/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/101028.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, October 28, 2010, Vol. 14, No. 299 Headlines 3 COLUMBUS CIRCLE: Developer Sues to Halt Foreclosure A-1 PLANK: Credit Bid Didn't Eliminate Realtor's Commission AMERICAN MEDIA: Extends Bond Exchange Offers to November 1 AMERICANWEST BANCORP: To File for Chapter 11; To Sell Bank ATA AIRLINES: Jury Slaps $66MM Fine on FedEx for Canceling Pact AWAL BANK: To Be Test Case for Limited Chapter 11 Use BARBARA SMITH: Case Summary & 9 Largest Unsecured Creditors BEN ENNIS: Case Summary & 15 Largest Unsecured Creditors BIG3D INC: 9th Cir. BAP Rejects Retroactive Adequate Protection BLOCKBUSTER INC: Receives Final Court Approval of 'DIP' Financing BLOCKBUSTER INC: Files Schedules of Assets & Liabilities BLOCKBUSTER INC: Files Statement of Financial Affairs BLOCKBUSTER INC: Weil Gotshal Says It's "Disinterested" BLOCKBUSTER INC: Rothschild Responds to Indemnification Objection BLOCKBUSTER INC: Committee Opposes Early Payment to Studios BLUEWATER HLD: Run by Delta Partners Staff While in Ch. 11 BRAVO ENTERPRISES: Case Summary & Largest Unsecured Creditor CANWEST GLOBAL: Restructuring Plan Successfully Implemented CARPENTER CONTRACTORS: Case Summary & Creditors List CHESTER DOWNS: S&P Assigns 'B+' Rating to $40 Mil. Loan CLOPAY AMES: S&P Assigns 'BB-' Corporate Credit Rating CRESTWOOD APARTMENTS: Files for Chapter 11 in Indianapolis CROWNBROOK DEBCO: Fifth Mezzanine Wants Case Dismissed D & L EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors DIGG INC: Cuts 37% of Staff Amid High Burn Rate, Exec Departures DOUGLAS RAY: State Breach Claims Beyond Bankr. Court's Reach DYNEGY INC: Asks Shareholders to Snub Seneca Move vs. Blackstone E*TRADE FINANCIAL: DBRS Affirms 'B' Rating After Q3 Results EASTMAN KODAK: Board OKs Company Indemnification of Employees ENGLISH & AMERICAN: 2nd Request for 304 Injunction Modification ENGLISH & AMERICAN: Recognition Hearing Set for Nov. 15 EXTENDED STAY: Five Mile Dismisses Lawsuit vs. Cerberus EXTENDED STAY: JPM, Deutsche to Sell $2 Bil. Loan by Month's End EXTENDED STAY: Seeks Approval of Deal With Zurich, et al. FAIRGROUNDS PLAZA: Voluntary Chapter 11 Case Summary FAIRPOINT COMMUNICATIONS: Sends New Plan Projections to Vermont FGIC CORP: Sharps Cancels Exchange Bid Due to Lack of Support FM AVIATION: Asks for OK to Use VFS Financing as Cash Collateral FX REAL ESTATE: Gets $800,000 from Sale of Pref. Stock & Warrants GAS CITY: Proposes January 21 Auction for Assets GENERAL MOTORS: New GM Approves Employee Incentive Plans GENTA INCORPORATED: Outstanding Shares Now at 93.33 Million GEO W PARK: SSG Advised Ch 11 Trustee in Sale to Blackstreet GERALD TROOIEN: Case Summary & 20 Largest Unsecured Creditors GETTY IMAGES: Moody's Downgrades Corporate Family Rating to 'Ba3' GETTY IMAGES: S&P Assigns 'BB-' Rating to $1.37 Bil. Loan GLOBAL BUSINESS: Case Summary & 4 Largest Unsecured Creditors GOODMAN GLOBAL: Moody's Cuts Rating on $250 Mil. Loan to 'B1' HACIENDA GARDENS: Has Access to Cash Collateral Until Nov. 4 HEATHERWOOD HOLDINGS: Sale Pact Limits Use of Golf Course Property HOME SERVICES: Loses Contract with HRA, Slashes 2,065 Jobs HORMI HOLDING: All Three Properties on the Market HARBOR REAL ASSET: Proposes Ray Quinney as Chapter 11 Counsel HILEX POLY: S&P Changes Outlook to Negative, Affirms 'B' Rating HOSPITALITY PROPERTIES: S&P Cuts Preferred Stock Rating to 'BB' IDEAL DIAMOND: Files for Bankruptcy Amid Infringement Fight IRH VINTAGE: Can Continue Using Cash Collateral ISLAND ONE: Can Continue Using Cash Collateral Until Nov. 17 ISLAND ONE: Creditors Committee Taps Bush Ross as Counsel ISLAND ONE: Files Schedules of Assets and Liabilities ISLAND ONE: Plan Contemplates Sale of Assets to Pay Creditors ISLAND ONE: U.S. Trustee Forms Three-Member Creditors Committee JACQUELINE AMRIKHAS: Case Summary & 17 Largest Unsecured Creditors KEYBANK NA: Fitch Puts B Support Floor Rating on Watch Negative KOOSHAREM CORP: S&P Downgrades Corporate Credit Rating to 'CCC-' KRONOS INT'L: Posts $15.4-Mil. Net Income in Sept. 30 Quarter LEIGH RZASA-ORMES: May Recoup $82,015 Paid to Arturi D'Argenio LIONS GATE: Says MGM Deal to Create Opportunities for Stakeholders LITE VIEW: Case Summary & 12 Largest Unsecured Creditors LOEHMANN'S CAPITAL: Sweetens Exchange Offer as Deadline Looms MANSIONS AT HASTINGS: Files for Chapter 11 in Houston MANSIONS AT HASTINGS: Voluntary Chapter 11 Case Summary MANSIONS AT HASTINGS GREEN: Voluntary Chapter 11 Case Summary MATANZAS PASS: Voluntary Chapter 11 Case Summary MATTHEW EDWARDS: Case Summary & 20 Largest Unsecured Creditors METRO-GOLDWYN-MAYER: Icahn Has 3-Headed Attack on Prepack Plan METRO-GOLDWYN-MAYER: Lions Gate Defends Merger Bid in Letter MGM RESORTS: Boyd Won't Match Offer for Borgata Stake MICHAEL JOHNSON: Case Summary & 20 Largest Unsecured Creditors MICROSEMI CORP: S&P Assigns 'BB-' Corporate Credit Rating MOMENTIVE PERFORMANCE: Launches Cash Offer for Second Lien Notes MOMENTIVE PERFORMANCE: Proposes $840 Million Debt Offering MOMENTIVE PERFORMANCE: To Launch Cash Offer for Senior Notes MOMENTIVE PERFORMANCE: Sees $117MM-$123MM Adjusted EBITDA for Q3 MOMENTIVE PERFORMANCE: Hexion to Issue $440MM of 2nd Lien Notes MOO TOWN DAIRY: Files for Chapter 11 in Sherman, Texas MOO TOWN: Voluntary Chapter 11 Case Summary NASHVILLE SENIOR: Burr's Fee Bid Approved, and Denied, In Part NCI BUILDING: S&P Puts 'B+' Corp. Credit Rating on Watch Negative NORTEL NETWORKS: Morneau Takes Over 2 Pension Plans NORTEL NETWORKS: Ontario Premier to Revisit Pensioners' Proposal NORTHERN TRUST: Fitch Puts BB+ Support Floor Rating on Watch Neg. PAINTEARTH ENERGY: Chapter 15 Case Summary PINAFORE HOLDINGS: S&P Assigns 'BB-' Corporate Credit Rating PNC BANK: Fitch Puts BB- Support Floor Rating on Watch Negative PRESTIGE BRANDS: Moody's Affirms 'B1' Corporate Family Rating PRESTIGE BRANDS: S&P Affirms Corporate Credit Rating at 'B+' PROTECTIVE LIFE: Fitch Affirms Trust Preferred Ratings at 'BB+' PROTECTIVE LIFE: Moody's Affirms Ratings on Senior Debt RADHA REALTY: Case Summary & 20 Largest Unsecured Creditors RENE COUMANS: Voluntary Chapter 11 Case Summary ROTHSTEIN ROSENFELDT: Trustee Sues Rothstein's Cousin RW LOUISVILLE: Gets Court's Interim Nod to Use Cash Collateral SEA ISLAND: Creditors' Recovery Doubled as Lenders Settle SENSATA TECHNOLOGIES: Posts $48MM Net Loss in Sept. 30 Quarter SHARON CASTER: GMAC Can Foreclose on Leased Vehicle SOFTLAYER HOLDINGS: S&P Assigns 'B+' Corporate Credit Rating SOUTH TAHOE: District To Manage Public Transit Starting Nov. 1 SOUTHCROSS COMMERCE: Voluntary Chapter 11 Case Summary SPENCER CREEK: A Single Asset Real Estate Case, Court Rules STRATEGIC PARTNERS: S&P Assigns 'B' Corporate Credit Rating SUNTRUST BANK: Fitch Puts BB- Support Rating on Watch Negative SYNCORA HOLDINGS: Expects Decrease in Statutory Capital TERRESTAR NETWORKS: Organizational Meeting on Oct. 29 TERRESTAR NETWORKS: Proposes Akin Gump as Bankr. Counsel TERRESTAR NETWORKS: Wins Nod for Garden City as Claims Agent TOUSA INC: Expanding Mediation Amid Outstanding Appeal TRIBUNE CO: Amends Chapter 11 Plan to Add LBO Settlements TRIBUNE CO: Parties Object to Panel's 2nd Plea to Pursue Claims TRIBUNE CO: Wants Feb. 28 Extension of Time to Remove Actions TRILOGY DEVELOPMENT: Court Validates JE Dunn's $12.4 Mil. Lien TROPICANA ENTERTAINMENT: Adamar Claims Canbergs Violated Stay TROPICANA ENTERTAINMENT: Castillejas Claim No Knowledge of Plan TROPICANA ENTERTAINMENT: Tropi LV Wants Sanctions Against Icahn TRUVO USA: Wins Confirmation of Exit Plan After Settlement TWIN CITY: Cash Collateral Use Hearing Tomorrow UNITED RENTALS: Fitch Assigns 'B' Rating to $750 Mil. Notes URBAN BRANDS: Gordon Brothers Wins Auction for Ashley Stewart US BANK: Fitch Puts BB- Support Floor Rating on Negative Watch UTSTARCOM INC: Cuts 2010 Revenue Target to $270MM-$280MM VALHI INC: S&P Puts 'CCC+' Rating on CreditWatch Positive VIKING ACQUISITION: Moody's Assigns 'B2' Corp. Family Rating * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* 3 COLUMBUS CIRCLE: Developer Sues to Halt Foreclosure ----------------------------------------------------- David Jones, writing for The Real Deal, reports that The Moinian Group, led by developer Joseph Moinian, filed a $200 million suit in New York State Supreme Court against Deutsche Bank and the Related Companies, alleging the companies engaged in a predatory scheme to take over his office building at 1775 Broadway, which Moinian renamed 3 Columbus Circle. According to Real Deal, Mr. Moinian claims that Related executives admitted their plan to snatch the building in a "loan to own" deal and that Deutsche, which is helping finance the deal with Related, prevented Mr. Moinian from paying the true loan balance and tried to force him to pay a prepayment penalty of $54 million. Mr. Moinian is asking the court for an injunction against the foreclosure action and an order to force the lender to accept his prepayment of the loan balance. Steven Meister, Esq., represents Mr. Moinian. Mark Walfish, Esq., represents Related. Lawyers for Related denied the charge and urged Mr. Moinian to pay the money that they say he owes on the loan. Citing the complaint, Real Deal relates Mr. Moinian bought 3 Columbus Circle in 1999, and initiated a $100 million renovation. Mr. Moinian refinanced the loan with one for $250 million from Wachovia Bank, the latter of which was scheduled to mature in 2016, but has been sold or reassigned multiple times since then. A-1 PLANK: Credit Bid Didn't Eliminate Realtor's Commission ----------------------------------------------------------- Under Kansas law, WestLaw reports, the Chapter 11 debtors' real estate agent was entitled to a 6% commission on the $800,000 cash bid for the debtors' real property, even though a bank's credit bid of $1.75 million took the sale, and a surcharge in the amount of $48,000 would be assessed against the property prior to its conveyance to the bank. The real estate agent's commission agreement specified that he would receive a commission on "any sale or exchange of the Property which closes," the bankruptcy court reasoned. The real estate agent procured a ready, willing, and able buyer who did not close on its $800,000 offer due to circumstances beyond its control, namely, the bank's credit bid. Furthermore, the court found, the real estate agent aided in the disposition of the property by marketing the property and supplying a cash bidder. The bank, which had avoided the costs and expenses of marketing the property itself, as well as the risk that it might have to hold the property for a lengthy period without being able to sell it for a favorable price, was currently in negotiations with the cash bidder to sell it the property and all the equipment therein for $1.975 million. In re A-1 Plank & Scaffold Mfg., Inc., --- B.R. ----, 2010 WL 4108896 (Bankr. D. Kan.) (Nugent, C.J.). A-1 Plank & Scaffold Mfg., Inc., and Allenbaugh Family Limited Partnership sought chapter 11 protection (Bankr. D. Kan. Case Nos. 10-10379 and 10-10378) on Feb. 21, 2010, and are represented by Edward J. Nazar, Esq., at Redmond & Nazar, L.L.P., in Wichita, Kan. The debtors ceased normal business operations in Oct. 2009 and all operations came to a halt in Feb. 2010. A-1 Plank & Scaffold disclosed $1.7 million in assets and $11.3 million in liabilities at the time of the filing. Allenbaugh disclosed $3.3 million in assets and liabilities of $3.2 million. Sunflower Bank is the major secured creditor. AMERICAN MEDIA: Extends Bond Exchange Offers to November 1 ---------------------------------------------------------- American Media, Inc., on Tuesday announced the extension by its operating subsidiary American Media Operations, Inc., of the previously announced offer to exchange all of AMO's outstanding 14% Senior Subordinated Notes due 2013 for a combination of cash and shares of common stock, par value $0.0001 per share, of AMI, and cash tender offer for all of AMO's outstanding 9% Senior PIK Notes due 2013. In conjunction with the Offers, AMO is soliciting consents from eligible holders of the Notes to certain amendments to the applicable indentures governing the Notes. The expiration of the Offers and Consent Solicitations has been extended to 5:00 p.m., New York City time, on November 1, 2010, unless further extended by AMO. All other terms and conditions of the Offers and Consent Solicitations currently remain in effect, although AMO is considering certain amendments to the Offers and Consent Solicitations. Eligible holders who have not yet tendered their Notes may tender until the Expiration Time, as extended. Pursuant to the terms of the Offers and Consent Solicitations, withdrawal rights expired as of the applicable consent time for the Consent Solicitations, which was, in the case of the PIK Notes, 5:00 p.m., New York City time, on July 27, 2010 and, in the case of the Subordinated Notes, 5:00 p.m., New York City time, on July 29, 2010. As of 5:00 p.m., New York City time, on October 25, 2010, approximately $344.2 million principal amount of Subordinated Notes, or approximately 96.7% of the outstanding aggregate principal amount of the Subordinated Notes, had been validly tendered in the Exchange Offer, and approximately $23.7 million principal amount of PIK Notes, or approximately 99.9% of the outstanding aggregate principal amount of PIK Notes, had been validly tendered in the Cash Tender Offer. AMO Has Consent to Defer Nov. 1 Interest Payment On October 12, 2010, AMO commenced a separate consent solicitation to amend the indenture governing the Subordinated Notes. AMO has obtained the consents required to amend the Subordinated Notes Indenture to allow AMO to defer to January 3, 2011, the interest payment due under the Subordinated Notes on November 1, 2010. Accordingly, AMO expects to execute a supplemental indenture within the next few days to amend the Subordinated Notes Indenture. Although the Interest Deferral Consent Solicitation is separate from and independent of the Offers and Consent Solicitations, they are related in that the purpose of the Interest Deferral Consent Solicitation is to help preserve cash, which will facilitate the consummation of the Offers and Consent Solicitations or any other alternatives that AMO and AMI may pursue to improve their capital structure. As reported by the Troubled Company Reporter, American Media said on July 2, that it had reached an agreement with more than 90% of its bondholders/shareholders for the company's debt in connection with the debt-for-equity exchange. The actual launch of the exchange offering occurred July 15. The consummation of the offers is conditioned upon the satisfaction or waiver of certain conditions as is customary in these types of deals. AMI is offering to exchange all of its outstanding 14% Senior Subordinated Notes due 2013 for a combination of cash and shares of common stock of American Media, Inc. Bondholders are being offered $269.52 in cash and 335.62 shares of AMI common stock for each $1,000 of principal amount exchanged. The total aggregate principal amount of outstanding subordinated notes as of the launch of the exchange is approximately $356 million. AMI is also offering to purchase each $1,000 principal amount of its $23.7 million aggregate principal amount of outstanding PIK Notes for $1,020. AMI projects that its debt will be reduced by $200 million and its leverage reduced from 7.2x to 5.1x following the transaction. AMI said the transaction gives it significant flexibility, with $50 million of free cash flow on a pro forma basis. Moelis & Company served as AMI's financial advisor in the transaction. About American Media Based in New York, American Media, Inc., publishes celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. In addition to print properties, AMI manages 14 different Web sites. The company also owns Distribution Services, Inc., the country's #1 in-store magazine merchandising company. In June 2010, Standard & Poor's Ratings Services lowered its rating on Boca Raton, Fla.-based American Media Inc. to 'D' from 'CCC.' The ratings downgrade reflects American Media's ongoing deferral of its May 1, 2010 interest payment on the 14% notes. The Company stated that 75% of noteholders consented that the May 1, 2010 interest payment be deferred until June 21, 2010. In July 2010, Moody's Investors Service downgraded American Media Operations, Inc.'s Probability of Default Rating to 'Ca' from 'Caa2' following the company's announcement that it has commenced an exchange offer for all of its 14% Senior Subordinated Notes due 2013. In conjunction with the exchange announcement, Moody's put on review for possible upgrade all other ratings given the expected decrease in debt obligations by approximately $200 million net of expected fees and related expenses. The downgrade of the PDR to 'Ca' reflects Moody's view that American Media's proposed offer for all of the $355.8 million outstanding 14% Senior Subordinate Notes, if successfully concluded, is an effective distressed exchange event of default. AMERICANWEST BANCORP: To File for Chapter 11; To Sell Bank ---------------------------------------------------------- AmericanWest Bancorporation disclosed an agreement to sell and recapitalize its wholly owned subsidiary, AmericanWest Bank, which will significantly strengthen the Bank's balance sheet and restore its compliance with regulatory capital requirements. SKBHC Holdings LLC, a private investor led by experienced banking professionals, and an affiliated entity, have signed an Asset Purchase Agreement with the Holding Company to acquire all of the common stock of the Bank for a cash payment to the Holding Company of $6.5 million, subject to a competitive bidding process. If SKBHC is the successful bidder, the agreement calls for SKBHC to recapitalize the Bank with additional capital of up to $200 million as required to satisfy the capital requirements imposed by the Bank's federal and state regulators. To facilitate these transactions, the Holding Company intends to voluntarily file a petition in the U.S. Bankruptcy Court under Chapter 11 of the Bankruptcy Code. Consistent with the Court's procedure under Section 363 of the Code, the Court would supervise a competitive bidding process for the Bank's common stock. Any competing bidder also is expected to be required to recapitalize the Bank to an appropriate level and demonstrate the ability to promptly receive required regulatory approvals. The Chapter 11 filing would affect only the Holding Company and would exclude its banking subsidiary, AmericanWest Bank and its Far West Bank division, which operate separately from the Holding Company. AmericanWest Bank operates under the name of Far West Bank in Utah. "This transaction will give AmericanWest Bank and Far West Bank the capital to become 'well-capitalized' and to meet the capital requirements defined by the Bank's regulators -- without any financial assistance from the government or taxpayers," said Pat Rusnak, President & CEO of AmericanWest Bancorporation. "We are pleased to have found a partner with extensive banking experience and a strong interest in enabling AmericanWest Bank to grow as a viable competitor that serves thousands of individuals and businesses in our communities." "Throughout this process, the Bank will continue to provide customers with the same great service they have come to expect," said Rusnak. "Customers will have full access to their accounts and the Bank's other services. Our most recent financial results demonstrate that the Bank has significant liquidity to meet its financial obligations. And customers can rest assured that their deposits continue to be safe, and, as always, are insured to the fullest extent possible by the FDIC." "This recapitalization of the Bank will satisfy the only significant regulatory requirement that the Bank has not yet achieved through its recovery process. The additional capital will enable us to do even more to meet the needs of our loan customers going forward, and will allow us to return to more normal lending levels after 18 months of dramatically curtailed lending activities due to the constraints that resulted from our lower capital levels," he added. The Bank maintains strong levels of liquidity to meet its obligations. In another news release issued the Holding Company announced that its total balance sheet liquidity as of September 30, 2010 -- comprised of cash, cash equivalents and securities -- stood at $334 million, up from $233 million on June 30, 2010. The Bank is regulated separately from the Holding Company, both at the federal and state levels. In compliance with regulatory orders in place since August 2008, the Bank has not paid dividends or transferred funds to the Holding Company since the third quarter of 2008, thus ensuring that the Bank's resources remain at the Bank level. The Holding Company's Board of Directors has unanimously approved the transaction with SKBHC and the Holding Company intends to petition the Bankruptcy Court to expedite its approval of the proposed sale and recapitalization of the Bank. The Holding Company believes the transaction, which is also subject to regulatory as well as Court approval, will be completed by the end of this year. "We have been actively engaged over the past two years in seeking additional capital, but no qualified investor has been willing to put new capital into the Holding Company without resolution, such as a discounted settlement, of its existing creditor claims," said Craig D. Eerkes, Chairman of the Board of the Holding Company. "The Court-supervised Chapter 11 process will give the Holding Company an effective way to handle those claims while preserving the value of the Bank's franchise for the community." The Holding Company does not expect to have sufficient assets to satisfy all of the claims of its creditors. The Holding Company expects that, as a result, creditors will receive less than the value of their claims and that the Holding Company will have no remaining assets to distribute to shareholders. Scott Kisting, Chairman and Chief Executive Officer of SKBHC, said, "We at SKBHC Holdings LLC believe that community banking has a bright future in the Inland Northwest and Utah. A well-regarded community bank like AmericanWest Bank can play a role in that future. If the court and the regulators approve the proposed transaction, SKBHC will invest up to $200 million of our $750 million in funding commitments, as well as the expertise and dedication of our experienced senior executive team, to recapitalize AmericanWest Bank and position it to grow." Sandler O'Neill + Partners, L.P. served as the Holding Company's financial advisor, and Morrison & Foerster LLP served as the Holding Company's legal advisor, and the Holding Company intends to apply for both to continue advising the Holding Company on the transaction during the pendency of the bankruptcy proceeding. SKBHC's legal advisor is Skadden, Arps, Slate, Meagher & Flom LLP. About AmericanWest Bancorporation AmericanWest Bancorporation is a bank holding company whose principal subsidiary is AmericanWest Bank, which includes Far West Bank in Utah operating as an integrated division of AmericanWest Bank. AmericanWest Bank is a community bank with 58 financial centers located in Washington, Northern Idaho and Utah. ATA AIRLINES: Jury Slaps $66MM Fine on FedEx for Canceling Pact --------------------------------------------------------------- Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy Review, reports that a federal jury in Indianapolis, Indiana, ruled that FedEx Corp. should pay $66 million for canceling a military shipping contract with ATA Airlines Inc. that accounted for most of ATA's revenue and directly led to ATA's decision to shut down. ATA filed for Chapter 11 protection on April 2, 2008, its second bankruptcy in four years, after FedEx terminated their agreement. The contract, which provided transportation for members of the U.S. military and their families, brought in $335 million a year in revenue, according to ATA. DBR notes FedEx denied responsibility for ATA's failure and said any delay in transporting military personnel was the result of ATA's failure to perform under their contract. DBR relates that in an interview Monday afternoon, FedEx spokeswoman Sandra Munoz said, "With all due respect to the jury, we disagree with their decision." Ms. Munoz said that with respect to an appeal, the company is "reviewing its options." While the jury award means some additional cash for creditors, the decision comes too late to save ATA, which has liquidated its assets, according to DBR. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., was a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA Airlines and its affiliates filed for Chapter 11 protection on October 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on January 31, 2006. The Debtors' emerged from bankruptcy on February 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor was represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., served as bankruptcy counsel to the Committee. FTI Consulting, Inc., acted as its financial advisors. ATA Airlines submitted to the Court its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement on December 12, 2008, two weeks after it completed the sale of its key assets to Southwest Airlines Inc. The First Amended Chapter 11 Plan was confirmed on March 26, 2009. The Plan became effective March 31, 2009. AWAL BANK: To Be Test Case for Limited Chapter 11 Use ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Awal Bank BSC, which filed a Chapter 11 petition on Oct. 21 to complement a Chapter 15 case begun in September 2009, may become a test case for companies in bankruptcy simultaneously in several countries. Mr. Rochelle recounts that the bank began bankruptcy administration proceedings in Bahrain in July 2009. In the Chapter 15 case in New York, the bankruptcy judge recognized Bahrain as the home of the foreign main proceeding, which meant that the foreign court would be largely responsible for collecting assets and making distributions to creditors. Awal filed the Chapter 11 petition this month in New York because the ability to bring lawsuits is limited in Chapter 15. According to Mr. Rochelle, Awal said it needs Chapter 11 powers so that its administrator can sue in the U.S. to recover preferences and fraudulent transfers. The bank wants U.S. Bankruptcy Judge Allan Gropper to rule that the Chapter 11 case may have "very limited scope." At a hearing October 26, Awal's administrator asked Judge Gropper to rule that there should be no creditors' committee and no filing of lists of creditors. The bank, the report relates, also wants to remove the requirement that lawyers and other professionals be retained with approval of the bankruptcy court. The bank believes professionals should be paid in the foreign proceeding without U.S. bankruptcy court approval. Awal's administrators want the assets collected in the U.S. to be distributed by the court in Bahrain under foreign law. Judge Gropper said at a hearing October 26, "I don't think I'm going to grant you very much today -- though I might let you apply for it with more notice." About Awal Bank Awal Bank BSC is a Bahrain lender owned by Saudi Arabian Saad Group. Awal Bank was principally an investment company that provides wholesale banking services in Bahrain including the acceptance of deposits and the making of loans. Awal Bank was taken into administration by the Central Bank of Bahrain on July 30, 2009, after defaulting on loans. U.S. lawyers for the bank said last year that under Bahrain law, Awal's administrator had two years to decide if the bank should liquidate or be returned to management and shareholders. Stewart Hey, Esq., at Charles Russell LLP, as external administrator of Awal Bank BSC, made a voluntary petition under Chapter 15 of the U.S. Bankruptcy Code for the bank (Bankr. S.D.N.Y. Case No. 09-15923) on Sept. 30, 2009, following the administration proceedings. Earlier this year, the bank began experiencing a liquidity squeeze, brought on in part, by the global economic crisis. The bank has ceased to operate as a going concern since it was place into administration. In the Chapter 15 petition, the bank estimated both assets and debts at more than $1 billion. Awal Bank filed a chapter 11 petition (Bankr. S.D.N.Y. Case No. 10-15518) in Manhattan on October 21, 2010. The Debtor estimated $50 million to $100 million and debts in excess of $1 billion as of the petition date. BARBARA SMITH: Case Summary & 9 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Barbara Lewis Smith dba Etta's Motel 5941 Moncrief Road West Jacksonville, FL 32219 Bankruptcy Case No.: 10-09288 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Albert H. Mickler, Esq. MICKLER & MICKLER 5452 Arlington Expressway Jacksonville, FL 32211 Tel: (904) 725-0822 E-mail: cmickler_32277@yahoo.com Scheduled Assets: $1,119,431 Scheduled Debts: $1,143,303 A list of the Debtor's nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb10-09288.pdf Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Lewis-Smith Mortuary Inc. 10-9280 10/25/10 BEN ENNIS: Case Summary & 15 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Ben Ennis dba Ennis Homes, LLC Ennis Commercial Properties, LLC ECP Florin Road, LLC Sequoia Land Development, Inc. EHA Modesto, LLC EHA Modesto II, LLC EHA-Atascadero, LLC EHA-Tulare, LLC Six Palms Ranch, a General Partnership Ennis Properties, LLC Ennis Enterprises, LLC Posters by Impact, Inc. 1540 N. Lombardi Street Porterville, CA 93257 Bankruptcy Case No.: 10-62315 Chapter 11 Petition Date: October 25, 2010 Court: U.S. Bankruptcy Court Eastern District of California (Fresno) Judge: Whitney Rimel Debtor's Counsel: Riley C. Walter, Esq. 8305 N. Fresno Street, #410 Fresno, CA 93720 Tel: (559) 435-9800 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,000,001 to $500,000,000 Debtor-affiliates filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Brian G. Ennis 10-61970 10/15/10 Ennis Commercial Properties, LLC 10-12709 03/16/10 Ennis Enterprises 190, LLC 09-15237 06/05/09 Ennis Homes, Inc. 09-10848 02/02/09 Pamela R. Ennis 10-61725 10/08/10 St. James & Ennis Hanford 09-17500 07/17/09 Investment Debtor's List of 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Bank, N.A. -- $41,842,908 2120 Park Place, 1st Floor, Suite 100 El Segundo, CA 90245-4714 Citizens Business Bank -- $34,410,452 9100 Ming Avenue, Suite 120 Bakersfield, CA 93311-0000 Bank of America -- $33,687,836 333 S. Hope Street, 11th Los Angeles, CA 90071-1497 Bank of the Sierra -- $26,833,223 P.O. Box 1930 Porterville, CA 93258-000 RaboBank -- $15,636,589 45 River Park Place West, Suite 507 Fresno, CA 93720-0000 Wells Fargo Real Estate Managed -- $9,364,504 A.G. 2120 Park Place, Suite 100 El Segundo, CA 90245-0000 United Security Bank -- $6,363,537 7088 N. First Street Fresno, CA 93720-0000 GE Capital -- $5,116,369 6464 185th Avenue NE, #100 Redmond, WA 98052-5048 Visalia Community Bank -- $4,742,067 1685 N. Helm Avenue Fresno, CA 93727-1637 Keith Watkins -- $2,480,000 14852 Lipson Avenue Maricopa, CA 93252-0000 Daryl C. and Victoria M. Nicholson -- $2,400,000 26914 Avenue 140 Porterville, CA 93257-0000 Valley Business Bank -- $1,698,074 918 W. Main Street Visalia, CA 93291-0000 Tri-Counties Bank -- $1,084,604 5201 California Boulevard, Suite 102 Bakersfield, CA 93309-0000 Lieng Hong Vang -- $347,472 PMZ 336 1279 W. Henderson Porterville, CA 93257-0000 WestAmerica Bank -- $12,789 BIG3D INC: 9th Cir. BAP Rejects Retroactive Adequate Protection --------------------------------------------------------------- WestLaw reports that a bankruptcy court did not abuse its discretion in denying a request by a creditor for retroactive adequate protection, from the date that the debtor's Chapter 11 case was filed to the date of the filing of its motion for adequate protection, even though the creditor, prior to commencement of the debtor's Chapter 11 case, had obtained a state court order for possession of the large piece of specialized machinery which secured its claim. There was a lack of evidence as to how long it would have taken the creditor to disassemble, remove and sell this machinery had the debtor's bankruptcy petition not intervened. Moreover, there was evidence that the depreciation in the value of the machinery was not from the debtor's use thereof, but from "deteriorating economic circumstances" that commenced at some unspecified date after the petition was filed. The amount of adequate protection to which an undersecured creditor is entitled is equal to the amount of depreciation its collateral suffers after it would have exercised its state court remedies. In re Big3D, Inc., ---B.R.----, 2010 WL 4174264, slip op. http://is.gd/gmasm(9th Cir. BAP). Big3D, Inc., located in Frsno, Calif., operates a commercial printing business, specializing in printing on plastic lenses to produce a three dimensional effect. Big3D sought Chapter 11 protection (Bankr. E.D. Calif. Case No. 08-16768) on Oct. 23, 2008, and is represented by Hilton A. Ryder, Esq. -- hilton.ryder@mccormickbarstow.com -- and Scott M. Reddie, Esq. -- scott.reddie@mccormickbarstow.com -- at McCormick Barstow Sheppard Wayte & Carruth, LLP, in Fresno. The Debtor disclosed $2,985,500 in assets and $7,866,251 in liabilities at the time of the filing. BLOCKBUSTER INC: Receives Final Court Approval of 'DIP' Financing ----------------------------------------------------------------- Blockbuster Inc. has received final authorization from the U.S. Bankruptcy Court for the Southern District of New York to obtain $125 million in "debtor-in-possession" financing from certain of the Company's senior noteholders. This funding is available to help Blockbuster meet its obligations to customers, suppliers and employees in the ordinary course as it implements a plan to recapitalize its balance sheet and substantially reduce debt. The Court had previously authorized Blockbuster access to $20 million of the DIP financing on an interim basis. Today's final order allows Blockbuster to access the entire $125 million facility. The Court also approved the retention of certain legal and restructuring advisors and granted Blockbuster authority to pay certain prepetition claims of movie studios and game providers, which will help ensure that Blockbuster's customers will continue to enjoy access to a wide variety of movies, games and television programs, including new releases the first day they become available. On September 23, 2010, Blockbuster announced that it reached agreement with its senior noteholders on the material terms of a plan to recapitalize its balance sheet and substantially reduce debt from nearly $1 billion currently to an estimated $100 million or less when the plan is implemented. The Company and its domestic subsidiaries filed voluntary Chapter 11 petitions to implement the recapitalization. Blockbuster has subsequently received final court authorization, among other things, to: Pay employees in the usual manner and continue their benefits without disruption; Continue honoring the Blockbuster Rewards(R) program, valid coupons, gift cards and other customer programs; Continue to maintain cash management systems; and, Pay certain undisputed pre-petition obligations of certain essential vendors, suppliers and service providers. Jim Keyes, chairman and chief executive officer, said: "We are pleased that the court has granted these final orders, which will enable us to continue to meet our obligations to customers, suppliers and employees as we move forward with the recapitalization process. We continue to work diligently with our senior noteholders, the movie studios, the unsecured creditors committee and other key parties on our recapitalization plan, which, when implemented, will strengthen our balance sheet and allow us to continue transforming our business model." All of Blockbuster's U.S. operations, including its stores, DVD vending kiosks, by-mail and digital businesses, are open and serving customers in the normal course. Blockbuster is fulfilling all orders as usual. 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: Files Schedules of Assets & Liabilities -------------------------------------------------------- A - Real Property Land, Net of Depreciation $8,600,698 Buildings, Net of Depreciation 1,639,434 B - Personal Property B.1 Cash on Hand 2,348,084 B.2 Bank Accounts 35,516,023 B.3 Security Deposits 861,877 B.4 Household goods - B.5 Book, artwork and collectibles 695,550 B.6 Wearing apparel - B.7 Furs and jewelry - B.8 Firearms and other equipment - B.9 Insurance Policies Undetermined B.10 Annuities - B.11 Interests in an education IRA - B.12 Interests in pension plans 401(k) Plan - B.13 Stock and Interests Undetermined B.14 Interests in partnerships/joint ventures Undetermined B.15 Government and corporate bonds - B.16 Accounts Receivable 35,951,993 B.17 Alimony - B.18 Other Liquidated Debts Owing Debtor - B.19 Equitable or future interests - B.20 Interests in estate death benefit plan - B.21 Other Contingent and Unliquidated Claims Undetermined B.22 Patents, copyrights, and others Undetermined B.23 Licenses, franchises & other intangibles Undetermined B.24 Customer lists or other compilations - B.25 Vehicles - B.26 Boats, motors and accessories - B.27 Aircraft and accessories - B.28 Office Equipment, furnishings & supplies 52,029,314 B.29 Equipment and Supplies for Business 52,010,130 B.30 Inventory 275,672,540 B.31 Animals - B.32 Crops - B.33 Farming equipment and implements - B.34 Farm supplies, chemicals, and feed - B.35 Other Personal Property 152,741,011 TOTAL SCHEDULED ASSETS $618,066,654 =========================================================== C - Property Claimed None D - Creditors Holding Secured Claims 11.75% Senior Secured Notes $665,831,108 E - Creditors Holding Unsecured Priority Claims Undetermined F - Creditors Holding Unsecured Nonpriority Claims 486,105,509 See http://bankrupt.com/misc/BBI_SAL_ScheduleF.pdf TOTAL SCHEDULED LIABILITIES $1,151,936,617 =========================================================== 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: Files Statement of Financial Affairs ----------------------------------------------------- Thomas Kurrikoff, Blockbuster Inc.'s treasurer and senior vice president for finance, discloses that Blockbuster Inc. earned these amounts from its business operations during the two years before the Petition Date: Period Amount ------ ------ 2010 YTD, 08/29/10 $1,512,840,406 2009 3,512,399,256 2008 4,265,616,234 Blockbuster also earned (i) $224,882 in 2008 for sale of various equipment and two stores, and (ii) $365,417 in 2010 for business interruption insurance income related to Hurricane Ike. Those incomes are from sources other than the operation of Blockbuster's business during the two years before the Petition Date. Within 90 days immediately preceding the Petition Date, Blockbuster paid $405,733,534 to 6,988 creditors for debts that are not primarily consumer debts. A list of the creditors is available for free at: http://bankrupt.com/misc/BBI_SOFA_3b_10222010.pdf Blockbuster also paid $188,172 for the benefit of 24 creditors, who are or were insiders, within one year immediately preceding the Petition Date. The largest of these payments are made to: Creditor/Insider Amount ---------------- ------ Jack of All Games Inc. $2,741,659 Casey, Thomas M. 1,185,759 Keyes, James W. 1,086,314 Peterson, Eric H. 626,828 Lee, Bill R. 538,508 Lewis, Kevin 517,668 Mr. Kurrikoff discloses that Blockbuster is a party to 423 lawsuits and administrative proceedings within one year immediately preceding the Petition Date. A list of the lawsuits is available for free at: http://bankrupt.com/misc/BBI_SOFA_4a_10222010.pdf On May 7, 2010, Blockbuster donated $27,982 in cash to the Muscular Dystrophy Association Inc., Mr. Kurrikoff says. The Debtor routinely incurs losses for a variety of reasons including theft, property damage and merchandise stock rotation, Mr. Kurrikoff relates. During the past 12 months, he says, Blockbuster incurred a total shrink of $15,696,228, which includes both rental and retail inventory shrink for all stores and distribution centers. He notes that the shrink amounts included both actual shrink recorded as a result of physical inventories and shrink reserve during the period. Within one year immediately preceding the Petition Date, Blockbuster paid these firms at various dates for services relating to debt counseling and bankruptcy: Firm Name Amount --------- ------ Weil, Gotshal & Manges LLP $4,899,491 Alvarez & Marsal North America LLC 4,522,725 Rothschild Inc. 4,379,243 Deloitte & Touche LLP 1,933,217 Kirkland & Ellis LLP 1,276,830 Within two years immediately preceding the Petition Date, Blockbuster transferred these properties, which transfers are not in the ordinary course of the business: Transferee Date Description/Amount ---------- ---- ------------------ Birchhall Investments Ltd. 08/28/09 Sale of Xtra-Vision Ltd. in Ireland. Net cash proceeds is $13,000,000 Preferred shareholders 11/14/08 Cash dividends: $2,812,500 Preferred shareholders 02/17/09 Cash dividends: $2,812,481 Blockbuster also transferred two properties on March 2, 2009, to: -- BB 2009 Trust certain trademarks; and -- NCR Corporation certain domain name. Creditor Blockbuster of Tennessee, Ltd., made set-offs against a debt or deposit of Blockbuster within 90 days preceding the Petition Date: Creditor Date Amount -------- ---- ------ Blockbuster of Tennessee, Ltd. 07/04/10 $47,930 Blockbuster of Tennessee, Ltd. 08/01/10 37,530 Blockbuster of Tennessee, Ltd. 08/29/10 68,915 Blockbuster further reveals its current partners, officers, directors and shareholders: % of Name/Entity Nature of Interest Interest ----------- ------------------ -------- Prentice Capital Mgmt. LP Equity Holder 8.4% M.A.M. Investment Ltd. Equity Holder 7.5% The Goldman Sachs Group Inc. Equity Holder 6.5% Zimmerman, Michael Equity Holder 5.7% Intana Management, LLC Equity Holder 5.0% Bleier, Edward Board Member <1.0% Dore, Kathleen Board Member <1.0% Fernandes, Gary Board Member <1.0% Fitzsimmons, Joseph Board Member <1.0% Haimowitz, Jules Board Member <1.0% Keyes, James W. Chairman and CEO <1.0% Kurrikoff, Tom SVP and Treasurer None Lewis, Bruce SVP and Controller <1.0% Lewis, Kevin SVP of Digital None McDonald, Rod VP/Sec./Gen. Counsel None McGill, Dennis EVP & CFO None Meyer, Gregory Board Member <1.0% Zelnick, Strauss Board Member <1.0% 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: Weil Gotshal Says It's "Disinterested" ------------------------------------------------------- Weil, Gotshal & Manges LLP, the Debtors' proposed bankruptcy counsel, contends that Lyme Regis Partners LLC's objection to its proposed retention is singularly devoid of merit. To recall, Lyme Regis has asked the Court to deny the Debtors' application to employ Weil Gotshal as their attorneys, saying the firm is not disinterested within the meaning of Section 101(14) of the Bankruptcy Code. Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, argues that his Firm has provided comprehensive disclosure with respect to all companies, creditors, vendors and other entities that are associated with the Debtors and also have relationships with it. As stated in his affidavit, Mr. Karotkin insists that Weil Gotshal does not represent any entity, other than the Debtors, in the Chapter 11 cases and has been meticulous in its conflicts check procedures and disclosures to ensure that the Firm is a disinterested party as defined by Section 101(14) of the Bankruptcy Code, as modified by Rule 2014(a) of the Federal Rules of Bankruptcy Procedure. The suggestion that Weil Gotshal has been disabling conflicts and is causing the Debtors to favor certain creditors is unfounded, baseless and not supported by any cognizable facts or legal authority, Mr. Karotkin argues. The fact that Lyme Regis, an obvious distressed debt trader, made a bad investment by purchasing not only unsecured but contractually subordinated debt, does not give it license to submit frivolous pleadings, he points out. "Indeed, based on the pleadings Lyme Regis has already filed in the short period these cases have been pending, it seems clear that Lyme Regis is utilizing a timeworn and unproductive scorched- earth strategy to leverage its deeply subordinated position," Mr. Karotkin tells the Court. "These tactics should not be tolerated," he adds. 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: Rothschild Responds to Indemnification Objection ----------------------------------------------------------------- Prior to filing their bankruptcy cases, Blockbuster Inc. retained Rothschild Inc. to provide financial advisory and investment banking services to support the Debtors' restructuring, Richard F. Hahn, Esq., at Debevoise & Plimpton LLP, in New York -- rfhahn@debevoise.com -- relates. Mr. Hahn contends that the U.S. Trustee's objection to the Debtors' application to employ Rothschild as financial advisor takes exception to two terms in Rothschild's Engagement Letter -- reimbursement of Rothschild's legal fees and indemnification of certain affiliates of Rothschild, including officers, directors, agents and employees. He notes that none of the parties with an economic stake in the cases has joined the Objection. The retention provisions that are the subject of the Objection have appeared in countless other engagement letters and have regularly been approved -- without objection from the U.S. Trustee -- as reasonable by other Courts in the Southern District of New York and elsewhere, Mr. Hahn argues. Hence, Rothschild submits that the U.S. Trustee's Objection is misplaced and should, accordingly, be overruled. 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: Committee Opposes Early Payment to Studios ----------------------------------------------------------- The Official Committee of Unsecured Creditors formed in Blockbuster Inc. said it has tried to work cooperatively with the Debtors to address the merits of the Debtors' request to pay certain prepetition claims of movie studios and game providers, and resolve the Creditors Committee's concerns for the relief requested by the Debtors. Counsel to the Committee, Jay R. Indyke, Esq., at Cooley LLP, in New York -- jindyke@cooley.com -- relates that the Debtors have agreements on account of Revenue Sharing Transactions, which account for 50% of Blockbuster's rental revenue with six Major Studios, five of which will expire by December 31, 2010. Yet the Debtors do not seek to condition payment to the five Major Studios on their agreement to extend the terms of these contracts, Mr. Hahn says. Rather, the Debtors suggest that they will simply "negotiate in good faith" with these Studios to extend their agreements at the appropriate time. Mr. Hahn tells Judge Burton R. Lifland that the Creditors Committee is not satisfied that this approach provides the estate with sufficient assurance that the Studios will continue to support the Debtors' reorganization effort once they are paid in full on account of their prepetition claims. Similarly, he notes, the accommodation agreements, which the Debtors propose to enter into with certain Participating Unsecured Studios, do not condition the Debtors' prepetition claim payments on the Participating Unsecured Studios' agreement to supply product on customary terms for the duration of the Debtors' reorganization effort. "In other words, other than placating an important creditor constituency, it is not clear that this estate is receiving any benefit in exchange for payment of the Studios' substantial prepetition claims, attorneys' fees and the release of any and all claims against them, including avoidance actions," Mr. Hahn argues. The Creditors Committee submits that it recognizes the importance of the requested relief to the Debtors' overall reorganization effort and may support the Studio Motion in the event that payment of the Studio Claims is conditioned upon the Studios' agreement to supply Product on customary terms through the effective date of a Chapter 11 plan, either by extension of an existing agreement or execution of an Accommodation Agreement. The Creditors Committee also asks that the Debtors be directed to consult with it prior to extending any existing agreements or executing Accommodation Agreements with the Studios, so as to provide it with a reasonable opportunity to resolve any concerns with the agreements consensually with the Debtors or, if necessary, with the involvement of the Court. Debtors Talk Back The Debtors contend that Lyme Regis Partners, LLC's objection to the Studio Motion should be overruled because the testimony of James Keyes, Blockbuster's chief executive officer, provided ample evidence to support the request. They add that Jeffery Stegenga, the Debtors' chief restructuring officer, possessed sufficient personal knowledge in the matters relating to the Studio Motion. The Debtors further argue that the Court's guidelines with respect to prepackaged plans in Chapter 11 cases are inapplicable to the relief requested in the Studio Motion. Lyme Regis Demands Discovery In another filing, Lyme Regis asks the Court to defer ruling on the Studio Motion until after it has had an opportunity to propound written and deposition discovery. Lyme Regis also asks for the opportunity to cross-examine witnesses before the Court and to present evidence, both through witnesses and documents, prior to the Court arriving at a decision on the Studio Motion. $118MM in Studio Claims To ensure it has adequate Product to meet customer demand, Blockbuster enters into various agreements with certain movie and game suppliers for the purchase of physical and digital copies of Product. Given the unique nature of the Product as proprietary, copyrighted material, the Studios are, in most cases, the only parties that can supply Blockbuster with the requisite Product. The Debtors are seeking: (1) authority to pay the undisputed outstanding prepetition obligations owed to: * the Secured Studios, consisting of Warner Home Video, Twentieth Century Fox Home Entertainment LLC and Sony Pictures Home Entertainment Inc., in accordance with that certain lien agreement dated March 31, 2010, between non-debtor affiliate Blockbuster Canada Co. and the Secured Studios; and * those certain unsecured studios with which Blockbuster may, in its sole discretion, enter into, on a postpetition basis, an accommodation agreement; and (2) administrative expense priority status for all undisputed obligations arising on account of the Studios' claims on a postpetition basis. Blockbuster estimates that, as of the Petition Date, it owes approximately $68.5 million to the Secured Studios and $49.6 million to the Unsecured Studios. Blockbuster further estimates that, within the Interim Period, approximately $28 million must be paid to the Secured Studios and approximately $12.4 million must be paid to the Unsecured Studios. 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) BLUEWATER HLD: Run by Delta Partners Staff While in Ch. 11 ---------------------------------------------------------- Craig M. Douglas at Boston Business Journal reports that Bluewater Holdings Corp. is being run by Igor Popov, a turnaround professional and principal with Delta Partners. Delta Partners is a private equity and reorganization specialist based in Annapolis, Maryland. Philip C. Silverman, Esq., at Anderson Aquino LLP, in Boston, Massachusetts, serves as counsel to the Debtor. Bluewater Holdings Corp. provides sewage and water-treatment services for the public and private sectors. Bluewater Hld Corp. filed for Chapter 11 on Oct. 19, 2010 (Bankr. D. Mass. Case No. 10-21384). The Debtor estimated assets and debts of $1 million to $10 million as of the Chapter 11 filing. BRAVO ENTERPRISES: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: Bravo Enterprises LLC 11009 6240 Way Montrose, CO 81401 Bankruptcy Case No.: 10-37021 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Phillip Jones, Esq. 200 N. 6th St P.O. Box 338 Grand Junction, CO 81502 Tel: (970) 242-6262 E-mail: pjones@wth-law.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 ------ --------------- ------------ Dana Clarkson Loan $6,335 604 S. 3rd Street Montrose, CO 81401 The petition was signed by John cochran Pladson, member and manager. CANWEST GLOBAL: Restructuring Plan Successfully Implemented ----------------------------------------------------------- 2737469 Canada Inc., formerly, Canwest Global Communications Corp. disclosed that the purchase and sale transaction with Shaw Communications Inc. contemplated by the amended and restated consolidated plan of compromise, arrangement and reorganization of Canwest Global Communications Corp., Canwest Media Inc. and certain of CMI's subsidiaries has been completed. Accordingly, the Company has disposed of all of its operating assets and ceased to carry on business. In addition, the Company's subordinate voting shares and non-voting shares have been delisted from the TSX Venture Exchange, the Company has changed its name to 2737469 Canada Inc., and the directors and officers of the CMI Entities have resigned from their positions. It is anticipated that FTI Consulting Canada Inc., the Court- appointed monitor of the CMI Entities, will commence bankruptcy proceedings in respect of the Company, CMI and certain other CMI Entities in due course. The Plan was successfully implemented in accordance with its terms and conditions and pursuant to the previously announced order of the Ontario Superior Court of Justice sanctioning the Plan. The Monitor will conduct distributions to affected creditors of certain of the CMI Entities as contemplated by the Plan and the Sanction Order. Shareholders of the Company are referred to the information notice attached as Appendix "A" to this news release. About Canwest Global Canwest Global Communications Corp. (TSX: CGS and CGS.A) -- http://www.canwest.com/-- an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. On October 6, 2009, Canwest Global, Canwest Media Inc., Canwest Television Limited Partnership (including Global Television, MovieTime, DejaView and Fox Sports World), The National Post Company and certain subsidiaries voluntarily entered into, and successfully obtained an Order from the Ontario Superior Court of Justice (Commercial Division) commencing proceedings under the Companies' Creditors Arrangement Act. The CMI Entities' commencement of these proceedings was undertaken in furtherance of a proposed recapitalization transaction that is supported by over 70% of holders of the 8% senior subordinated notes issued by CMI. On the same day, FTI Consulting Canada Inc., the Court-appointed Monitor in the CCAA proceedings, sought protection in the United States Bankruptcy Court under Chapter 15 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 09-15994) for certain of the entities involved in Canwest's television business that filed for protection under the CCAA, including Canwest, Canwest Media Inc. and Canwest Global Broadcasting Inc./Radiodiffusion Canwest Global Inc. Judge Stuart M. Bernstein presides over the Chapter 15 cases. Evan D. Flaschen, Esq., at Bracewell & Giuliani LLP, in Hartford, Connecticut, serves as Chapter 15 Petitioner's counsel. The Chapter 15 Debtors disclosed estimated assets of $500 million to $1 billion and estimated debts of $50 million to $100 million. In a regulatory filing with the U.S. Securities and Exchange Commission, Canwest Media disclosed C$4,847,020,000 in total assets and C$5,826,522,000 in total liabilities at May 31, 2009. CARPENTER CONTRACTORS: Case Summary & Creditors List ---------------------------------------------------- Debtor: Carpenter Contractors of America, Inc. dba R&D Thiel 941 SW 12th Avenue Pompano Beach, FL 33069 Bankruptcy Case No.: 10-42604 Chapter 11 Petition Date: October 25, 2010 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: Chad P. Pugatch, Esq. 101 NE 3 Avenue, Suite 1800 Ft. Lauderdale, FL 33301 Tel: (954) 462-8000 E-mail: cpugatch.ecf@rprslaw.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Bill D. Fritsch, vice president. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bill Giblin Worker's $468,474 1010 Curtiss, #B2 Compensation Downers Grove, IL 60515 Claim Ken Thilmont Worker's $136,883 N2020 City Road, LT 431 Compensation Lake Geneva, WI 53147 Claim Donald Boettcher Worker's $82,850 409 Douglas Street Compensation Belvidere, IL 61008 Claim G-Plex, Inc. Trade Debt $57,181 JIM GUSTAFSON Worker's $55,471 Compensation Claim Bluelinx Corporation Trade Debt $52,010 Suncoast Contractors Trade Debt $47,954 Imperial Credit Corp. Trade Debt $47,876 Chicago Carpenters TR Trade Debt $38,896 Alpine Engineered Pro Trade Debt $37,551 DJT, LLC Trade Debt $36,000 General Electric CAPI Trade Debt $35,517 ITW Building Componen Trade Debt $34,825 Manuel Robledo Worker's $34,775 Compensation Claim Anasco Inc Trade Debt $32,421 Construction Industry Trade Debt $31,057 GECF Business Propert Trade Debt $27,966 Marsh USA Inc. Trade Debt $20,330 Weyerhauser Trade Debt $19,187 Sy's Supplies, Inc. Trade Debt $17,304 CHESTER DOWNS: S&P Assigns 'B+' Rating to $40 Mil. Loan ------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to Chester Downs & Marina LLC's incremental $40 million term loan. S&P rated the notes 'B+' (two notches higher than the 'B-' corporate credit rating on the company) with a recovery rating of '1', indicating S&P's expectation of very high (90% to 100%) recovery in the event of a payment default. Chester will use the proceeds to repay an intercompany loan and for general corporate purposes, including capital expenditures. All other outstanding ratings on the company, including the 'B-' corporate credit rating, remain unchanged. The rating outlook is stable. "The 'B-' corporate credit rating on Chester Downs and Marina reflects the aggressive financial policy and weak credit quality of the indirect majority owner and property manager Harrah's Entertainment Inc.," said Standard & Poor's credit analyst Melissa Long. Through its subsidiary Harrah's Operating Co. Inc., Harrah's Entertainment's ownership stake in Chester Downs and Marina grew to 95% from about 67% following the refinancing last year. Given HET's substantial majority controlling position, S&P views the credit quality of Chester Downs and Marina as linked to that of HET. S&P believes that a bankruptcy at HET could cause a bankruptcy at Chester Downs and Marina, despite its relatively moderate financial burden. S&P believes that HET could decide to include Chester Downs and Marina in a broader bankruptcy proceeding, and management could accomplish this by buying out the minority investors for a relatively insignificant sum. While a call right relative to this interest does not currently exist, S&P expects such a transaction to occur through negotiation. S&P notes that as a stand-alone entity, Chester Downs and Marina's moderately leveraged capital structure, minimal capital spending needs, and strong market demographics offer credit strength that would support a higher rating. This is despite its limited diversity as an operator of a single gaming property and S&P's expectation for increasing competitive pressure as the Philadelphia-area gaming market expands. In addition, S&P believes the inclusion of this property in Harrah's Total Rewards player network offers some competitive advantages. As a private company, Chester Downs and Marina does not publicly release its financial results. However, the $230 million term loan results in a moderately leveraged capital structure. Still, despite a business and financial risk profile that would likely support a higher rating, the rating on Chester Downs and Marina is linked to S&P's rating on HET ('B-' with a stable outlook), which reflects a highly leveraged financial risk profile and a very aggressive financial policy. CLOPAY AMES: S&P Assigns 'BB-' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Clopay Ames True Temper Holding Corp. The rating outlook is stable. At the same time, S&P assigned a 'BB+' (two notches above the corporate credit rating) issue-level rating to Clopay Ames' $125 million asset-based revolving credit facility due 2015 and $375 million term loan due 2016. S&P assigned the facilities a recovery rating of '1', indicating S&P's expectation that lenders can expect very high (90% to 100%) recovery in the event of a payment default. These ratings follow S&P's previous assignment of preliminary ratings on Sept. 9, 2010. Proceeds from the proposed financings, combined with cash from parent company Griffon Corp. (unrated entity) were used to fund the acquisition of Ames True Temper. "The 'BB-' corporate credit rating on Clopay Ames True Temper Holding Corp. (Clopay Ames) reflects S&P's assessment of the combination of its fair business risk profile and aggressive financial risk profile," said Standard & Poor's credit analyst Thomas Nadramia. The rating also reflects its sizable customer concentrations in each business segment, exposure to construction cycles in two (garage doors and tools) of its three business lines, its somewhat aggressive financial risk profile given S&P's expectation that the company's pro forma adjusted debt to EBITDA will be about 3.5x, and the likelihood of further acquisitions. In addition, the rating takes into account the company's good diversity across three distinct business segments (specialty plastics, garage doors, and lawn and garden tools), relatively stable margins and international presence in its plastics business, and recognized brands and national footprint in the garage doors and lawn and garden tools segments. CRESTWOOD APARTMENTS: Files for Chapter 11 in Indianapolis ---------------------------------------------------------- MREF III Property LLC filed for Chapter 11 protection (Bankr. S.D. Ind. Case No. 10-16001) on Oct. 22, owing $16.6 million to US Bank NA, the mortgage holder. Bill Rochelle, the bankruptcy columnist for Bloomberg News, relates that MREF III is the owner of the 518-unit Crestwood Apartments in Indianapolis. The project is 77% rented, with a monthly rent roll of $204,000. The owner projects generating cash flow exceeding $5,000 a month from November through January after paying $35,000 a month on the mortgage. CROWNBROOK DEBCO: Fifth Mezzanine Wants Case Dismissed ------------------------------------------------------ Fifth Mezzanine Partners II LP, a major creditor of Nicos Polymer Group, asked the U.S. Bankruptcy Court for the Southern District of New York to dismiss Nicos Polymer's Chapter 11 case, and lift the automatic stay that denies the bank from foreclosing on its collateral in the company and auction off its assets, according to reporting by Mike Verespej at Plastic News. Fifth Mezzanine is trying to block the Company from using cash collateral from its secured creditors or accessing $1 million in postpetition financing that the Company has arranged to pay ongoing expenses. A hearing on the request is set for Oct. 28, 2010. Plastic News reports that the bank said the Company owes $20.3 million and not $18.33 million as what the Company claims it to be. According to papers filed with the Court, the Company had debts of more than $22 million as of Oct. 13, 2010, compared to an aggregate net book value of cash, accounts receivable, inventory, fixed assets and other assets that were just $4.3 million. About Nicos Polymers Nicos Polymers Group -- http://www.nicospolymers.com/-- is an industrial plastics recycler. CrownBrook Debco LLC, formed by an investment group, purchased Nicos Polymers in 2007. Crownbrook Debco, LLC, dba Nicos Polymers Group, filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-15345) on Oct. 13, 2010 in Manhattan. Samuel Jason Teele, Esq., at Lowenstein Sandler, P.C., in New Jersey, serves as counsel to the Debtor. The Debtor estimated assets of $1,000,001 to $10,000,000 and debts of $10,000,001 to $50,000,000 in its Chapter 11 petition. D & L EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: D & L Equipment Inc. 3203 Brooklyn Road Jackson, MI 49201 Bankruptcy Case No.: 10-72623 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Walter Shapero Debtor's Counsel: Thomas R. Morris, Esq. SILVERMAN & MORRIS, PLLC 7115 Orchard Lake Rd., Suite 500 West Bloomfield, MI 48322 Tel: (248) 539-1330 E-mail: morris@silvermanmorris.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/mieb10-72623.pdf The petition was signed by M. David Conlon, president. DIGG INC: Cuts 37% of Staff Amid High Burn Rate, Exec Departures ---------------------------------------------------------------- Digg Inc. CEO Matt Williams told employees in a blog posted on the firm's Web site, the company will downsize its staff from 67 to 42 people. "The fact is our business has a burn rate that is too high. We must significantly cut our expenses to achieve profitability in 2011. We've considered all of the possible options for reduction, from salaries to fixed costs. The result is that, in addition to lowering many of our operational costs, I've made the decision to downsize our staff from 67 to 42 people," Mr. Williams said on Monday. Patrick Hoge, writing for The San Francisco Business Times, reports that two high level executives have left or stepped aside at Digg. According to The Business, Chas Edwards, who became chief revenue officer at Digg in May 2009, issued a blog statement saying he was going to Mountain View-based Pixazza, a two-year old company that uses technology to enhance the use of imagery for advertising, to be chief revenue officer and head of publisher development. Mr. Edwards, who previously co-founded Federated Media, said he will continue as a strategic advisor to Digg. Business Times also reports that longtime Digg chief financial officer John Moffett started this month as CFO at Vizu, a venture- backed online advertising market research company located in San Francisco, according to his LinkedIn profile. Xconomy's chief correspondent Wade Roush notes Mr. Williams joined Digg as CEO in September, replacing interim CEO Kevin Rose, who had presided over an overhaul of the site that proved deeply unpopular with some users. Digg Inc. is a news aggregation Web site. According to its Web site, Digg "is a place for people to discover and share content from anywhere on the web. From the biggest online destinations to the most obscure blog, Digg surfaces the best stuff as voted on by its users." DOUGLAS RAY: State Breach Claims Beyond Bankr. Court's Reach ------------------------------------------------------------ In Battle Ground Plaza, LLC, v. Douglas Ray; Estate of Irwin Jessen; Dean Maldonado, case no. No. 09-60005 (9th. Cir.), the United States Court of Appeals examines whether a bankruptcy court retains jurisdiction over a collateral attack -- based on a state breach of contract theory -- on its previous sale order, having already approved a Chapter 11 Plan, including the sale of real property, closed the case, overseen payment of creditors, and discharged the debtor. Circuit Judges Michael Daly Hawkins, M. Margaret McKeown and Carlos T. Bea find that the bankruptcy court lacked jurisdiction over the state law breach of contract claims, and the case must be dismissed. The Clark County Court was perfectly capable of taking jurisdiction and assessing whether BG Plaza's claim is precluded given that the sale had already been finalized and approved in the previous bankruptcy proceeding. A copy of the Ninth Circuit's opinion dated October 25, 2010, is available at http://is.gd/glzJpfrom Leagle.com. Douglas M. Ray filed a Chapter 11 petition on August 10, 2005. Mr. Ray and Irwin P. Jessen were co-owners of commercial real estate consisting of a shopping center commonly known as the Battle Ground Plaza Shopping Mall. The Debtor and Mr. Jessen later sold the mall to Battle Ground Plaza, LLC. DYNEGY INC: Asks Shareholders to Snub Seneca Move vs. Blackstone ---------------------------------------------------------------- Dynegy Inc. responded to the filings made by Seneca Capital regarding the pending acquisition of Dynegy by an affiliate of The Blackstone Group L.P., and pursuant to which Dynegy stockholders would receive $4.50 in cash for each outstanding share of Dynegy common stock they own. Seneca Capital, a beneficial owner of 9.3% of Dynegy's outstanding common shares, said last week that it filed a preliminary proxy statement on Schedule 14A with the Securities and Exchange Commission in connection with a solicitation of proxies against the proposed acquisition of Dynegy by Denali Parent Inc., an affiliate of The Blackstone Group, for $4.50 per common share to be voted on at a special meeting of Dynegy's stockholders currently scheduled to be held on November 17. "We believe the $4.50 per share merger consideration ($0.90 per share if adjusted for Dynegy's recent 5 for 1 reverse stock split) does not adequately reflect the substantial long-term value that Dynegy stockholders would be able to receive without the merger," Seneca said. Dynegy said in a statement, "Seneca's position is not in the best interests of Dynegy's stockholders. A hedge fund like Seneca may have many reasons to take a risk on a deal. Dynegy does not know all of Seneca's interests in this situation. What Dynegy does know is that Seneca has not been a significant long-term holder of Dynegy stock. In fact, Seneca's public filings showed an ownership position of less than 1% before the Blackstone transaction was announced. Seneca has purchased the vast majority of its position since the announcement at prices above $4.50. Seneca's interests are NOT aligned with those of all Dynegy stockholders. "In recommending that stockholders vote for the proposal to adopt the merger agreement with Blackstone, the Dynegy Board of Directors carefully considered a number of important factors, including that Dynegy will continue to face significant challenges and that its ability to operate could be attended by significant risks. "Since August, when the Board reached its conclusion that the risks associated with an independent strategy outweigh the potential benefits of continuing as a stand-alone company, those risks have only increased. Commodity prices have continued to deteriorate. Using September commodity pricing, Dynegy's total projected negative cash flow has increased from the $1.1 billion anticipated in August to $1.6 billion over the next five years. "The analysis of numerous independent sell-side financial analysts and ratings agencies, who have a deep understanding of Dynegy's financial condition and the power generation industry, appears to support the Dynegy Board's conclusion that the Blackstone transaction is the best alternative available for Dynegy's stockholders: * "[The] [c]urrent $4.50/sh offer appears reasonable as market outlook remains challenging for the next few years. We continue to believe Blackstone's offer price remains a reasonable deal for current shareholders, especially as natural gas pricing has maintained its downward trend." -- Daniel W. Scott, Dahlman Rose & Co., October 6, 2010 * "Based on our assessment of these public filings, Dynegy's financial profile is expected to be quite fragile, particularly during 2011 and 2012, when the company is projected to generate both negative operating cash flow and negative free cash flow due to weak operating margins and the required funding of their capital investment programs." - Moody's, October 1, 2010 * "DYN value is very sensitive to assumptions. Time to return to a balanced supply demand power market is one of two big drivers for our IPP NAVs. Our base DYN assumption is a weighted average of 6 years to reach market equilibrium resulting in a $3.25/sh NAV, ~25% below BX's take out offer." -- Brandon Blossman, Tudor Pickering Holt, October 11, 2010 * "Since the deal was announced on August 13th, Dynegy's short run economics have been deteriorating. The forward price of Natural Gas, which sets the price utilities and municipalities pay for power, has dropped 9% since the deal was announced, and 21% from management's expectations at the 2011 end of the curve." -- Stephen Grahling, Jefferies & Co., October 5, 2010. "In addition, while evaluating Dynegy's alternatives, the Dynegy Board decided not to pursue an asset sale on a stand-alone basis, including the sale of the four natural gas-fired assets proposed to be sold to NRG Energy, Inc. concurrently with the closing of the Blackstone transaction, for several reasons. These reasons include the fact that such an asset sale is not permitted under Dynegy's existing $1.9 billion credit facility and, if undertaken, would result in the loss of that facility, exacerbating Dynegy's liquidity challenges. If Dynegy did the NRG asset sale itself, Dynegy would face a total projected negative cash flow substantially in excess of $1.5 billion over the next five years. "In summary, Dynegy believes Blackstone's cash offer of $4.50 per share provides Dynegy stockholders with full, fair and immediate value and is in the best interest of Dynegy and its stockholders. If the Blackstone transaction does not close, Dynegy believes its stockholders could lose significant value and face future dilution and further loss of investment." About Dynegy Inc. Headquartered in Houston, Texas, DHI is an independent power producer that owns a portfolio of more than 12,000 MW electric generating assets. DHI is wholly-owned by Dynegy, Inc. Dynegy Inc. and Dynegy Holdings each has a 'B-' issuer default rating from Fitch. In October 2010, Moody's Investors Service lowered the ratings of Dynegy Holdings, including its Corporate Family Rating to Caa1 from B3 along with the ratings of various affiliates or parent company Dynegy Inc. The rating outlook for DHI and Dynegy remains negative. The rating action follows the expiration of the 40- day "go shop" period, increasing the probability that Dynegy will be acquired by an affiliate of The Blackstone Group L.P. in a transaction valued at approximately $4.7 billion, including the assumption of existing debt. E*TRADE FINANCIAL: DBRS Affirms 'B' Rating After Q3 Results ----------------------------------------------------------- DBRS has commented that its ratings of E*TRADE Financial Corporation remain unchanged after the Company's 3Q10 earnings announcement. DBRS rates E*TRADE's Issuer & Senior Debt at B (high) and E*TRADE Bank's Deposits & Senior Debt (the Bank) at BB. All ratings, except the Short-Term Instruments rating of the Bank, have a Negative trend. The Company reported net income of $8 million in the quarter, its second consecutive quarter of profitability, following net income of $35 million in 2Q10. In the prior year's quarter, E*TRADE reported a net loss of $82 million, excluding a one-time non-cash charge related to its debt exchange. Over the past year, the Company has made significant progress in preserving its strong franchise, reducing non-core asset exposure and bolstering capitalization. Combined with improving credit trends, E*TRADE's swing to positive earnings is an important step from a ratings perspective. The positive earnings performance was largely driven by lower loan loss provisions, which declined 8% quarter-over-quarter (QoQ) and a more substantial 56% year-over-year (YoY). With improving credit performance trends supporting the reduction in provisions, DBRS anticipates that E*TRADE could continue to generate positive quarterly results, but the environment remains challenging. The Company continues to have success in its core brokerage franchise, included in its Trading and Investment segment, which generated net income of $158 million in the quarter. While down from $203 million in 2Q10 and $226 million in 3Q09, DBRS views the performance as solid given the lower level of client activity with increased market uncertainty and the seasonal slowdown in third quarter. Importantly for the franchise, customer metrics were strong, with $1.4 billion of net new brokerage assets in the quarter, customer assets in brokerage accounts and stock plans reaching $135.3 billion, up 13% QoQ and YoY, and a record 2.7 million brokerage accounts at 3Q10. Pursuing its focused strategy, E*TRADE continues to roll out new software and tools targeted at building on its active trader franchise, while expanding its customer relationships through its newly developed relationship management team and continuing to invest in marketing and advertising. DBRS views positively the Company's sustained investment in its business, particularly though marketing and improvements in technology. Net revenues declined 8% QoQ and 15% YoY to $489 million, affected by the decline in overall trading activity. Importantly, net interest income held up well, declining only marginally QoQ despite lower volumes and a decline in average earning assets that were offset by a 6 basis point improvement in Company's net interest margin (NIM) to 2.95%. E*TRADE's ability to sustain NIM is partly attributable to its success in growing higher yielding average margin balances, which increased 4% QoQ to $4.7 billion and illustrate its continued focus on the active trader segment. Daily average revenue trades (DARTS) were down 26% QoQ and 30% YoY, due to the slowdown in activity levels, pressuring total net revenues. Credit performance remains E*TRADE's critical challenge, but one that it is increasingly able to meet. E*TRADE generated operating income before provisions and taxes (IBPT) of $223 million to sufficiently absorb provisions of $152 million, despite a difficult trading quarter. Of the $71 million IBPT cushion, approximately $40 million is needed for payment of E*TRADE's corporate interest expense, largely due to the high rate paid on its springing lien notes. With just a nominal cushion remaining for positive earnings, DBRS looks to improvement in loan performance trends as a leading indicator for future profitability. Positively, at-risk and special mention delinquencies declined both sequentially and relative to 3Q09, largely driven by improvement in E*TRADE's one-to-four family loan portfolio. As E*TRADE's largest loan portfolio, one-to-four family loans of $8.7 billion, had delinquencies of 16% of total loans, while home equity delinquencies were 6% of total loans and consumer and other loans had delinquencies of just 2% of total loans. E*TRADE continues to work with third parties to combat delinquencies and restructure loans in its loan portfolios. The Company continued to roll off its loan portfolio, which was down by $1 billion QoQ, of which 80% was attributable to prepayments or scheduled principal reductions. While E*TRADE has been reducing assets outside of its non-core business activity, such as mortgage loans and its investment portfolio, it has focused on gaining market share by offering new products and enhancements for active traders and long-term investors. E*TRADE has also been growing customer deposits, particularly brokerage deposits, reducing its need for more expensive wholesale funding. The Company grew customer deposits by $1.3 billion in the quarter, resulting in total customer cash and deposits of $31.9 billion that are now funding 70% of E*TRADE's balance sheet. DBRS views E*TRADE as having built up a more comfortable cushion over the minimums to be well-capitalized, with a Tier 1 capital to risk- weighted assets ratio of 13.75% at 3Q10, up from 13.15% a year ago. Positively, the Bank was a capital generator for the third consecutive quarter, bringing excess risk-based capital in the Bank to $1.1 billion. Given that the Bank has substantial excess risk- based capital, the Company could upstream this capital from the Bank to the parent to pay down some of the parent's debt, which DBRS would view favorably from a ratings perspective, provided that capitalization at the Bank remains appropriate. While DBRS maintains a Negative trend on the rating, indicating the continued pressure on earnings and uncertainty of credit costs, DBRS views positively the Company's continued strength in online brokerage, improving trends in loan credit, and strengthened financial condition. Additionally, the Company's continued profitability bodes well from a ratings perspective. EASTMAN KODAK: Board OKs Company Indemnification of Employees ------------------------------------------------------------- The Board of Directors of Eastman Kodak Company approved an amendment to Article 8, Section 2(b) of the Company's by-laws to authorize the Company, to the full extent authorized or permitted by law, to advance expenses and indemnify and hold harmless against liabilities Company employees who are named as a party to or threatened to be made a party to any legal action by reason of the fact that the employee was serving at the request of the Company or authorized representative of the Company. Prior to this amendment, Article 8, Section 2(b) provided that authorization from the Board of Directors was required before Company management could advance expenses and indemnify or hold harmless Company employees. The Board of Directors approved the amendment to allow the Company to provide more expeditiously for indemnification and advancement of expenses for employees named or threatened to be named in a legal proceeding as a result of the performance of their responsibilities for the Company. A full-text copy of the Amended and Restated By-Laws is available for free at http://ResearchArchives.com/t/s?6d01 About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. On February 19, 2010, Moody's revised its rating outlook on the Company from negative to stable, and affirmed its B3 corporate rating and Caa1 senior unsecured rating. On February 11, 2010, S&P revised its B- rating outlook on the Company to stable from negative. All ratings on the Company, including the B- Corporate Rating, were affirmed. The Company's balance sheet at June 30, 2010, showed $6.7 billion in total assets, $6.9 billion in total liabilities, and a stockholders' deficit of $208.0 million. ENGLISH & AMERICAN: 2nd Request for 304 Injunction Modification --------------------------------------------------------------- The Scheme Manager of English & American Insurance Company is asking the Honorable James M. Peck to enter an order modifying the Permanent Injunction Order entered by the U.S. Bankruptcy Court on Jan. 15, 1995, and previously amended on July 26, 2000, giving full force and effect to the Amended Scheme of Arrangement proposed pursuant to part 26 of the Companies Act of Great Britain and approved by the insurer's creditors at meetings convened on April 30, 2010. The Amended Scheme was sanctioned by the High Court of Justice of England and Wales on Oct. 6, 2010, and was delivered to the Registrar of Companies in England and Wales on Oct. 12, 2010. Copies of the Scheme Documents are available at http://www.EnglishAndAmericanPools.com/or by contacting the Scheme Manager's U.S. Counsel: Stephen Doody, Esq. ALLEN & OVERY LLP 1221 Avenue of the Americas New York, NY 10020 Telephone: (212) 610-6300 Fax: (212) 610-6399 E-mail: stephen.doody@allenovery.com The Foreign Representative for English & American Insurance Company Limited commenced a section 304 proceeding (Bankr. S.D.N.Y. Case No. 93-42685) in 1993. The Scheme Managers are: Mike Walker Tom Riddell KPMG LLP Restructuring 8 Salisbury Square London EC4Y 8BB UNITED KINGDOM Tel +44 (0) 20 7694 1864 Fax +44 (0) 20 7694 3126 ENGLISH & AMERICAN: Recognition Hearing Set for Nov. 15 ------------------------------------------------------- PRO Insurance Solutions Limited -- in its role as the foreign representative Baloise Insurance Ltd, City International Insurance Company Limited, Dowa Insurance Company (Europe) Ltd, East West Insurance Company Limited, Fuji International Insurance Company Limited, Hiscox Insurance Company Limited, KX Reinsurance Company Limited, Metropolitan Reinsurance Company (U.K.) Limited, Moorgate Insurance Company Limited, Nippon Insurance Company of Europe Limited, Polygon Insurance Company Limited, Swiss Re International SE, UK Branch, and Tower Insurance Limited -- will ask the Honorable James M. Peck at a hearing at 10:00 a.m. on Nov. 23, 2010, in Manhattan, to enter an order recognizing proceedings under part 26 of the English Companies Act 2006 before the High Court of Justice of England and Wales as "foreign main proceedings" or "foreign non-main proceedings" under chapter 15 of the U.S. Bankruptcy Court. Objections, if any, to the Foreign Representative's request must be filed by 5:00 p.m. on Nov. 15, 2010, and served on: Ken Coleman, Esq. Stephen Doody, Esq. ALLEN & OVERY LLP 1221 Avenue of the Americas New York, NY 10020 Telephone: (212) 610-6300 Fax: (212) 610-6399 E-mail: ken.coleman@allenovery.com stephen.doody@allenovery.com Copies of the Schemes of Arrangement for these insurers are available at http://www.EnglishAndAmericanPools.com/or by contacting: Jonathan Cho, Esq. ALLEN & OVERY LLP 1221 Avenue of the Americas New York, NY 10020 Telephone: (212) 610-6300 Fax: (212) 610-6399 E-mail: jonathan.cho@allenovery.com PRO Insurance Solutions Limited -- in its role as the foreign representative Baloise Insurance Ltd, City International Insurance Company Limited, Dowa Insurance Company (Europe) Ltd, East West Insurance Company Limited, Fuji International Insurance Company Limited, Hiscox Insurance Company Limited, KX Reinsurance Company Limited, Metropolitan Reinsurance Company (U.K.) Limited, Moorgate Insurance Company Limited, Nippon Insurance Company of Europe Limited, Polygon Insurance Company Limited, Swiss Re International SE, UK Branch, and Tower Insurance Limited -- commenced chapter 15 proceedings (Bankr. S.D.N.Y. Case No. 10-15358) on Oct. 14, 2010. EXTENDED STAY: Five Mile Dismisses Lawsuit vs. Cerberus ------------------------------------------------------- Five Mile Capital II SPE ESH LLC entered into a stipulation dated October 22, 2010, to dismiss the adversary complaint it initiated against Cerberus Capital Management L.P. and three other companies. Five Mile sued Cerberus, Centerbridge Partners LP, The Blackstone Group Inc. and GEM Capital Management Inc. after they allegedly negotiated with Extended Stay Inc. and its affiliated debtors on the restructuring of their debt. The negotiations allegedly led to an agreement on the terms of a restructuring that was detrimental to the Debtors while beneficial to the defendants, according to Five Mile. The lawsuit was initially filed in the New York Supreme Court in June 2009, but was eventually transferred to the U.S. Bankruptcy Court for the Southern District of New York after the Debtors filed their Chapter 11 cases. Five Mile subsequently asked the Bankruptcy Court to remand the lawsuit back to the Supreme Court but its request was denied. Earlier, the U.S. District Court for the Southern District of New York upheld the Bankruptcy Court's decision denying the transfer of the lawsuit back to the Supreme Court after determining that there is "close interconnection between the issues raised by the lawsuit and the bankruptcy process." Consequently, Five Mile took an appeal of the District Court ruling to the U.S. Court of Appeals for the Second Circuit on October 4, 2010. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: JPM, Deutsche to Sell $2 Bil. Loan by Month's End ---------------------------------------------------------------- J.P. Morgan Chase & Co. and Deutsche Bank AG are planning to sell $2 billion of commercial mortgage-backed securities tied to the Extended Stay Inc. hotel chain, according to a report by The Wall Street Journal. The Banks are planning to sell the loan it provided to an investment group led by Centerbridge Partners LP to fund the group's $3.9 billion purchase of the Extended Stay hotel chain, WSJ reported, citing people familiar with the matter. The sale, which is expected to occur by the end of this month, follows a $3 billion deal tied to Blackstone Group LP's $26 billion purchase of Hilton Worldwide in October 2007. Banks, including Goldman Sachs Group Inc. and Bank of America Corp., provided $20 billion in financing but were stuck holding the loans when debt markets froze. The Hilton deal will allow the two banks to sell the $3 billion in senior debt they still hold, WSJ reported. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Seeks Approval of Deal With Zurich, et al. --------------------------------------------------------- Extended Stay Inc. asks the U.S. Bankruptcy Court for the Southern District of New York to approve a deal with Zurich American Insurance Company and Extended Stay LLC. The deal was hammered out to allow the assumption and assignment to Extended Stay LLC of ESI's insurance agreements with Zurich American that relate to the policy period June 30, 2005, to June 30, 2006. ESI's obligations under the insurance agreements could not be assumed and assigned pursuant to the restructuring plan that was confirmed by the Court since the company is not a debtor under the restructuring plan, according to ESI's lawyer, Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York. The Court confirmed the restructuring plan for ESI's 74 affiliated debtors on July 20, 2010. Pursuant to the restructuring plan, an investment group led by Centerbridge Partners LP will pay the ESI affiliates $3.925 billion and will contribute certificates representing interests in a $4.1 billion mortgage debt for the equity of ESI's affiliates. Under the deal, Extended Stay LLC agreed to assume ESI's obligations under the insurance agreements for the 2005-2006 policy period. In return, ESI will assign to Extended Stay LLC its rights, title and interest in any return premium or dividends owed or which may become due with respect to the insurance policies. ESI will also assign the so-called "loss reimbursement fund" that was established pursuant to the insurance agreements as well as all recoveries related to claims asserted under the insurance policies. The deal is formalized in a 10-page agreement, a copy of which is available at http://bankrupt.com/misc/ESI_AgreementZurich.pdf The Court will consider approval of the request at the hearing scheduled for November 18, 2010. Deadline for filing objections is November 12, 2010. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). FAIRGROUNDS PLAZA: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Fairgrounds Plaza, LLC 457 Andover St. San Francisco, CA 94110 Bankruptcy Case No.: 10-34213 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Matthew D. Metzger, Esq. BELVEDERE LEGAL, APC 605 Market St. #505 San Francisco, CA 94105 Tel: (415) 513-5980 E-mail: mmetzger@belvederelegal.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 Donald A. Pipkins, president. FAIRPOINT COMMUNICATIONS: Sends New Plan Projections to Vermont --------------------------------------------------------------- Billing & OSS World reports that FairPoint Communications Inc. filed new numbers to the Vermont Public Service Board in hopes of securing the commission's approval for its bankruptcy reorganization plan. The Company president Mike Smith expects for the Commission's approval by late November. According the report, board members have denied the Company's proposal for emerging from insolvency, despite two other states' approval. Unlike Maine and New Hampshire, commissioners in Vermont weren't convinced that FairPoint's financial projections were solid. The Vermont agency also was the one that objected most strenuously to the 2008 FairPoint takeover of Verizon Communications Inc.'s New England assets -- the deal that led to FairPoint's Oct. 2009 Chapter 11 filing. About FairPoint Communications FairPoint Communications, Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- is an industry-leading provider of communications services to communities across the country. FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. FairPoint and its affiliates filed for Chapter 11 protection on Oct. 26, 2009 (Bankr. D. Del. Case No. 09-16335). Rothschild Inc. is acting as financial advisor for the Company; AlixPartners, LLP as the restructuring advisor; and Paul, Hastings, Janofsky & Walker LLP is the Company's counsel. BMC Group is claims and notice agent. As of June 30, 2009, FairPoint reported $3.24 billion in total assets, $321.41 million in total current liabilities, $2.91 billion in total long-term liabilities, and $1.23 million in total stockholders' equity. Andrews Kurth is counsel to the Official Committee of Unsecured Creditors. Altman Vilandrie is the operational consultant to the Creditors' Committee. Verrill Dana is the Creditors' Committee's special regulatory counsel. Jeffries serves as the Creditors' Committee's financial advisor. FGIC CORP: Sharps Cancels Exchange Bid Due to Lack of Support ------------------------------------------------------------- Sharps SP I LLC said Monday it did not receive sufficient participation from eligible holders in its offer to exchange residential mortgage-backed securities and asset-backed securities insured by Financial Guaranty Insurance Corp. to satisfy the conditions necessary to complete the Offer and has terminated the Offer. None of the Eligible Insured Securities will be accepted in the Offer and all Eligible Insured Securities that have been tendered and not withdrawn will be returned promptly to the tendering party. As reported by the Troubled Company Reporter on September 27, 2010, Sharps SP I LLC increased the cash consent fee and other consideration being offered for certain classes of Eligible Insured Securities and has added 10 classes of securities to the offer as Eligible Insured Securities. The expiration date as to the added Eligible Insured Securities is 11:59 p.m., New York City time, on October 22, 2010. FGIC informed Sharps SP I that the New York State Insurance Department has indicated that it will not permit FGIC to consent to the extension of the Offer beyond 11:59 p.m., New York City time, on October 22, 2010, the current Expiration Date. On September 15, Sharps SP I reported that as of September 14, (i) Eligible Insured Securities representing $2,572,480,485 in current unpaid principal balance measured as of April 30, 2010 have been tendered into the offer, (ii) non-binding agreements have been reached by Sharps or FGIC and Eligible Insured Securities holders to tender Eligible Insured Securities totaling $121,808,237 in aggregate current unpaid principal balance measured as of April 30, 2010, and (iii) letters of transmittal have been completed, although the Eligible Insured Securities have not yet been delivered, with respect to Eligible Insured Securities totaling $559,997,560 in current unpaid principal balance measured as of April 30, 2010. The aggregate current unpaid principal balance of the Eligible Insured Securities referenced in clauses (i), (ii) and (iii) of the preceding sentence represent 34.5% of all Eligible Insured Securities subject to the exchange offer. As reported by the TCR on October 8, 2010, Sharps SP I scheduled a conference call on October 12 to discuss the offer. Sharps SP I, among other things, planned to discuss the consequences in the event that the conditions to the Offer are not satisfied. About FGIC Corp. New York-based FGIC Corporation is a privately held insurance holding company. FGIC Corp's main business interest lies in the holdings of the bond insurer Financial Guaranty Insurance Company -- http://www.fgic.com/-- and it depends on dividend payments by FGIC for sustaining its operations. FGIC had stopped paying dividends to parent FGIC Corp. since January 2008. FGIC Corp. filed for Chapter 11 bankruptcy protection on August 3, 2010 (Bankr. S.D.N.Y. Case No. 10-14215). The bond insurer subsidiary did not file for bankruptcy. Paul M. Basta, Esq., Brian S. Lennon, Esq., and Patrick J. Nash, Jr., Esq., at Kirkland & Ellis LLP, serve as counsel to the Debtor. Garden City Group, Inc., is the Debtor's claims and notice agent. The Company disclosed $11,539,834 in assets and $391,555,568 in liabilities as of the petition Date. As reported by the Troubled Company Reporter on August 16, 2010, FGIC filed a plan of reorganization and disclosure statement. The Plan negotiated between FGIC Corp. and its key creditors and shareholders will allow the FGIC Corp. to cancel debt obligations in the aggregate amount of $391.5 million. The Plan provides that holders of general unsecured claims against FGIC Corp. -- which include holders of outstanding debt under FGIC Corp.'s prepetition revolving credit facility and holders of FGIC Corp.'s 6% Senior Notes due 2034 -- will receive substantially all of its $11.5 million in cash and the common stock in Reorganized FGIC Corp. The three largest common shareholders of FGIC Corp., representing over 90% of its common stock, have agreed to the cancellation of their equity interests pursuant to the Plan and have agreed to waive general unsecured claims against the estate in the aggregate amount of $7.2 million. As agreed upon with FGIC Corp.'s major creditors, Reorganized FGIC Corp. will be capitalized with no more than $400,000 to fund its business needs and will continue to operate as an insurance holding company after the Effective Date of the Plan. FM AVIATION: Asks for OK to Use VFS Financing as Cash Collateral ---------------------------------------------------------------- FM Aviation II, LLC, asks for authorization from the U.S. Bankruptcy Court for the Middle District of Florida to use the cash collateral of VFS Financing, Inc. VFS Financing is owed $18,519,694 on account of notes secured by liens on two business-class jet aircraft of the Debtors and the proceeds thereof. Langfred W. White, Esq., at The Law Offices of Langfred W. White, P.A., explains that the Debtor needs to access the cash collateral to fund its Chapter 11 case, pay suppliers and other parties. In exchange for using the cash collateral, the Debtor proposes to grant to VFS, as adequate protection, a replacement lien equal in extent, validity, and priority to the lien held by VFS as of the Petition Date. The Debtor asserts that any interests of VFS will be adequately protected by replacement liens. The Debtor will provide on a weekly basis profit and loss statements on a cash basis to counsel for VFS. About FM Aviation Clearwater, Florida-based FM Aviation, LLC, filed for Chapter 11 bankruptcy protection on October 14, 2010 (Bankr. M.D. Fla. Case No. 10-24832). Langfred W. White, Esq., at the Law Offices Of Langfred W. White, PA, assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate Frank M. Mongelluzzi filed a separate Chapter 11 petition on September 22, 2010 (Bankr. M.D. Fla. Case No. 10- 39289). FX REAL ESTATE: Gets $800,000 from Sale of Pref. Stock & Warrants ----------------------------------------------------------------- FX Real Estate and Entertainment Inc. entered into, on October 18 through October 22, 2010, subscription agreements with accredited investors, pursuant to which the latter agreed to purchase an aggregate of 800 units at $1,000 apiece. Each Unit consists of (x) one share of the Company's Series B Convertible Preferred Stock, $0.01 par value per share, and (y) a warrant to purchase up to a specified number of shares of the Company's common stock at a specified exercise price per share. The number of shares of the Company's common stock underlying each Warrant ranges from 8,090.61 shares to 8,322.93 shares and the exercise price per share at which each Warrant is exercisable ranges from $0.360 to $0.371 due to variances in the Closing Prices referenced in clause (y) of the preceding sentence. The Warrants are exercisable for a period of 5 years. The Company generated aggregate proceeds of $800,000 from the sales of the Units pursuant to the Subscription Agreements. The Company intends to use the proceeds to fund working capital requirements and for general corporate purposes. The Company has created 2,500 shares of Series B Convertible Stock by filing a Certificate of Designation with the Secretary of State of the State of Delaware thereby amending its Amended and Restated Certificate of Incorporation, as amended. The Company has issued and sold thus far an aggregate of 1,750 shares of the Series B Convertible Preferred Stock as part of the Units and the sale of other units. Because there are at least 1,667 shares of Series B Convertible Preferred Stock outstanding, the Company's board of directors is required, at the request of the holders of a majority of the Series B Convertible Preferred Stock, to increase its size by one member and cause such resulting vacancy to be filled by a director designated by such holders. Such holders have not made such a request thus far. About FX Real Estate FX Real Estate and Entertainment Inc. owns 17.72 contiguous acres of land located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada. The Las Vegas Property is currently occupied by a motel and several commercial and retail tenants with a mix of short and long-term leases. On June 23, 2009, as a result of the default under the first mortgage loan, the first lien lenders had a receiver appointed to take control of the property. The Company is headquartered in New York City. The Company's balance sheet as of June 30, 2010, showed $141.8 million in total assets, $515.1 million in total liabilities, and a stockholders' deficit of $373.3 million. * * * As reported in the Troubled Company Reporter on April 15, 2010, LL Bradford, in Las Vegas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company is in default under the mortgage loan, has limited available cash, has a working capital deficiency and will need to secure new financing or additional capital in order to pay its obligations. The Company disclosed in its Form 10-Q for the quarter ended June 30, 2010, that it has no current cash flow and cash on hand as of August 13, 2010, is not sufficient to fund its short-term liquidity requirements, including its ordinary course obligations as they come due. On April 21, 2010, the Company's remaining Las Vegas subsidiary, namely FX Luxury Las Vegas I, LLC, filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Nevada (Case No. 10-17015). GAS CITY: Proposes January 21 Auction for Assets ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Gas City Ltd. intends to auction its gasoline stations on Jan. 21. Gas City filed a motion asking the bankruptcy judge to set up auction and sale procedures calling for the initial submission of bids by Jan. 14, followed by an auction on Jan. 21, and a hearing on Jan. 31 to approve the sale. Gas City said it would sell the business to one or more buyers. According to the report, Gas City owes $29.6 million to secured lender Bank of America NA. A debtor-affiliate, William J. McEnery Revocable Trust, owes another $225 million on mortgages. Gas City guaranteed $145 million of the mortgage debt. Bank of American accelerated the secured debt before the Chapter 11 filing, and the mortgages were in default. Gas City says it owes $10 million for fuel plus $2.5 million to suppliers of the convenience stores. In addition, $2.5 million is owing to creditors who delivered goods within 20 days of bankruptcy and are therefore entitled to full payment. About Gas City Gas City Ltd. is an independent chain of fueling stations with locations in Illinois, Indiana, Florida and Arizona. Frankfurt, Illinois-based Gas City, a family owned and operated company, was started in 1966 by its president and CEO, William McEnery, with a location at 55th and Pulaski streets in Chicago. The Company had more than 50 locations as of January 2009. The Company filed for Chapter 11 bankruptcy protection in Chicago (Bankr. N.D. Ill. Case No. 10-47879) on October 26, 2010. The Company estimated assets of $50 million to $100 million and debts of $100 million to $500 million in its Chapter 11 petition. Mark Thomas, Esq., and Paul Possinger, Esq., at Proskauer Rose, LLP, in Chicago, serve as bankruptcy counsel to the Debtor. Conway MacKenzie will provide staffing services and the firm's A. Jeffrey Zappone will be the chief restructuring officer. Kurtzman Carson Consultants is the noticing and claims agent. An affiliate, The William J. McEnery Revocable Trust Dated 4/22/1993 also filed for Chapter 11 (Bankr. N.D. Ill. Case No. 10-47895). GENERAL MOTORS: New GM Approves Employee Incentive Plans -------------------------------------------------------- General Motors Company disclosed in a regulatory filing with the Securities and Exchange Commission on October 8, 2010, that it approved a 2009 Long-Term Incentive Plan, as amended, a 2009 Salary Stock Plan, as amended and 2010 Short-Term Incentive Plan. The LTIP authorizes awards of restricted stock units and options. GM's Board approved an aggregate fungible pool of shares totaling 25 million for the LTIP, Salary Stock, and the STIP with a maximum grant to any one individual under the plan of 1 million options or 250,000 restricted stock units. The fungible pool assigns a ratio for counting share usage upon issuance of awards: * Stock options and stock appreciation rights granted under the LTIP will count against the pool on a 1:1 ratio; and * Full value awards granted under the LTIP, the SSP, and the STIP will count against the fungible pool on a 2.5:1 ratio for awards granted after October 5, 2010. Under the SSP, the Executive Compensation Committee of the Company's Board of Directors may select employees to receive base salary or other compensation as salary stock subject to a payment schedule over a three-year period. Compensation to be paid in salary stock is converted to RSUs at each quarter-end unless a different issue date is approved by the ECC. Salary stock RSUs are settled ratably in one-third increments on each of the first, second, and third anniversaries of the issue date thereof, or other settlement dates as approved by the ECC. Awards are not forfeitable and may be settled in cash, or stock, if settlement occurs after IPO. Pursuant to the STIP, grants of target awards may be made based on the establishment of one or more performance metrics by the ECC. Target awards may become final awards based on the relative achievement of the selected metrics, and any payment of final awards will be made in cash or restricted stock units subsequent to the determination of the actual performance achieved during the performance period. The maximum final award payable to any one individual under the STIP is $7.5 million, Nick S. Cyprus, vice president, controller and chief account officer of GM, relates. 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) GENTA INCORPORATED: Outstanding Shares Now at 93.33 Million ----------------------------------------------------------- Genta Incorporated reported with the Securities and Exchange Commission that the number of outstanding shares of the Company common stock par value $0.001 as of Oct. 22, 2010, is 93,333,757. About Genta Berkeley Heights, New Jersey, Genta Incorporated (OTCBB: GETA.OB) -- http://www.genta.com/-- is a biopharmaceutical company with a diversified product portfolio that is focused on delivering innovative products for the treatment of patients with cancer. * * * Genta Incorporated's balance sheet at June 30, 2010, showed $24.11 million in total assets, $6.39 million in total current liabilities, $145.17 million in total long-term liabilities, and a stockholders' deficit of $127.44 million. GEO W PARK: SSG Advised Ch 11 Trustee in Sale to Blackstreet ------------------------------------------------------------ SSG Capital Advisors, LLC, acted as the exclusive investment banker to Stan L. Neely as Chapter 11 Trustee of Jackson & Perkins Acquisition, Inc., Geo. W. Park Seed Co, Inc., and their subsidiaries in the sale of substantially all of the assets to an affiliate of Blackstreet Capital. The sale was conducted through a Section 363 auction under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of South Carolina. The sale was confirmed on August 23, 2010, and the transaction closed on August 25, 2010. The Chapter 11 Trustee hired SSG in May 2010, to explore a sale of substantially all of the assets of Jackson & Perkins and Park Seed. SSG immediately began to market the businesses and contacted over 100 potential strategic and financial buyers. In June and July 2010, SSG initiated negotiations on a stalking horse bid with Blackstreet which was approved by the Bankruptcy Court on July 27, 2010. SSG worked diligently during July and August 2010 to re-market the Company and obtain higher and better offers in order to assure the maximum value to the estate. As a result of SSG's marketing efforts, two additional qualified bidders attended an auction for substantially all of the Company's assets on August 23, 2010. The auction ultimately delivered a final price approximately 51% higher than the stalking horse bid, committed Blackstreet (the highest bidder) to retain the Company's employees and significantly increased recoveries to numerous estate constituents. Other professionals who worked on the transaction include: * Stan L. Neely, Chapter 11 Trustee; * Barbara G. Barton, Christine E. Brimm, Adam J. Floyd of Barton Law Firm, P.A., counsel to the Debtor; * Alan M. Noskow of Patton Boggs, LLP, counsel to Blackstreet Capital; * J. William Porter and Katie Trotter of Parker, Poe, Adams and Bernstein LLP and Randy P. Orlik of Cox Castle & Nicholson LLP, counsels to the Secured Creditors; and * Steven K. Kortanek, Rory D. Whelehan and Todd D. Ross of Womble, Carlyle, Sandridge & Rice, PLLC, counsel to the Unsecured Creditors' Committee Headquartered in Greenwood, SC, with rose breeding operations in Somis, CA, Jackson & Perkins and Park Seed are pioneers in direct marketing to consumers. With nearly 140 years of history, the Company has become known for offering ground-breaking and award- winning roses, seeds, plants and other related horticultural items. Jackson & Perkins and Park Seed own and operate multiple online stores and distribute a combined 13 catalog titles, including the very successful Jackson & Perkins Holiday Catalog. About SSG Capital Advisors SSG Capital Advisors, LLC -- http://www.ssgca.com/-- is a wholly owned broker dealer of SSG Holdings, LLC, and a boutique investment bank representing middle market clients in restructuring and special situations, both in and out of bankruptcy proceedings. SSG is a trade name for SSG Capital Advisors, LLC. SSG provides investment banking, restructuring advisory, merger, acquisition and divestiture services, private placement services and valuation opinions. About George W. Park Based in Greenwood, South Carolina, George W. Park Seed Co. Inc., along with four affiliates, filed for Chapter 11 protection on April 2, 2010 (Bankr. D. S.C. Lead Case No. 10-02431). R. Geoffrey Levy, Esq., represents the Company in its restructuring effort. In its schedules, the Company disclosed $8.33 million in assets and $44.79 million in liabilities. Jackson & Perkins-founded in 1872 and famous for its roses- became part of the Park Seed group in 2007. GERALD TROOIEN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Gerald Trooien aka Gerald Lee Trooien Jerry Trooien 965 Summit Avenue St. Paul, MN 55105 Bankruptcy Case No.: 10-37695 Chapter 11 Petition Date: October 25, 2010 Court: U.S. Bankruptcy Court District of Minnesota (St Paul) Judge: Nancy C. Dreher Debtor's Counsel: Douglas W. Kassebaum, Esq. Tel: (612) 492-7292 E-mail: dkassebaum@fredlaw.com James L. Baillie, Esq. Tel: (612) 492-7013 Fax: (612) 492-7077 E-mail: jbaillie@fredlaw.com FREDRIKSON & BYRON, P.A. 200 South Sixth Street, Suite 4000 Minneapolis, MN 55402 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,000,001 to $500,000,000 Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dougherty Funding, LLC Personal Guaranty $58,146,712 90 S. Seventh Street, Suite 4300 of Business Debt Minneapolis, MN 55402 Bank of America CIII Asset Personal Guaranty $44,228,413 Management LLC of Business Debt 5221 No. O'Connor Boulevard, Suite 600 Irving, TX 75039 PNC Bank, NA Personal Guaranty $34,474,886 1900 E. Ninth Street of Business Debt B7YB13221 Cleveland, OH 44114 Wells Fargo Bank Personal Guaranty $32,640,991 201 S. College Street of Business Debt Charlotte, NC 28244 BofA Leasing & Capital, LLC Judgment Entered $23,572,268 One Financial Plaza, Fifth Floor Providence, RI 02903 Bank of America Personal Guaranty $18,311,835 135 S. LaSalle Street, Suite 825 of Business Debt Chicago, IL 60603 PNC Bank Personal Guaranty $14,152,045 249 Fifth Avenue of Business Debt Mail Stop P1POPP811 Pittsburgh, PA 15222 GECPAC Investment II, Inc. Judgment Entered $13,139,253 44 Old Ridgbury Road Danbury, CT 06810 Wells Fargo Equipment Finance Personal Guaranty $7,523,854 1339 Chestnut Street, 10th Floor of Business Debt Mail Code Y1378100 Philadelphia, PA 19107 General Electric Capital Corp Judgment Entered $4,769,850 44 Old Ridgebury Road Danbury, CT 06810 Associated Bank NA Judgment Entered $2,345,601 100 W. Wisconsin Avenue Neenah, WI 54956 Private Bank Minnesota Personal Guaranty $2,048,735 222 S. Ninth Street, Suite 3800 of Business Debt Minneapolis, MN 55402 Key Equipment Finance Personal Guaranty $1,861,672 Portfolio Management Group of Business Debt 1000 S. McCaslin Boulevard Louisville, CO 80027 Wells Fargo Equipment Finance Personal Guaranty $1,476,426 1339 Chestnut Street, 10th Floor of Business Debt Mail Code Y1378100 Philadelphia, PA 19107 First Nat'l Bank of Deerwood Personal Guaranty $1,176,517 P.O. Box 2905 of Business Debt Baxter, MN 56424 Park Midway Bank Personal Guaranty $1,166,177 2265 Como Avenue of Business Debt Saint Paul, MN 55108 Bank of the West Personal Guaranty $930,836 1450 Treat Boulevard of Business Debt Mail Sort NCTRE03H Walnut Creek, CA 94597 Dorsey & Whitney LLP Legal Services $655,613 50 S. Sixth Street, Suite 1500 Minneapolis, MN 55402 Crown Bank Personal Guaranty $505,000 6600 France Avenue S, Suite 125 of Business Debt Minneapolis, MN 55435 Private Bank Minnesota Personal Guaranty $122,559 of Business Debt GETTY IMAGES: Moody's Downgrades Corporate Family Rating to 'Ba3' ----------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating for Getty Images, Inc., to Ba3 from Ba2 and its Probability of Default Rating to B1 from Ba3. Moody's also assigned Ba3 ratings to the company's new senior secured credit facilities. The rating outlook is stable. The downgrade was prompted by the company's plans to pay a special dividend of approximately $495 million to be funded in part by the proposed refinancing of its existing credit facilities. The downgrade reflects Moody's expectation that the company's financial leverage, which is expected to rise as a result of the refinancing, is likely to remain above historical levels based on management's acquisition strategy and shareholder-friendly policies. Getty Images plans to incur incremental debt of approximately $480 million and issue a new $100 million senior secured, first-lien revolver and a new $1,270 million senior secured, first lien term loan to fund the dividend and refinancing transactions. Downgrades: Issuer: Getty Images, Inc. -- Corporate Family Rating, Downgraded to Ba3 from Ba2 -- Probability of Default Rating, Downgraded to B1 from Ba3 Assignments: Issuer: Getty Images, Inc. * NEW $100 million senior secured, first lien revolver due 2015 - Ba3, LGD3-32% * NEW $1,270 million senior secured, first lien term loan due 2016 -- Ba3, LGD3-32% To be withdrawn upon repayment at the close of the transaction: Issuer: Getty Images, Inc. * $75 million senior secured, first lien revolver - to be withdrawn * $970 million senior secured, first lien term loan -- to be withdrawn Ratings Rationale The Ba3 corporate family rating reflects Getty Images' leading market position in the stock imagery market, geographic diversification of its customer base, stable EBITDA margins, and free cash flow generation. Management has a track record of maintaining EBITDA margins even as the company acquired businesses or experienced revenues declines. Despite weakness in global advertising demand which negatively impacted traditional imagery sales notably in 2008 and 2009, Getty Images was able to maintain EBITDA margins above 29%. Getty Images will incur an increase in its debt balances of approximately $480 million to fund its planned dividend. Pro forma for the dividend, the company's debt- to-EBITDA leverage ratio is approximately 4.4x (including Moody's standard adjustments). The Ba3 rating reflects Moody's expectations that the debt-to-EBITDA leverage ratio will decrease to approximately 4.0x by the end of 2011 reflecting single digit revenue growth, sustained EBITDA margins and 9-10% free cash flow as a percentage of debt (or more than $110 million) for 2011. The company's rating also considers the declining trends in its traditional higher quality creative stills business, the increasing supply of lower priced digital imagery, and potential threats from new competitors or technologies; however, Moody's believe growing demand for the company's microstock products is likely to offset weakness in the traditional segment. Risks associated with the potential for additional dividends or a debt financed acquisition constrain the CFR at Ba3. While the rating reflects Moody's expectation that Hellman & Friedman LLC and management will continue to demonstrate financial discipline by reducing leverage, Moody's believe event risk is high based on the company's acquisitive nature and shareholder-friendly financial policies, and that, as a result, leverage could rise above current levels over the rating horizon. The stable outlook reflects Moody's expectation that demand for the company's microstock products and other services will largely offset softness in the company's traditional imagery business. Moody's also expect the company's consolidated performance will improve at least modestly as the economy recovers and that free cash flow will be applied to reduce debt balances. The stable outlook reflects Moody's expectation that the debt-to-EBITDA leverage ratio will not exceed 5.0x (incorporating Moody's standard adjustments). Ratings could face downward pressure if overall performance were to deteriorate resulting in declining revenues, erosion in EBITDA margins or reduced cushion to financial covenants. Another leveraging event, including a sizable debt financed acquisition or distribution, could also result in a downgrade. While unlikely due to the company's shareholder-friendly policies demonstrated by the proposed $495 million dividend, ratings could be considered for an upgrade if debt-to-EBITDA leverage ratios were to be sustained below 3.0x (incorporating Moody's standard adjustments) in combination with the stabilization of the traditional imagery business and organic growth across operating segments. The last rating action was on June 9, 2008, when Moody's assigned ratings to new debt instruments, as well as a CFR and PDR, in conjunction with its acquisition by Hellman & Friedman LLC. Getty Images, Inc., is a leading creator and distributor of still imagery, footage and multimedia products, as well as a recognized provider of other forms of premium digital content, including music. The company is headquartered in Seattle, Washington. GETTY IMAGES: S&P Assigns 'BB-' Rating to $1.37 Bil. Loan --------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned preliminary issue-level and recovery ratings to Getty Images Inc.'s proposed $1.37 billion first-lien senior secured credit facility. The preliminary issue-level rating is 'BB-' (at the same level as the corporate credit rating on the company). The preliminary recovery rating is '4', indicating S&P's expectation of average (30% to 50%) recovery in the event of a payment default. The company plans to use the proceeds to repay its existing senior secured credit facilities and fund a distribution to its shareholders. At the same time, S&P affirmed its 'BB-' corporate credit rating on Getty Images. The outlook is stable. The facility consists of a $100 million revolving credit facility due 2015 and a $1.27 billion term loan due 2016. "The 'BB-' corporate credit rating reflects S&P's expectation that Getty Images' financial profile will become somewhat more aggressive and that its assessment of a weak business profile focuses on secular pressures related to digital migration," said Standard & Poor's credit analyst Tulip Lim. "It also reflects risks related to the company's limited business diversity and vulnerability to economic cyclicality." The outlook remains stable. GLOBAL BUSINESS: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Global Business Services, Inc. 1224 E. Broadway, Suite 205 Glendale, CA 91205 Bankruptcy Case No.: 10-55759 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: M. Jonathan Hayes, Esq. LAW OFFICE OF M JONATHAN HAYES 9700 Reseda Bl Ste201 Northridge, CA 91324 Tel: (818) 882-5600 Fax: (818) 882-5610 E-mail: jhayes@polarisnet.