtor: Petra Fund REIT Corp. 1370 Avenue of the Americas 23d Floor New York, NY 10019 Bankruptcy Case No.: 10-15500 Type of Business: Petra Fund REIT Corp. invests in commercial real estate-backed loans. Chapter 11 Petition Date: October 20, 2010 Bankruptcy Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Shaya M. Berger, Esq. Dickstein Shapiro, LLP 1633 Broadway New York, NY 10019-6708 Tel.: (212) 277-6500 Fax : (212) 277-6501 Email: bergers@dicksteinshapiro.com Estimated Assets: $1 million to $10 million Estimated Debts : $100 million to $500 million Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Petra Offshore Fund LP 10-15501 10/20/10 Assets: $1,000,001 to $10,000,000 Debts: $100,000,001 to $500,000,000 The petitions were signed by Andrew Stone, president. Petra Fund's List of 8 Largest Unsecured Creditors: Entity/Person Nature of Claim Claim Amount ------- -------------- ------------ Fried, Frank Harries, Legal Services Unknown Shriver, & Jacobson One New York Place New York, NY 10004 KBS Preferred Holding I, LLC Money Loaned & $65,922,650 c/o KBS REIT Judgment 620 Newport Ctr Dr., Suite 1300 Newport Beach, CA 92660 Petra Capital Management LLC Mgt. Services $4,900,000 1370 Avenue of the Americas 23rd Floor New York, NY 10019 Pricewaterhouse Coopers Accounting Unknown Proskauer Rose Legal Svcs Unknown Schulte Roth & Zabel LLP Legal Svcs Unknown Sidley Austine LLP Legal Svcs Unknown Winston Strawn LLP Legal Svcs Unknown Petra Offshore's List of 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ KBS Preferred Holding I, money loaned and $65,922,650 LLC c/o KBS REIT judement obtained 620 Newport Ctr Dr, Ste 1300 Newport Beach, CA 92660 Petra Capital Managment management services $4,900,000 LLC 1370 Avenue of the Americas, 23rd Floor New York, NY 10019 Bear Stearns Funding Inc. securities collateral Unknown c/o JP Morgan Chase Bank, NA 270 Park Avenue, 6th Floor New York, NY 10017 Fried, Frank Harris, legal services Unknown Shriver & Greenwich Cap. Fin. Prod securities Unknown Pricewaterhouse Coopers accounting services Unknown Proskauer Rose legal services Unknown Schufte Roth & Zabel LLP legal services Unknown Sidley Austin LLP legal services Unknown Winston Strawn LLP legal services Unknown New York, NY 10017 PETROLEUM & FRANCHISE: Plans to Pay Creditors in Installments ------------------------------------------------------------- Petroleum & Franchise Capital LLC, et al., submitted to the U.S. Bankruptcy Court for the District of Connecticut a proposed Plan of Reorganization and an explanatory Disclosure Statement. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, the Plan provides for (a) the continued operations of PFF as the surviving successor entity by way of corporate merger; and (b) payment in full of all holders of Allowed Claims with interest and (c) retention of Allowed Interests. Under the Plan, DZ Bank will receive with respect to the DZ Secured Claims: (i) the DZ Promissory Note, which will be issued by the Reorganized Debtor in the principal amount of the Allowed DZ Secured Claims plus any interest or other fees, subject to Bankruptcy Court approval, accrued thereon during the Chapter 11 case. DZ Bank AG Deutsche Zentral-Genossenschafts Bank, Frankfurt am Main, serves as agent and for the benefit of itself and Autobahn Funding Company, LLC. Each Holder of an Allowed General Unsecured Claim in Class 3 will receive from the Debtors quarterly cash payments of 12.5% of its Allowed Claim, commencing with the first full calendar quarter after the Effective Date and continuing until all Allowed General Unsecured Claim in Class 3 are paid in full, totaling the Allowed amount of the claim in full satisfaction, settlement, release and discharge of and in exchange for the claim. The sources of cash necessary for the Reorganized Debtor to pay Allowed Claims under the Plan will be: (a) the cash of the Reorganized Debtor on hand as of the Effective Date; (b) cash arising from the operation, ownership, maintenance, and sale of the assets owned, managed, or serviced by or at the direction of the Debtors, including, without limitation, the DZ collateral; (c) any cash generated or received by the Reorganized Debtor after the Effective Date from any other source, including, without limitation, any recoveries from the prosecution of all causes of action and revenues from new loans generated by the Reorganized Debtor as of the Effective Date. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/Petroleum&Franchise_DS.pdf About Petroleum & Franchise Danbury, Connecticut-based Petroleum & Franchise Capital, LLC, filed for Chapter 11 bankruptcy protection on June 23, 2010 (Bankr. D. Conn. Case No. 10-51465). Craig I. Lifland, Esq., and James Berman, Esq., at Zeisler and Zeisler, assist the Company in its restructuring effort. The Company estimated its assets and debts at $50 million to $100 million. Petroleum & Franchise Funding, LLC, an affiliate of the Debtor, a filed separate Chapter 11 petition on June 23, 2010 (Case No. 10- 51467). The Company estimated its assets and debts at $50 million to $100 million. POINT BLANK: Rosenbloom to Be Creditors' Board Observer ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Point Blank Solutions Inc. agreed to the appointment of Eric J. Rosenbloom to be an observer of its board of directors. The appointment of Mr. Rosenbloom settles a motion by the official committee of unsecured creditors for the appointment of a Chapter 11 trustee. Mr. Rosenbloom, who was general counsel for Hilco/Great American Group, will report to the official committees representing stockholders and unsecured creditors. About Point Blank Headquartered in Pompano Beach, Florida, Point Blank Solutions, Inc. -- http://www.pointblanksolutionsinc.com/-- designs and produces body armor systems for the U.S. Military, Government and law enforcement agencies, as well as select international markets. The Company maintains facilities in Pompano Beach, Florida, and Jacksboro, Tennessee. The Company's former chief executive officer and chief operating officer were convicted in September 2010 of orchestrating a $185 million fraud. Point Blank Solutions, formerly DHB Industries, filed for Chapter 11 protection on April 14, 2010 (Bankr. D. Del. Case No. 10-11255). Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves as corporate counsel. T. Scott Avila of CRG Partners Group LLC is the restructuring officer. Epiq Bankruptcy Solutions serves as claims and notice agent. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Equity Security Holders in the case. The Equity Committee has tapped Morrison Cohen LLP, and The Bayard, P.A., as counsel. Robert M. Hirsh, Esq., and Heike M. Vogel, Esq., at Arent Fox LLP, serve as counsel to the Creditors Committee, and Frederick B. Rosner, Esq., and Brian L. Arban, Esq., at Messana Rosner & Stern LLP, serve as co- counsel. POINT PLEASANT: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Point Pleasant Residences, LLC 17 Blueberry Hill Road Mahopac, NY 10541 Bankruptcy Case No.: 10-25168 Chapter 11 Petition Date: October 20, 2010 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Judge: Caryl E. Delano Debtor's Counsel: David W. Steen, Esq. DAVID W STEEN, P.A. 13902 N. Dale Mabry Highway, Suite 110 Tampa, FL 33618 Tel: (813) 251-3000 Fax: (813) 251-3100 E-mail: dwsteen@dsteenpa.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The list of unsecured creditors filed together with its petition does not contain any entry. The petition was signed by Theodosis Nicholoudis, managing member. POWER EFFICIENCY: Board Names Raphael Diamond as Director --------------------------------------------------------- The board of directors elected, in September 2010, Raphael Diamond to serve on the board of directors of Power Efficiency Corporation until the next annual meeting of the Company's stockholders or such time as his successor is elected. Mr. Diamond is the founder, President and CEO of Securing America's Future Energy since 2004. Mr. Diamond is also the President and CEO of the Electrification Coalition since 2009, a nonpartisan, not-for-profit group of business leaders committed to promoting policies and actions that facilitate the deployment of electric vehicles on a mass scale in order to combat the economic, environmental, and national security dangers caused by our nation's dependence on petroleum. Prior to his roles with SAFE and the Electrification Coalition, Mr. Diamond served as Deputy Director of Community Outreach on Senator Joe Lieberman's 2004 presidential campaign. Before that, Mr. Diamond was a Director at the Washington consulting firm Fontheim International LLC, working in all practice areas of the firm. Prior to coming to Washington, he worked with senior executives at Seagram Spirits and Wine Group on special projects. Mr. Diamond earned an Honours Bachelor of Arts from the University of Toronto in Peace and Conflict Studies and Political Science, as well as a Master of Arts in Law and Diplomacy from The Fletcher School. About Power Efficiency Las Vegas, Nev.-based Power Efficiency Corporation (OTC BB: PEFF) -- http://www.powerefficiency.com/-- is a clean technology company focused on efficiency technologies for electric motors. As reported in the Troubled Company Reporter on April 6, 2010, Sobel & Co., LLC, in Livingston, N.J., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, and the Company has experienced a deficiency of cash from operations. The Company discloses in its latest 10-Q that it experienced a $1.1 million deficiency of cash from operations for the six months ended June 30, 2010, and expects significant cash deficiencies from operations until the Company's sales and gross profit grow to exceed its cash needs. PREMIUM DEVELOPMENTS: IRS Wants Case Converted to Chapter 7 ----------------------------------------------------------- The Unites States of America, on behalf of the Internal Revenue Service, asks the U.S. Bankruptcy Court for the Eastern District of Washington to convert the Chapter 11 case of Premium Developments, LLC, to one under Chapter 7 of the Bankruptcy Code. The IRS explains that the Debtor failed to file federal employee withholding returns (Form 941); and federal unemployment returns (Form 940). The agency notes that without the tax returns, feasibility of any plan becomes an issue. The Court cannot evaluate a plan's payment schedule to determine feasibility until all amounts owing are reasonably determined, the IRS contends. Early this year, Robert D. Miller Jr., the acting U.S. Trustee for Region 18, filed requests for dismissal of the Chapter 11 case because the Debtor, a corporate entity, was not represented by counsel and has failed to submit proof of insurance on the assets of the estate. About Premium Developments LLC East Wenatchee, Washington-based Premium Developments, LLC, filed for Chapter 11 bankruptcy protection on December 4, 2009, (Bankr. E.D. Wash. Case No. 09-06746). Allan L. Galbraith, Esq., at Davis Arneil Law Firm LLP assists the Debtor in its restructuring effort. The Company estimated its assets and liabilities at $10 million to $50 million. PREMIUM WELL: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Premium Well Drilling, Inc P.O. Box 99 Pleasanton, TX 78064 Bankruptcy Case No.: 10-54062 Chapter 11 Petition Date: October 20, 2010 Court: United States Bankruptcy Court Western District of Texas (San Antonio) Judge: Leif M. Clark Debtor's Counsel: R. Glen Ayers, Jr., Esq. LANGLEY AND BANACK, INC 745 E Mulberry, 9th Floor San Antonio, TX 78212 Tel: (210) 736-6600 Fax: (210) 735-6889 E-mail: gayers@langleybanack.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Leo Quintanilla, director. QUEENS PLAZA: Proofs of Claims Due Tomorrow ------------------------------------------- The Hon. Robert E. Grossman of the U.S. Bankruptcy Court for the Eastern District of New York has established October 26, 2010, at 5:00 p.m. Eastern Time, as the deadline for any individual or entity to file proofs of claim against Queens Plaza Development, LLC. The Court also set March 29, 2011, at 5:00 p.m. as governmental units bar date. Proofs of claim must be filed by mailing or delivering the original proof of claim by hand to the: U.S. Bankruptcy Court Eastern District of New York Alfonse M. D'Amato S. Courthouse 290 Federal Plaza Central Islip, NY 11722 About Queens Plaza Development Garden City, New York-based Queens Plaza Development, LLC, filed for Chapter 11 bankruptcy protection on September 8, 2010 (Bankr. E.D.N.Y. Case No. 10-77035). Thomas A. Draghi, Esq., at Westerman Ball Ederer Miller & Sharfstein, LLP, assists the Debtor in its restructuring effort. The Debtor disclosed $11,000,022 in assets and $16,023,777 in liabilities as of the Petition Date. QWEST COMMS: To Redeem All 3.5% Conv. Senior Notes on November 18 ----------------------------------------------------------------- Qwest Communications International Inc. said it will redeem all of its outstanding 3.5% convertible senior notes due 2025 on Nov. 18, 2010, at a redemption price equal to 100% of principal amount of the Notes, plus accrued and unpaid interest. The redemption of the Notes is required by Qwest's merger agreement with CenturyLink, Inc. Approximately $1.118 billion in principal amount of the Notes remains outstanding as of Oct. 19, 2010. Pursuant to the indenture governing the Notes, holders of Notes may choose to surrender their Notes for conversion at any time prior to the close of business on Nov. 17, 2010. As permitted by the indenture governing the Notes, Qwest will pay cash to holders of any Notes surrendered for conversion in lieu of any shares of Qwest common stock that would otherwise be issuable upon conversion of such Notes. For any Notes that have not been surrendered for conversion prior to the close of business on Nov. 17, 2010, interest will cease to accrue, and the Notes will be redeemed, on Nov. 18, 2010. On Nov. 18, 2010, holders of redeemed Notes will receive a cash payment equal to 100% of the principal amount of such Notes, plus accrued and unpaid interest on such Notes to Nov. 18, 2010. Additional details regarding the redemption will be contained in the redemption notice sent to all holders of the Notes. U.S. Bank National Association, which is the trustee for the Notes, is acting as paying agent with respect to the redemption. 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% 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. Fitch Ratings is maintaining the Rating Watch Positive on the 'BB' Issuer Default Rating assigned to Qwest Communications International, Inc. and its subsidiaries. Concurrently, Fitch has affirmed the 'BBB-' issue rating assigned to Qwest's $1.035 billion senior secured credit facility and the senior unsecured debt issued by Qwest Corporation. Approximately $13.1 billion of debt outstanding as of June 30, 2010, including $7.9 billion of debt outstanding at QC, is affected by Fitch's action. RANDALL DARDENELLE: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------------- Joint Debtors: Randall R. Dardenelle Sharon K. Dardenelle aka Cypress Meadows Cypress Flower Farm 323 Cypress Avenue Moss Beach, CA 94038 Bankruptcy Case No.: 10-34142 Chapter 11 Petition Date: October 20, 2010 Court: U.S. Bankruptcy Court Northern District of California (San Francisco) Judge: Dennis Montali Debtors' Counsel: Craig V. Winslow, Esq. LAW OFFICES OF CRAIG V. WINSLOW 630 N. San Mateo Drive San Mateo, CA 94401 Tel: (650) 347-5445 E-mail: CVWinslow@aol.com Scheduled Assets: $3,621,125 Scheduled Debts: $2,516,776 A list of the Joint Debtors' six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb10-34142.pdf REDHAWK LANDING: Case Summary & Largest Unsecured Creditor ---------------------------------------------------------- Debtor: Redhawk Landing LLC 398 S 9th St Ste 260 Boise, ID 83702 Bankruptcy Case No.: 10-03386 Chapter 11 Petition Date: October 18, 2010 Court: United States Bankruptcy Court District of Idaho (Boise) Judge: Jim D. Pappas Debtor's Counsel: Howard R. Foley, Esq. FOLEY FREEMAN, PLLC P.O. Box 10 Meridian, ID 83680 Tel: (208) 888-9111 E-mail: hrfoley@foleyfreeman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Blaine County Treasurer Property taxes $4,792 219 1st Ave South Ste 102 Hailey, ID 83333 The petition was signed by John Mackey, manager. RICHARD PEACOCK: Case Summary & 15 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Richard Peacock 10880 Highway A1A Vero Beach, FL 32963-9470 Bankruptcy Case No.: 10-42195 Chapter 11 Petition Date: October 21, 2010 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Bradley S. Shraiberg, Esq. 2385 NW Executive Center Drive, #300 Boca Raton, FL 33431 Tel: (561) 443-0801 Fax: (561) 998-0047 E-mail: bshraiberg@sfl-pa.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 Debtor's List of 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service 1040 for Tax Period $304,002 P.O. Box 80110 12/31/2009 Cincinnati, OH 45280-0010 Internal Revenue Service 1040 for Tax Period $273,175 P.O. Box 80110 12/31/2008 Cincinnati, OH 45280-0010 Miami-Dade Tax Collector Real Property Taxes $112,357 140 W. Flagler Street, Room 101 Miami, FL 33130 PNC Bank Motor Home $93,240 Indian River Tax Collector Real Property Taxes $32,262 Guyco Electric Electrical Work $15,000 Coconut Grove Business -- $8,000 Improvement Distr Marriott Rewards VISA -- $5,000 Moffit Medical Group Medical Services $4,000 Seagrove P.O.A., Inc. Property Owner's $900 Association Dues FL Dept of Revenue -- unknown Internal Revenue Service -- unknown Internal Revenue Service -- unknown Internal Revenue Service -- unknown Internal Revenue Service -- unknown RURAL/METRO CORPORATION: Moody's Raises Corp. Family Rating to B1 ----------------------------------------------------------------- Moody's Investors Service upgraded Rural/Metro Corporation's corporate family and probability of default ratings to B1. Concurrently, Moody's assigned a (P) Ba1 provisional ratings to the proposed senior secured credit facility of Rural/Metro Operating Company, LLC, a wholly-owned subsidiary of Rural/Metro Corporation. The rating outlook was changed to stable from positive. These rating actions were taken: Rural/Metro Corporation -- Corporate family rating, upgraded to B1 from B2; -- Probability of default rating, upgraded to B1 from B2; -- 12.75% senior discount notes due 2016, upgraded to B3 (LGD5, 88%) from Caa1 (LGD5, 88%). Rural/Metro Operating Company, LLC -- $100 million senior secured revolving credit facility, due 2015, assigned (P) Ba1 (LGD2, 16%); -- $75 million senior secured term loan, due 2016, assigned (P) Ba1 (LGD2, 16%); -- $40 million senior secured revolving credit facility, due 2013, affirmed at Ba3 (LGD3, 30%); -- $180 million ($175 million outstanding) senior secured term loan, due 2014, affirmed at Ba3 (LGD3, 30%). Ratings Rationale LGD point estimates are subject to change and all ratings are subject to review of final documentation. The proceeds from the $175 million proposed senior secured credit facilities along with a proposed junior debt issuance are being used to refinance the company's existing debt. If the refinancing transactions closes as proposed, Moody's will withdraw the ratings on the existing senior secured credit facility and the 12.75% Senior Discount Notes, assuming substantially all the notes are tendered. The upgrade of the corporate family rating to B1 from B2 acknowledges expected sustained improvement in the company's credit metrics including debt leverage, interest coverage, and free cash flow generation as Rural/Metro has been able to reduce uncompensated care as well as increase average patient charge. The B1 rating currently does not take into consideration any meaningful acquisition activity. Rural Metro's B1 corporate family rating reflects the company's good free cash flow generation, ability to manage uncompensated care expense and national presence in a highly fragmented industry. However, the rating also considers the company's modest size and increased pressure on rates and/or subsidies from states and municipalities due to budgetary pressures. The outlook could be changed to positive or ratings upgraded if the company's adjusted free cash flow to debt increases to above 10% on a sustainable basis and debt to EBITDA declines below 3.0 times on a sustainable basis. The outlook could be changed to negative if the company adopts a more aggressive development or acquisition strategy, notably if that results in additional debt leverage. The ratings could be downgraded if adjusted debt to EBITDA is expected to approach 5.0 times. Rural Metro provides emergency and non-emergency medical transportation, fire protection, airport fire and rescue and home healthcare services in 20 states and approximately 440 communities within the United States. The services are provided under contract with government entities, hospitals, healthcare facilities and other healthcare organizations. Net revenue for the twelve months ended June 30, 2010 was approximately $531 million. SEDA FRANCE: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Seda France, Inc. fdba Seda France, Ltd. dba SedaFrance 8301 Springdale Road, Suite 800 Austin, TX 78724 Bankruptcy Case No.: 10-12948 Chapter 11 Petition Date: October 18, 2010 Court: United States Bankruptcy Court Western District of Texas (Austin) Judge: Craig A. Gargotta Debtor's Counsel: Kell C. Mercer, Esq. BROWN, MCCARROLL, LLP 111 Congress Avenue, Suite 1400 Austin, TX 78701 Tel: (512) 479-9749 Fax: (512) 479-1101 E-mail: kmercer@brownmccarroll.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Robert Hernandez, director. SINCLAIR TELEVISION: Holders of 78% of Notes Agree to Buyback ------------------------------------------------------------- Sinclair Television Group Inc. completed its tender offer for any and all of Sinclair's outstanding 8.0% Senior Subordinated Notes due 2012. On October 18, 2010, holders representing approximately 78.2% in principal amount of the Notes had validly tendered and not validly withdrawn their Notes. This includes the results of all holders who tendered at or prior to the early tender premium deadline on October 1, 2010. As part of the tender offer, Sinclair also solicited consents from the holders of the Notes for certain proposed amendments to eliminate substantially all of the restrictive covenants and events of default from the indenture governing the Notes. Adoption of the proposed amendments required the consent of the holders of at least a majority in aggregate principal amount of the outstanding Notes. As announced previously, Sinclair received the Required Consents in order to approve the proposed amendments to the indenture governing the Notes. Pursuant to the terms of the tender offer, holders of the remaining $49.0 million principal amount of Notes not tendered will no longer be entitled to the benefits of the restrictive covenants and other provisions contained in the indenture governing the Notes that will be eliminated by the proposed amendments. Sinclair expects to settle the tender offer on or around October 19, 2010 using the proceeds from its recent private placement of $250 million aggregate principal amount of 8.375% senior unsecured notes due 2018. Under the terms of the tender offer, any Notes validly tendered and not validly withdrawn on or prior to the Early Tender Premium Deadline were purchased at a purchase price of $1,002.50 per $1,000 in principal amount of the Notes. Any Notes validly tendered after the Early Tender Premium Deadline but on or prior to the Expiration Date will be purchased at a purchase price of $972.50 per $1,000 in principal amount. The purchase price for the Notes tendered at or prior to the Early Tender Premium Deadline included an early tender premium of $30.00 per $1,000 in principal amount. All withdrawal rights expired as of the Early Tender Premium Deadline. On October 19, 2010, Sinclair gave notice to the trustee of the Notes that all of the remaining Notes not tendered in the tender offer will be redeemed for cash on November 19, 2010 at a redemption price of 100% of the principal amount of the Notes plus accrued and unpaid interest. The redemption of the Notes will be effected in accordance with the terms of the indenture governing the Notes and will be funded from the net proceeds from the Private Placement and available cash on hand or borrowing capacity under Sinclair's revolving credit facility. About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. The Company's balance sheet at June 30, 2010, showed $1.53 billion in total assets, $1.71 billion in total liabilities, and a stockholders' deficit of $170.36 million. * * * Sinclair Broadcast has a 'B1' corporate family rating from Moody's. It has a 'B+' corporate credit rating from Standard & Poor's Ratings Services. "The CFR continues to reflect still high financial risk, nonetheless, and the inherent cyclicality of the broadcast television business, among other factors," Moody's said in August 2010. "The 'B+' rating reflects S&P's expectation that Sinclair will be able to reduce its leverage further by the end of 2010 through revenue and EBITDA growth and lower debt balances," explained Standard & Poor's credit analyst Deborah Kinzer in August. Moody's Investors Service raised its ratings for Sinclair Broadcast Group, Inc., and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of- Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments, concluding its review for possible upgrade as initiated on August 5, 2010. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. SOUTH BAY: Sues San Diego County in Tax Dispute ----------------------------------------------- Carla Main at Bloomberg News reports that South Bay Expressway LP and affiliate California Transportation Ventures sued to recover $31.5 million in property taxes they say were improperly assessed. A trial is scheduled for Oct. 25 before U.S. Bankruptcy Judge Louise DeCarl Adler in San Diego on whether holders of mechanics' liens come in ahead of other secured debt in the reorganization plan. South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed for Chapter 11 on March 22, 2010 (Bankr. S.D. Calif. Case No. 10-04516). Its affiliate, California Transportation Ventures Inc., also filed for bankruptcy. The Debtors developed and operate a four lane, nine mile express toll road in Southern California commonly referred to as the South Bay Expressway or State Road 125. Both estimated assets and debts of $500 million to $1 billion in their bankruptcy petitions. Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring effort. PricewaterhouseCoopers LLP is auditor and tax advisor. Imperial Capital LLC is financial advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The Debtors say that as of the bankruptcy filing, they have roughly $640 million in book value of total assets and roughly $570 million in book value of total liabilities. SOUTHPLACE LLP: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Southplace (America) LLP 2425 East Camelback Road, Suite 1020 Phoenix, AZ 85016 Tel: (602) 955-1455 Bankruptcy Case No.: 10-33724 Chapter 11 Petition Date: October 20, 2010 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Eileen W. Hollowell Debtor's Counsel: Olivier Andre Beabeau, Esq. GALBUT & GALBUT PC 2425 E. Camelback Road, #1020 Phoenix, AZ 85016 Tel: (602) 955-1455 Fax: (602) 955-1585 E-mail: obeabeau@galbutlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Andrew James Davison, joint administrator. SPHERIS INC: Plan Paying 23% of Unsecured Creditors' Claims ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist at Bloomberg News, reports that the liquidating trust for Spheris Inc. said in a statement that unsecured creditors should recover about 23% of their claims. The Court confirmed the Plan on August 26, 2010 and the Plan was declared effective September 20. The disclosure statement explaining the Plan had indicated that non-priority tax claims and other secured claims have a 100% estimated recovery, and general unsecured claims and senior subordinated note claims have a 22.85% estimated recovery. Subordinated claims' estimated recovery is not available, and equity interests have a 0% estimated recovery. 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. STEPHANIE REAM: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Stephanie Serpa Ream 493 Wraight Avenue Los Gatos, CA 95032 Bankruptcy Case No.: 10-54146 Chapter 11 Petition Date: October 20, 2010 Court: United States Bankruptcy Court District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Stephen R. Harris, Esq. BELDING, HARRIS & PETRONI, LTD 417 W Plumb Ln Reno, NV 89509 Tel: (775) 786-7600 Fax: (775) 786-7764 E-mail: steve@renolaw.biz Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Stephanie Serpa Ream. Debtor's List of three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ J.S. Development Company loans $4,662,881 716 N. Carson Street Carson City, NV 89701 D.G.D. Development Company loans $447,000 716 N. Carson Street Suite 3 Carson City, NV 89701 City National Bank guarantee on $1.00 1811 East College Parkway Tahoe Dev., CA Carson City, NV 89706 STONERIDGE INC: S&P Assigns 'B+' Rating to $175 Mil. Notes ---------------------------------------------------------- Standard & Poor's Ratings Services said it has assigned its 'B+' issue-level rating to Stoneridge Inc.'s $175 million senior secured notes due 2017. At the same time, S&P assigned its recovery rating of '4', indicating S&P's expectation that lenders would receive average (30% to 50%) recovery in the event of a payment default. Proceeds of this offering, together with current cash, are being used to repay the company's outstanding balance of $183 million, 11.5% senior notes due 2012. The $175 million notes are senior secured obligations of existing domestic restricted subsidiaries and future restricted subsidiaries that guarantee the debt of the company or its guarantors. The notes rank equally with all existing and future senior debt and are senior to all existing and future subordinated debt. The notes and guarantees are secured by first-priority liens on substantially all of the company's and guarantors' domestic assets, excluding accounts receivable, inventory, and other assets securing the asset-backed credit facility. The senior secured notes also have second-priority liens on assets securing the asset-backed lending facility. The rating on Warren, Ohio-based Stoneridge (B+/Positive/--) reflects the company's aggressive financial risk profile and weak business risk profile. Substantial increases in light-vehicle production in North America and commercial-truck production in North America and Europe, combined with substantial cost reductions, have boosted Stoneridge's sales and profitability. Still, S&P does not expect light-vehicle production to continue rising as quickly next year, and S&P believes the recovery in commercial-vehicle demand is in the early stages. Ratings List Stoneridge Inc. Corporate credit rating B+/Positive/-- New Rating Stoneridge Inc. $175 mil. sr. secured notes due 2017 B+ Recovery rating 4 SUNBELT CRANES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Sunbelt Cranes, Construction & Hauling, Inc. 200 Washington Avenue Dravosburg, PA 15034 Bankruptcy Case No.: 10-27460 Chapter 11 Petition Date: October 20, 2010 Court: United States Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 E-mail: rol@lampllaw.