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 four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-55759.pdf The petition was signed by Arbi Grigoryan, vice president. GOODMAN GLOBAL: Moody's Cuts Rating on $250 Mil. Loan to 'B1' ------------------------------------------------------------- Moody's Investors Service has downgraded the rating of Goodman Global Inc.'s new proposed $250 million 1st lien revolving credit facility and $1.5 billion 1st lien term loan B to B1 from Ba3, and affirmed the B3 rating on the company's proposed $275 million 2nd lien term loan. The company's B1 Corporate Family and Probability of Default ratings have been affirmed. The ratings outlook remains negative. Ratings Rationale The downgrade of the ratings for the proposed 1st lien revolver and term loan B result from a shift in the proposed capital structure, with $100 million of debt moving from the proposed 2nd lien term loan (now $275 million versus $375 million previously) into the 1st lien term loan B (now $1.5 billion versus $1.4 billion previously). As a result of this shift, consistent with Moody's Loss Given Default methodology, the rating on the 1st lien revolver and term loan B were lowered to B1 from Ba3. The B3 rating on the proposed 2nd lien term loan did not change. Goodman's B1 Corporate Family Rating reflects the company's competitive market position, established distribution, dealer network for HVAC systems, and credit metrics. EBITA margins at 18.5% for latest twelve months through June 30, 2010 were strong particularly given the challenging economic conditions. Proceeds from the refinancing, along with cash on hand, will be used to fund a $366 million dividend to shareholders. Although the proposed transaction increases the company's leverage to approximately 5x, Goodman has a track record of generating positive cash flow to service the debt. Moreover, with an improving earnings outlook, leverage metrics are not expected to exceed those seen as recently as December of 2009 when the company incurred debt to pay a similar dividend to shareholders. Cumulatively, $776 of dividends have been paid over the last year, and the increased leverage associated with these payments results in the negative rating outlook being sustained. Although the company should generate positive free cash flow over the next 12 months, the negative outlook considers the aggressive financial policy indicated by the cumulative dividend payments while the company's end markets are still in the early stages of recovery. Factors which might pressure the ratings down include erosion in the company's financial performance or further shareholder distributions that increase leverage or negatively impact the company's liquidity. If Debt/EBITDA were to remain above 5.0x sustainably or EBITA/interest expense were to fall below 1.5x, future rating actions could ensue. A rating upgrade or stable outlook is unlikely in the near term due to the leveraging nature of the dividend transaction. Future actions that could result in a positive rating action include operating results which show debt/EBITDA nearing 4.0x and EBITA/interest expense over 2.0x (all ratios adjusted per Moody's methodology). These ratings/assessments have been affected: Goodman Global, Inc.: -- Corporate Family Rating, affirmed B1; -- Probability of Default Rating, affirmed B1; -- $250 million senior secured 1st lien revolver due 2015, downgraded to B1 (LGD3, 43%) from Ba3 (LGD3, 41%); -- $1.5 (previously $1.4) billion senior secured 1st lien term loan B due 2016, downgraded to B1 (LGD3, 43%) from Ba3 (LGD3, 41%); -- $275 (previously $375) million senior secured 2nd lien term loan due 2017, affirmed at B3 (LGD6, 91%). The rating on Goodman Global, Inc.'s existing term loan, as well as the rating on Goodman Global Group Inc.'s senior discount note will be withdrawn at the close of the transaction. The last rating action on Goodman Global, Inc. was on October 6, 2010, when the company's B1 CFR, PDR, and negative outlook were affirmed. Goodman, located in Houston, Texas, is a domestic manufacturer of heating, ventilation and air conditioning products for residential and commercial use. Total revenue for the LTM period through June 30, 2010, was approximately $2.0 billion. HACIENDA GARDENS: Has Access to Cash Collateral Until Nov. 4 ------------------------------------------------------------ The Hon. Charles Novack of the U.S. Bankruptcy Court for the Northern District of California has continued a hearing until November 4, 2010, at 10:00 a.m., to consider Hacienda Gardens, LLC's continued access to the cash collateral of its secured creditors. The Debtor's secured creditors are First Horizon Home Loans, a Division of First Tennessee Bank National Association, successor- by-merger to First Horizon Home Loan Corporation, JP Morgan Chase Bank National Association, and the Martha E. Sanfilippo Survivor's Trust. The Court previously granted the Debtor access to $165,814 of the cash collateral until November 4 to operate its real property. As adequate protection for any diminution in value of the lenders' collateral, the Debtor will grant the secured creditors replacement liens on rents generated from each secured creditor's respective collateral; superpriority administrative expense claim; and payments of $45,000 to FHB, $20,661 to Chase, and $8,944 to Heritage Bank of Commerce. About Hacienda Gardens, LLC Cupertino, California-based Hacienda Gardens, LLC, owns and operates a commercial shopping center in San Jose, California. The Debtor leases the Center under the Ground Leases from the Rajkovich Family who own the underlying land. The Company filed for Chapter 11 bankruptcy protection on May 24, 2010 (Bankr. N.D. Calif. Case No. 10-55423). Robert G. Harris, Esq., and Roya Shakoori, Esq., at the Law Offices of Binder and Malter, assist the Debtor in its restructuring effort. The Company estimated assets and debts at $10 million to $50 million as of the petition date. HEATHERWOOD HOLDINGS: Sale Pact Limits Use of Golf Course Property ------------------------------------------------------------------ In Heatherwood Holdings, LLC., v. First Commercial Bank, Jonathan L. Kimerling, and HGC, Inc., case no. No. 1091016 (Ala. Sup. Ct.), the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division, certified three questions to the Alabama Supreme Court: "1. Whether Alabama law recognizes or will imply a restrictive covenant as to a golf course constructed as part of a residential development consistent with a case with similar facts, Shalimar Ass'n v. D.O.C. Enters., Ltd., 688 P.2d 682 (Ariz. Ct. App. 1984)? "2. Whether Alabama law recognizes an implied restrictive covenant that runs with the land when the Deed conveying the property did not contain an express covenant or restriction but a separate Agreement recorded simultaneously with the Deed and recorded immediately thereafter provided that 'Buyer covenants that it will operate the purchased assets [the real property] as a golf course for the twenty-five (25) years from the date of execution of this Agreement'? "3. Whether Alabama law permits the owner of real property to re-sell that property for any use, not limited to the use of a golf course, when the Deed conveying the property did not contain an express covenant or restriction but a separate Agreement recorded simultaneously with the Deed and recorded immediately thereafter provided that 'Buyer covenants that it will operate the purchased assets [the real property] as a golf course for the twenty-five (25) years from the date of execution of this Agreement'?" In an opinion dated October 22, 2010, Justice Patricia M. Smith agrees with the Bankruptcy Court's statement that the facts in Heatherwood are similar to the facts in Shalimar, at least insofar as those facts concern most of the matters surrounding the initial development of the property. The Supreme Court declines to answer the second and third questions. Chief Justice Sue Bell Cobb, and Justices Champ Lyons Jr., Thomas A. Woodall, Lyn Stuart, Michael F. Bolin, Tom Parker, and Greg Shaw, concur. Justice Glenn Murdock concurs in the result. Heatherwood Holdings LLC operated the Heatherwood golf course. HH began having financial problems and in late 2008 notified the former owner HGC Inc., that the golf course was about to cease operation. On January 6, 2009, HH filed for Chapter 11 bankruptcy protection, seeking to sell the property for any use, not limited to the golf course. HGC, which was formed by members of the Heatherwood golf course/club and homeowners in the area, objected, alleging there is an implied restrictive covenant that limits use of the property. A copy of the Supreme Court's opinion dated October 22, 2010, is available at http://is.gd/glGc6from Leagle.com. HOME SERVICES: Loses Contract with HRA, Slashes 2,065 Jobs ---------------------------------------------------------- Barbara Benson, writing for Crain's New York Business, reports that Home Services Systems Inc. lost its contract with New York City's Human Resources Administration three weeks ago. The company laid off 2,065 workers as a result. The workers are members of 1199 SEIU. Most of those affected probably will be offered jobs at Home Service Systems' successor, according to the report. Crain's reports that Home Service Systems could shut down as a result of the loss of the contract, unless HRA reconsiders. The company is "considering its options in the aftermath" of the contract loss, a spokesman said. A Human Resources Administration spokeswoman did not provide information on the contract by deadline. Based in Astoria, Queens, in New York, Home Service Systems provides home-attendant services to almost 1,900 Medicaid-eligible clients in Queens, Brooklyn, Manhattan and the Bronx. Home attendants provide personal-care services such as feeding; assisting in bathing, toileting and grooming; and light housekeeping chores such as laundry and meal preparation. It is affiliated with HANAC Inc., a Manhattan-based social-services agency. HORMI HOLDING: All Three Properties on the Market ------------------------------------------------- Dave Canfield at The Record reports that Hormi Holding Company, which is under Chapter 11 protection, said it has more than $4.7 million in assets -- nearly all on account of its three real estate properties -- and about $2 million due to creditors. According to the Record, three properties owned by the company in Troy were placed up for sale, including the Daisy Baker's building at 33 Second St., which is listed at $2.25 million. The other two properties are 17 First St., which houses the bar Footsy Magoos, and 1 Monroe St., the former Bruno Machinery building on the South Troy waterfront. They are on the market at $1.795 million and $595,000, respectively. According to the report, the three properties owe in excess of $275,000 in back taxes to the city of Troy, according to documents filed seeking bankruptcy protection. Their state and federal taxes are paid up to date. Based in Central Isip, New York, Hormi Holding Company Inc. filed for Chapter 11 bankruptcy protection on Oct. 8, 2010 (Bankr. C.D. Calif. Case No.:10-22788). Judge Maureen Tighe presided the case. Peter M. Lively, Esq., at the Law Offices of Peter M. Lively, represents the Debtor. The Debtor estimated assets of between $1 million and $10 million, and debts of between $500,000 and $1 million. HARBOR REAL ASSET: Proposes Ray Quinney as Chapter 11 Counsel ------------------------------------------------------------- Harbor Real Asset Fund, LP, asks the U.S. Bankruptcy Court for the District of Utah for permission to employ Ray Quinney & Nebeker P.C., as general bankruptcy counsel. The Debtor previously requested authorization to engage Parsons Kinghorn Harris, P.C. to represent it as its general bankruptcy counsel but the Court declined to approve the engagement because PKH also was representing affiliate HRAF Holdings, LLC, in a separate Chapter 11 case. The Court believes separate counsel must represent the Debtors. RQN will, among other things: -- assist the Debtor in analyzing and pursuing possible business reorganizations; -- review, analyze and advise the Debtor regarding claims or causes of action to be pursued on behalf of its estate; and -- review, analyze and advise the Debtor regarding issues involving the Debtor and HRAF. Michael Johnson, a shareholder and director of RQN, tells the Court that RQN has not received a retainer from the Debtor, but understands that PKH currently holds an $11,612 retainer to secure partial or total payment of RQN's allowed fees and costs. Mr. Johnson adds that his hourly rate is $345. The hourly rates of other RQN personnel are: Shareholders $210 to $345 Of Counsels $255 to $290 Associates $160 to $220 Paralegals $115 to $135 Mr. Johnson assures the Court that RQN is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Johnson can be reached at: Michael R. Johnson, Esq. RAY QUINNEY & NEBEKER P.C. 36 South State Street, 14th Floor P.O. Box 45385 Salt Lake City, UT 8415-0385 Tel: (801) 532-1500 Fax: (801) 532-7543 E-mail: mjohnson@rqn.com About Harbor Real Asset Fund L.P. Midvale, Utah-based HRAF Holdings, LLC, filed for Chapter 11 bankruptcy protection on September 9, 2010 (Bankr. D. Utah Case No. 10-32433). Affiliate Harbor Real Asset Fund L.P. filed for Chapter 11 bankruptcy protection on September 9, 2010 (Bankr. D. Utah Case No. 10-32436). The two cases are consolidated and jointly administered under the case of HRAF. The Debtors estimated their assets and debts at $10 million to $50 million each, as of the Petition Date. Parsons Kinghorn Harris, P.C., serves as general bankruptcy counsel for HRAF. HILEX POLY: S&P Changes Outlook to Negative, Affirms 'B' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised the outlook on Hilex Poly Co. LLC to negative from stable and affirmed the 'B' preliminary corporate credit rating. Based on the revised preliminary terms and conditions, the 'B' preliminary issue-level rating and '3' preliminary recovery rating on the company's proposed $135 million first-lien secured term loan are unchanged. These ratings indicate S&P's expectation that term loan lenders would experience meaningful (50% to 70%) recovery in a payment default scenario. Although the company is downsizing its proposed term loan to $135 million from $160 million, the interest rate on the term loan is meaningfully higher, and the scheduled term loan amortization is increasing to 10% from 1%. Hilex plans to use proceeds from the $135 million term loan to repay existing debt, fund a dividend to shareholders, and for ongoing working capital purposes. As part of the financing plan, the company is also placing an unrated $25 million asset-based revolving credit facility. The outlook revision to negative incorporates the company's less than adequate liquidity after the downsizing of its term loan. "The preliminary ratings on Hilex reflect a vulnerable business position in a niche segment for plastic bags and film products used mainly in high-volume grocery stores, and an aggressive financial profile that incorporates less than adequate liquidity, limited covenant headroom, and minimal free cash flow after debt amortization requirements," said Standard & Poor's credit analyst Liley Mehta. The negative outlook reflects the potential for a lower rating if there is any deterioration in the company's liquidity position. Operational challenges could occur if the company experiences unexpected volume declines owing to a shift in consumer preference or legislation banning plastic bags in other large markets, increased competition from imports, or a significant decline in business from a key customer. S&P could lower the ratings if availability under the revolving credit facility declines meaningfully and if the EBITDA cushions under covenants deteriorate to single-digit percentage levels. S&P could also lower the ratings if debt increases beyond current levels, free cash flow turns negative for an extended period, or if the key credit metric of funds from operations to total debt is below 12% on a consistent basis. In addition, S&P has reservations about financial policy, particularly in light of the proposed debt-financed dividend recapitalization and acquisition- driven growth strategy. S&P could revise the outlook to stable if the company's cost structure improves, liquidity and free cash generation strengthen meaningfully, and the company maintains a comfortable cushion with respect to covenant compliance. HOSPITALITY PROPERTIES: S&P Cuts Preferred Stock Rating to 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Hospitality Properties Trust to 'BBB-' from 'BBB'. Concurrently, S&P lowered its rating on the company's senior unsecured notes to 'BBB-' from 'BBB', affecting roughly $1.97 billion in rated securities. S&P also lowered its rating on the company's preferred stock to 'BB' from 'BB+'. S&P revised its outlook on HPT to stable from negative. "The downgrade reflects S&P's view that the high volatility HPT's tenants' businesses--travel centers and hotels--demonstrated during the recent business cycle will be an ongoing feature of these businesses," said Standard & Poor's credit analyst Elizabeth Campbell. "While S&P acknowledge that HPT's financial metrics have remained fairly stable to date, due to structural supports from its conservative lease and management contract structure, S&P believes HPT may have difficulty maintaining current rent levels given the weakness in its tenants' underlying businesses, and the company could face earnings erosion from rent shortfalls, downward rent renegotiations, or asset impairment charges over the next business cycle." Additionally, Standard & Poor's believe prospects for favorable- yielding investment opportunities -- to offset potential future earnings declines -- could be limited due to strong competition for acquisitions. S&P expects operating performance for HPT's hotel tenants to improve slowly, but that rent coverage levels will remain below 1x through 2011. S&P also expects tenant TA's business to remain weak and its earnings volatile. However, S&P has tolerance at the lower rating level for protracted rent coverage weakness. In the longer term, S&P would consider lowering the ratings further if lease renegotiations result in significant declines in rents or tenant credit quality continues to erode. Conversely, ratings improvement would be contingent on strong and stable performance from TA and a recovery in lodging tenant rent coverage that drives sustained improvement in HPT's rent and EBITDA interest coverage. IDEAL DIAMOND: Files for Bankruptcy Amid Infringement Fight ----------------------------------------------------------- Ideal Diamond Solutions, Inc., filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 10-50037) on October 25, with assets of between $50,000 and $100,000 but liabilities totaling $100,000 to $500,000. Laura Mortkowitz, writing for Crain's New York Business, reports that in March 2010, Blue Nile filed a copyright infringement lawsuit against IDS, claiming it copied photographs, pages and features and used them on other jewelers' Web sites. Crain's reports that David Brown, owner of Kilman Jewelers in Smyrna Beach, Fla., has been dragged into the lawsuit because Ideal Diamond made a demo site using what Blue Nile claims is its content. Mr. Brown had no interest in a site, but he agreed to see the demo they could create. According to Crain's, despite Ideal Diamond's promises to take care of the legal fees and ask Blue Nile to drop Kilman from the lawsuit, Mr. Brown said, six months later Ideal Diamond told Kilman to get its own legal representation. Brooklyn-based Ideal Diamond Solutions is a two-year-old company that built customized Web sites for independent jewelers. Crain's notes it was the brainchild of industry veteran Larry Chasin, who got his start with his family's jewelry business before working at Kwiat Inc. for 11 years. In 2008, Mr. Chasin founded Ideal Diamond Solutions to "level the online playing field, and to empower the independent retail jeweler," according to his Web site. IRH VINTAGE: Can Continue Using Cash Collateral ----------------------------------------------- IRH Vintage Park Partners, LP, et al., and obtained interim authorization from the Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas to use cash collateral until December 2010. Capmark Bank allegedly holds liens on the Debtors' assets. In July 2007, Debtors IRH and VPI General Partner, LLC's entered into a loan agreement with Capmark Bank, which provided, among other things, that Capmark loan the Debtor $41 million for the purchase of Vintage Park Apartment Homes. The Loan Agreement was subsequently modified by written agreement dated June 2009, and executed by the Debtor and Capmark, and as further modified pursuant to a second loan modification agreement dated January 2010, executed by the Debtor and Capmark. The Loan matured in July 2010. As of the Petition Date, the outstanding indebtedness owed to Capmark is approximately $41 million. T. Josh Judd, Esq., at Hoover Slovacek LLP, explained that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The Debtors will use the collateral pursuant to a weekly budget, a copy of which is available for free at http://bankrupt.com/misc/IRH_Vintage_cashcollateral_budget.pdf The IRH Debtor will establish a debtor in possession account for deposit of all receipts by it after the Petition Date and the deposits will not be used for any purpose not specifically authorized by court order and won't be commingled with any other funds. Tenant security deposits will be maintained in a separate debtor in possession account and the funds won't be considered cash collateral. The IRH Debtor is authorized to pay/return tenant security deposits in the ordinary course of business. As partial adequate protection for use by IRH Debtor of the cash collateral and for any diminution in the value of the cash collateral, Capmark is granted an extension of its prepetition liens to all postpetition assets of the estate with the same force and effect and in accordance with the priorities of the liens of Capmark that attach to the prepetition assets. As further partial adequate protection, the IRH Debtor will: (i) deposit with Capmark property tax escrow payments of $106,120 per month on October 15, November 15, December 15, 2010, and January 15, 2011, and the funds will be held in escrow for payment of the 2010 property taxes; (ii) deposit with Capmark, with the first payment to be made to Capmark by November 1, 2010, and on the first day of each month thereafter, insurance escrow payments of $10,915, and the funds will be held in escrow by Capmark for payment of insurance on the property; and (iii) pay to Capmark $75,000 per month, with the first payment to be made to Capmark by November 1, 2010, and on the first day of each month thereafter through the termination date. The IRH Debtor will give notice of this court order to all creditors and parties in interest. The parties will be notified that they have 21 days from the date of mailing of the notice to object he entry of this court order and the proposed adequate protection payments, in which case a hearing on this court order will be held. This court order will be a preliminary order during the 21-day period. If no objections are timely filed and served, this court order will become the final court order. Birmingham, Alabama-based IRH Vintage Park Partners, L.P., dba Vintage Park Apartment Homes, is a limited partnership that owns and operates a large 324 unit upscale gated apartment community located at 15727 Cutten Road, in northwest Houston. IRH is owned by VPI General Partner, LLC, its 1% general partner and Vintage Park Investments, LLC, its 99% limited partner. About IRH Vintage IRH Vintage filed for Chapter 11 bankruptcy protection on September 2, 2010 (Bankr. S.D. Texas Case No. 10-37503). Edward L Rothberg, Esq., Melissa Anne Haselden, Esq., and T. Josh Judd, Esq., at Hoover Slovacek, LLP, assist the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million as of the petition date. ISLAND ONE: Can Continue Using Cash Collateral Until Nov. 17 ------------------------------------------------------------ Island One, Inc., et al., obtained interim authorization from the Hon. Karen S. Jennemann of the U.S. Bankruptcy Court for the Middle District of Florida to use the cash collateral of Textron Financial Corporation and Liberty Bank, N.A., until 5:00 p.m. (ET) on November 17, 2010. As reported by the Troubled Company Reporter on September 21, 2010, the Debtors sought and obtained interim authorization from the Court to use the cash collateral until 5:00 p.m. (ET) on October 8, 2010. Elizabeth A. Green, Esq., at Baker & Hostetler LLP, explained that the Debtors need the money to fund their Chapter 11 case, pay suppliers and other parties. The Debtors will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/ISLAND_ONe_budget.pdf Each creditor with a security interest in the cash collateral will, to the extent of the diminution in value of cash collateral, have a perfected post-petition lien against the cash collateral to the same extent and with the same validity and priority as the creditor's prepetition lien, and in all of the Debtors' pre- petition and post-petition assets of every kind, nature, and description, tangible and intangible, now existing or hereafter arising. If the Replacement Liens and other forms of adequate protection are insufficient to provide adequate protection for the secured creditors, the Debtor will grant each of the secured creditors allowed superpriority claims against the Debtors' estates. The Debtors will maintain insurance coverage for their properties in accordance with the obligations under the loan and security documents with the secured creditors. The Court has set a final hearing for November 17, 2010, at 9:30 a.m. (ET), on the Debtor's request to use cash collateral. Orlando, Florida-based Island One, Inc., filed for Chapter 11 bankruptcy protection on September 10, 2010 (Bankr. M.D. Fla. Case No. 10-16177). Elizabeth A. Green, Esq., at Baker & Hostetler LLP, assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $100 million to $500 million as of the Petition Date. ISLAND ONE: Creditors Committee Taps Bush Ross as Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Island One, Inc., et al., asks the U.S. Bankruptcy Court for the Middle District of Florida for permission to employ Adam Lawton Alpert, Esq., a shareholder, and Bush Ross, P.A. as its general counsel. Bush Ross will, among other things: a. give the Committee legal advice with respect to its powers and duties; b. consult with the Committee and the Debtors regarding the administration of the bankruptcy case; and c. investigate the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtors' business, and any other matter relevant to the case or to the formulation of a plan; The Court document did not mention about Bush Ross' compensation for services to be rendered. To the best of the Committee's knowledge, Bush Ross and Mr. Alpert, are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. About Island One, Inc. Orlando, Florida-based Island One, Inc., filed for Chapter 11 bankruptcy protection on September 10, 2010 (Bankr. M.D. Fla. Case No. 10-16177). Elizabeth A. Green, Esq., at Baker & Hostetler LLP, assists the Debtor in its restructuring effort. The Debtor disclosed $155,100,767 in assets and $310,897,452 in liabilities as of the Petition Date. ISLAND ONE: Files Schedules of Assets and Liabilities ----------------------------------------------------- Island One, Inc., filed with the U.S. Bankruptcy Court for the Middle District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $25,413,232 B. Personal Property $129,687,535 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $114,165,670 E. Creditors Holding Unsecured Priority Claims $1,036,344 F. Creditors Holding Unsecured Non-priority Claims $195,695,438 ----------- ----------- TOTAL $155,100,767 $310,897,452 IOI Funding I, LLC, a debtor-affiliate, disclosed total assets of $9,230,309, and total liabilities of $7,265,160. About Island One, Inc. Orlando, Florida-based Island One, Inc., filed for Chapter 11 bankruptcy protection on September 10, 2010 (Bankr. M.D. Fla. Case No. 10-16177). Elizabeth A. Green, Esq., at Baker & Hostetler LLP, assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $100 million to $500 million as of the Petition Date. ISLAND ONE: Plan Contemplates Sale of Assets to Pay Creditors ------------------------------------------------------------- Island One, Inc., et al., submitted to the U.S. Bankruptcy Court for the Middle District of Florida a 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 contemplates a sale process under which: (i) some or all of the Debtors' assets will be sold to the highest and best bidder followed by a distribution of the proceeds to creditors based upon the priorities; or (ii) the equity interests in the Reorganized Debtors would be sold and transferred in connection with a confirmable reorganization plan outlined in the prevailing equity bid. The ultimate Plan treatment is completely dependent upon the outcome of the sale process. The Debtors intend to retain Western Reserve Partners LLC as postpetition investment bankers in order to assist in the search for a purchaser of some or all of the assets or for an equity partner. The Debtors, the Chief Sale Officer, and Western have already commenced updating a data room to facilitate the sale and has begun the process of marketing its assets to those parties reasonably known by the Debtors to have a potential interest in purchasing the Debtors' assets or making an equity investment in one or more of the Debtors. In the event, certain classes may be paid from proceeds of the sale in accordance with the priorities, and others may be subject to treatment outlined in the winning equity bid. The Debtors, Bay Harbour Management, and lenders Textron Financial Corporation and Liberty Bank are continuing discussions which may lead to a motion seeking approval of Bay Harbour Management as a "stalking horse" bidder for the equity interests in the Debtors. In such event, the Debtors may seek to further amend or modify this Disclosure Statement and the Plan. Any party with an interest in making a bid on the Debtors' equity interest under the Plan or otherwise bidding on the Debtors' assets in whole or part must deliver to Debtors and Debtors' counsel a letter of interest and a bid deposit equal to the lesser of $500,000 or 10% of the minimum bid price set by the Debtors. Executed purchased agreements by proposed bidders are due December 3. If there are multiple bidders for the assets, an auction will be held December 10. The Plan also provides for these terms: -- To the extent assets securing an allowed secured claim are sold for cash as part of the Sale Process, the holder of the secured claim will be entitled to payment from the proceeds of the sale. -- In the event the assets securing an allowed secured claim are sold in connection with an equity purchase, the Plan will be modified or amended to provide for the proposed payment to the holder of the allowed secured claim. -- In the event the assets securing an allowed secured claim are not sold for cash or in connection with an equity purchase, the debtors will transfer the collateral back to the holder of the allowed secured claim or into a liquidating trust for the holder's benefit. -- Holders of allowed unsecured claims will be entitled to payment from the proceeds of any cash sale. In the event the assets of the debtors are sold in connection with an equity purchase, the Plan will be modified or amended to provide for the proposed payment to holders of allowed unsecured claims. In the event the debtors' assets are not sold, allowed unsecured creditors will receive no distribution. --- Allowed Equity Interests will be cancelled. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/ISLANDOne_DS.pdf About Island One, Inc. Orlando, Florida-based Island One, Inc., filed for Chapter 11 bankruptcy protection on September 10, 2010 (Bankr. M.D. Fla. Case No. 10-16177). Jimmy D. Parrish, Esq., and Elizabeth A. Green, Esq., at Baker & Hostetler LLP, serve as bankruptcy counsel to the Debtor. In its schedules, the Debtor disclosed $155,100,767 in assets and $310,897,452 in liabilities as of the Petition Date. ISLAND ONE: U.S. Trustee Forms Three-Member Creditors Committee --------------------------------------------------------------- Donald F. Walton, the U.S. Trustee for Region 21, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases of Island One, Inc., et al. The Creditors Committee members are: 1. Kenneth Campbell 8400 Darlene Dr. Orlando, FL 32836 Tel: (407) 766-0523 E-mail: ken.campbell@myeetravel.com 2. Virgin Islands Design Build Group, LLC c/o Peter Locke 5031 Cotton Valley 55 H&C Christiansted, St. Croix, VI 00820 Tel: (340) 718-1400 Fax: (340) 718-8002 E-mail: plockel@msn.com 3. Peninsula Resort Management, LLC c/o Marsha G. Madorsky 100 SE 2d Street, Suite 4200 Miami, FL 33133 Tel: (305) 588-0824 Fax: (305) 530-0055 E-Mail: mmadorsky@carltonfields.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Island One, Inc. Orlando, Florida-based Island One, Inc., has provided timeshare vacation experiences through resort development and hospitality management since 1981 when it was founded by Deborah Linden and the Springer family. Today it owns and manages eight resorts in Florida and one resort in St. Croix U.S. Virgin Islands. Its vacation club, The Club Navigo, includes 29 resort destinations throughout the United States, the Caribbean, Latin America and Europe. Island One and its affiliates filed for Chapter 11 bankruptcy protection on September 10, 2010 (Bankr. M.D. Fla. Lead Case No. 10-16177). Jimmy D. Parrish, Esq., and Elizabeth A. Green, Esq., at Baker & Hostetler LLP, serve as bankruptcy counsel to the Debtor. In its schedules, the Debtor disclosed $155,100,767 in assets and $310,897,452 in liabilities as of the Petition Date. JACQUELINE AMRIKHAS: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Jacqueline Amrikhas 180 Harbor Drive, Suite 101 Sausalito, CA 94965 Bankruptcy Case No.: 10-14111 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: Craig K. Welch, Esq. LAW OFFICE OF CRAIG K. WELCH 809 Petaluma Blvd. N Petaluma, CA 94952 Tel: (707) 782-1790 E-mail: cwelch@craigwelchlegal.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 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb10-14111.pdf KEYBANK NA: Fitch Puts B Support Floor Rating on Watch Negative --------------------------------------------------------------- Fitch Ratings has placed the Support and Support Floor ratings of KeyBank, NA, on Rating Watch Negative following initial interpretation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its implications for systemically important financial institutions. KeyBank, NA's Issuer Default Rating and issue-level ratings are currently above their Support Floor Ratings as the IDR and issue-level ratings reflect the company's stand-alone strength, and do not rely on any implied government support. As such, KeyBank, NA's IDR and issue-level ratings are unaffected by the action. The ratings of KeyBank, NA's parent company KeyCorp and its other affiliates are also unaffected. Similar actions have been taken for other large U.S. banks. Refer to Fitch's press release dated Oct. 22, 2010, titled 'Fitch: U.S. FI Support Ratings Potentially Impacted by Proposed FDIC Rules' for additional information. Fitch's ratings of banks have always encompassed a view of intrinsic creditworthiness expressed through the Individual rating, while Fitch's view of Support has been expressed separately through its Support framework. Support Ratings communicate Fitch's judgment on whether the bank would receive support from the U.S. Government should this become necessary. The recently enacted legislative framework and potential regulatory rulemaking primarily affect Fitch's sovereign Support framework. Fitch places these ratings on Rating Watch Negative: KeyBank, NA -- Support '4'; -- Support Floor 'B'. KOOSHAREM CORP: S&P Downgrades Corporate Credit Rating to 'CCC-' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Koosharem Corp. to 'CCC-' from 'CCC'. The rating outlook is negative. All existing issue-level ratings on Koosharem's debt were also lowered by one notch in conjunction with the corporate credit rating downgrade. The recovery ratings on the company's debt issues remain unchanged. Total debt outstanding was $588 million as of Sept. 5, 2010. "The downgrade reflects Koosharem's continued delays in delivering its 2009 audited financial statements, and the risk that company's first-lien lenders could accelerate their loans if the company is not able to deliver financial statements over the near term," explained Standard & Poor's credit analyst Hal Diamond. "The rating also considers Koosharem's strained liquidity, as first- lien lenders have frozen its access to borrowing." Koosharem previously had proposed the exchange of its $100 million second-lien term loan into equity, but this plan was not consummated and was cancelled in February 2010. S&P would further lower its corporate credit rating if S&P becomes convinced that the company will seek to restructure its debt for equity again. In S&P's rating methodology, Standard & Poor's considers the completion of a debt-to-equity exchange, even with investor consent, to be tantamount to a default when the nonpayment is a function of the borrower being in financial distress. S&P views Koosharem's business risk profile as vulnerable because of its position as a small player in the highly fragmented, competitive, and cyclical temporary staffing industry. Slightly less than half of Koosharem's revenues are generated in California, which was severely affected by weak local market conditions in 2009. The company has a highly leveraged financial profile, in S&P's view, because of very high debt usage. Lease-adjusted debt to EBITDA declined to a still-high 7.8x in the 12 months ended Sept. 5, 2010, from 8.2x at the end of 2009. Lease-adjusted EBITDA coverage of interest expense declined to 1.6x from 2.3x over the same period because of increased pricing under the credit agreements, which were amended in December 2009 and again in May 2010. Interest coverage is likely to decline over the near term due to a further increase in loan pricing as a result of the company's inability to deliver financial statements. EBITDA conversion into discretionary cash flow was roughly 40% in the 12 months ended Sept. 5, 2010, versus 15% in 2009, as working capital (especially an increase in other liabilities) has been a source of funds. However, S&P expects discretionary cash flow will be minimal in full-year 2010, due to higher interest expense, receivables funding requirements, and S&P's expectation that the company's working capital cash generation cannot be sustained. KRONOS INT'L: Posts $15.4-Mil. Net Income in Sept. 30 Quarter ------------------------------------------------------------- Kronos International Inc. filed its quarterly report on Form 10-Q with the Securities and Exchange Commission, reporting net income of $15.4 million on $254.4 million of net sales for the three months ended Sept. 30, 2010, compared with net income of $3.0 million on $184.5 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2010, showed $198.7 million in total assets, $173.8 million in total current liabilities, $736.7 million in total noncurrent liabilities, and stockholder's equity of $103.4 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6cfe About Kronos International Kronos International, Inc., produces and markets TiO2 pigments in Europe, and is a wholly owned subsidiary of Kronos Worldwide, Inc., headquartered in Dallas, Texas. * * * As reported by the Troubled Company Reporter on June 25, 2010, Moody's Investors Service raised Kronos International's Corporate Family Rating to B3 from Caa1 and the rating on the EUR400 million senior secured notes due 2013 to Caa1 from Caa2. The upgrade reflects KII's better operating results, improved titanium dioxide market conditions and the expectation that credit metrics will improve further in 2010. The outlook is stable. Moody's also said KII's liquidity is supported by its positive cash flow from operations, cash balances and unused availability under its EUR80 million revolving credit, which matures in less than one year (May 2011). Total use of the revolver was restored to the company in May 2010 after complying with the amended covenants in the first quarter 2010. Availability had been limited to EUR51 million since the facility was amended in September 2009 to accommodate the shortfall in EBITDA generation during the global economic downturn, which would have led to a violation of the leverage covenant. The improved profitability in 2010 could allow the company to meet the original financial covenants and revert the credit facility to its pre-amendment terms and conditions. The TCR on April 19, 2010, reported that Fitch Ratings has upgraded Kronos' Issuer Default Rating to 'B-' from 'CCC' and its securities ratings: Senior secured revolving credit facility to 'BB-/RR1' from 'B+/RR1'; Senior secured notes to 'B-/RR4' from 'CCC/RR4'. The Rating Outlook has been revised to Stable from Negative. Fitch said the ratings reflect high financial leverage at Kronos International as well as Kronos Worldwide's solid market position in the TiO2 industry, the fifth largest globally with 10% of global capacity. The ratings also reflect the early stages of a recovery in the TiO2 industry and Fitch's expectations that earnings over the next 24 months will remain below the average over the period from 2005 through 2008. LEIGH RZASA-ORMES: May Recoup $82,015 Paid to Arturi D'Argenio -------------------------------------------------------------- Leigh Rzasa-Ormes seeks summary judgment on Count I of the Amended Complaint against Arturi, D'Argenio, Guaglardi & Meliti, LLP and Conrad Roncati, pursuant to Sections 547 and 550 of the Bankruptcy Code. The Plaintiff seeks to avoid and recover $82,015.63 in preferential transfers to the Defendants. The Defendants argue the Transfers were to or for the benefit of the Defendants, that the Transfers were for or on account of an antecedent debt owed by the Plaintiff to the Defendants, and that the payments were made within 90 days of the Petition date. The Defendants deny that the Plaintiff was insolvent at the time of the Transfers or that the Transfers enabled the Defendants to "receive more" than they would have through a hypothetical Chapter 7 liquidation. The Hon. Donald H. Steckroth holds that Defendant has not raised triable issues of fact. Therefore, the motion for summary judgment is granted in its entirety. The case is Rzasa-Ormes, et al., v. Arturi, D'Argenio, Guaglardi & Meliti, LLP et al., Adv. Proc. No. 09-01883 (Bankr. D. N.J.), and a copy of the Court's decision dated October 25, 2010, is available at http://is.gd/glDbgfrom Leagle.com. New Jersey-based Leigh Rzasa-Ormes, Mahwah filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 09-23958) on May 29, 2009. Richard D. Trenk, Esq., at Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C., served as Debtor's bankruptcy counsel. The Debtor estimated $10 million to $50 million in both assets and debts. On April 1, 2010, the Court entered an Order confirming the Debtor's Chapter 11 Plan. LIONS GATE: Says MGM Deal to Create Opportunities for Stakeholders ------------------------------------------------------------------ Lions Gate Entertainment Corp. on October 25, 2010, sent a letter to Metro-Goldwyn-Mayer Inc. in connection with its proposal for the potential combination of the business of the Company and MGM. Jon Feltheimer, Co-Chairman and CEO of Lions Gate, told MGM in the letter that Lions Gate continues to believe that a merger with MGM represents a unique, value creating opportunity for the stakeholders of Lions Gate and MGM. Lions Gate made a presentation on July 13, 2010, to the steering sub-committee of the MGM lender group. In Monday's letter, Mr. Feltheimer said Lions Gate believes that recent positive developments at Lions Gate and MGM, as well as further specific and actionable opportunities, have the potential to increase cash flow from Lions Gate's July projections by over $40 million in fiscal year 2011 and over $120 million over the subsequent five years. Specifically: 1) an incremental $10 million to $15 million of annual overhead savings for a total potential annual overhead savings of over $100 million per year. This results in approximately $68 million of savings over five years vs. the July Projections; 2) Positive developments in Lions Gate's Channel Ventures, including the recently announced EPIX deal with Netflix, resulting in significant cash flow improvements; 3) The exercise of MGM's right to `opt-out' of certain elective distribution right `buyouts'. "Importantly, these projections and actionable opportunities make this plan cash flow positive in the first fiscal year after MGM emerges from bankruptcy and have the potential to generate greater than 100% recovery rate for the MGM secured creditors on the par value of the prepetition bank debt (including swaps) on a non- discounted basis assuming a five year holding period. These recoveries include MGM's 55% of equity in the combined company and the $500 million of cash/take back debt under the current Lionsgate proposal," Mr. Feltheimer wrote. The Letter included as exhibits, (i) material portions of a slide presentation dated July 13, 2010, previously made available to the Lender Steering Subcommittee for MGM, (ii) a proposal dated October 11, 2010, sent to Houlihan Lokey, financial advisor to the Subcommittee for the potential transaction, (iii) diligence questions sent by Moelis & Company, MGM's financial advisor, in connection with the potential transaction, and (iv) a response from the Company, dated October 15, 2010 to the Diligence Questions. Members of the Subcommittee and Moelis & Company were subject to certain confidentiality obligations. The Company now anticipates that the confidential information in the Secured Lender Package will be made available to parties not subject to confidentiality obligations. Lions Gate said the Secured Lender Package was prepared for the limited purpose of aiding the Subcommittee in its evaluation of a potential combination of the business of the Company and MGM. Lions Gate has presented certain updated information to the Presentation, in the Letter included in the Secured Lender Package. Other than as expressly stated in the Letter, the Presentation has not been updated and no inference as to its accuracy as of any date subsequent thereto shall be made. A full-text copy of Lions Gate's letter is available at http://ResearchArchives.com/t/s?6d11 As reported by the TCR on October 13, 2010, Claudia Eller, writing for The Los Angeles Times, said people close to the matter indicated that Lions Gate made another merger proposal to MGM lenders, which would give the MGM lenders a 55% stake in the merged company. The Journal's Mr. Spector and Ms. Schuker said MGM's largest creditors have balked at the offer, countering that MGM is worth close to $2 billion -- twice Lions Gates' current market capitalization. Prepackaged Plan MGM's secured lenders will vote on the Company's prepackaged bankruptcy plan tomorrow. Mike Spector and Lauren A.E. Schuker, writing for The Wall Street Journal, report that if the plan wins enough support -- odds appear to favor it -- MGM will file for a Chapter 11 bankruptcy as soon as Sunday. As reported by the TCR on October 8, 2010, the plan provides for MGM's secured lenders to exchange more than $4 billion in outstanding debt for approximately 95.3% of equity in MGM upon its emergence from Chapter 11. Spyglass Entertainment would contribute certain assets to the reorganized company in exchange for approximately 0.52% of the reorganized company. In addition, two entities owned by Spyglass affiliates -- Cypress Entertainment Group, Inc. and Garoge, Inc. -- will merge with and into a subsidiary of MGM, with the MGM subsidiary as the surviving entity. The stockholders of Cypress and Garoge will receive approximately 4.17% of the reorganized company in exchange. Gary Barber and Roger Birnbaum, currently Co-Chairman and Chief Executive Officer of Spyglass Entertainment, would serve as the Co-Chairman and Chief Executive Officer of MGM following the company's emergence from Chapter 11. The Journal's Mr. Spector and Ms. Schuker earlier reported that if MGM gets enough creditor support, it hopes to spend roughly two months under Chapter 11 bankruptcy protection. When it exits bankruptcy, MGM's ambitions will be scaled back to making only a handful of new movies each year. The studio plans to tap a new $500 million credit line to finance new film production, people familiar with the matter said, far less than the company had originally envisioned. MGM has received a series of forbearance agreements from its bondholders and lenders, wherein the lenders extended the period during which MGM won't have to pay principal and interest on its bank debt, including a revolving credit facility. The latest forbearance agreement expires October 29. MGM tried to sell itself in March 2010 but received low bids. According to The Wall Street Journal, Sahara India Pariwar offered a bit more than $2 billion for MGM in September, but the studio's creditors rejected the overture. MGM has hired investment bank Moelis & Company and Skadden, Arps, Slate, Meagher & Flom. According to the Wall Street Journal, Moelis media banker Navid Mahmoodzedegan prepared a confidential book for MGM's prospective buyers and advised on its subsequent restructuring. The Journal says Skadden's Jay Goffman, Esq., prepared bankruptcy papers and helped draw up a "prepackaged" bankruptcy. In August 2009, MGM hired the restructuring expert Stephen F. Cooper to help lead the company. The Journal also relates Irwin Gold, head of restructuring at Los Angeles investment bank Houlihan Lokey, advises MGM's creditors. About Metro-Goldwyn-Mayer Metro-Goldwyn-Mayer, Inc., is an independent, privately held motion picture, television, home video, and theatrical production and Distribution Company. The Company owns the world's largest library of modern films, comprising approximately 4,000 titles, and over 10,400 episodes of television programming. An investor consortium, comprised of Providence Equity Partners, TPG Capital, Sony Corporation of America, Comcast Corporation, DLJ Merchant Banking Partners and Quadrangle Group, acquired MGM from Kirk Kerkorian for $5 billion in 2005. The studio is now valued at around $1.9 billion, according to The Wall Street Journal. About Lions Gate British Columbia-domiciled and Santa Monica, California- headquartered Lions Gate is a leading, diversified independent producer and distributor of motion pictures, home entertainment, television programming and animation worldwide and holds a majority interest in the pioneering CinemaNow VOD business. The Lions Gate brand name is synonymous with original, cutting edge, quality entertainment in markets around the world. Lions Gate Entertainment Corp. reported total assets of $1,592,874,000 against total liabilities of $1,594,454,000, resulting in total deficiency of $1,580,000 as of June 30, 2010. As reported by the Troubled Company Reporter on March 10, 2010, Standard & Poor's Ratings Services revised its rating outlook on Lions Gate to negative from stable. At the same time, S&P affirmed ratings on Lions Gate, including the 'B-' corporate credit rating. Lions Gate carries Moody's "B2" corporate family rating and probability of default rating. Standard & Poor's Ratings Services revised the CreditWatch implications on its 'B-' corporate credit rating for British Columbia, Canada-domiciled and Santa Monica, Calif.