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/pawb10-27460.pdf The petition was signed by Ray G. Anthony, president. Debtor-affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Ray Anthony International, LLC 10-26576 09/15/10 Ray G. Anthony 10-26552 09/14/10 SUNCAL COMPANIES: Lehman Says Stay Won't Make Plan Confirmable -------------------------------------------------------------- Lehman Commercial Paper, Inc., et al., ask the U.S. Bankruptcy Court for the Central District of California to deny SunCal Companies and its debtor-affiliates' request to impose a stay on all activity by Lehman related entities. SunCal entities have Chapter 11 cases pending before the Central District of California while Lehman entities have chapter 11 cases pending before the U.S. Bankruptcy Court for the Southern District of New York. The Lehman Entities relate that SunCal wants a stay, not just in the cases of the Voluntary Debtors that SunCal is orchestrating, but also in the cases of the Trustee Debtors, over which SunCal has no authority and which hold over 80% of the Lehman Entities' collateral. The purported justification is to "level the playing field" between SunCal's proposed plan of reorganization and two plans proposed by the Lehman Entities: a plan that incorporates the settlement between the Lehman Entities and the Trustee (the Lehman/Trustee TD Plan) for which the Trustee is a co-proponent, and another plan for twelve of the Voluntary Debtors that offers those Debtors' creditors a current payment in exchange for conveyance to the Lehman Entities of their properties. SunCal seeks the stay because it cannot confirm its plan without relief from the Lehman automatic stay, both to prosecute its equitable subordination claims and to deny LCPI the right to credit bid for the collateral securing over $2.3 billion in loan obligations. The Lehman Entities explain that: 1. The Lehman stay is not the reason SunCal Plan is not confirmation-ready. 2. SunCal has not even requested relief from stay from the Lehman bankruptcy court to deny LCPI the right to credit bid. 3. SunCal alone is responsible for the delayed consideration of its motion for relief from stay to prosecute its equitable subordination claims. 4. A stay would be unfair to creditors. 5. A stay is unwarranted as punishment for bad behavior. The motion posits that SunCal deserves the assistance because the Lehman Entities are improperly asserting the Lehman automatic stay as a "sword" and are bad actors with a "history of prevarication." The Lehman Entities are represented by: PACHULSKI STANG ZIEHL & JONES LLP Richard M. Pachulski, Esq. Dean A. Ziehl, Esq. 10100 Santa Monica Blvd., 11th Floor Los Angeles, CA 90067-4100 Tel: (310) 277-6910 Fax: (310) 201-0760 WEIL, GOTSHAL & MANGES LLP Edward Soto, Esq. Shai Waisman, Esq. 767 Fifth Avenue New York, NY 10153-0119 Tel: (212) 310-8000 Fax: (212) 310-8007 About SunCal Companies SunCal Companies -- http://www.suncal.com/-- has more than 250,000 residential lots and 10 million square feet of commercial space in various stages of development throughout California, Arizona, Nevada and New Mexico. Some of SunCal's communities include Amerige Heights in Fullerton, Lincoln Crossing near Sacramento and Terra Lago and Fairway Canyon near Palm Springs. SunCal Companies recently added an active-adult, commercial, homebuilding, multifamily and urban divisions; and expanded to Florida, Texas and Washington, D.C. Irvine, California-based Palmdale Hills Property, LLC, develops real estate property. It filed for Chapter 11 protection on Nov. 6, 2008 (Bankr. C. D. Calif. Case No. 08-17206). Affiliates who also filed separate Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I, LLC; SunCal Communities III, LLC; and SJD Development Corp. Paul J. Couchot, Esq., at Winthrop Couchot P.C., represents Palmdale Hills in its restructuring effort. The Company estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. 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 disclosed US$639 billion in assets and US$613 billion in debts in its Chapter 11 petition, 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) SUNSET VILLAGE: Meeting of Creditors Scheduled for Nov. 15 ---------------------------------------------------------- A meeting of creditors of Sunset Village LP has been scheduled in the Chicago, Illinois court for November 15, 2010, Carla Main at Bloomberg News reports. Sunset Village has filed a motion to use its lenders' cash collateral until November 6. Sunset Village filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 10-45772) on October 13, 2010 in its hometown, Chicago. Eugene Crane, Esq., at Crane Heyman Simon Welch & Clar., serves as counsel to the Debtor. The Debtor estimated assets and debts of $10 million to $10 million in its Chapter 11 petition. TACO DEL MAR: Franchise Brands to Pay $3.25MM for Business ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Franchise Brands LLC, with an offer of $3.25 million, was the winning bidder for the assets of Taco Del Mar Franchising Corp. The auction had three bidders. The first bid was $1.95 million. Franchise Brands is acquiring a business with more than 200 locations. Unsecured creditors, with $12 million in claims on file, will receive distributions from the portion of the sale price above about $2 million, Bloomberg also reported, citing a court filing by a financial adviser for the official creditors' committee. "Franchise Brands is a company with an interest in acquiring businesses to create a diverse portfolio ready for expansion through franchising. TACO DEL MAR(R) is an established brand with name recognition. The concept fits our preferred business model with its ease of operation, relatively low investment and presence in a popular foodservice category," said Franchise Brands Managing Director, Lisa M. Oak, in a statement. Created in 2005 with the support and guidance of the co-founders of the SUBWAY(R) restaurant chain, Franchise Brands, LLC acquires and or creates strategic alliances with both food and non-food businesses that can offer growth opportunities to franchisees and entrepreneurs worldwide. Some of Frachise Brands' brands are Personal Training Institute, Mama DeLuca's Pizza Now! and HomeVestors of America Inc. About Taco Del Mar Franchising Founded in Seattle, Washington, in 1992 by brothers James and John Schmidt, Taco Del Mar is a quick-service casual restaurant chain inspired by southern Baja, Mexico, and coastal beach shacks known for serving some of the tastiest burritos and tacos. Today, Taco Del Mar operates in more than 225 locations throughout the U.S., Canada and Guam. Taco Del Mar Franchising Corp. and its affiliate, Conrad & Barry Investments Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Wash. Case No. 10-10528) on January 22, 2010. George S. Treperinas, Esq., at Karr Tuttle Campbell represents the Debtor in its restructuring effort. The Official Unsecured Creditors' Committee is represented by Geoffrey Groshong, Esq., at Miller Nash LLP. The Company estimated assets at $10 million to $50 million and debts at $50 million to $100 million. TAMARACK RESORTS: Federal Judge Denies $2 Million Loan ------------------------------------------------------ John Miller at The Associated Press reports that a federal bankruptcy judge rejected a $2 million loan to Tamarack Resort because Credit Suisse Group-led DIP loan proposal did not meet federal laws, was likely to default, and had the potential to further hurt those already owed millions by Tamarack after its 2008 collapse. Credit Suisse was leading investors who offered the money to hire a chief restructuring officer, pay a tardy $250,000 state land lease to Idaho, and complete Tamarack's sale, according to The AP. Tamarack Resort LLC, a golf and ski resort in Valley County, Idaho, was sent to Chapter 7 after creditors submitted an involuntary petition (Bankr. D. Idaho Case No. 09-03911). The petitioning creditors include an affiliate of Bank of America Corp. owed $4.7 million. On April 9, 2010, Bankruptcy Judge Terry Myers, signed an order converting Tamarack Resort LLC's involuntary chapter 7 case to a chapter 11 reorganization. The project's 27.5% owner, VPG Investments Inc., filed for Chapter 11 reorganization in 2008, only to have the petition dismissed in October 2008 at the request of the secured creditor, Credit Suisse, Caymans Islands Branch. VPG was controlled by Mexican businessman Alfredo Miguel Afif. Credit Suisse, the agent for the secured lenders, characterized VPG's Chapter 11 case as "a classic example of a bad faith filing" made "solely as a litigation tactic" to stop foreclosure. TAYLOR BEAN: Wants to Sell Jumbolair Mortgage Note for $2 Million ----------------------------------------------------------------- Taylor, Bean & Whitaker Mortgage Corp., et al., ask the U.S. Bankruptcy Court for the Middle District of Florida for authorization to sell Jumbolair, Inc., Mortgage Note to Gissy Holdings II, LLC. The Debtor is the holder of that certain renewal and consolidation line of credit note for business and commercial loans dated August 28, 2008, made by Jumbolair, Inc., in the face amount of $7,360,000. The note is secured by a mortgage on certain real estate in Marion County, Florida, known as Jumbolair Estates, a luxury "fly-in" community. The note is further secured by personal guaranties from individuals, Jeremy E. Thayer and Jennifer T. Thayer, owning a majority interest in Jumbolair. Jumbolair has not made any payments on the note since January 2009. The note matured on August 2009. Pursuant to a loan sale agreement dated October 8, 2010, the buyer agreed to pay $2,000,000 to the Debtors in exchange for all the Debtors' rights and interests under the loan documents. As required in the agreement, the buyer deposited $200,000 with the Debtor as earnest money. Members of Navigant Capital Advisors, LLC, support staff marketed the note. About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean filed for Chapter 11 bankruptcy protection August 24 (Bankr. M.D. Fla. Case No. 09-07047). Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition. Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Florida, represents the Debtor. Troutman Sanders LLP is special counsel. BMC Group, Inc., serves as claims agent. TELECONNECT INC: Completes Acquisition of Hollandsche Exploitatie ------------------------------------------------------------------ Teleconnect Inc. said it has completed the acquisition of 100% of Hollandsche Exploitatie Maatschappij BV in The Netherlands. HEM, established in 2007, developed the very effective age validation system 'Ageviewers', which makes it virtually impossible for minors to acquire alcohol or tobacco. On Oct. 15, 2010, Teleconnect and HEM formalized a contract before a Public Notary in The Netherlands, whereby Teleconnect purchased HEM in exchange for 12% of the outstanding shares -- post issuance -- of Teleconnect. The purchase of HEM was subject to an assessment of the viability of HEM's business plan by Teleconnect's management. Also, at a special written meeting of the stockholders, 91.69% of the shareholders of the Teleconnect ratified the Board's decision to complete this purchase. The Company said, "Our assessment included, but was not limited to, analyses of the employed technology and HEM's intellectual property rights, as well as a thorough analysis of the market. In addition, a report on the value of HEM and the launch readiness of Ageviewers were requested from independent third parties. During our assessment, HEM's management demonstrated the viability of the Ageviewers solution by entering into contract with over 20 alcohol outlets in the Netherlands for a period of 36 months -- which was previously defined in HEM's business plan as a milestone to be achieved before September 30th 2010." "We have identified risk factors which could affect the success of HEM's business. For instance, the resistance from commercial parties that benefit from the sales of alcohol and tobacco is expected to be well organized. Teleconnect management believes that despite this possible resistance and other obstacles, an effective solution such as Ageviewers is likely to be implemented. Teleconnect expects that in due time, the Ageviewers system can play a prominent role in the prevention of sales of alcohol and tobacco to minors by retail businesses." About Teleconnect Inc. Based in Breda, The Netherlands, Teleconnect Inc. (OTC: TLCO) -- http://teleconnect.es/-- derives its revenues from continuing operations primarily from the sale of multimedia kiosks and hardware components to retail chains in the Netherlands. These kiosks and components can be applied to different functions such as recharging prepaid telephone cards. On May 3, 2010, the Company signed a letter of intent to acquire 100% of Hollandsche Exploitatie Maatschappij BV (HEM) in The Netherlands. The purchase price contemplated by the letter of intent is 12% of the outstanding common stock of the Company, post emission. The purchase of HEM is subject to due diligence by Teleconnect as well as shareholders' approval. HEM, established in 2007, developed an age validation system, "Ageviewers", which utilizes the Company's products in its processes. Teleconnect reported a net loss US$335,712 on US$111 of revenue for the three months ended March 31, 2010, compared with a net loss of US$312,861 on US$95,061 of revenue for the same period of 2009. The Company's balance sheet at March 31, 2010, showed US$2,055,793 in assets, US$2,974,233 of liabilities, and a stockholders' deficit of US$918,440. TERREL REID: Plan Confirmation Hearing Set for November 3 --------------------------------------------------------- The Hon. Jim D. Pappas of the U.S. Bankruptcy Court for the District of Idaho will consider at a hearing on November 3, 2010, at 9:30 a.m., the confirmation of Terrel R. Reid and Sharon M. Davies' Plan of Reorganization. Any objections to the confirmation of the Plan and ballots accepting or rejecting the Plan are due 10 days prior to the hearing date. As reported in the Troubled Company Reporter on May 5, according to the Disclosure Statement, the Plan provides for the secured claim of Bank of America to be paid in full. With respect to other secured creditors, the Debtors propose to maintain non- default status by continuing payments on the debts. The Debtors propose paying all unsecured claims in full, with each unsecured creditor getting full payment of its claim. Payments and distributions under the Chapter 11 Plan will be funded by the proceeds from the sale of the real property located in Jackson, Wyoming, with potential further funds provided in the form of distributions from Davies Reid, Inc., a company wholly owned by the Debtors. A full-text copy of the Disclosure Statement, as amended, is available for free at http://bankrupt.com/misc/TerrelReid_AmendedDS.pdf About Terrel Reid Ketchum, Idaho-based Terrel Reid and Sharon Davies filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Idaho Case No. 10-40057). Matthew Todd Christensen, Esq., at Angstman, Johnson & Associates, PLLC, assists the Debtors in their restructuring efforts. The Debtors estimated their assets and debts at $10 million to $50 million. TERREL REID: Says Case Dismissal Means More Funds for Unsecureds ---------------------------------------------------------------- Terrel R. Reid and Sharon M. Davies ask the U.S. Bankruptcy Court for the District of Idaho to dismiss their Chapter 11 bankruptcy. The Debtors relate that they have worked out a settlement with Bank of America, their largest creditor, and project sufficient ability to maintain the settlement payments with Bank of America. Additionally, the Debtors are not seeking a discharge of their debts. The Debtors explain that allowing them to dismiss their bankruptcy case will allow them to finish paying their creditors without the reporting requirements and supervision of the bankruptcy court. The Debtors will not be forced to incur the additional cost of preparing monthly or quarterly operating reports, including the costs of attorney and accountant fees for the same. Additionally, the Debtors, by dismissing their case, can avoid the additional cost of US Trustee fees based on their disbursements. This will, in turn, allow more funds to be available for paying the unsecured creditors. The Debtors are represented by: Thomas J. Angstman, Esq. Matthew T. Christensen, Esq. ANGSTMAN JOHNSON 3649 Lakeharbor Lane Boise, ID 83703 Tel: (208) 384-8588 Fax: (208) 853-0117 About Terrel Reid Ketchum, Idaho-based Terrel Reid and Sharon Davies filed for Chapter 11 bankruptcy protection on January 15, 2010 (Bankr. D. Idaho Case No. 10-40057). Matthew Todd Christensen, Esq., at Angstman, Johnson & Associates, PLLC, assists the Debtors in their restructuring effort. The Debtors estimated their assets and debts at $10 million to $50 million. TERRESTAR NETWORKS: Proposes to Assume Restructuring Support Deal ----------------------------------------------------------------- TerreStar Networks Inc. and its debtor affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to assume a certain restructuring support agreement they negotiated with EchoStar Corporation, their largest secured creditor. The RSA will help pave the way for the Debtors to exit Chapter 11 with a deleveraged balance sheet and give the Debtors the best available opportunity to maximize value for their estates, including their stakeholders, Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, counsel to the Debtors, contends. After running a full and robust process seeking debtor-in- possession financing and a potential comprehensive restructuring, the Debtors were able to "kill two birds with one EchoStar," Mr. Dizengoff relates. The Debtors, he reveals, (1) procured $75 million of "junior" DIP Financing from EchoStar, and (2) negotiated and agreed with EchoStar on the terms of an exit strategy, which is embodied in the RSA. The agreed exit strategy essentially provides that EchoStar has committed to: (i) backstop $100 million of a $125 million preferred stock rights offering, which will allow the Debtors to repay their DIP Financing facility in full and, if the rights offering is fully subscribed, finance their operations upon their emergence from Chapter 11; and (ii) support the equitization of the totality of its secured notes, which represents more than 50% of the Debtors' close to $1 billion secured notes obligations. "The agreement with EchoStar to provide the Debtors with DIP Financing and to enter into the RSA was, without a doubt, the most attractive restructuring alternative available," Mr. Dizengoff asserts. The Restructuring Support Agreement The Restructuring Term Sheet attached to the RSA contemplates, among other things: (a) Entry into a proposed postpetition DIP financing facility, consisting of the $75 million DIP Facility provided by EchoStar, which proceeds will be used primarily to fund postpetition operating expenses of the Debtors incurred in the ordinary course of business and certain other costs and expenses incurred in connection with the administration of their Chapter 11 cases; and (b) The Debtors' filing of a Chapter 11 plan, and seeking confirmation of that plan within certain milestones. The Plan will consist of: * holders of allowed Senior Secured Notes receiving (x) their pro rata share of 97% of the New Common Stock to be issued by TSN, and (y) rights to purchase a number of shares of New Preferred Stock corresponding to their proportionate ownership of the Senior Secured Notes through a $125 million rights offering, $100 million of which will be backstopped by EchoStar; * holders of allowed claims under the Purchase Money Credit Facility, which the Debtors entered into Prepetition with EchoStar and certain lenders, being repaid in cash, or at the holders' discretion, reinstated; * holders of allowed Senior Exchangeable Notes receiving (x) their pro rata share of [__]% of the New Common Stock; and (y) Rights to purchase New Preferred Stock; * holders of allowed unsecured claims at the Debtors' receiving (x) their pro rata share of [__]% of the New Common Stock; and (y) Rights to purchase New Preferred Stock; and * holders of interests in the Debtors, including preferred stock, receiving no distributions on account of the interests, with those interests being cancelled. Mr. Dizengoff notes that while the Debtors believe that the proposed Plan represents the best opportunity to maximize value of their estates, the Debtors negotiated for a "fiduciary out' provision in the RSA that will enable the Debtors to comply with their fiduciary duties. Specifically, a section of the RSA provides, in pertinent part that: (a) nothing in the RSA or in the Term Sheet will require any Debtor, any non-debtor subsidiary or affiliate of any Debtor, or any of their respective directors or officers or agents or advisors to take any action, or to refrain from taking any action, to the extent that taking such action or refraining from taking such action would result in a breach of the person's fiduciary obligations under applicable law; (b) for the avoidance of doubt, the Debtors may terminate their obligations under the RSA by written notice to the Plan Sponsors only if: (i) on or after the Petition Date but prior to entry of a Bankruptcy Court Order authorizing the Debtors' assumption of the RSA pursuant to Section 365(a) of the Bankruptcy Code, the Debtors determine in good faith that pursuit of an alternative course of action would be more favorable to their bankruptcy estates than consummation of the Plan, taking into account all legal, financial, regulatory, and other aspects of the alternative course of action, including litigation risks and potential delays; or (ii) at any time after the Assumption, the Debtors determine in good faith that pursuit of an alternative course of action would be superior to consummation of the proposed Plan. The RSA, like most restructuring support agreements, contains a number of events that will result in its termination, which includes: (1) the failure to meet certain milestones in connection with filing and prosecution of the chapter 11 cases, including milestones requiring the Debtors to pursue a restructuring and plan process diligently and consistent with an agreed upon schedule; (2) any material modification to any terms of the Restructuring that is inconsistent with terms and conditions set forth in the Term Sheet, without the prior written consent of EchoStar; (3) withdrawal of, or the filing of a motion to withdraw, the Plan or submit an amended plan of reorganization or liquidation that is adverse to EchoStar or materially inconsistent with the terms and provisions of the Term Sheet; (4) the occurrence of any event, development or circumstance on or after June 30, 2010 that, either alone or in combination, has had or could reasonably be expected to have a material adverse effect on the business, operations, assets, liabilities or condition of the Debtors taken as a whole; (5) the conversion of the Chapter 11 cases to one under Chapter 7 of the Bankruptcy Code; (6) the Debtors' breach of any material provision of the Term Sheet; or (7) the occurrence and continuation of a default under the DIP Facility. Specifically, with respect to the Chapter 11 Milestones, the Debtors have agreed to pursue a restructuring in accordance with these deadlines: (1) A disclosure statement and a plan consistent with the terms set forth in the Term Sheet filed no later than November 5, 2010; (2) an application with the Federal Communications Commission filed by December 14, 2010; (3) a final order approving the disclosure statement consistent with the terms set forth in the Term Sheet entered by the Bankruptcy Court no later than December 14, 2010; (4) a hearing to confirm a plan consistent with the terms set forth in the Term Sheet commenced by the Bankruptcy Court no later than January 31, 2011; (5) a final order approving the confirmation of a plan consistent with the terms set forth in the Term Sheet entered by the Bankruptcy Court no later than February 14, 2011; and (6) occurrence of the effective date of the Plan no later than May 31, 2011, or a later date that is mutually agreed. The Term Sheet includes provisions for the automatic termination of the RSA on the 7th business day after the occurrence of certain Sponsor Termination Events unless waived in writing by EchoStar before the expiration of that waiver period. For certain other Sponsor Termination Events, the RSA will terminate only after EchoStar provides the Debtors with written notice of the Sponsor Termination Event and that Sponsor Termination Event remains uncured for at least five days following the delivery of notice. Additionally, the Debtors may also terminate the Term Sheet and all of the obligations of the parties to the Agreement at their sole discretion, if (i) EchoStar breaches any material provision in the Term Sheet; or (ii) the Chapter 11 cases are converted to cases under Chapter 7 of the Bankruptcy Code. Should any of these events occur, the termination of the Term Sheet will be effective upon (i) written notice being provided to EchoStar by the Debtors; and (ii) if applicable, the breach remaining uncured for at least five days following EchoStar's receipt of the notice. Full text copies of the RSA and the Restructuring Term Sheet are available for free at: http://bankrupt.com/misc/TSN_RSA.pdf http://bankrupt.com/misc/TSN_RSATermSht.pdf About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. The Garden City Group, Inc. will act as claims and noticing agent in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Wins Interim Nod of $75MM DIP Financing ----------------------------------------------------------- Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York has permitted TerreStar Networks Inc. and its debtor affiliates to borrow as much as $18 million, on an interim basis, from the $75 million secured superpriority postpetition loan the Debtors are trying to procure from EchoStar Corporation and certain lender parties. The Debtors have decided to enter into a secured financing agreement with EchoStar to be able to operate their businesses for more than a brief period during the pendency of their Chapter 11 cases. Blackstone Advisory Partners L.P., a financial adviser firm, assisted the Debtors in exploring the best avenue to obtain the DIP financing on the best possible terms. The DIP Credit Facility the Debtors were able to arrange with EchoStar, et al., provides for these salient terms: Borrower : TerreStar Networks Inc. Guarantors : All other Debtors DIP Agent : The Bank of New York Mellon Initial Lender : EchoStar Corporation DIP Lenders : Certain lender parties Final Commitment : $75 million non-amortizing term loan facility Interim Commitment: $18 million Maturity : The earlier of: (i) nine months after the Petition Date; (ii) the date of the acceleration of the DIP Loan; (iii) 35 calendar days after the entry of the Interim Order, unless the Final Order will have been entered; (iv) the closing date of a sale pursuant to Section 363 of the Bankruptcy Code of all or substantially all of the Debtors' assets; or (v) the effective date of a plan of reorganization in the Borrower's Chapter 11 case. Loan Proceeds : Proceeds of the DIP Financing will be used used to, among other things, fund working capital and general corporate needs in accordance with an Agreed Budget. The official committee of unsecured creditors, if and when appointed in the Debtors' cases, cannot use the Cash Collateral or DIP Loan to (i) object, contest or raise any defense to the validity, perfection, priority, or enforceability of any amount due under the DIP Documents, the Prepetition Loan Documents or the liens or claims granted under the Interim Order, the DIP Documents or the Prepetition Loan Documents, or to (ii) assert any Claims and Defenses or any other causes of action against the DIP Agent, the DIP Lenders, the Prepetition Agent, the other Prepetition Secured Parties or their respective agents, affiliates, subsidiaries, directors, officers, representatives, attorneys or advisors, in each case, solely in their capacity as Prepetition Secured Parties; provided, however, that up to $200,000 of the Prepetition Collateral, DIP Loans, the DIP Collateral or the Carve-Out may be used by the Committee to investigate the validity, enforceability or priority of the Prepetition Obligations or the liens on the Prepetition Collateral securing the Prepetition Obligations, or investigate any Claims and Defenses or other causes action against the Prepetition Agent or the Prepetition Secured Parties. Discount : Each DIP loan will be made available to the Borrower at an original issue discount of 2%. Interest Rate : 15% paid in kind and added to the principal amount of the DIP Loan. Default Interest Rate : The rate that would otherwise be applicable plus 2.00% per annum. Fees : Upfront Fees -- Upon the occurrence of the Closing Date, the Borrower will pay to the DIP Lenders an upfront fee of 3.0% on the amount of that DIP Lender's commitment under the DIP Financing. Funding Fee -- 2% of the principal amount of each Loan made by each Lender, payable on the date the Loan is made. Unused Commitment Fee -- 1.0% per annum on the daily undrawn portion of the commitment in respect of the DIP Loan, payable monthly in arrears after the Closing Date, which fee is to be payable in kind. Liens and Priorities : The Debtors grant the following as collateral securing all DIP Financing obligations, subject to the Carve-Out: * Liens on DIP Collateral. Pursuant to Section 364 of the Bankruptcy Code, -- a fully perfected first priority security interest in and lien on the Unencumbered Property, -- Junior Liens on property secured by the Prepetition Secured Party Liens and Permitted Prepetition Liens, in each case subject to the Carve-Out and not including any property upon which a lien may not be granted pursuant to applicable law, and -- valid, binding, continuing, enforceable, fully perfected, priming liens on property secured by the TSN Secured Party Liens, in each case subject to prepetition liens and the Carve-Out. * Future Property. The DIP Collateral includes all property and assets of the Debtors and their estates, including all causes of action. * Avoidance Actions. The DIP Collateral will include the Debtors' claims and causes of action arising under Sections 542-553 of the Bankruptcy Code and the related proceeds. Priorities: Obligations under the DIP Financing constitute superpriority administrative expenses in the Debtors' Chapter 11 cases and will be senior to the Prepetition Debt obligations. Carve-Out : The Carve-Out applies to: (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the U.S. Trustee under Section 1930(a) of Judiciary and Judicial Procedures Code; (ii) fees and expenses up to $50,000 incurred by a trustee under Section 726(b) of the Bankruptcy Code; (iii) with respect to the information officer to be appointed by the Canadian Court in connection with the proceedings commenced pursuant to the Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended in the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada, all fees and expenses required to be paid to the Information Officer in connection with the Canadian Proceedings, including to the extent secured by the charge to be granted by the Canadian Court over the Debtors' assets in Canada, in the maximum amount of C$125,000, to secure payment of any fees and expenses of the Information Officer; and (iv) after the occurrence and during the continuance of an Event of Default under the DIP Documents, the payment of allowed professional fees and disbursements incurred by the Debtors or the Committee after the occurrence of the Event of Default not to exceed $800,000 (plus all unpaid professional fees and expenses allowed by the Bankruptcy Court that were incurred prior to the occurrence of the Event of Default); provided that (X) the Carve-Out will not be available to pay any professional fees and expenses incurred in connection with the initiation or prosecution of any claims, causes of action, adversary proceedings or other litigation against the DIP Agent, the DIP Lenders, or the Prepetition Secured Parties, (Y) so long as no Event of Default will have occurred and be continuing, the Carve-Out will not be reduced by the payment of fees and expenses allowed by the Bankruptcy Court under Sections 328, 330 and 331 of the Bankruptcy Code, and (Z) nothing in the Interim or Final DIP Order will impair the right of any party to object to the reasonableness of any those fees or expenses. Events of Default : The DIP Agreement sets forth a number of customary events of default, which include the dismissal of the Debtors' Chapter 11 cases, the conversion of the Debtors' cases into a chapter 7 case, and the Debtors' failure to pay principal, interest or fees in connection with the DIP Loan. Funding of non-Debtor affiliates : The DIP Agreement provides for a $70,000 per month payment made by TerreStar Networks (Canada) Inc. to compensate TerreStar Solutions Inc. for expenses paid on behalf of TerreStar Networks (Canada) Inc., including pro rata salaries of employees, payments to consultants, office space rentals, utilities and offices spaces from and after the Petition Date permitted to be paid in accordance with an Agreed Budget. In addition, there will be a onetime payment of no more than $7,000 to TerreStar Global Ltd., the proceeds of which are used to pay its taxes. Indemnification : The Debtors will indemnify the DIP Agent, each DIP Lender and each of their respective officers, directors, employees, agents, advisors, attorneys and representatives of each pursuant to customary indemnification provisions. The DIP Facility further requires the Debtors to achieve certain milestones: (1) A plan and disclosure statement should have been filed by November 5, 2010. Bankruptcy Court approval for the Disclosure Statement should be obtained by December 14, 2010, and a hearing on the confirmation of the plan should have been commenced by January 31, 2011. A final, non- appealable order confirming the proposed plan of reorganization should have been entered by February 14, 2011. (2) By December 14, 2010, a filing, jointly with any person required by the Federal Communications Commission or Industry Canada, must have been made of (a) all necessary applications for approval of the transfers of control over all the FCC Licenses, or the transfer of assignment of all the Industry Canada Licenses, and related authorizations held by any Loan Party that are contemplated by any Acceptable Plan, and (b) all required notifications to the FCC and Industry Canada. (3) Within 7 days after the request of the Required Lenders with respect to any order issued by the Bankruptcy Court, a corresponding recognition order reasonably acceptable to the Required Lenders will have been entered in the Canadian Court, which order will have become final and non-appealable within 21 days after entry of that order by the Canadian Court. (4) A Final Order and Final Recognition Order will have become final and non-appealable within 60 days and 63 days of the entry of the Interim Order and Initial Recognition Order, respectively. Nevertheless, the parties agree that failure to meet any Milestone Requirements solely due to the action or inaction of EchoStar, as the initial DIP Lender, will not result in a default of any milestone. Supporting Declarations Jeffrey W. Epstein, chief executive officer of TSN, and Steve Zelin, senior managing director of adviser firm Blackstone Advisory Partners L.P, filed with the Court separate declarations in support of the Debtors' DIP Financing Motion. Mr. Epstein said that the Debtors' need for a DIP financing cannot be understated as the Debtors' cash on hand as of the Petition Date is less than $500,000. Mr. Zelin related that, in addition to the EchoStar offer, the Debtors also entertained a financing proposal from certain financial institutions that were not current stakeholders of the Debtors. He noted that although the Third Party proposal offered $250 million in DIP financing, the amount is not comparable to the $75 million DIP Financing proposed by the EchoStar because: -- The DIP Financing proposal offered by the third party lenders would have repaid, in full, the Debtors' prepetition credit facility, meaning that, in effect it was actually only $163 million in cash proceeds to the Company; -- The Third Party DIP Financing proposal included a 10% cash interest component, for one year, incremental original issue discount, and commitment fees thereby further reducing the amount of the DIP amount from $163 million to $136 million; and -- The Third Party DIP financing assumed a longer bankruptcy, therefore funding more operating costs, leaving $113 million versus the $75 million proposed by EchoStar. Mr. Zelin further noted that EchoStar has agreed not to take any prepetition commitment fees, thereby allowing the Debtors to conduct an orderly Chapter 11 filing with their available remaining cash. Moreover, all fees related to the DIP financing are payable in kind rather than in cash, he added. Final Hearing The Debtors are due before the Court on November 16, 2010, for a final hearing on their postpetition financing request. Any party-in-interest who wants to file a formal objection to the Debtors' request has until November 9 to do so. Full-text copies of the EchoStar DIP Credit Agreement and the Interim DIP Order are available for free at: http://bankrupt.com/misc/TSN_75MMDIPCreditPact.pdf http://bankrupt.com/misc/TSN_InterimDIPOrder.pdf About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. The Garden City Group, Inc. will act as claims and noticing agent in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Access to Cash Collateral Approved on Interim ----------------------------------------------------------------- TerreStar Networks Inc. and its debtor affiliates sought and obtained permission from Judge Sean Lane of the U.S. Bankruptcy for the Southern District of New York to continue using the Cash Collateral of their prepetition lenders, on an interim basis. The Debtors disclose that their current $500,000 cash on hand and minimal cash generated from their operations will be insufficient to pay their employees and suppliers and make the necessary capital expenditures. They need access to the Cash Collateral to 7provide for their working capital and for other general corporate purposes, including for payment of any adequate protection obligations. The Debtors are authorized to use the Cash Collateral of their Prepetition Secured Lenders in accordance with a prepared budget for the 13-week period ending in December 2010, a copy of which is available for free at: http://bankrupt.com/misc/TSN_13WkBudget_endedDec2010.pdf As of the Petition Date, the instruments evidencing the Debtors' significant indebtedness are: Amt. Outstanding as of the Facility Borrower/Issuer the Petition Date -------- --------------- ----------------- 15% Senior Secured Notes Issuer: TSN $943.9 million Issued on 02/14/2007 Guarantors: TerreStar Agent: U.S. Bank, N.A. Networks Holdings (Canada) Inc., TerreStar Networks (Canada) Inc., TerreStar National Services Inc. and TerreStar License Inc. Sr. Exchangeable Notes Issuers: TSN, TSC $178.7 million Issued on 02/07/08 and certain Agent: U.S. Bank, N.A. subsidiaries Guarantors: TerreStar National Services Inc. and TerreStar License Inc. Purchase Money Credit Borrower: TSN $85.9 million Facility or the PMCA Collateral Agent: Issued on 02/05/08 U.S. Bank N.A. Lenders: Harbinger and EchoStar The PMCA and the Senior Secured Notes are secured by a first priority security interest and first lien on certain of the Debtors' assets. Those assets, including cash on hand, constitute Cash Collateral of the Prepetition Secured Parties. The Senior Exchangeable Notes are unsecured obligations of the Debtors. Because not all of the Prepetition Secured Lenders are participating in the proposed DIP Financing, they cannot be deemed to have consented to the use of Cash Collateral contemplated by the DIP Financing, Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, clarifies. Pursuant to Section 363(c) of the Bankruptcy Code, the Debtors may only use cash collateral of the Prepetition Secured Lenders subject to the consent of those parties or the grant of adequate protection. As adequate protection and to compensate the Prepetition Secured Parties for any diminution in the value of their prepetition collateral, the Court permits the Debtors to provide the Prepetition Secured Lenders with these adequate protection liens: * As security for the payment of the Adequate Protection Obligations with respect to the PMCA, the PMCA Agent, for itself and for the benefit of the PMCA Lenders, is granted a valid, perfected replacement security interest in and lien on the PMCA Collateral, subject and subordinate only to the Permitted Prepetition Liens; the Prepetition Secured Party Liens; the DIP Liens; and the Carve-Out. * As security for the payment of the Adequate Protection Obligations with respect to the 15% Notes, the 15% Notes Trustee/Agent, for itself and for the benefit of the 15% Noteholders, is granted (a) a valid, perfected replacement security interest in and lien on the 15% Notes Collateral; and (b) a non-avoidable, valid, enforceable and perfected security interest in and lien on all of the DIP Collateral not included in (a), each of which will be subject and subordinate only to, to the extent applicable, the Permitted Prepetition Liens; the Prepetition Secured Party Liens; the DIP Liens; and the Carve-Out. The Adequate Protection Obligations will constitute superpriority claims as provided under Section 507(b) of the Bankruptcy Code, with priority in payment over any and all administrative expenses of the kinds specified or ordered pursuant to any provision of the Bankruptcy Code, subject and subordinate only to (i) the Carve-Out, and (ii) the Superpriority Claims granted in respect of the DIP Obligations. Except to the extent set forth in the Interim or Final DIP Order, the Prepetition Secured Parties will not receive or retain any payments, property or other amounts in respect of the 507(b) Claims unless and until all DIP Obligations will have indefeasibly been paid in full in cash and the commitments under the DIP Documents have been terminated. The Court will convene a hearing on November 16, 2010, to consider the Debtors' request, on a final basis. About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. The Garden City Group, Inc. will act as claims and noticing agent in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TERRESTAR NETWORKS: Judge OKs TSN as Foreign Representative ----------------------------------------------------------- Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York has authorized TerreStar Networks, Inc. to act as the foreign representative on behalf of the Debtors' estates in the proceedings to be initiated pursuant to the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada. As Foreign Representative, TSN is authorized by the Bankruptcy Court and will have the power to act in any way permitted by applicable foreign law, including, but not limited to: (i) seeking recognition of the Debtors' Chapter 11 cases in the Canadian Proceedings; (ii) asking that the Canadian Court lend assistance to the Bankruptcy Court in protecting the property of the Debtors' estates; and (iii) seeking any other appropriate relief from the Canadian Court that TSN deems just and proper in the furtherance of the protection of the Debtors' estates. Judge Lane also seeks the aid and assistance of the Canadian Court to recognize the Debtors' bankruptcy cases as a "foreign main proceeding" and TSN as a "foreign representative" pursuant to the CCAA and to recognize and give full force and effect in all provinces and territories of Canada to the Order. About TerreStar Networks Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR) -- http://www.terrestar.com/-- is in the mobile communications business through its ownership of TerreStar Networks, its principal operating subsidiary, and TerreStar Global. TerreStar Networks, in cooperation with its Canadian partners, TerreStar Canada and TerreStar Solutions, majority-owned subsidiaries of Trio 1 and 2 General Partnerships, plans to launch an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using integrated satellite-terrestrial smartphones and other devices. This system build out will be based on an integrated satellite and ground- based technology intended to provide communication service in most hard-to-reach areas and will provide a nationwide interoperable, survivable and critical communications infrastructure. The Company intends to provide multiple communications applications, including voice, data and video services. As of June 30, 2010, the Company had four wholly owned subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar Holdings Inc., and TerreStar New York Inc. Motient Ventures Holding Inc., a wholly owned subsidiary of MVH Holdings Inc., directly holds approximately 89.3% and 86.5% interest in TerreStar Networks and TerreStar Global, respectively. TerreStar Networks Inc. and Its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No. 10-15446). The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not among the Chapter 11 filers. The Garden City Group, Inc. will act as claims and noticing agent in the chapter 11 cases. Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq. at Fraser Milner Casgrain LLP and Ira Dizengoff, Esq. , Arik Preis, Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP , serve as bankruptcy counsel to the Debtors. Blackstone Advisory Partners LP is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes TerreStar Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by TerreStar Networks Inc. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TOMKINS FINANCE: S&P Downgrades Rating on Senior Debt to 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services said it is lowering its issue- level ratings on Tomkins Finance PLC's (Tomkins Finance Ltd. after the closing) senior unsecured debt to 'B' from 'BBB' and removing the ratings from CreditWatch, where they were placed on July 28, 2010, with negative implications. S&P is also assigning a recovery rating of '6' on the debt. The debt consists of GBP250 million, 6.125% notes due Sept. 16, 2015, and GBP150 million senior unsecured Europe medium-term notes (maturing 2011). The rating actions reflect the outcome of the company's recent tender for these notes, which left GBP141 million of the 2015 notes and GBP109 million of the 2011 notes outstanding following the conclusion of the tender offer. As S&P stated in its release of Sept. 21, 2010, S&P expected to lower the ratings on any unsecured debt that was left outstanding following the tender offer. Although the company reports that cash has been set aside for payment in full for the remaining ?141 million of 2015 notes, S&P does not believe this arrangement meets its criteria for a legal defeasance, so S&P continues to rate the issues based on their recovery prospects. The company reported that the GBP109 million of 2011 notes will be subject to a subsequent tender offer in the near term. If either series of notes is fully repaid prior to maturity, S&P would withdraw the ratings. The ratings reflect S&P's view that the 2011 notes and the 2015 notes are currently unsecured. The documentation contains a negative-pledge clause whereby, as long as the notes remain outstanding, the issuer (Tomkins Finance PLC), the guarantor, and the guarantor's subsidiaries will not permit their assets to be pledged in favor of any debt obligations unless the notes are secured equally. The definition of debt obligations does not include bank debt or non-tradable debt. The company does not believe the recent leveraged buyout financing triggers the negative pledge. A put option is also available to the holders of the 2011 notes and the 2015 notes if a third party acquires 50% or more of the guarantor's (Tomkins PLC) share capital. This option is conditional on either Standard & Poor's or another recognized ratings agency lowering or withdrawing its ratings on the notes to speculative grade as a consequence of the change of control. Ratings List Ratings Revised Tomkins Finance PLC To From -- ---- Senior Unsecured B BBB/Watch Neg Recovery rating 6 Tomkins PLC* To From -- ---- Senior Unsecured B BBB/Watch Neg Recovery rating 6 * Guaranteed by Tomkins Finance PLC TOWNE INC: Bankruptcy Court Won't Hear Owners' Spat With BMW FS --------------------------------------------------------------- BMW Financial Services on June 22, 2009, commenced a foreclosure proceeding against Donald and Madeline Ploetner in the Superior Court of New Jersey, Chancery Division, Morris County. The Ploetners then filed counterclaims against BMW FS and BMW of North America, as third-party defendants. The counterclaims allege various violations of the New York State Franchised Motor Vehicle Dealer Act, N.Y. Veh. & Traf. Sections 460, et seq., and the New Jersey Franchise Practices Act, N.J.S.A. 56:10-1, et seq. BMW FS and BMW NA argue that the claims belong to debtors Towne, Inc. and DMD Towne, Inc. -- in which the Ploetners serve as principal shareholders -- and, after conversion, the chapter 7 Trustee, and were released by the Trustee pursuant to the Sale and Release approved during the bankruptcy case. BMW NA removed the matter to the Bankruptcy Court on May 18, 2010, and, together with BMW FS, now seek to dismiss the counterclaims pursuant to Federal Rule of Civil Procedure 12(b)(6). BMW FS was a secured lender to the Debtors. BMW NA was a party to several dealership agreements with the Debtors. During the bankruptcy case, the Debtors attempted to effectuate a sale of dealership assets and real estate pursuant to 11 U.S.C. Sections 363 and 365. As part of any sale agreement, however, BMW FS and BMW NA insisted on the Debtors executing a release of claims in favor of BMW FS and BMW NA. The Debtors refused to consent to a release and the Court ultimately denied the sale motion. Shortly thereafter, the Court, upon motion of the United States Trustee, converted the case to chapter 7. A chapter 7 Trustee was appointed and took control of the Debtors' estates. On January 7, 2010, the Trustee filed a new sale motion that included the release agreement sought by BMW FS and BMW NA. The Court approved the sale and the Release became effective immediately. The Hon. Donald H. Steckroth holds that the Bankruptcy Court does not have jurisdiction in the matter. Even if otherwise properly removed by the third-party defendant, BMW NA, pursuant to Sec. 1452(a), the litigation is between non-debtor parties and lacks a sufficiently close nexus to the bankruptcy case. The initial litigation in state court was a foreclosure proceeding on the real property of a non-debtor party and can have no effect on either the Debtor or the estate. Judge Steckroth says the BMW entities retain all rights under the Release granted during the bankruptcy case and may seek dismissal of their claims pursuant thereto in the state court. Accordingly, the Court remands the matter to the Superior Court of New Jersey pursuant to Sec. 1452(b). The adversary case is BMW Financial Services, et al., v. Ploetner, et al., Adv. Proc. No. 10-01637 (Bankr. D. N.J.), and a copy of the Court's order dated October 21, 2010, is available at http://is.gd/gfttTfrom Leagle.com. Towne Inc. and DMD Towne Inc. were in business of operating BMW automotive dealerships. Towne and DMD Towne filed voluntary Chapter 11 bankruptcy petitions on February 5, 2009 and April 6, 2009, respectively. For procedural efficiency, the Court administratively consolidated the two cases (Bankr. D. N.J. Lead Case No. 09-12804). Lawrence Morrison, Esq., in New York, served as counsel to the Debtors. Towne Inc. estimated $1 million to $10 million in both assets and debts. TRIBUNE COMPANY: CEO Michaels Steps Down; Executive Council Formed ------------------------------------------------------------------ Tribune Company's board of directors has appointed an Executive Council that will assume the responsibilities of the Office of the Chief Executive and President and oversee the company's publishing and broadcast operations. Randy Michaels has resigned as the company's CEO, effective immediately. The executive council is composed of: Don Liebentritt, Tribune's Chief Restructuring Officer, Nils Larsen, Tribune's Chief Investment Officer, Tony Hunter, President, Publisher and CEO of Chicago Tribune Company and Eddy Hartenstein, Publisher and CEO of Los Angeles Times Communications, LLC. Nils Larsen has also been named Chairman of Tribune Broadcasting. The Executive Council will report directly to Tribune's board of directors. Tribune Broadcasting President Jerry Kersting will work very closely with the Council and will continue in his role overseeing the company's broadcast operations, including its 23 television stations, cable network WGN America, and WGN Radio. The company's Chief Operating Officer, Gerry Spector, will report directly to the Council. "These appointments are designed to ensure a smooth, seamless transition of management responsibilities to a group of experienced executives who have a strong understanding of the company's media businesses," said Sam Zell, Tribune's Chairman of the Board. "The Council will provide the company with stability and continuity as it enters what is traditionally the busiest time of the year for its business units and their advertising partners. Tribune has strong brands, valuable assets and innovative, dedicated employees," Zell continued. "Its media businesses have generated solid financial performance through the first three quarters of 2010 -- the company is building on that momentum." As previously announced, Tribune expects to file a plan of reorganization with the U.S. Bankruptcy Court for the District of Delaware later today. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE COMPANY: Files Plan of Reorganization --------------------------------------------- Tribune Company has filed with the United States Bankruptcy Court for the District of Delaware, a Plan of Reorganization that would keep the company intact, sharply reduce its debt, and turn ownership over to holders of the company's Initial and Incremental Term Loans. The Plan, which must still be approved by Tribune creditors and the Court, incorporates the terms of two previously announced settlement agreements endorsed by the mediator and reached by its Unsecured Creditors Committee, Oaktree Capital Management, L.P., Angelo, Gordon & Co, L.P., and JPMorgan Chase Bank. "We are pleased to be able to put before the court and our creditors the previously announced settlement of LBO claims in a plan that maximizes the value of the bankruptcy estates, preserves all stakeholders' legitimate entitlements and enables the company to conclude its bankruptcy proceedings as soon as possible," said Don Liebentritt, Tribune's Chief Restructuring Officer. "In addition, we believe this plan has broad support within the senior lender class, including from an ad hoc group of lenders called the Credit Agreement Lenders, which collectively represents approximately $5 billion of Initial and Incremental term Loans -- Oaktree, and Angelo, Gordon, are part of this ad hoc group." Documents to be filed with the plan contain highlights of the company's recent and projected financial performance. The company expects operating cash flow for full year 2010 to be $617 million, approximately $123 million higher than 2009*. Under the Plan, Tribune expects to continue its recently implemented employee retirement plan, featuring a 401(k) plan with company matching contributions and an annual discretionary profit- sharing contribution based on the achievement of certain financial goals; the company's employee stock ownership plan (ESOP) would terminate and the shares held by the ESOP and in employee accounts would be extinguished. *Tribune Company and its subsidiaries maintain their financial records in accordance with generally accepted accounting principles ("GAAP"); however, the information included herein is preliminary and includes some non-GAAP financial measures. The Company uses cash operating expenses and operating cash flow to evaluate internal performance. "Cash operating expenses" are defined as operating expenses before depreciation and amortization, write-downs of intangible assets, stock-based compensation, certain special items including severance, non- operating items, and reorganization costs. "Operating cash flow" is defined as earnings before interest and dividend income, interest expense, equity income and losses, depreciation and amortization, write-downs of intangible assets, stock-based compensation, certain special items including severance, non- operating items, and reorganization costs. Cash operating expenses and operating cash flow are not measures of financial performance under GAAP and should not be considered as a substitute for measures of financial performance prepared in accordance with GAAP. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austion LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UNIVISION COMMUNICATIONS: Moody's Puts B2 Rating on $750MM Notes ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Univision Communications, Inc.'s $750 million senior secured notes due 2020, and B2 ratings to the amended and extended term loan and revolver portion of the company's senior secured credit facility. Univision plans to utilize the net proceeds from the note offering to repay a portion of indebtedness outstanding under the senior secured credit facilities. The credit facility amendment also favorably extends the maturity of a portion of the facility by up to 2.5 years. Univision's B3 Corporate Family Rating, B3 Probability of Default Rating, SGL-3 speculative-grade liquidity rating and stable rating outlook are not affected. Following is a summary of the rating action: Assignments: Issuer: Univision Communications, Inc. -- Senior Secured Bank Credit Facility (Term Loan), Assigned a B2, LGD3 - 41% -- Senior Secured Bank Credit Facility (Revolver), Assigned a B2, LGD3 - 41% -- $750 million Senior Secured Regular Bond/Debenture due 2020, Assigned a B2. LGD3 - 41% Ratings Rationale The transactions improve Univision's maturity profile and reduce the refinancing risk related to its significant 2014/2015 maturities, although cash interest costs will increase meaningfully. Univision's credit facility amendment extends the maturity on approximately $2.5 billion (subject to any upsize) of the remaining $6.7 billion term loan facility (after factoring in the paydown from the note proceeds) to March 2017 from September 2014 and the bulk of the $600 million revolver to March 2016 to March 2014. Univision remains highly leveraged and will continue to need access to capital markets to refinance the revised maturity structure given projected cash generation, but the transactions reduce the large tower in 2014 when a significant amount of corporate debt maturities could create challenging refinancing conditions for leveraged borrowers. The extension of the senior secured credit facility also favorably satisfies a material contingency (a requirement to extend at least $3.25 billion of the 2014/2015 debt maturities) to completing the previously announced transactions with Grupo Televisa, S.A.B. (Televisa; Baa1, stable outlook) whereby Televisa will invest $1.2 billion in Univision and amend its Program License Agreement (PLA) with Univision. Assuming the other contingency (HSR regulatory approval) to the Televisa transactions is satisfied, the refinancing of at least $3.25 billion of 2014/2015 maturities paves the way for the extension of the term of the PLA to 2020 from 2017. Moody's believes the PLA extension provides greater certainty regarding Univision's cash flow generation over the next 10 years by locking up access to Televisa's programming over that span. The extended credit facility maturity will shorten to March 2015 if Univision does not utilize at least $1.1 billion of the $1.2 billion to be invested by Televisa to repay by January 29, 2015 a portion of its $1.7 billion senior unsecured toggle notes due March 2015 (2015 Toggle Notes), among other conditions. Moody's expects Univision will exercise the call option or retire by some other means at least $1.1 billion of the 2015 Toggle Notes (initially callable on March 15, 2011 at 104.875) to satisfy this condition. Assuming the transactions with Televisa and the partial refinancing of the capital structure (including the partial call of the 2015 notes, extension of the bulk of the revolver and $2.5 billion of the term loan) are completed as contemplated, Moody's estimates that Univision would have approximately $4.8 billion of debt maturities in 2014/2015. Reducing the 2014/2015 debt maturities to $2.5 bilion or less by 2/28/14 is a condition to extending the term of the PLA to at least 2025. The new notes will be guaranteed by Univision's domestic operating subsidiaries and Broadcast Media Partners Holdings, Inc. (Univision's parent) and will be secured by a first lien on substantially all of the assets of Univision and its subsidiaries that secure the company's $7.2 billion senior secured credit facility (including the extended term loan and revolver). Moody's does not anticipate that repayment of at least $1.1 billion of the 2015 Toggle Notes from the proceeds of the Televisa investment will affect the B2 ratings on the senior secured first lien instruments. Moody's ranks the credit facility, 12% notes due 2014 and the new 2020 notes the same in its loss given default notching methodology based on the instruments' pari passu first lien senior secured claims. The credit facility nevertheless contains covenants that could