-headquartered Lions Gate Entertainment Corp. and its subsidiary, Lions Gate Entertainment Inc., to developing from negative. S&P initially placed the rating on CreditWatch with negative implications on March 24, 2010, in response to investor Carl Icahn's unsolicited tender offer to acquire all outstanding shares of the entertainment company's common stock. LITE VIEW: Case Summary & 12 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Lite View Unlimited LLC 3315 Bardstown Rd Louisville, KY 40218 Bankruptcy Case No.: 10-35636 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Western District of Kentucky (Louisville) Judge: Thomas H. Fulton Debtor's Counsel: David M. Cantor, Esq. SEILLER WATERMAN LLC 462 S. 4th Street, Ste 2200 Louisville, KY 40202 Tel: (502) 584-7400 Fax: (502) 583-2100 E-mail: cantor@derbycitylaw.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 12 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/kywb10-35636.pdf The petition was signed by Vimia Rai, manager. LOEHMANN'S CAPITAL: Sweetens Exchange Offer as Deadline Looms ------------------------------------------------------------- Loehmann's Capital Corp. on Monday said that -- in connection with its pending private offer to exchange its outstanding 12% Senior Secured Class A Notes due 2011, Senior Secured Class A Floating Rate Notes due 2011 and 13% Senior Secured Class B Notes due 2011 for 12% Senior Secured Class A Notes due 2014, Senior Secured Class A Floating Rate Notes due 2014 and 13% Senior Secured Class B Notes due 2014 -- it is increasing the consideration offered to eligible holders that validly tender their old notes on or prior to October 27, 2010, the expiration date of the exchange offer. Eligible holders that validly tender their old notes at or prior to 11:59 p.m., New York City time, on October 27, 2010, will receive $1,000 principal amount of new notes of the same class for each $1,000 principal amount of their old notes that are accepted for exchange. As reported by the Troubled Company Reporter on September 27, 2010, eligible holders that validly tender their old notes after October 22, 2010 but at or prior to 11:59 p.m., New York City time, on October 27, 2010, would receive $970 principal amount of new notes of the same class for each $1,000 principal amount of their old notes that are accepted for exchange. The consummation of the exchange offer will be subject to customary conditions, including the receipt of valid and unrevoked tenders of at least 97% in principal amount of the outstanding old notes. As reported by the TCR on October 15, 2010, Loehmann's said it has received valid consents from holders representing more than 50% in aggregate outstanding principal amount of the old notes. Subject to applicable law, the company may terminate or amend, modify or waive the terms of the exchange offer. The new notes have not been and will not be registered under the Securities Act of 1933, as amended, or any state securities laws, may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements, and will therefore be subject to substantial restrictions on transfer. The exchange offer are only being made, and copies of the exchange offer documents will only be made available to, holders of old notes who have certified to Loehmann's in an eligibility letter as to certain matters, including their status as "qualified institutional buyers," as that term is defined under the Securities Act, "qualified purchasers," as that term is defined under the Investment Company Act of 1940 and "disqualified Non- U.S. Holders," as that term is defined in the eligibility letter. Copies of the eligibility letter are available to qualified holders through the information agent, Global Bondholder Services Corporation, Attn: Corporate Actions, at 65 Broadway, Suite 404, New York, New York 10006, telephone number: 212-430-3774. A supplemental confidential offering memorandum, dated October 25, will be distributed to qualified holders. Oct. 1 Interest Payment Missed As reported by the TCR on October 5, 2010, Loehmann's Capital Corp. missed an October 1, 2010, interest payment on its senior secured notes. Standard & Poor's believes the company is not likely to make the payment within the 30-day grace period. S&P lowered its corporate credit rating on Loehmann's Holdings Inc. to 'D' from 'CC' and the issue-level rating on the senior secured notes to 'D' from 'C'. As reported by the TCR on June 18, 2010, Bill Rochelle, bankruptcy columnist at Bloomberg News, said Loehmann's hired three financial advisory firms with experience in turnarounds and bankruptcy reorganizations. The firms are AlixPartners LLP, Perella Weinberg Partners and Clear Thinking Group LLC, according to people with knowledge of the situation. Reuters on April 6 reported that Loehmann's said it was fulfilling its financial obligations in response to new questions about its ability to keep its operations afloat. According to Reuters, Loehmann's denied a report in The New York Post that it missed a $6 million interest payment on its debt the previous week. But a source briefed on the situation said the store chain had delayed payments to CIT Group Inc. in order to make the interest payment. Reuters also reported that the NY Post, citing sources close to the situation, also said suppliers to the company were holding back shipments due to its deteriorating financial situation. A source told Reuters that CIT had suspended its factoring approvals for Loehmann's because the company had slowed payments to vendors and to CIT due to the interest payment. It was not immediately clear if CIT had reinstated its factoring approval, Reuters said. Loehmann's received a speculative-grade "CC" corporate credit rating from Standard & Poor's. The ratings agency said in March 2010, "we believe that current cash on hand and availability under the company's revolver may not be sufficient to cover operating needs over the near term." Loehmann's is a discount retailer with more than 60 stores. The Bronx, New York-based company is owned indirectly by Istithmar PJSC, an investment firm owned by the government of Dubai. Loehmann's emerged from a 14-month Chapter 11 reorganization with a confirmed plan in September 2000. At the time, it operated 44 stores in 17 states. MANSIONS AT HASTINGS: Files for Chapter 11 in Houston ----------------------------------------------------- Mansions at Hastings Green, L.P., filed for Chapter 11 protection (Bankr. S.D. Texas Case No. 10-39474) on Oct. 22, 2010. An affiliate, Mansions at Hastings Green Senior, L.P. (Bankr. S.D. Texas. Case No. 10-39476), filed on the same day. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the owners of affordable-housing projects in Houston sought bankruptcy protection to forestall the appointment of receivers on their loans. Mr. Rochelle relates that, according to court documents, the Mansions Family Apartment Housing Community has 230 units with monthly rents as high as $900. The Mansions Senior Living Apartment Housing Community, a complex for residents aged 55 and older, has 252 units and rents as high as $775 a month. They are located beyond the Interstate 10 beltway in northwest Houston. Both were finished in mid-2009 and are 95% rented. According to the report, Wells Fargo Bank NA, the lender, declined to extend the maturities of a $14 million construction loan for the Mansions Family complex and a $13.2 million mortgage for the Mansions Senior Living project, court papers show. The owners were unable to secure permanent financing to repay the loans. MANSIONS AT HASTINGS: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Mansions at Hastings Green Senior, L.P. dba The Mansions Senior Living Apartment Housing Community Two Miranova Place, 12th Floor Columbus, OH 43215 Bankruptcy Case No.: 10-39476 Chapter 11 Petition Date: October 22, 2010 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Letitia Z. Paul Debtor's Counsel: Edward L. Rothberg, Esq. HOOVER SLOVACEK, LLP 5847 San Felipe, Suite 2200 Houston, TX 77057 Tel: (713) 977-8686 Fax: (713) 977-5395 E-mail: rothberg@hooverslovacek.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Gary L. McGlaughlin, vice president of SCDC, LLC, managing member of Hastings Green, Senior, LLC, additional general partner. The Debtor did not file its list of largest unsecured creditors when it filed its petition. Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Mansions at Hastings Green, L.P. 10-39474 10/22/10 MANSIONS AT HASTINGS GREEN: Voluntary Chapter 11 Case Summary ------------------------------------------------------------- Debtor: Mansions at Hastings Green, L.P. dba The Mansions at Hastings Green, A Multifamily Community Two Miranova Place, 12th Floor Columbus, OH 43215 Bankruptcy Case No.: 10-39474 Chapter 11 Petition Date: October 22, 2010 Court: U.S. Bankruptcy Court Southern District of Texas (Houston) Judge: Letitia Z. Paul Debtor's Counsel: Edward L. Rothberg, Esq. HOOVER SLOVACEK, LLP 5847 San Felipe, Suite 2200 Houston, TX 77057 Tel: (713) 977-8686 Fax: 713-977-5395 E-mail: rothberg@hooverslovacek.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Gary L. McLaughlin, VP of SCDC, LLC, managing member of Hastings Green, LLC, additional G.P. MATANZAS PASS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Matanzas Pass Marina Venture LLC 10 Compass Rd Fort Lauderdale, FL 33308 Bankruptcy Case No.: 10-42467 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: John O. Hopkins, Esq. J.O. HOPKINS AND ASSOCIATES, P.A. 1515 N Federal Hwy #107 Boca Raton, FL 33432 Tel: (561) 392-7000 Scheduled Assets: $2,000,000 Scheduled Debts: $3,600,788 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by John Lesousky, managing member. MATTHEW EDWARDS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Matthew J. Edwards 1840 La Coronill Drive Santa Barbara, CA 93109 Bankruptcy Case No.: 10-15478 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Central District Of California (Santa Barbara) Debtor's Counsel: Joseph M. Sholder, Esq. GRIFFITH & THORNBURGH, LLP 8 E Figuerora St Ste 300 Santa Barbara, CA 93101 Tel: (805) 965-5131 Fax: (805) 965-6751 E-mail: sholder@g-tlaw.com Scheduled Assets: $6,160,180 Scheduled Debts: $4,409,022 A list of the Debtor's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb10-15478.pdf METRO-GOLDWYN-MAYER: Icahn Has 3-Headed Attack on Prepack Plan -------------------------------------------------------------- Carl Icahn has launched a three-headed attack to win over Metro- Goldwyn-Mayer Inc. creditors' support and scuttle the studio's prepackaged bankruptcy plan: (A) On Tuesday, Mr. Icahn said his affiliated entities are commencing a tender offer for Metro-Goldwyn-Mayer Inc. senior secured loans. Tuesday's Tender Offer is at a purchase price of $0.53 per $1.00 in principal amount and is conditioned on at least $1.6 billion in principal amount of Senior Loans being tendered in the Tender Offer. If Tender Offer condition is satisfied and the Spyglass Prepackaged Plan is rejected, then the Icahn affiliates will purchase $1.6 billion in principal amount of Senior Loans, less those accepted pursuant to the Put Offer now in progress. This amount plus the amount of Debt currently owned by the Icahn parties will approximate 51% of the outstanding Senior Loans. Payment for tendered Senior Loans accepted in the Tender Offer will be made immediately following acceptance. Mr. Icahn, in its sole discretion, may accept tenders as they are made, whether or not any conditions are satisfied, and may accept any amount tendered, but in no event will Mr. Icahn accept more than the $1.6 billion stated. (B) On Wednesday, Mr. Icahn said his affiliated entities have been buying MGM senior secured loans outside of the tender and put offers at a purchase price of $0.50 per $1.00 in principal amount. Mr. Icahn indicated that his affiliates had already purchased a substantial amount of Senior Loans and are seeking to acquire an aggregate of $500 million in principal amount of Senior Loans. UNLIKE THE TENDER AND PUT OFFERS, PURCHASES ARE NOT CONDITIONED ON ANY MINIMUM AMOUNT BEING ACQUIRED AND PAYMENT WILL BE MADE IMMEDIATELY. Sellers must be record holders of Senior Loans and must vote against the Spyglass Plan. Those interested in selling their Senior Loans should call Vincent Intrieri at 212-702-4328. (C) As reported by the Troubled Company Reporter on October 22, 2010, Mr. Icahn offered holders of MGM senior secured loans the right to put loans to Icahn Affiliates at a purchase price of $0.45 per $1.00 in principal amount on a first-come, first-served basis. The offer would give participating holders of Senior Loans the right to keep the upside on their MGM position, if there is one, without taking risk on the downside. The Put offer is conditioned on a minimum of $963,000,000 in principal amount in Senior Loans participating in the offer. Mr. Icahn will accept tenders and puts on a first-come, first served basis in the order submitted. Both the Tender Offer and the Put Offer will expire at the voting deadline for the Spyglass Plan on October 29, 2010, unless extended by Mr. Icahn's affiliates in their sole discretion and are conditioned on the Spyglass Plan being rejected at the October 29, 2010 vote. Mr. Icahn said last week that he is firmly opposed to MGM's current proposed Spyglass Plan and the related transaction with Spyglass. He characterized the Spyglass Plan as a "prescription for disaster". Mr. Icahn noted that "the plan is being backed by certain members of the MGM creditors committee, and is being ramrodded through with the typical fear tactic that the "sky will fall" if the plan is not approved." Mr. Icahn stated that he believes that "it is more likely for the sky to fall if the Spyglass Plan was approved." Any questions or requests for assistance or documents, including the definitive Tender Offer documents, may be directed to Innisfree M&A Incorporated, the Information Agent for the offer. Prepackaged Plan MGM's secured lenders will vote on the Company's prepackaged bankruptcy plan tomorrow. Mike Spector and Lauren A.E. Schuker, writing for The Wall Street Journal, report that if the plan wins enough support -- odds appear to favor it -- MGM will file for a Chapter 11 bankruptcy as soon as Sunday. As reported by the TCR on October 8, 2010, the plan provides for MGM's secured lenders to exchange more than $4 billion in outstanding debt for approximately 95.3% of equity in MGM upon its emergence from Chapter 11. Spyglass Entertainment would contribute certain assets to the reorganized company in exchange for approximately 0.52% of the reorganized company. In addition, two entities owned by Spyglass affiliates -- Cypress Entertainment Group, Inc. and Garoge, Inc. -- will merge with and into a subsidiary of MGM, with the MGM subsidiary as the surviving entity. The stockholders of Cypress and Garoge will receive approximately 4.17% of the reorganized company in exchange. Gary Barber and Roger Birnbaum, currently Co-Chairman and Chief Executive Officer of Spyglass Entertainment, would serve as the Co-Chairman and Chief Executive Officer of MGM following the company's emergence from Chapter 11. The Journal's Mr. Spector and Ms. Schuker earlier reported that if MGM gets enough creditor support, it hopes to spend roughly two months under Chapter 11 bankruptcy protection. When it exits bankruptcy, MGM's ambitions will be scaled back to making only a handful of new movies each year. The studio plans to tap a new $500 million credit line to finance new film production, people familiar with the matter said, far less than the company had originally envisioned. MGM has received a series of forbearance agreements from its bondholders and lenders, wherein the lenders extended the period during which MGM won't have to pay principal and interest on its bank debt, including a revolving credit facility. The latest forbearance agreement expires October 29. MGM tried to sell itself in March 2010 but received low bids. According to The Wall Street Journal, Sahara India Pariwar offered a bit more than $2 billion for MGM in September, but the studio's creditors rejected the overture. MGM has hired investment bank Moelis & Company and Skadden, Arps, Slate, Meagher & Flom. According to the Wall Street Journal, Moelis media banker Navid Mahmoodzedegan prepared a confidential book for MGM's prospective buyers and advised on its subsequent restructuring. The Journal says Skadden's Jay Goffman, Esq., prepared bankruptcy papers and helped draw up a "prepackaged" bankruptcy. In August 2009, MGM hired the restructuring expert Stephen F. Cooper to help lead the company. The Journal also relates Irwin Gold, head of restructuring at Los Angeles investment bank Houlihan Lokey, advises MGM's creditors. About Metro-Goldwyn-Mayer Metro-Goldwyn-Mayer, Inc., is an independent, privately held motion picture, television, home video, and theatrical production and Distribution Company. The Company owns the world's largest library of modern films, comprising approximately 4,000 titles, and over 10,400 episodes of television programming. An investor consortium, comprised of Providence Equity Partners, TPG Capital, Sony Corporation of America, Comcast Corporation, DLJ Merchant Banking Partners and Quadrangle Group, acquired MGM from Kirk Kerkorian for $5 billion in 2005. The studio is now valued at around $1.9 billion, according to The Wall Street Journal. METRO-GOLDWYN-MAYER: Lions Gate Defends Merger Bid in Letter ------------------------------------------------------------ Lions Gate Entertainment Corp. on October 25, 2010, sent a letter to Metro-Goldwyn-Mayer Inc. in connection with its proposal for the potential combination of the business of the Company and MGM. Jon Feltheimer, Co-Chairman and CEO of Lions Gate, told MGM in the letter that Lions Gate continues to believe that a merger with MGM represents a unique, value creating opportunity for the stakeholders of Lions Gate and MGM. Lions Gate made a presentation on July 13, 2010, to the steering sub-committee of the MGM lender group. In Monday's letter, Mr. Feltheimer said Lions Gate believes that recent positive developments at Lions Gate and MGM, as well as further specific and actionable opportunities, have the potential to increase cash flow from Lions Gate's July projections by over $40 million in fiscal year 2011 and over $120 million over the subsequent five years. Specifically: 1) an incremental $10 million to $15 million of annual overhead savings for a total potential annual overhead savings of over $100 million per year. This results in approximately $68 million of savings over five years vs. the July Projections; 2) Positive developments in Lions Gate's Channel Ventures, including the recently announced EPIX deal with Netflix, resulting in significant cash flow improvements; 3) The exercise of MGM's right to `opt-out' of certain elective distribution right `buyouts'. "Importantly, these projections and actionable opportunities make this plan cash flow positive in the first fiscal year after MGM emerges from bankruptcy and have the potential to generate greater than 100% recovery rate for the MGM secured creditors on the par value of the prepetition bank debt (including swaps) on a non- discounted basis assuming a five year holding period. These recoveries include MGM's 55% of equity in the combined company and the $500 million of cash/take back debt under the current Lionsgate proposal," Mr. Feltheimer wrote. The Letter included as exhibits, (i) material portions of a slide presentation dated July 13, 2010, previously made available to the Lender Steering Subcommittee for MGM, (ii) a proposal dated October 11, 2010, sent to Houlihan Lokey, financial advisor to the Subcommittee for the potential transaction, (iii) diligence questions sent by Moelis & Company, MGM's financial advisor, in connection with the potential transaction, and (iv) a response from the Company, dated October 15, 2010 to the Diligence Questions. Members of the Subcommittee and Moelis & Company were subject to certain confidentiality obligations. The Company now anticipates that the confidential information in the Secured Lender Package will be made available to parties not subject to confidentiality obligations. Lions Gate said the Secured Lender Package was prepared for the limited purpose of aiding the Subcommittee in its evaluation of a potential combination of the business of the Company and MGM. Lions Gate has presented certain updated information to the Presentation, in the Letter included in the Secured Lender Package. Other than as expressly stated in the Letter, the Presentation has not been updated and no inference as to its accuracy as of any date subsequent thereto shall be made. A full-text copy of Lions Gate's letter is available at http://ResearchArchives.com/t/s?6d11 As reported by the TCR on October 13, 2010, Claudia Eller, writing for The Los Angeles Times, said people close to the matter indicated that Lions Gate made another merger proposal to MGM lenders, which would give the MGM lenders a 55% stake in the merged company. The Journal's Mr. Spector and Ms. Schuker said MGM's largest creditors have balked at the offer, countering that MGM is worth close to $2 billion -- twice Lions Gates' current market capitalization. Prepackaged Plan MGM's secured lenders will vote on the Company's prepackaged bankruptcy plan tomorrow. Mike Spector and Lauren A.E. Schuker, writing for The Wall Street Journal, report that if the plan wins enough support -- odds appear to favor it -- MGM will file for a Chapter 11 bankruptcy as soon as Sunday. As reported by the TCR on October 8, 2010, the plan provides for MGM's secured lenders to exchange more than $4 billion in outstanding debt for approximately 95.3% of equity in MGM upon its emergence from Chapter 11. Spyglass Entertainment would contribute certain assets to the reorganized company in exchange for approximately 0.52% of the reorganized company. In addition, two entities owned by Spyglass affiliates -- Cypress Entertainment Group, Inc. and Garoge, Inc. -- will merge with and into a subsidiary of MGM, with the MGM subsidiary as the surviving entity. The stockholders of Cypress and Garoge will receive approximately 4.17% of the reorganized company in exchange. Gary Barber and Roger Birnbaum, currently Co-Chairman and Chief Executive Officer of Spyglass Entertainment, would serve as the Co-Chairman and Chief Executive Officer of MGM following the company's emergence from Chapter 11. The Journal's Mr. Spector and Ms. Schuker earlier reported that if MGM gets enough creditor support, it hopes to spend roughly two months under Chapter 11 bankruptcy protection. When it exits bankruptcy, MGM's ambitions will be scaled back to making only a handful of new movies each year. The studio plans to tap a new $500 million credit line to finance new film production, people familiar with the matter said, far less than the company had originally envisioned. MGM has received a series of forbearance agreements from its bondholders and lenders, wherein the lenders extended the period during which MGM won't have to pay principal and interest on its bank debt, including a revolving credit facility. The latest forbearance agreement expires October 29. MGM tried to sell itself in March 2010 but received low bids. According to The Wall Street Journal, Sahara India Pariwar offered a bit more than $2 billion for MGM in September, but the studio's creditors rejected the overture. MGM has hired investment bank Moelis & Company and Skadden, Arps, Slate, Meagher & Flom. According to the Wall Street Journal, Moelis media banker Navid Mahmoodzedegan prepared a confidential book for MGM's prospective buyers and advised on its subsequent restructuring. The Journal says Skadden's Jay Goffman, Esq., prepared bankruptcy papers and helped draw up a "prepackaged" bankruptcy. In August 2009, MGM hired the restructuring expert Stephen F. Cooper to help lead the company. The Journal also relates Irwin Gold, head of restructuring at Los Angeles investment bank Houlihan Lokey, advises MGM's creditors. About Metro-Goldwyn-Mayer Metro-Goldwyn-Mayer, Inc., is an independent, privately held motion picture, television, home video, and theatrical production and Distribution Company. The Company owns the world's largest library of modern films, comprising approximately 4,000 titles, and over 10,400 episodes of television programming. An investor consortium, comprised of Providence Equity Partners, TPG Capital, Sony Corporation of America, Comcast Corporation, DLJ Merchant Banking Partners and Quadrangle Group, acquired MGM from Kirk Kerkorian for $5 billion in 2005. The studio is now valued at around $1.9 billion, according to The Wall Street Journal. About Lions Gate British Columbia-domiciled and Santa Monica, California- headquartered Lions Gate is a leading, diversified independent producer and distributor of motion pictures, home entertainment, television programming and animation worldwide and holds a majority interest in the pioneering CinemaNow VOD business. The Lions Gate brand name is synonymous with original, cutting edge, quality entertainment in markets around the world. Lions Gate Entertainment Corp. reported total assets of $1,592,874,000 against total liabilities of $1,594,454,000, resulting in total deficiency of $1,580,000 as of June 30, 2010. As reported by the Troubled Company Reporter on March 10, 2010, Standard & Poor's Ratings Services revised its rating outlook on Lions Gate to negative from stable. At the same time, S&P affirmed ratings on Lions Gate, including the 'B-' corporate credit rating. Lions Gate carries Moody's "B2" corporate family rating and probability of default rating. Standard & Poor's Ratings Services revised the CreditWatch implications on its 'B-' corporate credit rating for British Columbia, Canada-domiciled and Santa Monica, Calif.-headquartered Lions Gate Entertainment Corp. and its subsidiary, Lions Gate Entertainment Inc., to developing from negative. S&P initially placed the rating on CreditWatch with negative implications on March 24, 2010, in response to investor Carl Icahn's unsolicited tender offer to acquire all outstanding shares of the entertainment company's common stock. MGM RESORTS: Boyd Won't Match Offer for Borgata Stake ----------------------------------------------------- Boyd Gaming Corporation said on October 25, 2010, that, following a careful review, it has decided not to exercise its right to match the offer MGM Resorts International received for its non- controlling 50% interest in Borgata announced on October 12. "Given other opportunities and our current focus on deleveraging our balance sheet, the current offer would not provide a sufficient return on investment for our shareholders. Despite this decision, we are confident in the future of Borgata. The property represents a major investment by Boyd Gaming, and it has delivered substantial value for our shareholders. We remain comfortable with our current position as managing member and 50% owner of Borgata, the region's premier destination resort," Boyd said. As reported by the Troubled Company Reporter on July 30, 2010, MGM Resorts reached an agreement to sell four long-term ground leases and their underlying real property parcels at The Borgata Hotel Casino & Spa in Atlantic City, New Jersey, to Vornado Realty Trust and Geyser Holdings for roughly $73 million. The underlying real property parcels subject to the transaction are comprised of roughly 11.3 acres. The parties entered into a purchase and sale agreement regarding the transaction on July 2, 2010. Following the completion of the inspection period under such agreement, the parties have agreed to proceed with matters in preparation for closing. The transaction is subject to customary closing conditions contained in the purchase and sale agreement, including approval by the New Jersey Casino Control Commission and the New Jersey Division of Gaming Enforcement. The parties expect the transaction to close by the fourth quarter of this year. MGM Resorts continues to own roughly 85 acres of developable land in Atlantic City of which roughly 70 acres are adjacent to The Borgata on Renaissance Point. The approximate 85 acres of developable land are not included in this transaction. Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) -- http://www.boydgaming.com/-- is a diversified owner and operator of 16 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana, and Louisiana. About MGM Resort MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau. The Company's balance sheet at June 30, 2010, showed $19.98 billion in total assets, $1.19 billion in total current liabilities, $2.65 billion in deferred income taxes, $13.04 billion in long-term debt $243.29 million in other long- term obligations, and $2.85 billion in total stockholders' equity. * * * As reported by the Troubled Company Reporter on October 18, 2010, Standard & Poor's Ratings Services revised its rating outlook on MGM Resorts to stable from developing. At the same time, S&P affirmed all of its existing ratings on MGM, including the 'CCC+' corporate credit rating. The 'CCC+' corporate credit rating reflects MGM's significant debt burden, S&P's expectation for meaningful declines in cash flow generation in 2010, and the company's weak liquidity position. While MGM maintains a leading presence on the Las Vegas Strip, 2010 will be another challenging year for the Strip, and prospects for a meaningful rebound in 2011 are uncertain. The recent pricing of the primary offering of common stock has bolstered liquidity; however, the company's ability to weather the current downturn and continue to service its debt obligations over the longer term relies on continued progress toward addressing its challenging debt maturity schedule, as well as a substantial rebound in cash flow generation. The TCR also reported that Fitch Ratings revised the Rating Outlook for MGM Resorts to Positive following the company's equity issuance. In addition, Fitch affirmed these ratings: Issuer Default Rating at 'CCC'; Senior secured notes due 2013, 2014, 2017, and 2020 at 'B+/RR1'; Senior credit facility at 'B-/RR3'; Senior unsecured notes at 'CCC/RR4'; Convertible senior notes due 2015 at 'CCC/RR4'; and Senior subordinated notes at 'C/RR6'. MGM's 'CCC' IDR continues to reflect a credit profile with substantial credit risk. MGM's probability of default still displays a high sensitivity to an uninterrupted recovery in the Las Vegas market, significant reliance on a favorable refinancing and capital markets environment due to its heavy debt maturity schedule, a highly leveraged balance sheet despite potential debt reduction from the equity issuance, and a weak near-term free cash profile. In addition, MGM's obligation under the CityCenter completion guarantee continues to escalate, and Fitch believes the company is currently under-investing in its properties, which will likely impact asset quality. MICHAEL JOHNSON: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Michael F. Johnson 1001 NE 14 Avenue, Apartment 507 Fort Lauderdale, FL 33309 Bankruptcy Case No.: 10-42426 Chapter 11 Petition Date: October 24, 2010 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: Henry N. Portner, Esq. CONSUMER LAWYERS OF AMERICA, P.A. 1001 W Indiantown Rd # 105 Jupiter, FL 33458 Tel: (561) 400-0027 E-mail: attatlaw@hotmail.com Scheduled Assets: $506,810 Scheduled Debts: $3,216,372 A list of the Debtor's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb10-42426.pdf Debtor-affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Paul Ciarelli MICROSEMI CORP: S&P Assigns 'BB-' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'BB-' corporate credit rating to Microsemi Corp. At the same time, S&P assigned a preliminary 'BB+' issue-level rating (two notches higher than the 'BB-' corporate credit rating) and preliminary recovery rating of '1', indicating its expectation of very high (90% to 100%) recovery for lenders in the event of a payment default, to the company's proposed $425 million first-lien senior secured credit facility. The facility includes a $50 million revolving credit facility and $375 million term loan. S&P rated the credit 'BB+' (two notches higher than the 'BB-' corporate credit rating on the company). The rating outlook is stable. Standard & Poor's expects Microsemi's good niche position as a provider of defense, security, aerospace, and industrial applications-focused analog and mixed signal semiconductor components to result in continued modest revenue and profitability growth driven by sustained end-market demand and manufacturing facility closings. S&P also expects the company will work to reduce leverage through debt reduction as a buffer against industry cyclicality. Microsemi Corp. is a designer and manufacturer of high-reliability discrete semiconductor products to the security, defense, and aerospace industries and integrated circuits for a broad range of commercial, enterprise, and industrial applications. The acquisition of Actel broadens Microsemi's current product portfolio to include field?programmable gate array products targeting the defense and aerospace industries. In certain end markets, the company competes against much larger firms with greater financial resources and product breadth, such as the analog semiconductor division of Texas Instruments Inc., Analog Devices Inc., Maxim Integrated Products Inc., and National Semiconductor Corp. Though S&P views the company's recent operating trends and the acquisition of Actel as positive developments, Standard and Poor's views Microsemi's business risk profile as weak. S&P's assessment primarily reflects its short track record at current revenue and profitability levels, execution risk associated with the Actel acquisition, and its midtier competitive position in a highly cyclical industry. These factors are only partly offset by the company's presence in the more stable aerospace, defense, and security market(over 60% of June 2010 LTM revenues), which has provided some offset to the generally volatile semiconductor industry. S&P views Microsemi's financial risk profile as aggressive, reflecting pro forma adjusted leverage in the low-3x area, the modest scale of Microsemi's free operating cash flow (FOCF) relative to larger competitors on an absolute basis, and its reduced pro forma cash balances after the Actel acquisition. Although S&P believes adjusted leverage could reduce to the low-2x area over the next five quarters, the rating incorporates room for cash flow volatility given the cyclicality of the industry and uncertainties around the full costs of integrating Actel. MOMENTIVE PERFORMANCE: Launches Cash Offer for Second Lien Notes ---------------------------------------------------------------- Momentive Specialty Chemicals Inc., formerly known as Hexion Specialty Chemicals, Inc., said it will launch a cash tender offer with respect to any and all of its outstanding 9.75% Second- Priority Senior Secured Notes due 2014. Each holder who validly tenders its Notes prior to 5:00 p.m., New York City time, on November 4, 2010, unless such time is extended by the Company, will receive, if such Notes are accepted for purchase pursuant to the tender offer, the total consideration of $1053.75 per $1,000 principal amount of Notes tendered, which includes $1043.75 as the tender offer consideration and $10.00 as an early tender payment. In addition, accrued interest up to, but not including, the applicable payment date of the Notes will be paid in cash on all validly tendered and accepted Notes. Each tender offer is scheduled to expire at 11:59 p.m., New York City time, on November 19, 2010, unless extended or earlier terminated. Tendered Notes may be withdrawn at any time prior to the Early Tender Date but not thereafter, except to the extent that the Company is required by law to provide additional withdrawal rights. Holders who validly tender their Notes after the Early Tender Date will receive only the tender offer consideration and will not be entitled to receive an early tender payment if such Notes are accepted for purchase pursuant to the tender offer. Subject to the terms and conditions described below, payment of the tender offer consideration or total consideration, as applicable, will occur promptly after the Expiration Date. In addition, at any time after the Early Tender Date but prior to the Expiration Date, and subject to the terms and conditions described below, the Company may accept for purchase Notes validly tendered on or prior to such time and purchase such notes for the tender offer consideration or total consideration, as applicable, promptly thereafter. The consummation of the tender offer is conditioned upon, among other things, the issuance of new second-priority senior secured debt, with terms acceptable to the Company in its sole discretion, to permit the closing of the tender offer and related transactions, and the availability of proceeds from the issuance of the new debt necessary to pay the applicable total consideration and interest to the applicable payment date, for validly tendered notes. If any of the conditions are not satisfied, the Company may terminate the tender offer and return tendered Notes. The Company has the right to waive any of the foregoing conditions with respect to the Notes. In addition, the Company has the right, in its sole discretion, to terminate the tender offer at any time, subject to applicable law. Subject to the occurrence of the closing of the new debt offering, the Company thereafter will, pursuant to the provisions of the Notes and the indenture under which the Notes were issued, including applicable notice provisions, redeem any Notes not tendered and accepted for payment in the tender offer, or if the tender offer is not consummated, any and all outstanding Notes. This announcement shall not constitute an offer to purchase or a solicitation of an offer to sell any securities. The complete terms and conditions of the tender offer are set forth in an Offer to Purchase dated October 22, 2010 and the related Letter of Transmittal that are being sent to holders of the Notes. The tender offer is being made only through, and subject to the terms and conditions set forth in, the Tender Offer Documents and related materials. Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC will act as Dealer Managers for the tender offer. Global Bondholder Services Corporation will act as the Information Agent for the tender offer. Neither the Company's board of directors nor any other person makes any recommendation as to whether holders of Notes should tender their Notes, and no one has been authorized to make such a recommendation. Holders of Notes must make their own decisions as to whether to tender their Notes, and if they decide to do so, the principal amount of the Notes to tender. Holders of the Notes should read carefully the Tender Offer Documents and related materials before any decision is made with respect to the tender offer. Apollo Management L.P. owns approximately $127 million principal amount of the Notes, which collectively represents approximately 24% of the total outstanding Notes and 21% of the total outstanding Notes together with the Second-Priority Senior Secured Floating Rate Notes due 2014 that were issued under the Indenture. Apollo will enter into an agreement to exchange the entire amount of its current holdings of Notes for new debt of the Company at an exchange ratio determined based on the tender consideration offered to holders of the Notes, which is intended to give Apollo an aggregate value equivalent to that which it would receive if it had received the total consideration in the tender offer and used the proceeds thereof to invest in the new debt. The new debt will have the same terms as the new notes issued by the Company to finance the tender offer. About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. As of March 30, 2010, Momentive had $3.22 billion in total assets, $3.79 billion in total liabilities, and stockholders' deficit of $565.8 million. Momentive carries a 'CCC-' corporate credit rating from Standard & Poor's Ratings Services. Standard & Poor's Ratings Services said that it affirmed all its ratings on Hexion Specialty Chemicals Inc., including the 'B-' corporate credit rating. The outlook is stable. At the same time, S&P placed all its ratings on Momentive Performance Materials Inc., including the 'CCC+' corporate credit rating, on CreditWatch with positive implications. MOMENTIVE PERFORMANCE: Proposes $840 Million Debt Offering ---------------------------------------------------------- Momentive Performance Materials Inc. announced plans to issue $840,000,000 U.S. dollar equivalent principal amount of USD second-priority springing lien notes due 2020 and EUR second- priority springing lien notes due 2020 in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended. The Notes will be guaranteed on a senior unsecured basis by the domestic subsidiaries of the Company that are guarantors under our senior secured credit facilities. The Company intends to use the net proceeds from the offering of Notes: i) to pay the consideration for the cash tender offer with respect to the Company's outstanding 9 3/4% Senior Notes due 2014, 9% Senior Notes due 2014 and 10 1/8 / 10 7/8% Senior Toggle Notes due 2014' ii) redeem any remaining Existing Senior Unsecured Notes, following the expiration of the cash tender offer, at the applicable redemption price plus accrued and unpaid interest, and iii) to pay certain related transaction costs and expenses. The proposed offering of the Notes is subject to market and other conditions, and may not occur as described or at all. The Notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S. The Notes will not be initially registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws. About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. As of March 30, 2010, Momentive had $3.22 billion in total assets, $3.79 billion in total liabilities, and stockholders' deficit of $565.8 million. Momentive carries a 'CCC-' corporate credit rating from Standard & Poor's Ratings Services. Standard & Poor's Ratings Services said that it affirmed all its ratings on Hexion Specialty Chemicals Inc., including the 'B-' corporate credit rating. The outlook is stable. At the same time, S&P placed all its ratings on Momentive Performance Materials Inc., including the 'CCC+' corporate credit rating, on CreditWatch with positive implications. MOMENTIVE PERFORMANCE: To Launch Cash Offer for Senior Notes ------------------------------------------------------------- Momentive Performance Materials Inc. said it will launch cash tender offers with respect to any and all of its outstanding 9.75% Senior Notes due 2014, 9.00% Senior Notes due 2014 and 10.125% / 10.875% Senior Toggle Notes due 2014. Each holder who validly tenders its Notes prior to 5:00 p.m., New York City time, on November 4, 2010, unless such time is extended by the Company, will receive, if such Notes are accepted for purchase pursuant to the tender offers, the total consideration of: 1) $1053.75 per $1000 principal amount of 2006 9.75% Notes tendered, which includes $1043.75 as the tender offer consideration and $10.00 as an early tender payment; 2) EUR1050.00 per EUR1,000 principal amount of 2006 9.00% Notes tendered, which includes EUR1040.00 as the tender offer consideration and EUR10.00 as an early tender payment; and 3) $1056.25 per $1000 principal amount of Senior Toggle Notes tendered, which includes $1046.25 as the tender offer consideration and $10.00 as an early tender payment. In addition, accrued interest up to, but not including, the applicable payment date of the Notes will be paid in cash on all validly tendered and accepted Notes. Each tender offer is scheduled to expire at 11:59 p.m., New York City time, on November 18, 2010, unless extended or earlier terminated. Tendered Notes may be withdrawn at any time prior to the Early Tender Date but not thereafter, except to the extent that the Company is required by law to provide additional withdrawal rights. Holders who validly tender their Notes after the Early Tender Date will receive only the tender offer consideration and will not be entitled to receive an early tender payment if such Notes are accepted for purchase pursuant to the tender offers. Subject to the terms and conditions described below, payment of the tender offer consideration or total consideration, as applicable, will occur promptly after the Expiration Date. In addition, at any time after the Early Tender Date but prior to the Expiration Date, and subject to the terms and conditions described below, the Company may accept for purchase Notes validly tendered on or prior to such time and purchase such notes for the tender offer consideration or total consideration, as applicable, promptly thereafter. The consummation of the tender offers is conditioned upon, among other things, the issuance of new senior debt, with terms acceptable to the Company in its sole discretion, to permit the closing of the tender offers and related transactions, and the availability of proceeds from the issuance of the new debt necessary to pay the applicable total consideration and interest to the applicable payment date, for validly tendered notes. If any of the conditions are not satisfied, the Company may terminate the tender offers and return tendered Notes. The Company has the right to waive any of the foregoing conditions with respect to the Notes of any or all series and to consummate any or all of the tender offers. In addition, the Company has the right, in its sole discretion, to terminate the tender offers at any time, subject to applicable law. In connection with, and subject to the occurrence of, the closing of the new senior unsecured debt offering, the Company will, pursuant to the provisions of the Notes and the indentures under which they were issued, redeem any Notes not tendered and accepted for payment in the tender offers, or if the tender offers are not consummated with respect to any series of Notes, any and all outstanding Notes of such series. This announcement shall not constitute an offer to purchase or a solicitation of an offer to sell any securities. The complete terms and conditions of the tender offers are set forth in an Offer to Purchase dated October 22, 2010 and the related Letter of Transmittal that are being sent to holders of the Notes. The tender offers are being made only through, and subject to the terms and conditions set forth in, the Tender Offer Documents and related materials. Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC will act as Dealer Managers for the tender offers for the 2006 9.75% Notes and Senior Toggle Notes, and Citigroup, Credit Suisse and J.P. Morgan Securities Ltd. will act as the Dealer Managers for the tender offer for the 2006 9.00% Notes. Global Bondholder Services Corporation will act as the Information Agent for the tender offers. Neither of Company's board of directors nor any other person makes any recommendation as to whether holders of Notes should tender their Notes, and no one has been authorized to make such a recommendation. Holders of Notes must make their own decisions as to whether to tender their Notes, and if they decide to do so, the principal amount of the Notes to tender. Holders of the Notes should read carefully the Tender Offer Documents and related materials before any decision is made with respect to the tender offer. Apollo Management, L.P., owns approximately $234.3 million principal amount of the 2006 9.75% Notes, EUR88.2 million principal amount of the 2006 9.00% Notes, and $139.4 million principal amount of the Senior Toggle Notes, representing approximately 33%, 36% and 65% of the total outstanding 2006 9.75% Notes, 2006 9.00% Notes and Senior Toggle Notes, respectively. Apollo will enter into an agreement to exchange the entire amount of its current holdings of each series of Notes for new debt of the Company at an exchange ratio determined based on the tender consideration offered to holders of the Notes, and intended to give Apollo an aggregate value equivalent to that which it would receive if it had received the total consideration in the tender offers and used the proceeds thereof to invest in such new debt. The new debt will have the same terms as the new notes issued by the Company to finance the tender offers. About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. As of March 30, 2010, Momentive had $3.22 billion in total assets, $3.79 billion in total liabilities, and stockholders' deficit of $565.8 million. Momentive carries a 'CCC-' corporate credit rating from Standard & Poor's Ratings Services. Standard & Poor's Ratings Services said that it affirmed all its ratings on Hexion Specialty Chemicals Inc., including the 'B-' corporate credit rating. The outlook is stable. At the same time, S&P placed all its ratings on Momentive Performance Materials Inc., including the 'CCC+' corporate credit rating, on CreditWatch with positive implications. MOMENTIVE PERFORMANCE: Sees $117MM-$123MM Adjusted EBITDA for Q3 ---------------------------------------------------------------- Momentive Performance Materials Inc. reported preliminary results for the third quarter ended September 26, 2010. The Company said it expects to file a more detailed report regarding its third quarter 2010 results as well as file its Form 10-Q for the three months ended September 26, 2010, in early November 2010, with an accompanying investor conference call to follow shortly thereafter. Momentive Performance Materials expects to post third quarter 2010 net sales of approximately $662 million, GAAP operating income of approximately $65 million to $75 million and Adjusted EBITDA of approximately $117 million to $123 million and Pro Forma Adjusted EBITDA of approximately $130 million to $136 million. In addition, the Company expects Adjusted EBITDA and Pro Forma Adjusted EBITDA for the twelve-month period ended September 26, 2010, to be between $475 million and $481 million and between $525 million and $531 million, respectively, which will represent a new record for the Company. Last year in the third quarter, the Company recorded net sales of $568.4 million, GAAP operating income of $44.1 million, Adjusted EBITDA and Pro Forma Adjusted EBITDA of $93.5 million and Last Twelve Month Adjusted EBITDA and Pro Forma Adjusted EBITDA of $231 million. Last year's Adjusted EBITDA and Pro Forma Adjusted EBITDA excludes the EBITDA of one of our subsidiaries that is designated as an Unrestricted Subsidiary under our debt documents of $1 million and $1 million for the quarter and twelve-month periods ended September 27, 2009, respectively. Momentive Performance Materials also estimates that as of September 26, 2010 its total debt, net of cash and cash equivalents, will be between $2,645 million and $2,665 million, compared to $2,670 million as of the end of last quarter. The Company expects to be in compliance with all of the terms of the agreements governing its outstanding indebtedness, including the financial covenants, at the end of the third quarter of 2010. Momentive Performance Materials also announced today that it repaid $25 million of borrowings under its revolving credit facility in September 2010, leaving no borrowings outstanding under this facility. "In the third quarter, we expect significantly higher sales and Adjusted EBITDA compared to the same period last year due to the recovery in our business and our cost initiatives during the recession," said Craig O. Morrison, Chairman and CEO. He added, "Inflation in raw material costs, though somewhat offset by pricing actions, and inventory reductions from our planned second quarter build up, however, negatively impacted Adjusted EBITDA comparisons on a sequential basis." About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. As of March 30, 2010, Momentive had $3.22 billion in total assets, $3.79 billion in total liabilities, and stockholders' deficit of $565.8 million. Momentive carries a 'CCC-' corporate credit rating from Standard & Poor's Ratings Services. Standard & Poor's Ratings Services said that it affirmed all its ratings on Hexion Specialty Chemicals Inc., including the 'B-' corporate credit rating. The outlook is stable. At the same time, S&P placed all its ratings on Momentive Performance Materials Inc., including the 'CCC+' corporate credit rating, on CreditWatch with positive implications. MOMENTIVE PERFORMANCE: Hexion to Issue $440MM of 2nd Lien Notes --------------------------------------------------------------- Momentive Specialty Chemicals Inc. said that Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC, wholly owned subsidiaries of the Company, are proposing to issue $440 million aggregate principal amount of second-priority senior secured notes due 2020 in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended. The Notes will be guaranteed by the Company and by certain domestic subsidiaries of the Company. The entities that are intended to issue and guarantee the Notes are the same entities that issued and guaranteed the Company's existing second lien notes. The Notes will be secured by the same collateral as the Company's existing second lien notes, and the priority of the collateral liens securing the Notes will be junior to the collateral liens securing the Registrant's senior secured notes and senior secured credit facilities. The Company intends to use the net proceeds from the offering of Notes: i) to pay the consideration for the cash tender offer with respect to the Company's outstanding 9 3/4% Second-Priority Senior Secured Notes due 2014, ii) redeem any remaining Existing Fixed Rate Second Lien Notes, following the expiration of the cash tender offer, at the applicable redemption price plus accrued and unpaid interest, and iii) to pay certain related transaction costs and expenses. The proposed offering of the Notes is subject to market and other conditions, and may not occur as described or at all. The Notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S. The Notes will not be initially registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws. About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. As of March 30, 2010, Momentive had $3.22 billion in total assets, $3.79 billion in total liabilities, and stockholders' deficit of $565.8 million. Momentive carries a 'CCC-' corporate credit rating from Standard & Poor's Ratings Services. Standard & Poor's Ratings Services said that it affirmed all its ratings on Hexion Specialty Chemicals Inc., including the 'B-' corporate credit rating. The outlook is stable. At the same time, S&P placed all its ratings on Momentive Performance Materials Inc., including the 'CCC+' corporate credit rating, on CreditWatch with positive implications. MOO TOWN DAIRY: Files for Chapter 11 in Sherman, Texas ------------------------------------------------------ Moo Town Dairy, LLC, filed for Chapter 11 (Bankr. E.D. Texas Case No. 10-43676) on October 25. Its owner, Rene Coumans, also field for Chapter 11 (Bankr. E.D. Texas Case No. 10-43677). The Debtors owe $8.24 million to Bank of the West, one of the secured lenders. An additional $2.78 million in secured debt is owing to Legacy FLCA. Bill Rochelle, the bankruptcy columnist for Bloomberg News, relates that according to a court filing, the dairy farm near Como, Texas, has more than 5,200 head of cattle, including 1,900 milking cows. The decline in raw milk prices in 2009 was blamed in part for the Chapter 11 filing. MOO TOWN: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Moo Town Dairy, LLC 3415 FM 1567 E Como, TX 75431 Bankruptcy Case No.: 10-43676 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Robert T. DeMarco, Esq. Michael S. Mitchell DEMARCO-MITCHELL, PLLC 1255 West 15th St., 805 Plano, TX 75075 Tel: (972) 578-1400 Fax: (972) 346-6791 E-mail: robert@demarcomitchell.com mike@demarcomitchell.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Ren� H. Coumans, sole member. The Debtor did not file its list of largest unsecured creditors when it filed its petition. NASHVILLE SENIOR: Burr's Fee Bid Approved, and Denied, In Part -------------------------------------------------------------- Burr & Forman LLP filed a First and Final Application for Interim Compensation and Reimbursement of Expenses pursuant to 11 U.S.C. Sec. 330, 331, 503(b)(2) and 507(a)(1) in the bankruptcy cases of Nashville Senior Living LLC et al. Objections were filed by the Debtors and GE Business Financial Services, Inc., alleging that compensation for Burr's failed attempt to retain Venable LLP as counsel for the Official Committee of Unsecured Creditors and for Burr's pursuit of an appeal that was ultimately dismissed as moot did not benefit the estate, and should therefore be denied. The Hon. George C. Paine, II, rules that Burr's representation of Venable seeking reinstatement as Committee Counsel is not compensable pursuant to 11 U.S.C. Sec. 330. The Court says Burr's fees sought in connection with appeal of the Sale Order are granted as proper under 11 U.S.C. Sec. 330. On November 20, 2008, the Court entered an order authorizing the Carolina 7 Debtors to sell substantially all of their assets. The Debtors consummated that transaction with purchaser on December 3, 2008. A copy of the Court's memorandum dated Oct. 25, 2010, is available at http://is.gd/gls1ifrom Leagle.com. Nashville Senior Living, LLC, sought Chapter 11 protection (Bankr. M.D. Tenn. Case No. 08-07254) on August 17, 2008, reporting less than $1 million in assets and liabilities. Seven affiliates -- see http://is.gd/17gmrand http://is.gd/17gp9-- contemporaneously filed Chapter 11 petitions, each estimating up to $10 million in assets and up to $100 million in liabilities. Robert A. Guy, Esq., at Waller Lansden Dortch & Davis, in Nashville, represents the Debtor. NCI BUILDING: S&P Puts 'B+' Corp. Credit Rating on Watch Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B+' corporate credit rating, on NCI Building Systems Inc. on CreditWatch with negative implications, meaning the rating could be affirmed or lowered following the completion of S&P's review. "The CreditWatch listing reflects S&P's view that reduced demand for metal buildings as a result of still-weakening nonresidential construction activity, combined with increased price competition among producers, will likely result in poorer operating performance over the next several quarters," said Standard & Poor's credit analyst Thomas Nadramia. Standard & Poor's expects commercial construction to decline by about 15% in 2010 and another 6% in 2011 before stabilizing toward the end of next year. As a result, S&P believes NCI's operating earnings and EBITDA levels may be weaker than S&P's previous expectations, resulting in credit measures that may no longer be in-line with the current rating. Standard & Poor's notes that NCI maintains what S&P considers to be strong liquidity at this time, with more than $53 million of cash on hand and $90 million of availability (as of Aug. 1, 2010) under its $125 million asset-based revolving credit facility due April 30, 2014. Also, the company is not subject to financial ratio covenants under its bank credit facilities until the first quarter of fiscal year 2012. In resolving the CreditWatch listing, Standard & Poor's expects to meet with NCI's management to review its near-term operating and financial strategies given the current challenging market environment. If a downgrade were the outcome of its analysis, S&P think it would likely be limited to one notch given the company's strong liquidity position. NORTEL NETWORKS: Morneau Takes Over 2 Pension Plans --------------------------------------------------- Nortel Networks Corporation reconfirmed that as of October 1, 2010, the administration of the Nortel Networks Negotiated Pension Plan and the Nortel Networks Limited Managerial and Non-Negotiated Pension Plan will be transitioned to Morneau Sobeco Limited Partnership, the replacement administrator appointed by the Ontario Superintendent of Financial Services. This transition is pursuant to the court approved Settlement Agreement with former and disabled Canadian employee representatives initially announced on February 8, 2010, and is in accordance with the Ontario Pension Benefits Act. Nortel and its court appointed Monitor, Ernst & Young Inc., have been actively working toward a smooth transition of the Pension Plans and have been in ongoing discussions with the Superintendent. Effective October 1, 2010, all inquiries regarding the Pension Plans should be directed to the replacement plan administrator, Morneau Sobeco Limited Partnership at 1-877- 392-2074 with regards to the Managerial Plan and 1-877-392-2073 with regards to the Negotiated Plan or at the dedicated email address at nortelwindup@morneausobeco.com. The replacement administrator has advised Nortel that current monthly pension payments will continue unchanged until it notifies pensioners that a change will be made and that this is not expected to occur before the end of 2010. Ongoing information can be found, on and after October 1, 2010, at www.pensionwindups.morneausobeco.com. As a reminder, contact information for counsel in these proceedings is: * LTD Beneficiaries -- Koskie Minsky LLP at 1-866-777-6344 or www.kmlaw.ca * Continuing Employees, which group includes employees whose employment has transferred to purchasers of Nortel business units after January 14, 2009 - Nelligan O'Brien Payne LLP and Shibley Righton LLP at 1-888-565-9912 or ncce@nelligan.ca. * Members or former members of the CAW represented by counsel to the CAW - Barry Wadsworth at 1-800-268-5763 ext. 3776 or by e-mail to mbondy@caw.ca Former Employees (including pensioners and those receiving survivor benefits) -- Koskie Minsky LLP at 1-866-777-6344 or www.kmlaw.ca. 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: Ontario Premier to Revisit Pensioners' Proposal ---------------------------------------------------------------- Ontario Premier Dalton McGuinty said the Canadian government will reconsider a proposal by pensioners to put Nortel's pension plan in the hands of private investment managers, according to a report by The Ottawa Citizen. The reversal came after a group of Nortel pensioners staged a small protest outside a banquet hall in Ottawa where Mr. McGuinty was being honored for his 20th year in politics. Mr. McGuinty and Finance Minister Dwight Duncan earlier rejected the proposal. "I did have a chance to meet with representatives from Nortel with the minister of finance and I have undertaken to give this a second review," The Ottawa Citizen quoted Mr. McGuinty as saying in the legislature. Mr. McGuinty added that he will be speaking with representatives again. Pensioners have been asking the Canadian government to allow them to reinvest their $2.5 billion pension plan rather than winding up the plan and converting the funds into annuities. The pensioners are concerned that they will lose more money through the annuity purchase given that the annuity markets are at historic lows and lack the capacity to take on the Nortel fund's massive infusion of capital, according to the report. In rejecting the proposal, Mr. Duncan argued that the proposal is too risky and would create greater risk for pensioners. He said that Ontario would not allow a $250 million government contribution to the Pension Benefit Guarantee Fund to be used in the alternative approach, The Ottawa Citizen reported. The PBGF, which tops up the first $1,000 of monthly pensioner income in failed private pension funds, is also underfunded. Mr. Duncan further said there is also no guarantee that any Nortel retiree or other beneficiary will be better off under the proposal, The Ottawa Citizen reported. Don Sproule, national chair of the Nortel Retirees and Former Employees Protection Canada group, said professional actuaries and insurance industry experts believe the underfunded pension fund can be put on firmer ground. He said the proposal could increase pension benefits, provide some inflation protection and reduce pressure on taxpayers. "There has been a lot of misinformation put out by the government. But we haven't given up hope that the government will listen to our case for trying a new approach," The Ottawa Citizen quoted Mr. Sproule as saying. 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. NORTHERN TRUST: Fitch Puts BB+ Support Floor Rating on Watch Neg. ----------------------------------------------------------------- Fitch Ratings has placed the Support and Support Floor ratings of The Northern Trust Company on Rating Watch Negative following initial interpretation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its implications for systemically important financial institutions. The Northern Trust Company's Issuer Default Rating and issue-level ratings are currently above their Support Floor Ratings as the IDR and issue-level ratings reflect the company's stand-alone strength, and do not rely on any implied government support. As such, The Northern Trust Company's IDR and issue-level ratings are unaffected by the action. The ratings of The Northern Trust Company's parent company Northern Trust Corporation and its other affiliates are also unaffected. Similar actions have been taken for other large U.S. banks. Refer to Fitch's press release dated Oct. 22, 2010, titled 'Fitch: US FI Ratings Potentially Impacted by Proposed New FDIC Rules' for additional information. Fitch's ratings of banks have always encompassed a view of intrinsic creditworthiness expressed through the Individual rating, while Fitch's view of Support has been expressed separately through its Support framework. Support Ratings communicate Fitch's judgment on whether the bank would receive support from the U.S. Government should this become necessary. The recently enacted legislative framework and potential regulatory rulemaking primarily affect Fitch's sovereign Support framework. Fitch places these ratings on Rating Watch Negative: The Northern Trust Company -- Support '3'; -- Support Floor 'BB+'. PAINTEARTH ENERGY: Chapter 15 Case Summary ------------------------------------------ Chapter 15 Debtor: Paintearth Energy Services, Ltd. Ernst & Young Twr 1000, 440 2nd Ave SW Calgary, Alberta T2P 5E9 Canada Chapter 15 Case No.: 10-39434 Chapter 15 Petition Date: October 22, 2010 Court: Southern District of Texas (Houston) Judge: Karen K. Brown Chapter 15 Petitioner's Counsel: Elizabeth Carol Freeman, Esq. PORTER & HEDGES, LLP 1000 Main Street, 36th Floor Houston, TX 77002 Tel: (713) 226-6631 Fax: (713) 226-6231 E-mail: efreeman@porterhedges.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $10,000,001 to $50,000,000 PINAFORE HOLDINGS: S&P Assigns 'BB-' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said it has assigned its 'BB-' corporate credit rating on Pinafore Holdings B.V. and withdrew its 'BB-' corporate credit rating on Tomkins Finance Ltd. The outlook is negative. In addition, S&P finalized its 'BB' issue-level rating and '2' recovery rating on Pinafore Holdings' $2.3 billion senior secured credit facility, and S&P finalized its 'B+' issue-level rating and '5' recovery rating on its $1.15 billion second-lien secured notes. The debt ratings on Tomkins Ltd.'s unsecured notes due 2011 and Tomkins Finance Ltd.'s 2015 notes remain at 'B' with a recovery rating of '6'. This debt was issued before the leveraged buyout LBO). The rated and financial reporting entity became Pinafore Holdings B.V. under the corporate structure implemented on the completion of the leveraged buyout of Tomkins PLC by unrated Onex Corp. and Canada Pension Plan Investment Board. The ratings on Pinafore reflect S&P's view of the company's financial risk profile as aggressive, following completion of the LBO in September 2010 by the private equity consortium of Onex and CPPIB. For the rating, S&P assumes adjusted total debt to EBITDA will remain under 5.0x. "S&P's view of the company's business risk profile as satisfactory remains unchanged from its assessment of the company's business risk prior to the LBO," said Standard & Poor's credit analyst Nancy Messer. This reflects S&P's expectation that the company's strategic policy and collection of operating assets will remain largely unchanged. "S&P believes Pinafore's double-digit EBITDA margins will continue. S&P's opinion is supported by the company's margins in recent years and its relative lack of volatility in results despite the recession in the U.S.," she continued. S&P expects cost-side initiatives to be implemented by the new financial sponsors, continuing the company's cost focus prior to the LBO. The business position is underpinned by Pinafore's solid market positions for its core products, as it supplies components to the cyclical automotive, industrial, and construction markets. S&P believes these positions also provide reasonable end-market and customer diversification. Although Pinafore operates in fragmented market segments, S&P believes its results benefit from the company's wide range of products and a low cost base. S&P views as key business risks Pinafore's exposure to various difficult conditions in its end markets and its relatively high concentration of revenues in North America. S&P does not view asset sales as a large source of potential cash. S&P expects Pinafore's capital expenditures, mostly related to application engineering, to average about 2.5% of sales for the next several years. S&P assumes that Pinafore will use surplus cash for debt reduction and not undertake any transforming debt-funded acquisitions. The negative outlook indicates that S&P could lower the ratings if the economic recovery or the company's performance falters, funds from operations to debt is less than 10%, debt to EBITDA totals more than 5x, and the company generates negative cash flow. S&P could also lower the ratings if S&P believed cash generation would become negative through a spike in commodity or other unexpected costs. Leveraged distributions to shareholders that raised leverage further could also result in a lower rating. S&P estimates that leverage could exceed 5x if gross margins decline from historical levels of about 33% and revenues fail to gradually rise. For the current rating, S&P assumes debt to EBITDA will remain under 5.0x; S&P estimates this will happen if revenue growth is minimal and gross margins remain near historical levels of about 33%. S&P assumes that Pinafore will avoid any major debt-funded acquisitions, manage its working capital position carefully, implement its cost-saving measures effectively, and use surplus cash for debt reduction. S&P considers an upgrade unlikely in the next year because doing so would require the ratings agency to reassess the financial risk profile to significant from the current aggressive, which would require the company to significantly lower its lease-adjusted leverage through debt reduction and EBITDA expansion. S&P would look for these measures as indicators of an enhanced financial profile: annual free cash generation of $150 million or better; pension- and lease-adjusted leverage of about 4.0x; and FFO to total debt of about 20%. S&P estimate Pinafore's adjusted leverage could fall to near 4.0x in 2012 if, for example, it could achieve annual adjusted EBITDA of $800 million and use surplus cash for debt reduction. S&P estimate this would not require significant margin increases but would need single-digit revenue growth. S&P believes the next 12 months will be challenging because S&P expects weak auto and construction sales in North America, and S&P believes cost-side pressures, including the risk of higher commodity prices, could pressure margins. PNC BANK: Fitch Puts BB- Support Floor Rating on Watch Negative --------------------------------------------------------------- Fitch Ratings has placed the Support and Support Floor ratings of PNC Bank, N.A., on Rating Watch Negative following initial interpretation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its implications for systemically important financial institutions. PNC Bank Issuer Default Rating and issue- level ratings are currently above their Support Floor Ratings as the IDR and issue-level ratings reflect the company's stand-alone strength, and do not rely on any implied government support. As such, PNC Bank's IDR and issue-level ratings are unaffected by the action. The ratings of PNC Bank's parent company PNC Financial Services Group, Inc. and its other affiliates are also unaffected. Similar actions have been taken for other large U.S. banks. Refer to Fitch's press release dated Oct. 22, 2010, titled 'Fitch: U.S. FI Ratings Potentially Impacted by Proposed New FDIC Rules' for additional information. Fitch's ratings of banks have always encompassed a view of intrinsic creditworthiness expressed through the Individual rating, while Fitch's view of Support has been expressed separately through its Support framework. Support Ratings communicate Fitch's judgment on whether the bank would receive support from the U.S. Government should this become necessary. The recently enacted legislative framework and potential regulatory rulemaking primarily affect Fitch's sovereign Support framework. Fitch places these ratings on Rating Watch Negative: PNC Bank, N.A. -- Support '3'; -- Support Floor 'BB-'. PRESTIGE BRANDS: Moody's Affirms 'B1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service affirmed Prestige Brands, Inc.'s debt ratings, including the company's corporate family rating of B1. Moody's also affirmed ratings on the company's upsized senior secured bank facilities and senior unsecured notes offering at Ba2 and B3, respectively. The company's Speculative Grade Liquidity rating was also affirmed at SGL-2. Proceeds from the upsized debt offerings will be used to fund Prestige's acquisition of 100% of the stock of Blacksmith Brands Holdings, Inc., for $190 million in cash which is expected to close in the fourth quarter. The outlook remains stable. Moody's affirmation of Prestige's B1 corporate family rating and stable outlook are supported by a diverse and balanced portfolio of leading niche brands; high margins; flexible, outsourced business model; and low-capital spending requirements. The rating is constrained by the company's small revenue base, participation in highly competitive segments in near-pharmacy like categories, primarily with companies that have significantly more resources and financial flexibility, declining sales trends within the personal care category, and mature nature of the OTC and household segments. In addition, Moody's expect over time Prestige will continue to supplement its growth through leveraged acquisitions and that this will temper any ratings upside given the relatively low organic growth rate and small scale of the company's other businesses. "Prestige's acquisition of the Efferdent, PediaCare, Ludens and other over-the-counter brands from Blacksmith will meaningfully increase its market position and support stronger organic growth in its core cough/cold and oral care categories while reducing its exposure to highly competitive, lower growth household product categories," says Moody's Vice President and Senior Credit Officer Janice Hofferber. "We expect integration risk to be quite low while profitability and free cash flow metrics, already quite high for Prestige, to remain strong despite the increase in debt incurred to complete the acquisition," adds Janice Hofferber. Accordingly, while Moody's expects Prestige's Debt to EBITDA to approach 4.0 times -- a meaningful increase from current levels, it is still well within Moody's downgrade trigger of 5.0 times especially given the important strategic benefits of the acquisition. Nevertheless, should certain operating thresholds not be achieved within a reasonable timeframe, or if operating results of the existing business deteriorate and/or if the company's strong liquidity profile meaningfully change, Prestige's credit ratings and/or outlook could be revised lower. These ratings of Prestige were affirmed (amounts upsized and LGD point estimates revised): -- Corporate Family Rating of B1 -- Probability of Default Rating of B1 -- $40 million senior secured revolving credit facility due 2015 of Ba2 (LGD 2, 25%) (upsized by $10 million) -- $265 million senior secured term loan B due 2016 of Ba2 (LGD 2, 25%) (upsized by $115 million) -- $250 million senior unsecured notes due 2018 of B3 (LGD 5, 80%) (upsized by $100 million) -- Speculative Grade Liquidity rating of SGL-2 -- Outlook is stable. The last rating action regarding Prestige was on March 10, 2010 when Moody's assigned ratings to the company's proposed senior secured bank facilities and senior unsecured notes offerings; upgraded its Speculative Grade Liquidity rating to SGL-2 from SGL- 3 and affirmed the company's long-term ratings including its corporate family rating of B1 with a stable outlook. Prestige Brands, Inc., headquartered in Irvington, New York, is a marketer of a broad portfolio of branded over-the-counter healthcare products, household cleaning products, and personal care products. Key brands include Compound W, Chloraseptic, Little Remedies, Clear Eyes, Murine, Wartner, New Skin, Comet, Chore Boy, Spin and Span, and Cutex. Total revenues for the last twelve month period ending June 30, 2010 were approximately $300 million. PRESTIGE BRANDS: S&P Affirms Corporate Credit Rating at 'B+' ------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed its 'B+' corporate credit rating on Irvington, N.Y.