improve recovery prospects relative to the notes. Univision's B3 CFR reflects its strong and leading market position in Spanish-language media within the United States and good intermediate-term growth prospects tempered by its very high leverage, vulnerability to cyclical advertising and high refinancing risk associated with 2014/2015 debt maturities. Growth prospects supported by Hispanic demographic trends, as well as the market position and strong operating margins support Univision's unlevered cash flow generation. The risk of a restructuring of its highly leveraged balance sheet (gross debt- to-EBITDA is approximately 13.3x LTM 6/30/10 incorporating Moody's standard adjustments and excluding non-cash advertising revenue) nevertheless remains elevated, particularly if economic conditions were to weaken. A deterioration in liquidity including an inability to achieve and sustain positive free cash flow, a decline in projected covenant cushion, heightened concern that the 2014 maturities cannot be refinanced, renewed economic weakness, or heightened risk of a discounted debt repurchase or other restructuring, could result in a downgrade. The ratings will also be vulnerable to a downgrade as long as debt-to-EBITDA is above 10x, although a downgrade may not occur if the company has adequate liquidity given the potential for meaningful de-levering during economic expansions. Good operating execution or an equity offering that leads to consistent free cash flow generation and debt reduction after factoring in all capital costs (including PIK interest), debt-to- EBITDA sustained below 8.5x and free cash flow (under the assumption that all interest is paid in cash) exceeding 3% of debt could position the company for an upgrade. A good liquidity position including a high degree of confidence that Univision can refinance its maturities and maintain access to Televisa's programming would be necessary for an upgrade. The last action was on October 6, 2010, when Moody's changed Univision's rating outlook from negative to stable. Univision, headquartered in New York, is the leading Spanish- language media company in the United States. Annual revenue is approximately $2.1 billion. US AIRWAYS: Fitch Gives Positive Outlook ---------------------------------------- The credit quality and ratings outlook for the largest U.S. airlines remains positive this fall, according to Fitch Ratings' latest 'Airline Credit Navigator' report. More than a year into the cyclical demand recovery that began to drive improved operating results late in 2009, U.S. airlines are again poised to report solid operating and credit quality trends as third quarter 2010 (3Q'10) results roll out this month. Despite ever-present risks of external demand shocks and rising fuel costs, the largest carriers continue to report progress in their efforts to reduce leverage, generate strong free cash flow and bolster liquidity. 'Since M&A activity has picked up substantially with the United Airlines-Continental Airlines merger and Southwest Airlines' bid to acquire AirTran Holdings, there should be a more sustainable capacity growth path that will allow the U.S. industry to counter inevitable demand and fuel price shocks more resiliently through the next cycle,' said Bill Warlick, Senior Director at Fitch. According to the report, progress toward leverage reduction and more consistent cash flow generation has been significant over the last year, and all of the large carriers now have sufficient liquidity to fund upcoming cash obligations comfortably, absent a large external demand or fuel price shock. With the United- Continental merger now closed and the Southwest-AirTran deal expected to be approved, the industry has now consolidated dramatically from a position of fragmentation and persistent overcapacity just five years ago. Fitch says investors should be focused on any outlook language that points to an erosion of full-fare booking trends for the remainder of the year during the airlines' 3Q'10 earnings calls. More difficult revenue per available seat mile comparisons will inevitably reduce unit revenue growth moving into 2011, but Fitch continues to believe that modest industry revenue growth can be supported next year, mainly through diminished but still material gains in passenger yields. Assuming relatively stable fuel prices over the next year, most of the large U.S. carriers are well placed to report positive FCF, allowing them to direct more cash toward debt reduction and continuing the process of balance sheet repair at a point in the economic cycle when credit quality improvement is essential. Fitch's U.S. Airlines Ratings: -- United Continental Holdings, Inc.: IDR 'B-'; Positive Outlook -- Delta Air Lines, Inc.: IDR 'B-'; Stable Outlook -- AMR Corp./American Airlines, Inc.: IDR 'CCC' -- US Airways Group, Inc.: IDR 'CCC' -- Southwest Airlines Co.: IDR 'BBB'; Stable Outlook -- JetBlue Airways Corp.: IDR 'B-'; Stable Outlook US FIDELIS: Missouri Attorney General Protests Settlement --------------------------------------------------------- The Associated Press reports that Missouri Attorney General Chris Koster is objecting to US Fidelis Inc.'s proposed settlement, citing that the deal would let the owners' wives keep too much money and shield the Company's principals from further lawsuits. According to The AP, Company owners Darain and Cory Atkinson would pay about $10.5 million and surrender possibly $10 million more in assets. The brothers' wives would keep $500,000 apiece but be barred from turning those assets over to their husbands. Assets surrendered would go into a fund that then could be tapped by US Fidelis creditors and customers who agree not to sue the brothers. The AP relates that the settlement plan does not call for US Fidelis to recover about $1.1 million the brothers have paid to retain criminal-defense lawyers. The settlement applies only to the lawsuit US Fidelis filed against the brothers in April, accusing them of stripping the company of at least $101 million through high salaries, cash distributions and the company spending that kept them living in luxury. The AP says, under the proposed deal, the Atkinsons would surrender much of their home furnishings and jewelry, including at least five Rolex watches, 17 Tiffany & Co. baubles and 11 Cartier rings and bracelets. Mia Atkinson would keep up to $25,000 in jewelry, furnishings up to $50,000 and two vehicles with a total resale value no greater than $75,000. Heather Atkinson -- Cory Atkinson's wife -- would get to keep up to $75,000 in jewelry and furnishings and two vehicles with a combined resale value not more than $50,000. Wentzville, Missouri-based US Fidelis, Inc., was a marketer of vehicle service contracts developed by independent and unrelated companies. The Company filed for Chapter 11 bankruptcy protection on March 1, 2010 (Bankr. E.D. Mo. Case No. 10-41902). Robert E. Eggmann, Esq., at Lathrop & Gage, assists the Company in its restructuring effort. According to the schedules, the Company had assets of $74,386,836, and total debts of $25,770,655 as of the petition date. UNITED CONTINENTAL: Fitch Gives Positive Outlook ------------------------------------------------ The credit quality and ratings outlook for the largest U.S. airlines remains positive this fall, according to Fitch Ratings' latest 'Airline Credit Navigator' report. More than a year into the cyclical demand recovery that began to drive improved operating results late in 2009, U.S. airlines are again poised to report solid operating and credit quality trends as third quarter 2010 (3Q'10) results roll out this month. Despite ever-present risks of external demand shocks and rising fuel costs, the largest carriers continue to report progress in their efforts to reduce leverage, generate strong free cash flow and bolster liquidity. 'Since M&A activity has picked up substantially with the United Airlines-Continental Airlines merger and Southwest Airlines' bid to acquire AirTran Holdings, there should be a more sustainable capacity growth path that will allow the U.S. industry to counter inevitable demand and fuel price shocks more resiliently through the next cycle,' said Bill Warlick, Senior Director at Fitch. According to the report, progress toward leverage reduction and more consistent cash flow generation has been significant over the last year, and all of the large carriers now have sufficient liquidity to fund upcoming cash obligations comfortably, absent a large external demand or fuel price shock. With the United- Continental merger now closed and the Southwest-AirTran deal expected to be approved, the industry has now consolidated dramatically from a position of fragmentation and persistent overcapacity just five years ago. Fitch says investors should be focused on any outlook language that points to an erosion of full-fare booking trends for the remainder of the year during the airlines' 3Q'10 earnings calls. More difficult revenue per available seat mile comparisons will inevitably reduce unit revenue growth moving into 2011, but Fitch continues to believe that modest industry revenue growth can be supported next year, mainly through diminished but still material gains in passenger yields. Assuming relatively stable fuel prices over the next year, most of the large U.S. carriers are well placed to report positive FCF, allowing them to direct more cash toward debt reduction and continuing the process of balance sheet repair at a point in the economic cycle when credit quality improvement is essential. Fitch's U.S. Airlines Ratings: -- United Continental Holdings, Inc.: IDR 'B-'; Positive Outlook -- Delta Air Lines, Inc.: IDR 'B-'; Stable Outlook -- AMR Corp./American Airlines, Inc.: IDR 'CCC' -- US Airways Group, Inc.: IDR 'CCC' -- Southwest Airlines Co.: IDR 'BBB'; Stable Outlook -- JetBlue Airways Corp.: IDR 'B-'; Stable Outlook UNITED RENTALS: Moody's Upgrades Corporate Family Rating to 'B2' ---------------------------------------------------------------- Moody's Investors Service upgraded United Rentals CFR and PDR to B2 from B3. In related actions Moody's assigned the proposed new $500 million senior sub notes Caa1 to reflect its junior position in the capital structure and adjusted other facilities' ratings. Proceeds of the new senior sub notes will be applied towards the redemption of the company's 7 3/4% senior subordinates notes due 2014 and other capital structure adjustments, as well as for general corporate purposes. The ratings outlook is stable. The upgrade of the CFR to B2 reflects the company's success in managing its fleet inventory in the difficult economy and the belief that while capital expenditures will increase as demand increases, the company will likely be cautious in its purchases in order to maximize its utilization rates and return on assets. Recent year's track record suggests a focus on balance sheet management as the company has worked to reduce its debt balances, and reduce its cost structure. The new $500 million senior sub notes along with an increased draw on the company's revolver are to prefund the repayment of its 7.75% Senior Sub Notes due 2013 and of its 1.875% Convertible Senior Sub Notes due 2023. The new notes are junior in their priority of claim behind approximately $1.9 billion of secured claims. URI's speculative grade liquidity rating remains unchanged at SGL- 3, reflecting Moody's belief that the company will maintain an adequate liquidity profile over the next twelve months. Moody's expects that operating cash flow generation should be sufficient to fund the company's normal operating requirements and capital spending needs. The company has been able to sell assets and generate positive cash flow through working capital release during the downturn. The stable outlook reflects Moody's belief that the company is well positioned in the current rating category given the difficult economy. So long as the economy does not change materially, the company is expected to continue to generate positive cash flow. As the economy improves, additional working capital will have to be invested in rental equipment thereby pressuring the company's cash flow over the short term but yielding a benefit in the future. The rating outlook or ratings could strengthen if positive revenue growth combined with improving operating margins. EBITA/Interest above 1.3 times, debt/EBITDA below 4.0 times, retained cash flow/debt above 8% (all ratios adjusted per Moody's methodology), with at least an adequate liquidity profile, would also support positive ratings action. The ratings could be under pressure if EBITA/Interest falls below 1.3 times, or the company generates negative free cash not explained by an increase in capital expenditures or a lack of improvement in ROA. The ratings may be downgraded if the company's operating margin was anticipated to contract, or if EBITA/Interest was anticipated to fall below 1.0 times on a projected basis. Debt/EBITDA above 5.0 times could also result in a ratings downgrade. Assignments: Issuer: United Rentals (North America), Inc. -- $500 million Senior Subordinated Notes assigned a Caa1, LGD5, 86% Upgrades: Issuer: United Rentals (North America), Inc. -- Probability of Default Rating, Upgraded to B2 from B3 -- Corporate Family Rating, Upgraded to B2 from B3 -- Senior Secured Bank Credit Facility, Upgraded to Ba1, LGD2, 15% from Ba2, LGD2, 17% -- Senior Unsecured Regular Bond/Debenture, Upgraded to B2 from B3 Issuer: United Rentals Trust I -- Preferred Stock, Upgraded to Caa1 from Caa2 LGD adjustments: Issuer: United Rentals (North America), Inc. -- Senior Subordinated Regular Bond/Debenture, changed to LGD5, 86% from LGD5, 78% -- Senior Unsecured Regular Bond/Debenture, changed to LGD4, 57% from LGD3, 47% Issuer: United Rentals Trust I -- Preferred Stock, changed to LGD6, 95% from LGD6, 94% Withdrawals: -- 1 7/8% Convertible Senior Subordinated Notes due 2023 -- 7 3/4% Senior Subordinated Notes due 2014 (upon its redemption, expected November 20, 2010). The last rating action was on November 9, 2009 when the ratings of United Rentals (North America), Inc. -- Corporate Family and Probability of Default Ratings were downgraded to B3 from B2. United Rentals, Inc., headquartered in Greenwich, CT, is a holding company that conducts its operations through United Rentals (North America), Inc., and its subsidiaries. URI is the world's largest equipment rental company operating approximately 549 rental locations throughout the United States and Canada. The company maintains a large breadth of rental equipment having an original equipment cost of $3.6 billion. UNITED RENTALS: S&P Assigns 'CCC+' Rating to $500 Mil. Notes ------------------------------------------------------------ Standard & Poor's Ratings Services said that it has assigned its 'CCC+' issue-level rating to the proposed new $500 million senior subordinated notes due 2020 to be issued by United Rentals (North America) Inc., a subsidiary of United Rentals Inc. URI is the guarantor of the notes. The rating is two notches lower than the corporate credit ratings on United Rentals (North America) and URI. The recovery rating on this debt is '6', indicating S&P's expectation of negligible (0%-10%) recovery in the event of a default scenario. S&P expects the company to use the proceeds from the new notes to redeem its 7.75% senior subordinated notes due 2013, to reduce borrowings under its asset-backed revolving credit facility, and to pay related expenses. The issue-level ratings and recovery ratings for the company's existing debt remain unchanged. "The ratings on Greenwich, Conn.