-based Prestige Brands Inc. The outlook is stable. S&P affirmed its 'BB' issue rating (two notches higher than the corporate credit rating) on Prestige's senior secured revolving credit facility due 2015 after the company announced plans to increase it to $40 million from $30 million. S&P affirmed its 'BB' issue rating on the company's term loan facility due 2016 after the company added on $115 million, bringing the total amount under its term loan to about $265 million. The recovery rating on the secured debt remains '1', indicating S&P's expectation for very high (90% to 100%) recovery in the event of a payment default. At the same time, S&P lowered its issue rating on the company's senior unsecured notes due 2018, which the company plans to increase by $100 million to $250 million, to 'B' (one notch lower than the corporate credit rating) from 'B+', and removed the rating from CreditWatch with negative implications. S&P revised the recovery rating on these notes to '5' (indicating its expectation for modest (10% to 30%) recovery in the event of a payment default) from '3'. S&P estimate that pro forma for the transactions, the company will have approximately $515 million of total reported debt outstanding. "The downgrade of the company's senior unsecured notes reflects S&P's expectation that unsecured noteholders will be further disadvantaged and recovery prospects will weaken following the incremental secured debt added to the company's capital structure to fund a portion of its acquisition of Blacksmith Brands," said Standard & Poor's credit analyst Mark Salierno. Blacksmith is a portfolio company of over-the-counter consumer product brands, include Efferdent, PediaCare, and Luden's. The transaction is expected to close in the fourth calendar quarter of 2010. "The affirmation of the 'B+' corporate credit rating and the stable outlook reflects S&P's view that operating performance and credit measures will remain in line with its expectations, and that the company will continue to maintain sufficient cushion under its financial covenants following the transaction," added Mr. Salierno. S&P's ratings on Prestige Brands Inc. reflect the company's participation in the highly competitive consumer products industry, where it competes with larger and better capitalized companies. The ratings also reflect Prestige Brands' lack of international diversity in its product lines and its aggressive financial risk profile. Although S&P views the business risk profile as weak for these reasons, S&P believes that the company has well-established brands with leading niche market positions. However, many of these products compete with those of much larger pharmaceutical and consumer products companies with much greater resources for product development and marketing. S&P believes that Prestige's acquisition of Blacksmith Brands strengthens the company's position in the highly competitive OTC market segment, and S&P believes the acquired brands are complementary to the Prestige's existing product portfolio. However, most of the company's products still have U.S. domestic concentrations and have more of a niche focus. Prestige has acquired many of its brands from larger competitors who underinvested in their growth because of their limited potential to expand globally. The company's strategy is to develop new product innovations for these brands and increase marketing. Although the company is involved in developing new product innovations, Prestige outsources research and development and manufacturing to third parties. Although this helps reduce Prestige's expenses, it also potentially limits the company's control of new product development. Most of its existing brands, such as Compound W, Clear Eyes, and Chloraseptic, are well established and have No. 1 or No. 2 market positions in their categories. S&P expects the company to continue to focus on evaluating strategic, niche brand acquisitions as part of its growth strategy as well as increasing its marketing spending on core brands over the intermediate term. The rating outlook is stable. S&P believes that integration risk related to the Blacksmith acquisition to be relatively low, Prestige Brands' debt leverage to remain below 4x, and the company to maintain its niche market positions. S&P would consider lowering its rating on Prestige Brands if liquidity tightens due to increased competition and/or unforeseen integration issues or other operating difficulties result in total debt to EBITDA exceeding 5.5x. S&P estimate pro forma leverage could rise to this level if EBITDA declines more than 30%. S&P would consider raising its rating if credit protection measures were to improve through debt reduction and stronger operating performance, with total debt to EBITDA of less than 3x. However, S&P believes this is unlikely over the near term given S&P's expectation for the company to remain acquisitive and for leverage to remain between 3x and 4x. PROTECTIVE LIFE: Fitch Affirms Trust Preferred Ratings at 'BB+' --------------------------------------------------------------- Fitch Ratings has affirmed Protective Life Corp.'s Issuer Default Rating at 'BBB+' and senior debt ratings at 'BBB'. Fitch has also affirmed PL's trust preferred ratings at 'BB+' and primary life insurance subsidiaries' Insurer Financial Strength ratings at 'A'. The Rating Outlook is Stable. A full rating list is shown below. The affirmation follows an announcement by PL that its primary life insurance subsidiary, Protective Life Insurance Company (PLICO), will acquire a block of approximately 1.3 million life insurance policies through a reinsurance transaction with Liberty Life Insurance Company. The transaction is expected to close in early 2011. The rationale for the rating action is that the announced transaction is consistent with PL's acquisition strategy and represents modest execution risk given the relative size of the transaction and PL's extensive track record of successfully acquiring blocks of life insurance. Under the terms of the transaction, PLICO will reinsure on a coinsurance basis approximately $1.6 billion of statutory reserves and pay to Liberty Life a $200.5 million ceding commission plus the statutory interest maintenance reserve on assets transferred from Liberty at closing. Fitch estimates that the block acquired from Liberty Life will represent approximately 5% of PLICO's statutory liabilities after the acquisition. Although the acquisition is expected to be accretive to earnings, it will increase PL's risk based capital charges. Fitch's pro forma RBC calculations indicate an initial decline in PLICO's RBC ratio on both a reported basis and when subjected to Fitch's investment stress test. Nonetheless, Fitch believes PLICO will continue to hold sufficient capital for its current rating level even after Fitch's investment stress test. Fitch notes that under its Total Financings and Commitments ratio, PL demonstrates high (above average) leverage compared to peers at approximately 1.2 times. This is due mainly to financings for Regulation XXX reserving. Fitch generally views these activities as well managed, and related risks were previously captured in Fitch's ratings. The key rating drivers that could result in an upgrade include improvement in earnings, growth in equity and surplus (particularly if accomplished through retained earnings) and a reduction in leverage on both a traditional and TFC basis. The key rating drivers that could result in a downgrade include actual realized investment losses that exceed Fitch's stress test estimates, material declines in GAAP or statutory capital, a downturn or weak growth in earnings, or a material reinsurance loss. Fitch has affirmed these ratings with a Stable Rating Outlook: Protective Life Corporation -- IDR at 'BBB+'; -- $10 million in medium-term notes due 2011 at 'BBB'; -- $250 million in senior notes due 2013 at 'BBB'; -- $150 million in senior notes due 2014 at 'BBB'; -- $150 million in senior notes due 2018 at 'BBB'; -- $400 million of 7.38% senior notes due 2019 at 'BBB'; -- $300 million of 8.45% senior notes due 2039 at 'BBB'; -- $100 million of 8% senior retail notes due 2024 at 'BBB'; -- $103 million trust preferred issued through PLC Capital Trust III due 2031 at 'BB+'; -- $119 million trust preferred issued through PLC Capital IV due 2032 at 'BB+'; -- $103 million trust preferred issued through PLC Capital Trust V due 2034 at 'BB+'; -- $200 million class D junior subordinated notes due 2066 at 'BB+'. Protective Life Insurance Company Protective Life and Annuity Insurance Company West Coast Life Insurance Company -- IFS at 'A'. Protective Life Secured Trust -- Notes at 'A'; -- Medium-term notes at 'A'. PROTECTIVE LIFE: Moody's Affirms Ratings on Senior Debt ------------------------------------------------------- Moody's Investors Service affirmed the debt ratings of Protective Life Corporation (senior debt at Baa2) and the A2 insurance financial strength rating of its operating subsidiaries, following the company's announcement that it had signed a definitive agreement to coinsure the individual life insurance business of Liberty Life Insurance Company (Liberty Life - not rated), a subsidiary of Royal Bank of Canada. Protective's rating outlook is stable. The transaction is expected to close in the first quarter of 2011, in conjunction with Athene Holding Ltd's acquisition of Liberty Life, subject to regulatory approval. Liberty Life will coinsure its individual life business to Protective Life Insurance Company, Protective's lead life insurance operating company. PLICO will invest a total of $310 million consisting of a ceding commission paid to Liberty Life and statutory capital to support the business at Protective's target regulatory risk-based capital level of 350%. Liberty Life's closed block of individual life insurance, with about $1.6 billion in reserves and assets that will be transferred to PLICO, will become part of Protective's Acquisition segment. Moody's Vice President and Senior Credit Officer, Ann Perry commented, "The affirmation of Protective's ratings and stable outlook reflect the relatively low risk profile of the acquired liabilities, and the expectation that the NAIC risk based capital ratio will be maintained at a minimum of 350%. Liberty Life's individual life insurance business is a seasoned block of primarily small 'home service' policies with predictable persistency and mortality. Protective has a core competency of acquiring small life insurance companies and blocks of business and has a proven track record of administering the business on a cost-efficient basis." Because of the large number of small policies being acquired, Moody's said that it expects Protective will outsource policy administration for the Liberty Life block. The Acquisitions segment has historically produced stable and predictable profits. With earnings from the Liberty Life acquisition, as well as the recently announced United Investors Life Insurance Company transaction, the Acquisition segment's contribution to total company earnings is expected to grow to more than 35%. In conjunction with the transaction, Protective has also announced that it plans to complete a 10-year letter of credit facility to provide collateral for up to approximately $900 million of reserves associated with term life insurance business written by its subsidiaries in 2008 through 2010 and required by Regulation XXX. By ceding XXX reserves to a captive insurance company, PLICO expects to free up regulatory capital and substantially improve its RBC ratio. Moody's noted that the affirmation of Protective's credit ratings, with stable outlook, incorporates the expectation that the company will complete the LOC transaction prior to year- end 2010. Moody's added that Protective's financing of the transaction entirely with internally generated funds at PLICO will allow the company to maintain financial leverage at a moderate 25% (as of June 30, 2010), while the expected addition to statutory earnings from the acquisition should help replenish the initial reduction in regulatory capital as well as provide a modest boost to interest coverage. Although the Liberty Life investments acquired under the reinsurance transaction contain about 30% in commercial mortgages, these loans are well diversified and the bond portfolio is entirely investment grade, with a concentration in higher quality credits. The rating agency noted, however, that the Liberty Life transaction and the UILIC acquisition are expected to close within a short time of each other. The timing proximity heightens execution risk and has the potential to strain internal resources at Protective. In addition, Protective faces challenges in light of a continuing weak economy and the pressure that a stress scenario could place on its earnings and regulatory capital. Pressure on regulatory capital will be increased as over $500 million of capital is expected to be deployed in completing the two acquisitions. According to Moody's, Protective's ratings reflect the company's diverse revenue and earnings sources, multiple distribution channels, and stable earnings from a number of acquired blocks of individual life insurance business. Protective's investment losses have lessened in 2010 compared to 2009, and are expected to continue to decrease over the next several quarters. Protective also has no short-term debt outstanding, and its next significant debt maturity is $250 million due in 2013. These ratings were affirmed with a stable outlook: * Protective Life Corporation -- senior unsecured debt at Baa2; senior unsecured shelf at (P)Baa2; subordinated shelf at (P)Baa3; preferred shelf at (P)Ba1; junior preferred shelf at (P)Ba1; capital securities at Ba1; * Protective Life Insurance Co. -- insurance financial strength at A2; short-term insurance financial strength at Prime-1; * West Coast Life Insurance Co. -- insurance financial strength at A2; * PLC Capital Trusts III-V -- trust preferred at Baa3; * PLC Capital Trusts VI-VIII -- trust preferred shelf at (P)Baa3; * Protective Life Secured Trusts -- senior secured at (P)A2; * Protective Life U.S. Funding Trusts -- senior secured at (P)A2; * General Repackaging ACES SPC 2006-1, General Repackaging ACES SPC 2007-1 -- funding agreement-backed senior secured debt rating at A2. On June 30, 2010, the company reported total consolidated GAAP assets of approximately $44.6 billion and shareholders' equity of about $3.1 billion. RADHA REALTY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Radha Realty, Inc. dba Comfort Inn & Suites 6752 W. Indiantown Road Jupiter, FL 33458 Bankruptcy Case No.: 10-42559 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Erik P. Kimball Debtor's Counsel: Bradley S. Shraiberg, Esq. SHRAIBERG, FERRARA, & LANDAU P.A. 2385 NW Executive Center Dr. #300 Boca Raton, FL 33431 Tel: (561) 443-0801 Fax: (561) 998-0047 E-mail: bshraiberg@sfl-pa.com Estimated Assets: $50,001 to $100,000 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/flsb10-42559.pdf The petition was signed by Mahendra Patel, president. RENE COUMANS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Rene H. Coumans dba Belle Vue Dairy 3415 FM 1567 E Como, TX 75431 Bankruptcy Case No.: 10-43677 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Robert T. DeMarco, Esq. Michael S. Mitchell DEMARCO-MITCHELL, PLLC 1255 West 15th St., 805 Plano, TX 75075 Tel: (972) 578-1400 Fax: (972) 346-6791 E-mail: robert@demarcomitchell.com mike@demarcomitchell.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Mr. Coumans. The Debtor did not file its list of largest unsecured creditors when it filed its petition. ROTHSTEIN ROSENFELDT: Trustee Sues Rothstein's Cousin ----------------------------------------------------- Jon Burstein, writing for South Florida Sun-Sentinel, reports that bankruptcy trustee Herbert Stettin sued Robin Kempner, one of Scott Rothstein's cousins, on Monday, "accusing her of pocketing more than $620,000 as her relative ran South Florida's largest financial fraud ever." According to the Sun-Sentinel, the lawsuit accesses Mr. Kempner of pocketing more than $620,000 from Mr. Rothstein's fraud. The suit says Mr. Rothstein paid off the mortgage on Ms. Kempner's Pompano Beach home, as well as employing her at his law firm -- Rothstein Rosenfeldt Adler. The firm was paying her $100,000 annually. "The (bankruptcy) trustee challenges the reasonableness of the payments made to Kempner as salary for 2008 and 2009," the Sun- Sentinel quotes the lawsuit as saying. "The amounts are challenged as being overpayments of compensation for the two-year period subject to this lawsuit because they were unreasonable and improper." About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA, has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non-existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. RW LOUISVILLE: Gets Court's Interim Nod to Use Cash Collateral -------------------------------------------------------------- RW Louisville Hotel Associates, LLC, sought and obtained interim authorization from the U.S. Bankruptcy Court for the Western District of Kentucky to use $660,000 of the cash collateral for the four week period beginning October 11, 2010. As of the Petition Date, the Debtor has assets including the hotel Real Property and improvements assessed for tax purposes at $10 million, and accounts receivable, inventory and other personal property the value of which is being determined. The Real Property is subject to a recorded mortgage executed on May 21, 1998, in favor of Column Financial, Inc., in the original principal amount of $18,500,000. The Mortgage secures a May 21, 1998 Promissory Note by the Debtor to Column in the original principal sum of $18,500,000. In conjunction with the Note and Mortgage, the parties executed and caused the recording of an Assignment of Leases and Rents. The Note, Mortgage and Assignment of Leases and Rents were subsequently assigned to and are currently held by Wells Fargo Bank, N.A., as Trustee, for the Registered Holders of DLJ Commercial Mortgage Corp., Commercial Mortgage Pass-Through Certificates, Series 1998-CF2. Wells Fargo will contend that rents and other proceeds derived from the Real Property are subject to the Loan Documents and are its cash collateral. As of the Petition Date, the Debtor was indebted to the Trust in the approximate principal amount of $13.9 million. The Debtor has been making monthly interest payments and sending to Wells Fargo for escrow the required funds for taxes and insurance. Lea Pauley Goff, Esq., at Stoll Keenon Ogden PLLC, explained that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. As adequate protection of the Trust's asserted interest in the Cash Collateral, the Debtor proposes that Wells Fargo be granted replacement liens in post-petition inventory, accounts receivable, and proceeds thereof generated by the Debtor's post-petition operations. The Debtor also proposes to escrow funds for the payment of property taxes to replace the previously escrowed funds which Wells Fargo has taken. Wells Fargo objected to the Debtor's use of cash collateral, saying that the Debtor isn't capable of adequately protecting Wells Fargo in exchange for any use of cash collateral, as it has no unencumbered cash to make periodic payments and it has no unencumbered assets on which to grant replacement liens. The Debtor's offer of protection is insufficient, according to Wells Fargo. The Court has set a final hearing for November 15, 2010, at 1:30 p.m. on the Debtor's request to use cash collateral. Wells Fargo is represented by Stites & Harbison, PLLC. Louisville, Kentucky-based RW Louisville Hotel Associates, LLC, aka Holiday Inn Hurstbourne, owns a hotel property located at 1325 South Hurstbourne Parkway, Louisville, Kentucky 40222. It is an independent franchisee of InterContinental Hotels Group and operates a 271 room full-service Holiday Inn on the Real Property and employs approximately 110 employees. RW Louisville filed for Chapter 11 protection on October 8, 2010 (Bankr. W.D. Ky. Case No. 10-35356). Emily Pagorski, Esq., and Lea Pauley Goff, Esq., at Stoll Keenon Ogden PLLC, assist RW Louisville in its restructuring effort. RW Louisville estimated its assets and debts at $10 million to $50 million at the Petition Date. SEA ISLAND: Creditors' Recovery Doubled as Lenders Settle --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, stated that Sea Island Co. is set for approval of the liquidating Chapter 11 plan at a Nov. 4 confirmation hearing as the result of a settlement between unsecured creditors and secured lenders. Mr. Rochelle relates that as a result of the settlement, the lenders are increasing the fund for unsecured creditors to $6.33 million from $3 million. The lenders are also making $217,000 available to finance a liquidating trust. Directors and officers won't receive releases, although plaintiffs in lawsuits may only recover from directors' and officers' liability insurance policies. The settlement ended disputes over which assets are covered by the secured lenders' liens and which aren't. The bankruptcy court will consider approval of the settlement at the Nov. 4 confirmation hearing. The hearing is also to approve the $212.4 million sale of the assets to a group including Oaktree Capital Management LP, Avenue Capital Group, Starwood Capital Group Global LP and Anschutz Corp. The opening bid at auction had been $197.5 million. About Sea Island St. Simons Island, Georgia-based Sea Island Company -- http://www.seaisland.com/-- aka Sea Island Shooting School, Sea Island Yacht Club, Sea Island Stables, and Cabin Bluff, is a private resort and real estate development company founded in 1926. Sea Island Company owns and operates Sea Island Resorts, featuring two of the world's most exceptional destinations: the Forbes Five-Star Cloister at Sea Island and The Lodge at Sea Island. Sea Island filed for Chapter 11 protection on August 10, 2010 (Bankr. S.D. Ga. Case No. 10-21034). Sea Island filed a Chapter 11 plan based upon an agreement to sell substantially all of its assets to Sea Island Acquisition LP, a limited partnership formed by investment funds managed by the global investment firms Oaktree Capital Management, L.P., and Avenue Capital Group. Sarah R. Borders, Esq., Harris Winsberg, Esq., Sarah L. Taub, Esq., and Jeffrey R. Dutson, Esq., at King & Spalding LLP, assist the Debtor in its restructuring effort. Robert M. Cunningham, Esq., at Gilbert, Harrell, Sumerford & Martin PC, is the Debtor's co-counsel. FTI Consulting, Inc., is the Debtor's restructuring advisor. EPIQ Bankruptcy Solutions, LLC, is the Debtor's claims and notice agent. Donald F. Walton, the U.S. Trustee for Region 21, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of Sea Island Company, et al. The official committee of unsecured creditors has retained Jordi Guso, Esq. and Berger Singerman, P.A. as its counsel. The Debtor estimated its assets and debts at $500 million to $1 billion as of the Petition Date. Affiliates Sea Island Coastal Properties, LLC; Sea Island Services, Inc.; Sea Island Resort Residences, LLC; Sea Island Apparel, LLC; First Sea Island, LLC; and Sical, LLC, filed separate Chapter 11 petitions on August 10, 2010. SENSATA TECHNOLOGIES: Posts $48MM Net Loss in Sept. 30 Quarter -------------------------------------------------------------- Sensata Technologies B.V. filed its quarterly report on Form 10-Q with the Securities and Exchange Commission, reporting a net loss of $48.43 million on $383.29 million of net revenue for the three months ended Sept. 30, 2010, compared with a net loss of $54.02 million on $302.47 million of net revenue for the same period a year earlier. The Company's balance sheet at Sept. 30, 2010, showed $3.25 billion in total assets, $2.42 billion in total liabilities, and stockholder's equity of $825.96 million. A full-text copy of the quarterly report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?6cff About Sensata Almelo, Netherlands-based Sensata Technologies B.V. -- http://www.sensata.com/-- supplies sensing, electrical protection, control and power management solutions. Majority- owned by affiliates of Bain Capital Partners, LLC, a leading global private investment firm, and its co-investors, Sensata employs approximately 9,500 people in nine countries. Sensata's products improve safety, efficiency and comfort for millions of people every day in automotive, appliance, aircraft, industrial, military, heavy vehicle, heating, air-conditioning, data, telecommunications, recreational vehicle and marine applications. As reported by the TCR on December 7, 2009, Moody's Investors Service has upgraded Sensata Technologies B.V.'s Corporate Family and Probability of Default ratings to Caa1 from Caa2, as well as the company's senior secured credit facility to B2, senior unsecured notes to Caa2, and senior subordinated notes to Caa3. In a related rating action, Moody's affirmed the Company's Speculative Grade Liquidity rating at SGL-3. The outlook is positive. The TCR on Nov. 4, 2009, said that Standard & Poor's affirmed the ratings on Attleboro, Massachusetts-based Sensata Technologies, Inc., including the 'CCC+' corporate credit rating. At the same time, S&P revised the outlook on the company to stable from negative. Standard & Poor's Ratings Services raised its ratings on sensors and controls manufacturer Sensata Technologies B.V., including the corporate credit rating, to 'B+' from 'B'. The outlook is positive. Moody's Investors Service has upgraded Sensata Technologies B.V.'s Corporate Family and Probability of Default ratings to B2 from B3. In a related action, the company's senior secured credit facility was affirmed B1, senior unsecured notes affirmed Caa1, and senior subordinated notes upgraded to Caa1 from Caa2. Moody's also upgraded the company's Speculative Grade Liquidity rating to SGL-2 from SGL-3. The rating outlook is positive. SHARON CASTER: GMAC Can Foreclose on Leased Vehicle --------------------------------------------------- The Hon. Pat E. Morgenstern-Clarren grants a request by GMAC, now known as Ally Financial Inc., for relief from stay to permit it to exercise its legal rights with respect to Sharon E. Caster's leased vehicle. The Debtor tried, but failed, to block GMAC's bid. A copy of the Court's memorandum of opinion is available at http://is.gd/glz05from Leagle.com. Sharon E. Carter filed for Chapter 7 bankruptcy protection (Bankr. N.D. Ohio Case No. 09-17748) on August 19, 2009. On the Debtor's unopposed motion, the court converted the case to Chapter 11 on July 28, 2010. SOFTLAYER HOLDINGS: S&P Assigns 'B+' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned Dallas, Texas-based IT hosting and managed services provider SoftLayer Holdings Inc. its preliminary corporate credit rating of 'B+'. The rating outlook is stable. At the same time, S&P assigned the company's $275 million senior secured credit facility a preliminary issue-level rating of 'B+' (at the same level as S&P's 'B+' corporate credit rating on SoftLayer). S&P also assigned this debt a preliminary recovery rating of '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. The facility consists of a $255 million term loan due 2016 and a $20 million revolving credit facility due 2015, with subsidiaries ThePlanet.com Internet Services, Inc. and SoftLayer Technologies, Inc., listed as co-borrowers. The company plans to use credit facility proceeds to cover costs related to the merger of SoftLayer Technologies and ThePlanet.com, which includes repayment of existing debt at the entities, fees and integration costs, and payment to exiting equity investors. Private equity firm GI Partners holds a majority stake in each company, and will maintain majority ownership of the merged entity. S&P expects to assign final ratings upon closing of the proposed transaction and its review of final documentation. "The preliminary ratings reflect the competitive, fragmented nature of the hosting and managed services sector, as well as risks associated with SoftLayer's target customer base in the Internet-centric small and midsize business market," said Standard & Poor's credit analyst Michael Senno. Further, most customers operate on month-to-month contracts with no commitments, exposing SoftLayer to cyclical trends or potential technological change. However, S&P expects continued double-digit annual revenue growth pro forma for the merger, due to the high growth trends in IT outsourcing and managed services. This growth expectation partially mitigates the business risks facing the company. Additional scale from the merger will strengthen SoftLayer's position in the fragmented market, and provide leverage to negotiate better rates for bandwidth and data-center leases, its two biggest non-labor costs. SoftLayer's business model employs a flexible capital spending program that S&P believes will allow the company to scale back expenditures if growth fails to materialize. The company purchases most servers as demand warrants and can redeploy servers from exiting customers to new customers, which should mitigate overexpansion risk and help the company maintain positive free operating cash flow. Pro forma for the transaction, S&P expects the combined entity to have generated about $267 million in revenue and about $103 million in EBITDA for the 12 months ended Sept. 30, 2010. SOUTH TAHOE: District To Manage Public Transit Starting Nov. 1 -------------------------------------------------------------- Annie Flanzraich at Nevada Appeal reports that South Tahoe Area Transit Authority's public transit could be under the management of the Tahoe Transportation District on Nov. 1, 2010, assuming certain conditions set by the district's board of directors are met. According to the report, a number of those conditions hinge on the bankruptcy proceedings regarding BlueGo's former management agency, the South Tahoe Area. South Tahoe Area filed for bankruptcy due to an ongoing lawsuit brought against it by MV Transportation, its former operating contractor. MV Transportation contends that South Tahoe Area owes more than $2 million for previous service and improvements to the bus fleet. Based in Stateline, Nevada, South Tahoe Area Transit Authority filed for Chapter 11 bankruptcy protection on Sept. 13, 2010 (Bankr. D. Nev. Case No.: 10-53666). Gregg W. Zive preceded the case. Jeffrey L. Hartman, Esq., at Hartman & Hartman, represents the Debtor. The Debtor listed assets of $394,369, and debts of $3,585,585. SOUTHCROSS COMMERCE: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Southcross Commerce Center III, LLC 2999 West County Road 42, Suite 206 Burnsville, MN 55306 Bankruptcy Case No.: 10-37697 Chapter 11 Petition Date: October 25, 2010 Court: United States Bankruptcy Court District of Minnesota (St Paul) Judge: Gregory F. Kishel Debtor's Counsel: Thomas G. Wallrich, Esq. HINSHAW & CULBERTSON LLP 333 South Seventh Street, Suite 2000 Minneapolis, MN 55402 Tel: (612) 333-3434 E-mail: twallrich@hinshawlaw.com Scheduled Assets: $5,851,238 Scheduled Debts: $5,127,952 The Debtor did not file a list of its largest unsecured creditors together with its petition. Debtor-affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- EFH Co. 10-37219 09/30/10 EFH Realty Advisors, Inc. 10-37218 09/30/10 The petition was signed by Eugene F. Happe, president/director. SPENCER CREEK: A Single Asset Real Estate Case, Court Rules ----------------------------------------------------------- The Hon. George C. Paine, II, determines, at the behest of Renasant Bank, that Spencer Creek Properties is a "single asset real estate" case as defined in 11 U.S.C. Sec. 101(51B). As of the Petition Date, Spencer Creek owed the Bank $5,900,000 secured by 25 residential lots known as the "Carolina Close" subdivision in Franklin, Tennessee. The Real Property is platted and taxed as 28 separate residential lots, 25 of which are still owned by the Debtor. A copy of the Court's memorandum dated Oct. 25, 2010, is available at http://is.gd/glrWYfrom Leagle.com. Based in Nashville, Tennessee, Spencer Creek Properties filed for Chapter 11 bankruptcy protection (Bankr. M.D. Tenn. Case No. 10-08732) on August 18, 2010. Elliott Warner Jones, Esq., at Emerge Law PLC, serves as Debtor's bankruptcy counsel. The Debtor estimated $1 million to $10 million in both assets and debts. STRATEGIC PARTNERS: S&P Assigns 'B' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to Chatsworth, Calif.-based Strategic Partners Inc. The outlook is stable. At the same time, S&P assigned its 'B' issue rating to the company's $205 million senior secured credit facility, which consists of a five-year $30 million revolving credit facility and a six-year $175 million term loan. The recovery rating is a '4', indicating S&P's expectation of average (30% to 50%) recovery in the event of a payment default. Net proceeds of the term loan, along with a new $75 million unsecured mezzanine loan (unrated) and $212.4 million in common equity, financed the acquisition of Strategic Partners by BAML Capital Partners. Strategic Partners had about $250 million in debt outstanding when the transaction closed in August 2010. "The ratings on Strategic Partners reflect the company's substantial concentration and minimal bargaining power with its largest customer Wal-Mart Stores Inc., which constitutes 35% of sales; small size; narrow business focus; and participation in a highly competitive industry," said Standard & Poor's credit analyst Brian Milligan. Strategic Partners benefits from a strong market share, but does so in a niche market segment. The ratings also incorporate S&P's expectation that the company will use a substantial portion of its excess free cash flows (after capital expenditures) for debt reduction. Strategic Partners is a narrowly focused company that supplies medical uniforms (83% of sales), school uniforms (10%), and footwear/accessories (7%) in the U.S. According to management, the company has a 42% market share in the niche U.S. medical uniform market (including 8% contribution from recently acquired Dickies license). Strategic Partners outsources substantially all of its manufacturing to suppliers, most of which are in low-cost countries. The company provides medical uniforms under brand names such as Cherokee and the recently added Dickies license. The company believes its Cherokee and Dickies brands represent the No. 1 and No. 2 brands, respectively, in the U.S. medical uniform industry. The company also has a considerable private-label business. Basic and fashion solids account for approximately 67% of sales, with the balance consisting of prints, including licenses of fictional characters. The stable outlook reflects S&P's expectation for consistent sales and margin performance, continued medical uniform market share gains, and a financial policy which leads to steadily improved credit measures. In addition, the outlook reflects S&P's expectation for continued free cash flow generation, sufficient covenant cushion, and adequate liquidity. However, S&P could lower the ratings if there is a significant reduction or loss of business from Wal-Mart, liquidity becomes constrained, or if financial policy becomes more aggressive, thereby restricting steady credit measure improvement. S&P could also lower the rating if covenant cushion falls below 10%. EBITDA would need to decline 15% from current levels for this to occur. Although less likely, S&P could raise the ratings if Wal-Mart's revised merchandising strategy and the Dickies brand addition lead to accelerated revenue growth and margin expansion, resulting in significantly stronger credit measures, including total debt to EBITDA approaching 3.5x. EBITDA would need to increase 30% from current levels for this to occur. SUNTRUST BANK: Fitch Puts BB- Support Rating on Watch Negative -------------------------------------------------------------- Fitch Ratings has placed the Support and Support Floor ratings of SunTrust Bank on Rating Watch Negative following initial interpretation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its implications for systemically important financial institutions. SunTrust Bank's Issuer Default Rating and issue-level ratings are currently above their Support Floor Ratings as the IDR and issue-level ratings reflect the company's stand-alone strength, and do not rely on any implied government support. As such, SunTrust Bank's IDR and issue-level ratings are unaffected by the action. The ratings of SunTrust Bank's parent company SunTrust Banks, Inc. and its other affiliates are also unaffected. Similar actions have been taken for other large U.S. banks. Refer to Fitch's press release dated Oct. 22, 2010, titled 'Fitch: U.S. FI Support Ratings Potentially Impacted by Proposed FDIC Rules' for additional information. Fitch's ratings of banks have always encompassed a view of intrinsic creditworthiness expressed through the Individual rating, while Fitch's view of Support has been expressed separately through its Support framework. Support Ratings communicate Fitch's judgment on whether the bank would receive support from the U.S. Government should this become necessary. The recently enacted legislative framework and potential regulatory rulemaking primarily affect Fitch's sovereign Support framework. Fitch places these ratings on Rating Watch Negative: SunTrust Bank -- Support '3'; -- Support Floor 'BB-'. SYNCORA HOLDINGS: Expects Decrease in Statutory Capital ------------------------------------------------------- Syncora Holdings Ltd. said on Monday its wholly owned, New York domiciled financial guarantee subsidiary, Syncora Guarantee Inc., estimates that, based on information available to date, it will record a decrease in its statutory policyholders' surplus of roughly $25 million to $40 million for the third quarter of 2010, principally as a result of adverse development with respect to residential mortgage backed securities and other guaranteed transactions. The Company previously reported statutory policyholders' surplus of $143.8 million as of June 30, 2010. In connection with the adverse development of its reserves, Syncora Guarantee has identified a potential mismatch of future long-term claim payments and reimbursement of such claim payments which may impact liquidity at that time. If not mitigated, these issues could materially impair the Company's ability to satisfy its future obligations. Syncora is actively exploring means of addressing the liquidity, surplus and other challenges that it faces. In addition, Syncora Guarantee expects the discount rate used in the calculation of its reserves and loss adjustment expenses at December 31, 2010, to be lower, as compared to that used in prior periods during 2010 and as of December 31, 2009. While this discount rate is only one factor in the calculation of such reserves, a decrease in this rate will cause the Company's reserves and loss adjustment expenses to increase and such increase may have a material adverse effect on the Company's policyholders' surplus. As reported by the Troubled Company Reporter-Latin America, Syncora said on July 20, 2010, Syncora Guarantee completed its remediation plan sufficient to meet its minimum statutory policyholder surplus requirements and address short and medium term liquidity issues. The remediation plan included purchases of certain of SGI's guaranteed exposures, monetization of certain of its illiquid assets, receipt of a partial pre-payment of a surplus note from its wholly owned subsidiary Syncora Capital Assurance Inc. and various other loss remediation and restructuring actions. About Syncora Holdings Ltd. Based in Bermuda, Syncora Holdings Ltd. (OTC: SYCRF) -- http://www.syncora.com/-- through its subsidiary, Syncora Guarantee Inc., a monoline financial guarantee insurance provider, provides credit enhancement for the obligations of debt issuers worldwide. As of July 21, 2010, the company continues to carry Moody's "C" long term and preferred stock rating. As reported by the TCR on July 30, 2010, Standard & Poor's Ratings Services withdrew its 'D' counterparty credit rating and its 'R' financial strength and financial enhancement ratings on Syncora Guarantee Inc. Standard & Poor's also said that it affirmed its 'C' issuer credit rating on Twin Reefs Pass-Through Trust and its 'CC' financial strength and financial enhancement ratings on Syncora Guarantee U.K. Ltd. In addition, the 'C' preferred stock rating on Syncora Holdings Ltd. remains on CreditWatch negative. Standard & Poor's subsequently withdrew all of these ratings as well. TERRESTAR NETWORKS: Organizational Meeting on Oct. 29 ----------------------------------------------------- Tracy Hope Davis, United States Trustee for Region 2, will hold an organizational meeting on October 29, 2010, at 11:00 a.m. in the bankruptcy case of TerreStar Networks, Inc., et al. The meeting will be held at the United States Trustee Meeting Rooms, 80 Broad Street, 4th Floor, New York, NY 10004. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. 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: Proposes Akin Gump as Bankr. Counsel -------------------------------------------------------- TerreStar Networks Inc. and its units seek the U.S. Bankruptcy Court for the Southern District of New York's authority to employ Akin Gump Strauss Hauer & Feld LLP as their attorneys nunc pro tunc to the Petition Date. Jeffrey Epstein, TerreStar Networks, Inc.'s president and chief executive officer, relates that the Debtors have selected Akin Gump to serve as their attorneys because of the firm's knowledge of their business and financial affairs and the firm's extensive general experience and institutional knowledge, and, in particular, its recognized expertise with business reorganizations under Chapter 11 of the Bankruptcy Code. The Debtors propose to employ Akin Gump to render these services: a. Advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued operation of their business and the management of their properties; b. Advise the Debtors and take all necessary or appropriate actions at the Debtors' direction with respect to protecting and preserving the Debtors' estates, including the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; c. Draft all necessary or appropriate motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates on behalf of the Debtors; d. Represent the Debtors in negotiations with all other creditors, equity holders, and other parties-in-interest, including governmental authorities; e. Advise the Debtors with respect to the cross-border issues in the Chapter 11 cases; f. Take all necessary or appropriate actions in connection with a plan or plans of reorganization and related disclosure statement and all related documents, and the further actions as may be required in connection with the administration of the Debtors' estates; and g. Perform and advise the Debtors as to all other necessary legal services in connection with the Chapter 11 cases, including, without limitation, any general corporate legal services. Akin Gump will work closely with Fraser Milner Casgrain LLP and Stikeman Elliot LLP, Canadian counsel to the Debtors, and any other professionals that may be employed by the Debtors. Akin Gump will take whatever steps are necessary and appropriate to avoid any unnecessary duplication of services with other professionals. The Debtors propose to pay Akin Gump at its standard hourly rates which currently are: -- $525 to $1,150 for partners, -- $475 to $835 for counsel, -- $325 to $600 for associates, and -- $125 to $290 for paraprofessionals. The current hourly rates for Akin Gump's attorneys with primary responsibility in the Debtors' Chapter 11 cases are: -- Ira S. Dizengoff, Partner for Finc'l. Restructuring, $950 -- Russell W. Parks Jr., Partner for Corporate, $880 -- Arik Preis, Counsel for Financial Restructuring, $675 -- Joanna Newdeck, Counsel for Financial Restructuring), $575 -- Ashleigh L. Blaylock, Associate-Finc'l Restructuring, $430 -- Kelly Labritz, Senior Attorney-Corporate, $575 In addition, the Debtors seek to reimburse all of Akin Gump's actual and necessary expenses that are incurred in connection with the contemplated representation, including, but not limited to, photocopying services, printing, delivery charges, filing fees, postage, and computer research time. Ira S. Dizengoff, Esq., a member of Akin Gump, assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. 