-based URI reflect the company's highly leveraged financial profile with high debt levels and an aggressive financial policy. Its fair business risk profile as the largest equipment rental company in the U.S. only partially offsets these factors," said Standard & Poor's credit analyst Helena Song. The outlook is stable. S&P expects the company to operate within credit measures commensurate for the ratings. However, S&P could lower the ratings if a worse-than-expected market downturn and debt-financed activities weaken liquidity or result in a meaningful deterioration of credit measures, for example, debt to EBITDA higher than 6x. Conversely, if the long-term competitiveness of URI's business remains healthy, and the company's credit measures, liquidity, and financial policies support this trend, S&P could raise its ratings on the company. Ratings List United Rentals Inc. United Rentals (North America) Inc. Corporate Credit Rating B/Stable/-- New Rating United Rentals Inc. United Rentals (North America) Inc. $500 million sr. sub notes due 2020 CCC+ Recovery rating 6 UNIVISION COMMUNICATIONS: S&P Keeps 'B-' on CreditWatch Positive ---------------------------------------------------------------- Standard & Poor's Ratings Services reports that in the original version of this report published, the maturity date on Univision's $750 million senior secured notes was misstated in certain places. A corrected version is: S&P is assigning U.S.-based Spanish-language TV and radio broadcaster Univision Communications Inc.'s $750 million senior secured notes due 2020 S&P's 'B' issue-level rating and a recovery rating of '3'. S&P's 'B-' corporate credit rating for Univision remains on CreditWatch with positive implications. The CreditWatch listing reflects its expectation that S&P will raise its rating on Univision to 'B' with a stable outlook over the immediate term, after the company has obtained final commitments on the company's amend-and-extend transaction. S&P assigned Univision's offering of $750 million senior secured notes due 2020 its issue-level rating of 'B' (at the same level as S&P's expected corporate credit rating on the company following the completion of the previously launched amend-and-extend transaction). S&P also assigned this debt a recovery rating of '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. Other existing ratings on the company remain unchanged. S&P expects the company will use proceeds of its $750 million of 7.875% senior secured notes due 2020, to pay down existing senior secured term debt. On Oct. 6, 2010, the company announced it was seeking to extend a portion of its senior secured credit facilities, which is contingent on the aforementioned notes offering. Under terms of the amend and extend, Univision is seeking to extend $2.5 billion of its $7 billion term loan to March 2017 from September 2014, and to push out the maturity of its $600 million revolving credit facility to March 2016 from March 2014. In exchange for the extension, proposed pricing increases by 175-200 basis points on both facilities. In addition, the amendment will allow for future extensions, as well as the issuance of first-lien, second-lien, or unsecured debt under certain conditions, to refinance senior credit facilities. "Upon successful completion of the amendment and extension transaction, S&P expects to raise its corporate credit rating on Univision to 'B' with a stable outlook," says Standard & Poor's credit analyst Michael Altberg. UPPER MARKET: Files for Chapter 11 to Stop Foreclosure ------------------------------------------------------ Carla Main at Bloomberg News reports that Upper Market Place LLC said it filed for bankruptcy protection to "protect its assets from foreclosure." Upper Market Place filed for Chapter 11 protection (N.D. Calif. Case No. 10-34082) on October 15, 2010. Mark J. Romeo, Esq., in San Francisco California, serves as counsel to the Debtor. The Debtor, a California-based single asset real estate company, estimated assets of $1 million to $10 million and debts of $10 million to $50 million in its Chapter 11 petition. The largest unsecured creditors include East West Bank, which is owed $12.3 million against collateral with a fair market value of $7.9 million. WINALTA INC: Emerges From CCAA Protection as Oilfield Service Firm ------------------------------------------------------------------ Winalta Inc. disclosed that it has now received court and creditor approval for its Plan of Arrangement pursuant to the Companies' Creditors Arrangement Act pursuant to an Order granted on October 22, 2010, by the Court of Queen's Bench of Alberta, Judicial Centre of Edmonton and a vote by the affected secured creditors of the Company held on October 14, 2010, as required by the Court. Winalta, together with its subsidiary companies Winalta Carriers Inc., Winalta Oilfield Rentals Inc. and Baywood Property Management Inc. will now be amalgamated to form Winalta Inc. and will emerge from CCAA protection to begin focused operations on their oilfield services business. New Winalta will not have any material subsidiaries. New Winalta will continue to trade on the TSX Venture Exchange under the symbol: WTA.A. New Winalta's head office is located at #4 26302 Township Road, Acheson Alberta, T7X 5A3 with its registered office located at 120, 110 Quarry Park Blvd. SE Calgary, Alberta T2C 3G3. A full text copy of the company's press release is available free at http://ResearchArchives.com/t/s?6cfb Winalta Inc. is an Oilfield Rentals provider that leases portable industrial accommodations and catering services to the energy sector. WORKFLOW MANAGEMENT: Opens Production Facility in New Jersey ------------------------------------------------------------ Dayton Daily News reports that Workflow One has opened a production and distribution facility in Cranbury, New Jersey. According to the report, the marketing products company said the nearly 200,000-square-foot facility will "add to the company's capabilities" in digital printing, bindery, distribution and mailing services. The Company said it also plans to add capabilities at facilities in Atlanta, Columbus, Ontario and elsewhere. A meeting for the company's creditors is for Nov. 3, 2010, in Norfolk, the report notes. About Workflow Management Headquartered in Dayton, Ohio Workflow Management, Inc., fka Workflow Graphics, Inc. -- http://www.workflowone.com/-- offers commercial printing services, including print buying and document management capabilities, through three divisions: WorkflowOne, Freedom Graphics Services, and United Envelope. It also distributes office products and promotional items through an online ordering system. Its customers include both small and large companies throughout North America in such sectors as financial services, health care, retail, and government. Workflow Management Inc., and its affiliates, filed for Chapter 11 bankruptcy protection on September 29, 2010 (Bankr. E.D. Va. Lead Case No. 10-74617). Cullen A. Drescher, Esq., Daniel F. Blanks, Esq., Douglas M. Foley, Esq., and Patrick L. Hayden, Esq., at McGuireWoods LLP; Sarah Beckett Boehm, Esq., at McGuireWoods LLP; and Rosa J. Evergreen, Esq., at Arnold & Porter LLP, assist the Debtors in their restructuring effort. Arnold & Porter LLP is the Debtors' special counsel. Kaufman & Canoles, P.C., is the Debtors' corporate counsel. FTI Consulting is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Workflow Management estimated its assets and debts at $100 million to $500 million as of the Petition Date. * Alger & Associates to Join Grant Thornton LLP ----------------------------------------------- National accounting, tax and business advisory firm Grant Thornton LLP announced today that effective January 1, 2011, Alberta-based corporate recovery and personal bankruptcy firm Alger & Associates will join Grant Thornton. "This is a very exciting development for our two firms," says Phil Noble, Executive Partner and Chief Executive Officer, Grant Thornton LLP. "Bruce Alger and his team have built a highly successful firm, with offices in the major centres in Alberta, and this combination will add to our already-strong recovery and reorganization (R&R) practice across the country. This combination further strengthens the depth and breadth of our advisory services, and it clearly demonstrates that we are a firm on the move-looking for opportunities to grow strategically, whether it's through adding strength in specific practice areas or expanding in key geographic markets across Canada." "I'm proud of the significant success that our firm has achieved," says Alger & Associates' Managing Partner Bruce Alger. "We pride ourselves on the consistent high-quality of corporate recovery and personal bankruptcy services we've provided over the years. We feel the time is right to be able to offer even more services, and joining Grant Thornton is both an effective and efficient way to achieve this." Commenting on the opportunities that the combination will offer the team at Alger & Associates, Mr. Alger adds: "There are many benefits that being a part of a national and international firm will have for our people-access to resources and expertise at both the national and global level, to name just two. * McKool Smith's Sam Baxter Honored as Best Lawyers 2011 -------------------------------------------------------- The Best Lawyers in America has named Sam Baxter of McKool Smith the 2011 Dallas Intellectual Property "Lawyer of the Year." The publication compiles its lists of outstanding attorneys by conducting in-depth, comprehensive surveys in which thousands of leading lawyers confidentially evaluate their professional peers. Only one lawyer in each practice area in each community is honored as "Lawyer of the Year," based on high ratings they received for their abilities, professionalism, and integrity. Mr. Baxter consistently is recognized among the top lawyers in his field by many of the country's leading legal publications, including The Best Lawyers in America, Chambers USA, and The Legal 500. Most recently, he was named one of the "10 Most Admired Intellectual Property Attorneys" by Law360. McKool Smith is recognized as a premier trial law firm in the United States based on significant courtroom victories and substantial settlements for domestic and international clients. With more than 125 attorneys in Austin, Dallas, Houston, Marshall, New York, and Washington D.C., the firm handles complex commercial litigation, intellectual property claims, bankruptcy matters, and white collar litigation for companies and individuals worldwide. McKool Smith has won more of the Top 100 Verdicts than any other law firm in the nation every year since 2008. Firm clients include major airlines, telecommunications companies, medical device manufacturers, energy producers, and many others. * BOND PRICING -- For Week From October 18 to 22, 2010 ------------------------------------------------------ Company Coupon Maturity Bid Price ------- ------ -------- --------- 155 E TROPICANA 8.750% 4/1/2012 5.375 ABITIBI-CONS FIN 7.875% 8/1/2009 17.000 ADVANTA CAP TR 8.990% 12/17/2026 12.000 AFFINITY GROUP 10.875% 2/15/2012 47.250 AHERN RENTALS 9.250% 8/15/2013 54.400 AMBAC INC 9.375% 8/1/2011 41.550 AMBASSADORS INTL 3.750% 4/15/2027 50.000 ANTIGENICS 5.250% 2/1/2025 41.000 AT HOME CORP 0.525% 12/28/2018 0.016 BAC-CALL11/10 5.000% 5/15/2014 98.200 BALLY TOTAL FITN 14.000% 10/1/2013 1.000 BANK NEW ENGLAND 9.875% 9/15/1999 9.875 BANK NEW ENGLAND 8.750% 4/1/1999 9.875 BANKUNITED FINL 6.370% 5/17/2012 7.313 BLOCKBUSTER INC 9.000% 9/1/2012 1.050 BOWATER INC 9.500% 10/15/2012 29.000 BOWATER INC 6.500% 6/15/2013 30.000 C&D TECHNOLOGIES 5.500% 11/15/2026 68.625 CAPMARK FINL GRP 5.875% 5/10/2012 34.125 CELL GENESYS INC 3.125% 5/1/2013 35.000 CHAMPION ENTERPR 2.750% 11/1/2037 1.323 CHENIERE ENERGY 2.250% 8/1/2012 44.375 EDDIE BAUER HLDG 5.250% 4/1/2014 5.000 FAIRPOINT COMMUN 13.125% 4/1/2018 7.550 FAIRPOINT COMMUN 13.125% 4/2/2018 8.500 FEDDERS NORTH AM 9.875% 3/1/2014 0.900 FRANKLIN BANK 4.000% 5/1/2027 1.125 FREEPORT-MC C&G 7.000% 2/11/2011 31.700 GENERAL MOTORS 9.450% 11/1/2011 32.250 GENERAL MOTORS 7.125% 7/15/2013 33.250 GREAT ATLA & PAC 6.750% 12/15/2012 49.000 GREAT ATLA & PAC 5.125% 6/15/2011 68.000 HAWAIIAN TELCOM 9.750% 5/1/2013 1.180 IDLEAIRE TECH CP 13.000% 12/15/2012 0.900 INDALEX HOLD 11.500% 2/1/2014 0.750 KEYSTONE AUTO OP 9.750% 11/1/2013 44.500 LEHMAN BROS HLDG 11.500% 9/26/2022 19.750 LEHMAN BROS HLDG 11.000% 6/22/2022 20.500 LEHMAN BROS HLDG 11.000% 3/17/2028 19.625 LEHMAN BROS HLDG 10.375% 5/24/2024 19.250 LEHMAN BROS HLDG 9.500% 12/28/2022 20.625 LEHMAN BROS HLDG 9.500% 1/30/2023 18.750 LEHMAN BROS HLDG 9.500% 2/27/2023 20.500 LEHMAN BROS HLDG 9.000% 12/28/2022 20.500 LEHMAN BROS HLDG 9.000% 3/7/2023 20.500 LEHMAN BROS HLDG 8.920% 2/16/2017 19.000 LEHMAN BROS HLDG 8.800% 3/1/2015 21.000 LEHMAN BROS HLDG 8.500% 8/1/2015 20.000 LEHMAN BROS HLDG 8.500% 6/15/2022 20.500 LEHMAN BROS HLDG 8.400% 2/22/2023 19.750 LEHMAN BROS HLDG 8.050% 1/15/2019 20.125 LEHMAN BROS HLDG 8.000% 3/17/2023 20.625 LEHMAN BROS HLDG 7.000% 4/16/2019 20.000 LEHMAN BROS HLDG 6.875% 5/2/2018 23.000 LEHMAN BROS HLDG 6.625% 1/18/2012 22.000 LEHMAN BROS HLDG 6.500% 9/20/2027 12.000 LEHMAN BROS HLDG 6.200% 9/26/2014 22.000 LEHMAN BROS HLDG 6.000% 7/19/2012 22.000 LEHMAN BROS HLDG 6.000% 6/26/2015 20.625 LEHMAN BROS HLDG 6.000% 12/18/2015 20.750 LEHMAN BROS HLDG 6.000% 2/12/2018 20.625 LEHMAN BROS HLDG 5.875% 11/15/2017 20.500 LEHMAN BROS HLDG 5.750% 4/25/2011 21.000 LEHMAN BROS HLDG 5.750% 7/18/2011 21.000 LEHMAN BROS HLDG 5.750% 5/17/2013 21.375 LEHMAN BROS HLDG 5.750% 1/3/2017 0.100 LEHMAN BROS HLDG 5.750% 11/12/2023 15.000 LEHMAN BROS HLDG 5.625% 1/24/2013 22.250 LEHMAN BROS HLDG 5.600% 1/22/2018 19.600 LEHMAN BROS HLDG 5.500% 4/4/2016 21.000 LEHMAN BROS HLDG 5.400% 3/6/2020 15.000 LEHMAN BROS HLDG 5.250% 2/6/2012 21.500 LEHMAN BROS HLDG 5.250% 1/30/2014 20.625 LEHMAN BROS HLDG 5.250% 2/11/2015 20.750 LEHMAN BROS HLDG 5.250% 3/5/2018 18.300 LEHMAN BROS HLDG 5.150% 2/4/2015 20.750 LEHMAN BROS HLDG 5.100% 1/28/2013 20.625 LEHMAN BROS HLDG 5.000% 1/22/2013 20.625 LEHMAN BROS HLDG 5.000% 2/11/2013 20.500 LEHMAN BROS HLDG 5.000% 3/27/2013 20.500 LEHMAN BROS HLDG 5.000% 8/3/2014 20.625 LEHMAN BROS HLDG 5.000% 8/5/2015 20.000 LEHMAN BROS HLDG 4.800% 2/27/2013 20.750 LEHMAN BROS HLDG 4.800% 3/13/2014 22.250 LEHMAN BROS HLDG 4.700% 3/6/2013 20.250 LEHMAN BROS HLDG 4.500% 8/3/2011 20.625 LEHMAN BROS INC 7.500% 8/1/2026 11.000 LOCAL INSIGHT 11.000% 12/1/2017 30.000 MERRILL LYNCH 1.850% 3/9/2011 98.500 NETWORK COMMUNIC 10.750% 12/1/2013 35.013 NEWPAGE CORP 12.000% 5/1/2013 33.500 NEWPAGE CORP 10.000% 5/1/2012 61.250 NTY-CALL11/10 7.125% 10/1/2015 99.550 PALM HARBOR 3.250% 5/15/2024 55.750 RAFAELLA APPAREL 11.250% 6/15/2011 74.750 RASER TECH INC 8.000% 4/1/2013 37.000 RESTAURANT CO 10.000% 10/1/2013 31.000 RESTAURANT CO 10.000% 10/1/2013 31.250 RJ TOWER CORP 12.000% 6/1/2013 0.900 SBARRO INC 10.375% 2/1/2015 36.750 SPHERIS INC 11.000% 12/15/2012 1.000 STATION CASINOS 6.875% 3/1/2016 0.750 THORNBURG MTG 8.000% 5/15/2013 3.000 TIMES MIRROR CO 7.250% 3/1/2013 42.400 TRANS-LUX CORP 8.250% 3/1/2012 9.500 TRICO MARINE 3.000% 1/15/2027 9.500 TRICO MARINE SER 8.125% 2/1/2013 17.500 VIRGIN RIVER CAS 9.000% 1/15/2012 45.500 WASH MUT BANK FA 5.125% 1/15/2015 0.380 WASH MUT BANK NV 6.750% 5/20/2036 0.625 WCI COMMUNITIES 7.875% 10/1/2013 0.250 WCI COMMUNITIES 4.000% 8/5/2023 1.000 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2010. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***