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 Nod for Garden City as Claims Agent ------------------------------------------------------------ TerreStar Networks Inc. and its units sought and obtained the U.S. Bankruptcy Court's authority to employ The Garden City Group, Inc., as their claims and noticing agent. Garden City's employment will maximize efficiency in administering the Debtors' Chapter 11 cases and will ease administrative burdens that otherwise would fall upon the Debtors and the Clerk of the United States Bankruptcy Court for the Southern District of New York, Jeffrey Epstein, TerreStar Networks, Inc.'s president and chief executive officer, relates. Garden City is a bankruptcy administrator that specializes in providing comprehensive Chapter 11 administrative services including noticing, claims processing, balloting and other related services critical to the effective administration of Chapter 11 cases. As the Debtors' claims and noticing agent, Garden City will undertake these actions and procedures: (a) Notify all potential creditors of the filing of the bankruptcy petitions and of the setting of the date for the first meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code, under the proper provisions of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure; (b) Maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs, listing the Debtors' known creditors and the amounts owed; (c) Notify all potential creditors of the existence and amount of their claims as evidenced by the Debtors' books and records and as set forth in the Debtors' Schedules of Assets and Liabilities; (d) Furnish a notice of the last date for the filing of proofs of claim and a form for the filing of a proof of claim, after the notice and form are approved by the Court; (e) Maintain a post office box for the purpose of receiving claims; (f) For all notices, file with the Clerk's Office an affidavit or certificate of service, which includes a copy of the notice, a list of persons to whom it was mailed, and the date mailed, within seven days of service; (g) Docket all claims received by the Clerk's Office, maintain the official claims register for the Debtors on behalf of the Clerk's Office, and, upon the receipt of a request from the Clerk's Office, provide the Clerk's Office with a certified duplicate, unofficial Claims Register; (h) Specify, in the Claims Register, these information for each claim docketed: * the claim number assigned; * the date received; * the name and address of the claimant and agent, if applicable, who filed the claim; and * the classifications of the claim; (i) Record all transfers of claims and provide any notices of the transfers as required by Rule 3001(e) of the Federal Rules of Bankruptcy Procedure; (j) Relocate, by messenger or overnight courier, all of the court-filed proofs of claim to the offices of GCG, not less than weekly; (k) Upon completion of the docketing process for all claims received to date for each case, turn over to the Clerk's Office copies of the claims register for review by the Clerk's Office; (l) Make changes in the Claims Registers pursuant to Court Order; (m) Maintain the official mailing list for each Debtor of all entities that have filed a proof of claim, which will be available upon request by a party-in-interest or the Clerk's Office; (n) Assist with, among other things, solicitation and calculation of votes and distribution as required in furtherance of confirmation of a Chapter 11 plan of reorganization; (o) Arrange to have submitted to the Court, 30 days prior to the close of these cases, a proposed Order dismissing the claims and noticing agent and terminating the services of the agent upon completion of its duties and responsibilities and upon the closing of the Chapter 11 cases; (p) File with the Court the final version of the claims register immediately before the close of the Chapter 11 cases; and (q) At the close of the case, box and transport all original documents, in proper format, as provided by the Clerk's Office, to the Federal Archives Record Administration, located at Central Plains Region, 200 Space Center Drive, Lee's Summit, MO 64064. As full compensation for the services to be provided by Garden City, the Debtors will pay the firm's fees according to a pricing schedule. A copy of the Pricing Schedule is available for free at http://bankrupt.com/misc/TSN_GCGPriceSked.pdf In addition, the Debtors will pay Garden City a $50,000 retainer, to be applied first against the prepetition fees and expenses incurred by the Debtors in connection with the Services and then against the final bill for the postpetition fees and expenses incurred by the Debtors in connection with the Services. Mr. Epstein notes that Garden City has received $169,100 in advances; has applied $119,100 to its prepetition fees and expenses; and will apply the balance first against any additional prepetition fees and expenses and then against the last bill for fees and expenses that it will incur in the Chapter 11 cases. Angela Ferrante, a senior director of Garden City, declared that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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) TOUSA INC: Expanding Mediation Amid Outstanding Appeal ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the bankruptcy judge overseeing the liquidation of Tousa Inc. directed warring factions to expand the scope of the mediation that began Oct. 12. Mr. Rochelle relates that originally, Tousa and the Official Committee of Unsecured Creditors were in mediation with lenders who were on the losing end of a decision in October 2009 that secured loans were infected by fraudulent transfers. This week, the bankruptcy judge directed that the mediation be expanded in scope to include officers and directors who also are being sued. Early this month, the bankruptcy judge denied a motion by the officers and directors to dismiss the suit. According to Mr. Rochelle, although the mediation is under way, two U.S. district judges held arguments last week on appeals taken by the lenders from the fraudulent transfer judgment. The bankruptcy judge appointed New York bankruptcy lawyer Peter L. Borowitz to serve as mediator. The mediation will continue until Mr. Borowitz declares an impasse. The objective of the mediation is to craft a settlement of the fraudulent transfer suits and thereby enable confirmation of a consensual Chapter 11 plan. The bankruptcy judge, John K. Olson in Fort Lauderdale, Florida, ruled last year that the bailout and refinancing in mid-2007 of a joint venture in Transeastern Properties Inc. included fraudulent transfers. About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on January 29, 2008 (Bankr. S.D. Fla. Case No. 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq., and Paul M. Basta, Esq., at Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger Singerman, to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. TRIBUNE CO: Amends Chapter 11 Plan to Add LBO Settlements --------------------------------------------------------- Tribune Company and its debtor affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware a joint plan of reorganization and an accompanying disclosure statement on October 22, 2010. The Plan incorporates the terms of two previously announced settlement agreements reached by the Official Committee of Unsecured Creditors Committee, Oaktree Capital Management, L.P., Angelo, Gordon & Co, L.P., and JPMorgan Chase Bank, and endorsed by Judge Kevin Gross, the mediator in the Debtors' Chapter 11 cases. The settlements resolve disputes related to the 2007 leveraged buy-out of Tribune. Under the Settlement, creditors of the Debtors, other than the Senior Lenders and Bridge Lenders, will receive cash recoveries totaling approximately $598 million, plus a share of recoveries obtained by the Creditors' Trust and Litigation Trust from prosecution of the Preserved Causes of Action. Of the $598 million in total cash recoveries, $521 million is being provided as Settlement consideration by the current Senior Lenders, the Step Two Arrangers and certain current or former Senior Lenders, and Bridge Lenders that received principal, interest or fees in respect of the Bridge Loan Agreement or Incremental Senior Loans prior to the Petition Date and will be distributed under the Settlement Plan to the Holders of Senior Noteholder Claims, Other Parent Claims, Convenience Claims, and General Unsecured Claims against the Filed Subsidiary Debtors. In return, the Estate would release all LBO-Related Causes of Action other than certain specific Preserved Causes of Action against those parties in certain capacities. All Preserved Causes of Action would be transferred primarily to either the Creditors' Trust or the Litigation Trust for pursuit after the Effective Date of the Settlement Plan for the benefit of Tribune's creditors. The Plan, according to Tribune, keeps the company intact, sharply reduce its debt, and turn ownership over to holders of the company's Initial and Incremental Term Loans. "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 filed with the Plan contain highlights of Tribune'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. Summary of Allowed Claims and Interests Claims & Estimated Description Allowed Claims Treatment ----------- -------------- --------- Priority Non-tax Claims (Class 1A) $0 to $1 million Unimpaired Other Secured Claims (Class 1B) Undetermined Unimpaired Senior Loan Claims (Class 1C) $8.571 billion Impaired Bridge Loan Claims $0, as of the (Class 1D) Effective Date Impaired Senior Noteholder Claims (Class 1E) $1.283 billion Impaired Other Parent Claims (Class 1F) $260-$350 million Impaired Convenience Claims (Class 1G) $0 to $1 million Unimpaired EGI-TRB LLC Notes $0, as of the Claims (Class 1I) Effective Date Impaired PHONES Notes Claims (Class 1J) $760,880,790 Impaired Intercompany Claims (Class 1K) N/A Impaired Securities Litigation Claims (Class 1L) Undetermined Impaired Tribune Interests (Class 1M) N/A Impaired Priority Non-Tax Claims (Class 2A-111A) $0 to $1 million Unimpaired Other Secured Claims (Class 2B-111B) Undetermined Unimpaired Senior Guaranty Claims (Classes 50C- 111C) $8.722 billion Impaired Bridge Loan Guaranty $0, as of the Claims(Class 50D-111D) Effective Date Impaired General Unsecured Claims(Classes 2E- $85 million to $150 111E) million Impaired Intercompany Claims (Class 2K-111K) N/A Impaired Securities Litigation Claims(Classes 2L- 111L) Undetermined Impaired Interests in the Filed Subsidiary Debtors (Classes 2M- 111M) N/A Unimpaired According to Tribune, if the Settlement Plan is not confirmed, the alternatives include (i) continuation of the Chapter 11 cases, (ii) approval of a competing plan, or (iii) liquidation of the Debtors under Chapter 7 or Chapter 11 of the Bankruptcy Code. A full-text copy of the Settlement Plan is available for free at http://bankrupt.com/misc/Tribune_PlanOct22.pdf A full-text copy of the Specific Disclosure Statement relating to the Joint Plan of Reorganization filed by the Debtors, the Committee, Oaktree, Angelo Gordon and JPMorgan is available for free at http://bankrupt.com/misc/Tribune_SpecificDS.pdf A full-text copy of the Joint Disclosure Statement for any competing plan is available for free at: http://bankrupt.com/misc/Tribune_DSoct22.pdf Plan Confirmation Schedule A status conference was held on October 13, 2010, before the Court concerning, among other things, certain deadlines in connection with considering the adequacy of certain disclosure documents that may be proposed in connection with any plans of reorganization. The Mediation Parties negotiated the terms and agreed on a revised proposed order providing that: (a) The Debtors will (i) on or prior to October 18, 2010, circulate to the Mediation Parties information regarding their revised valuation analysis evidencing the amount of value available for distribution to holders of allowed claims that will be set forth in the General Disclosure Document and (ii) on or prior to October 22, 2010, file with the Court their (x) plan of reorganization, (y) a Specific Disclosure Document describing their Plan and (z) the General Disclosure Document; (b) Any party-in-interest that wished to file a Plan will file a competing plan and a Specific Disclosure Document on or prior to October 29, 2010; (c) On or prior to November 9, 2010, parties-in-interest may file a statement limited to 5 pages per Competing Plan that they propose to include in the Master Disclosure Statement, which Responsive Statement will be limited to a discussion of Competing Plans or Specific Disclosure Documents previously filed by the various parties; (d) On or prior to November 16, 2010, parties-in-interest will file objections to the General Disclosure Document, the Specific Disclosure Documents, or the Responsive Statements; and (e) A hearing will be held on November 29, 2010, to consider approval of the General Disclosure Document, any Specific Disclosure Documents, and any Responsive Statements to be incorporated into the Master Disclosure Document. Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware signed the Revised Proposed Order submitted by the Debtors. Missouri Revenue Dept. Has Objection The Missouri Department of Revenue asserts that the terms of the Debtors' Plan of Reorganization lack specificity regarding payment of the Priority Tax Claims and would be extremely difficult to enforce in the event of a default in plan payments. The Debtors' Plan states that installment payment will commence after the Priority Tax Claims becomes and Allowed Claim, the Department points out. The Department has filed Priority Tax Claims totaling $4,175 for the 2006 and 2007 corporate income tax liability. The Department requests that the Debtors incorporate this language in the Plan or Confirmation Order should the Court confirm the Plan: "In the event that the Missouri Department of Revenue's Allowed Administrative Expenses, Allowed Priority Tax Claims, and Allowed General Unsecured Claims are not paid in accordance with the terms of the Plan of Reorganization or Confirmation Order, Debtor will be in default. The Department will provide Debtor with written notice of the default by mail. If default is not made good within fifteen (15) days after notification, the entire principal and accrued interest shall at once become due and payable without further notice. The Department may thereafter proceed with either or all of the following remedies: (a) enforce the entire amount of its claim under Missouri law; (b) exercise any and all its rights and remedies under Missouri law; (c) seek such relief as may be appropriate in this Court." 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 CO: Parties Object to Panel's 2nd Plea to Pursue Claims --------------------------------------------------------------- Wilmington Trust, Successor Indenture Trustee for the Exchangeable Subordinated Debentures due 2029 in the aggregate amount of $1.2 billion, and Merrill Lynch Capital Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated object to the reinstated motion of the Official Committee of Unsecured Creditors to prosecute claims on the Debtors' behalf. (a) Wilmington Trust Wilmington Trust complains that the Standing Motion raises these questions that need to be addressed: -- Whether the relief requested is too narrowly drawn. Causes of Actions related to the Leveraged ESOP Transactions are critically important, but there are other potentially valuable estate causes of action that also should be preserved. Wilmington Trust contends that there should be a full report from the Debtors and the Creditors' Committee as to what investigations have been undertaken regarding estate causes of action not otherwise covered by the Examiner's Report, and a complete allocation of responsibility to commence all viable claims not otherwise tolled. -- Whether the Committee is appropriately positioned to control the prosecution of those estate causes of action. According to Wilmington Trust, the Committee should not be given the green light to zealously prosecute claims it wants to settle before the complaints are even filed. Accordingly, Wilmington Trust asks the Court to grant the Standing Motion, but only if the issues it raised are sufficiently resolved. (b) Merrill Entities Merrill Lynch does not object to the Court granting the Committee standing to pursue colorable, appropriate claims on behalf of the Debtors' estates. However, Merrill Lynch objects to the Standing Motion on the grounds that certain claims and allegations in the Complaint are defective. Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, in Wilmington, Delaware, asserts that the Complaint is defective because it seeks to sue MLCC as "Administrative Agent" to avoid all obligations owed by the Debtors under a $1.6 billion Senior Unsecured Interim Loan Agreement. Ms. Silverstein points out that MLCC has not been the administrative agent under the Bridge Facility since April 26, 2010, when Wells Fargo Bank, N.A., assumed that position. Ms. Silverstein adds that the Complaint is also defective because the Committee seeks to recover all fees and interest payments related to the Bridge Facility from MLCC solely because MLCC was the administrative agent under the Bridge Facility. Even if there was a basis to avoid those fees and interest payments, those transfers cannot be recovered from MLCC because, as former administrative agent to the Bridge Facility, MLCC was only a mere conduit -- not the initial transferee -- of those payments, she avers. Merrill Lynch also objects to the request of Aurelius Capital Management, LP, that the Committee be allowed to assert additional causes of action and name additional defendants without any further notice or Court order. According to Merrill Lynch, Aurelius's request is a blatant attempt to circumvent the requirement that the Committee be granted standing to pursue colorable claims. Committee Responds The Committee relates that much has happened since it filed its Standing Motion. The Committee, the Debtors, Oaktree Capital Management, L.P., and Angelo, Gordon & Co., L.P., and JPMorgan Chase Bank, N.A., have reached agreement on the settlement of LBO- Related Claims and the Debtors have submitted a Plan of Reorganization reflecting the terms of those settlements. However, the Committee maintains that the agreement only confirms the need to grant its Standing Motion for these reasons: (a) Whatever form a plan of reorganization takes valuable claims arising from the LBO Transaction must and will be litigated for the benefit of the Debtors' estates and their unsecured creditors. (b) The Debtors cannot and should not be the party that litigates or settles these valuable LBO Claims. According to the Committee, it makes no sense to leave the hopelessly conflicted Debtors, who recognize that they should not, and do not intend to, pursue the LBO Claims, with the authority to settle those claims. The Committee says it has been conducting an extensive investigation into the LBO for well over a year, is conflict-free, and is ready to prosecute the LBO Claims. The Committee asserts that the Court should reject any suggestion lodged by Wells Fargo and Wilmington Trust that the Court considers whether to authorize, now or in the future, a party other than the Committee to bring the LBO Claims. The Committee contends that it would be an enormous and unnecessary waste of resources for a new party to begin to investigate, review and analyze the LBO Claims at this point in the Debtors' cases. Committee Files Proposed Order The Court held a hearing on October 22, 2010, to consider the Committee's Standing Motion. At the conclusion of the hearing, the Court instructed the Committee to submit a form of order granting the Standing Motion consistent with the Court's ruling on the record at the hearing. Additionally, the Court scheduled a teleconference for October 26, 2010 to, among other things, address any outstanding issues with regard to the Proposed Order. The Court a proposed order deleted, among other things, a provision which provides that the Committee may amend or modify the draft complaints attached to the Standing Motion to add other claims relating to the leveraged buyout of Tribune in 2007 that are based on a common nucleus of operative facts with any of the claims asserted in the draft complaints attached to the Standing Motion. 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 CO: Wants Feb. 28 Extension of Time to Remove Actions ------------------------------------------------------------- Tribune Company and its affiliates ask Judge Kevin G. Carey of the U.S. Bankruptcy Court for the District of Delaware to further extend their deadline to file notices of removal of claims and causes of action through February 28, 2011. James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, relates that given the pending expiration of the Debtors' removal periods on October 29, 2010, they request that the time during which they may remove actions is automatically extended from October 29 to until the extension motion will be heard by the Court pursuant to Rule 9006-2 of the Local Rules of Bankruptcy Practice and Procedure of the U.S. Bankruptcy Court for the District of Delaware. Mr. Conlan maintains that since the Petition Date, the Debtors have devoted substantially all their resources to stabilizing and operating their business, addressing critical case management issues, evaluating and resolving the prepetition claims, and formulating a plan of reorganization. He avers that given the size of the Debtors' business enterprise and the unusually large number of Debtors involved, transitioning their businesses into smooth operations in Chapter 11 and meeting the ongoing requirements of the Chapter 11 process, together with the substantial effort required to manage their business enterprise and pursue a joint plan of reorganization, and address the numerous and varied task attendant to that process, have been formidable undertakings. Mr. Conlan relates that the Debtors have, however, made substantial progress in addressing the prepetition claims asserted against their estates, particularly with regard to prepetition litigation claims. Since the Petition Date, the Debtors have filed 36 omnibus objections to claims, as well as several discrete objections to prepetition litigation claims. According to Mr. Conlan, those actions have collectively resulted in the disallowance of more than one thousand proofs of claim against the Debtors' estates. Several other prepetition litigation claims have been the subject of various orders or stipulations concerning relief from automatic stay, and those claims have been addressed accordingly, he adds. Mr. Conlan further tells the Court that the Debtors have continued to review their litigation-related proofs of claim and to discuss potential resolutions of the claims reflected therein, or to pursue objections thereto, as the Debtors determine is warranted. "As a result of these tasks and their attendant demands of the Debtors' personnel and professionals, the Debtors require additional time to review their outstanding litigation matters and evaluate whether those matters should properly be removed pursuant to Bankruptcy Rule 9027," Mr. Conlan asserts. "In the absence of such relief, the Debtors would lose a potentially key element of their overall ability to manage litigation during these chapter 11 cases even before that litigation would reasonably have been evaluated, to the detriment of the Debtors, their estates, and their creditors," Mr. Conlan adds. Judge Carey will convene a hearing on November 23, 2010, at 10:00 a.m. to consider approval of the extension request. Objections are due November 16. 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) TRILOGY DEVELOPMENT: Court Validates JE Dunn's $12.4 Mil. Lien -------------------------------------------------------------- Under Missouri law, WestLaw reports, as predicted by a Missouri bankruptcy court, strict compliance with the mechanics' lien statute [V.A.M.S. Sec. 429.012, subd. 1] is not required but, instead, substantial compliance satisfies the notice requirements. While there is much language in the Missouri cases regarding strict compliance with the mechanics' lien statutes, there are also numerous expressions to the effect that the mechanics' lien laws are remedial in nature and should be liberally construed for the benefit of lien claimants, the court observed. In fact, the court found, the concept of substantial compliance has a long pedigree in the Missouri cases dating back as least as far as 1870. Accordingly, in the case at bar, the court was unable to find as a matter of law that a contractor did not have a valid mechanics' lien against property of the bankruptcy estate and that the contractor's claim against the estate was unsecured. In re Trilogy Development Co., --- B.R. ----, 2010 WL 3938336 (Bankr. W.D. Mo.) (Dow, J.). A copy of the Honorable Dennis R. Dow's Memorandum Opinion dated Oct. 5, 2010, is available at http://is.gd/gmbGgfrom Leagle.com. Kansas City, Mo.-based Trilogy Development Company, LLC, was founded by advertising magnate Bob Bernstein to build a mixed-use development at 48th St. and Belleview Ave. The Company sought Chapter 11 protection (Bankr. W.D. Mo. Case No. 09-42219) on May 15, 2009. Jonathan A. Margolies, Esq., and R. Pete Smith, Esq., at McDowell, Rice, Smith & Buchanan represent the Debtor. In its petition, the Debtor estimated its assets and at $100 million to $500 million. TROPICANA ENTERTAINMENT: Adamar Claims Canbergs Violated Stay ------------------------------------------------------------- Adamar of NJ In Liquidation, LLC, fka Adamar of New Jersey, Inc.; and Manchester Mall, Inc., ask Judge Judith Wizmur of the U.S. Bankruptcy Court for the District of New Jersey to declare the actions of Nicholas Caliendo, Esq., Michael Canberg, and Patricia Canberg to be willful violations of the automatic stay provisions of Section 362 of the Bankruptcy Code. The Canbergs filed a complaint against Adamar in the Superior Court of New Jersey, Law Division, Ocean County, styled as "Michael Canberg and Patricia Canberg v. Adamar of New Jersey, Inc., d/b/a Tropicana Casino & Resort-Atlantic City and John Doe (1-5) (fictitious person(s) and/or entity(ies)," Docket No. OCN- L-428.10, wherein they asserted causes of action for negligence and loss of consortium. Nicholas A. Caliendo, Esq., of Manning, Caliendo & Thomson, P.A., represents the Canbergs under the Superior Court Action. The NJ Debtors were formally served with the Canberg Action on March 4, 2010. Moreover, Mr. Canberg filed Claim No. 810 in an unliquidated amount approximately 14 months after the Bar Date, Ilana Volkov, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, New Jersey, notes. The NJ Debtors recount that they closed on the sale of substantially all of their assets to Tropicana Entertainment Inc., Tropicana Atlantic City Corp. and Tropicana AC Sub Corp. pursuant to the Amended and Restated Purchase Agreement, on March 8, 2010. By March 14, 2010, Tama Hughes, Esq., in-house counsel to Tropicana AC, sent Nicholas Caliendo, Esq., counsel to the Canbergs, a letter stating that the Canberg Action violates the automatic stay and requested the withdrawal of the Action. The Canbergs refused to do so. Subsequently, on March 19, 2010, bankruptcy counsel to the NJ Debtors received correspondence from Mr. Caliendo's office requesting for the names of the manufacturer, welder or fabricator of the alleged defective stool from which Mr. Canberg allegedly sustained injuries. Tropicana AC then received a subpoena in relation to the Canberg Action on July 30, 2010. Similar to the March 19 Letter, the Subpoena requested the identities of the stool manufacturer in question. Tropicana AC forwarded the Subpoena to the NJ Debtors' bankruptcy counsel for review and response. In response to the Subpoena, the NJ Debtors' bankruptcy counsel called Daniel Eastmond, Esq., an attorney in Mr. Caliendo's office, on August 2, 2010, to notify the office that any actions to continue the Canberg Action were in violation of the automatic stay and that absent cessation of those actions, the NJ Debtors would seek to recover actual damages and, potentially, punitive damages under Section 362(k). Again, Mr. Caliendo refused to discontinue pursuit of the Canberg Action. To avoid burdening the Bankruptcy Court with, and incurring costs associated with, a violation of the automatic stay motion, as courtesy to the NJ Debtors, Tropicana AC reviewed its files to determine whether it possessed the names of the stool manufacturer, welder or fabricator. Among other things, Mr. Caliendo's office was advised that there were no records of a welder or installer of the slot machine stool in question. In an effort to appease Mr. Caliendo's office, the NJ Debtors sought Tropicana AC's permission to allow representatives from Mr. Caliendo's office to come on-site and inspect the stool in question with the caveat that Adamar was no longer involved in the Canberg Action in the event the stool manufacturer, welder or fabricator were discovered, Ms. Volkov reveals. The condition was premised on the fact that the automatic stay was still in place and the Canbergs' only remedy with respect to the Prepetition Incident was to file a timely proof of claim. The Superior Court dismissed the Canberg Action without prejudice on Sept. 24, 2010, "pending receipt of relief from the Bankruptcy Act automatic stay provisions." However, by Sept. 30, 2010, Tropicana AC was served with a Motion to Reinstate the Complaint and a Motion for leave to file a First Amended Complaint naming additional defendants Gasser Chair Company and Top Line Seating, Inc. Counsel to the NJ Debtors, Ms. Volkov asserts that the First Amended Complaint was improperly served upon Trop AC. The Amended Complaint also continues to name Adamar as a defendant, she notes. The Reinstatement Motion, she adds, was filed without first receiving relief from the automatic stay in direct contradiction to the Sept. 24 Canberg Action Dismissal Order. On October 12, 2010, the NJ Debtors' counsel again advised Mr. Eastmond that the Canbergs were violating the automatic stay and that the request for reinstatement and the First Amended Complaint were in contradiction to the parties' understanding that Adamar would no longer be involved in the Canberg Action. Mr. Eastmond responded that the Canbergs and his office "wanted to move forward and not incur the additional expense of further amending the Reinstatement Motion," Ms. Volkov says. To this end, Mr. Eastmond was informed that the NJ Debtors would be forced to seek appropriate relief for violation of the automatic stay in the Bankruptcy Court, according to Ms. Volkov. In a letter dated October 12, 2010, Mr. Eastmond stated and recognized, in pertinent part, that "they are aware of the automatic stay stemming from the [NJ] Debtors' bankruptcy cases." Nonetheless, Mr. Caliendo's letter stated that his office intended to move forward on the return date of the Reinstatement Motion, Ms. Volkov relates. The NJ Debtors' opposition to the Reinstatement Motion was due on October 20, 2010. The NJ Debtors' bankruptcy counsel's request for an adjournment of the October 29, 2010 return date of the Reinstatement Motion was denied. The Canbergs should be ordered to withdraw the Reinstatement Motion and should be precluded from reinstatement or re-filing of the Canberg Action, Ms. Volkov argues. Against this backdrop, the NJ Debtors also ask Judge Wizmur: (i) to award them all reasonable costs and expenses incurred in connection with the Canberg Action, the Reinstatement Motion, and the motion pursuant to Section 362(k) of the Bankruptcy Code; and (ii) to expunge the Canberg Claim pursuant to Sections 502(b) and 503 of the Bankruptcy Code and Rule 3007 of the Federal Rules of Bankruptcy Procedure as late filed. Judge Wizmur is set to consider the NJ Debtors' request on October 26, 2010. No Stay Violation Occurred, Canbergs Assert The Canbergs do not dispute the Chapter 11 bankruptcy status of the NJ Debtors or the automatic stay that is in place, according to Nicholas A. Caliendo, Esq., at Manning, Caliendo & Thomson, P.A., in Freehold, New Jersey. Rather, the Canbergs simply contend that no violation of the automatic stay has occurred, he emphasizes. Mr. Caliendo clarifies that the March 14 Letter from Tama Hughes, Esq., in-house counsel to Tropicana AC, "does not contain any request to withdraw the Superior Court action;" but rather, it requests the Canbergs to "cease prosecution" of the NJ Debtors. To this end, Mr. Caliendo makes clear, the Canbergs never took a single action towards prosecution of the NJ Debtors since the receipt of the March 14 Letter. Mr. Caliendo relates that NJ Debtors counsel Ryan T. Jareck, Esq., advised Daniel J. Eastmond, Esq., an associate attorney in the Caliendo firm, that Tropicana AC does not supply the type of information sought in the March 19, 2010 Correspondence without a subpoena. Mr. Jareck further advised that Ms. Hughes was concerned that Mr. Caliendo was attempting to prosecute the NJ Debtors, despite their Chapter 11 bankruptcy status. Mr. Eastmond assured Mr. Jareck that Mr. Caliendo was fully aware of the automatic stay and that he had no intention of pursuing Adamar. Mr. Jareck himself suggested sending a subpoena in order to obtain the requested information, and the Canbergs took Mr. Jareck's advice and subsequently sent a subpoena to that effect, Mr. Caliendo tells Judge Wizmur. Mr. Eastmond further relayed that he spoke with Mr. Jareck on August 23, 2010, and was advised that there would be no objection to the filing of a late claim, but that Mr. Jareck believed the filing would be worthless in light of the fact that the Canbergs were unsecured creditors. "The simple and most important fact of this matter is that since the March 14, 2010 Letter from Ms. Hughes, when the Canbergs first learned of the NJ Debtors' bankruptcy status and the automatic stay, the Canbergs have done nothing that would constitute a violation of the automatic stay," Mr. Caliendo emphasizes. "The events of the past few months of contact between the Canbergs and Mr. Jareck were clearly nothing more than requests for information intended to aid in the discovery of the identities of the other parties for Mr. Canberg's injuries," Mr. Caliendo asserts. In this light, Mr. Caliendo maintains, the NJ Debtors have failed to explain how the Canbergs' request for information - whether it be via regular mail correspondence, telephone call, subpoena, or any other means - can possibly be interpreted as prosecution of the NJ Debtors. Requests for information are not violative of the automatic stay, Mr. Caliendo asserts. "The NJ Debtors have failed to produce any evidence to the contrary," he points out. The Canbergs thus ask Judge Wizmur to deny the NJ Debtors' request to declare them in violation of the automatic stay. About Tropicana Entertainment Tropicana Entertainment LLC and its units owned eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08- 10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation from the Bankruptcy Court of a reorganization plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of Investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Effective March 8, Tropicana Entertainment successfully emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have obtained approval of a separate Chapter 11 plan. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have merged into Adamar of NJ In Liquidation, LLC. The merger and name change is in accordance with an Amended and Restated Purchase Agreement, which governs the sale and transfer of the operations of the Tropicana Casino and Resort - Atlantic City, including substantially all of the New Jersey Debtors' assets, to Tropicana Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana AC Sub Corp., free and clear of any and all liens, claims and encumbrances. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). TROPICANA ENTERTAINMENT: Castillejas Claim No Knowledge of Plan --------------------------------------------------------------- The Reorganized OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey, and Evansville, Indiana, are asking the U.S. Bankruptcy Court for the District of Delaware to determine that any potential wrongful death and personal injury claims asserted against Reorganized OpCo Debtor Columbia Properties Laughlin, LLC, doing business as River Palms Hotel & Casino, by Briana Castilleja and Shirley Gallego in connection with the death of Larissa Castilleja were discharged and enjoined under the First Amended OpCo Plan of Reorganization. In response, claimants Brian Castilleja and Shirley Gallego, on behalf of Larissa Castilleja, assert that they were known creditors of the Reorganized OpCo Debtors and were constitutionally entitled to actual notice of the confirmation hearing, but no notice was ever received. As previously reported, Msses. Castilleja and Gallego sought potential wrongful death and personal injury claims against the Reorganized OpCo Debtors in relation to the demise of Larissa Castilleja, who was allegedly hit and killed on September 9, 2009 by a van driven by Gino Gagliardi, an independent contractor of Columbia Properties Laughlin casino. The Claimants were known creditors to the Reorganized OpCo Debtors, specifically Reorganized OpCo Debtor Columbia Properties Laughlin, LLC, dba River Palms Resort and Casino, as it had or should have had knowledge of the Claimants on or after Sept. 9, 2009, the date of the accident involving one of its employees, Daniel K. Hogan, Esq., at The Hogan Firm, in Wilmington, Delaware, says. Counsel to the Claimants, Mr. Hogan adds that, at the very latest, the Reorganized OpCo Debtors should have known of the Claimants' potential as creditors in these bankruptcy proceedings when Mr. Gagliardi pled guilty on April 5, 2010, which is two days before the Administrative Claim Bar Date. Mr. Hogan further asserts that even if the Claimants are found to be unknown creditors, the doctrine of excusable neglect prevents their administrative expense claim from being discharged in these bankruptcy proceedings and thereby allows the Claimants to commence a wrongful death or personal injury action against the Reorganized OpCo Debtors. According to Mr. Hogan, the Claimants have, contemporaneously with the filing of their objection, filed a motion for allowance of late-filed administrative expense claim, which formally asserts the administrative expense claim and justification for the Claimants' failure to timely file the administrative expense claim. About Tropicana Entertainment Tropicana Entertainment LLC and its units owned eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08- 10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation from the Bankruptcy Court of a reorganization plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of Investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Effective March 8, Tropicana Entertainment successfully emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have obtained approval of a separate Chapter 11 plan. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have merged into Adamar of NJ In Liquidation, LLC. The merger and name change is in accordance with an Amended and Restated Purchase Agreement, which governs the sale and transfer of the operations of the Tropicana Casino and Resort - Atlantic City, including substantially all of the New Jersey Debtors' assets, to Tropicana Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana AC Sub Corp., free and clear of any and all liens, claims and encumbrances. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). TROPICANA ENTERTAINMENT: Tropi LV Wants Sanctions Against Icahn --------------------------------------------------------------- Pursuant to Rule 9011 of the Federal Rules of Bankruptcy Procedure, Defendants Tropicana Las Vegas, Inc., and Reorganized Debtor Hotel Ramada of Nevada, LLC, ask the U.S. Bankruptcy Court for the District of Delaware to impose sanctions against the Icahn Plaintiffs and their counsel SNR Denton US LLP, formerly known as Sonnenschein Nath & Rosenthal LLP, and Proskauer Rose LLP. The Icahn Plaintiffs are Icahn Agency Services LLC, Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Partners Master Fund II LP, Icahn Partners Master Fund III LP, Tropicana Entertainment Inc., and New Tropicana Holdings, Inc. The Icahn Plaintiffs are successors-in-interest to the OpCo Debtors or their creditors, who emerged from bankruptcy on March 8, 2010. The Tropicana LV Defendants are successors-in-interest to the LandCo Debtors, who emerged from bankruptcy on July 1, 2009. Icahn Agency Services LLC, as the administrative and collateral agent for the lenders under the December 29, 2009 OpCo Exit Facility; Icahn Partners LP; Icahn Partners Master Fund LP; Icahn Partners Master Fund II LP; Icahn Partners Master Fund III LP; Tropicana Entertainment Inc.; and New Tropicana Holdings, Inc. commenced an adversary complaint on August 10, 2010, in the U.S. Bankruptcy Court for the District of Delaware against Tropicana Las Vegas, Inc., and Hotel Ramada of Nevada, LLC, to: (a) enforce prior orders of the Bankruptcy Court; and (b) enjoin the Defendants' alleged wrongful efforts to assert in a Nevada state court action that they, and not Plaintiff New Tropicana Holdings, are the owners of the "TROPICANA" and "TROP" trademarks and service marks. The Icahn Plaintiffs particularly take issue of the Defendants' alleged right to use the Tropicana Trademark on a royalty free basis in connection with their Las Vegas operations as they had when the LandCo Debtors were wholly owned by the OpCo Debtors. Bankruptcy Rule 9011 tracks the language of Rule 11 of the Federal Rules of Civil Procedure, which "is intended to discourage pleadings that are frivolous, legally unreasonable, or without factual foundation, even though the paper was not filed in subjective bad faith." Bankruptcy Rule 9011 provides that, once a violation is found, the court "shall impose" an "appropriate sanction," which may include an order to pay "the amount of the reasonable expenses incurred because of the filing of the document, including a reasonable attorney's fee." The Icahn Complaint is a wholly inappropriate attempt to avoid adverse rulings in the Nevada Action and is patently unmeritorious and frivolous, counsel to the Defendants, Garvan F. McDaniel, Esq., at Bifferato Gentilotti LLC, in Wilmington, Delaware, contends. "Thus, sanctions are warranted." Mr. McDaniel argues that: (a) The Complaint represents an egregious example of forum shopping and abusive pleading. He notes that the Icahn Plaintiffs had lost multiple times in respect of the relief they seek -- first, in the Bankruptcy Court in their attempt to prevent the Tropicana LV Defendants from proceeding with the Nevada Action; then, in the Nevada District Court in their attempt to prevent remand to the Nevada court; and then, in the Nevada court on the merits and again on reconsideration. "The Complaint is nothing more than a transparent attempt to transfer the underlying claims to what the [Icahn] Plaintiffs hope is a friendlier forum," Mr. McDaniel tells Judge Carey. (b) The Complaint is intended to intimidate the Nevada court from concluding the Nevada Action. Mr. McDaniel notes that the Icahn Plaintiffs had filed a notice of the Complaint in the Nevada Action and wrongly asserted that the Nevada Action could not proceed because the Tropicana LV Defendants had violated the automatic stay. He clarifies that there is no automatic stay in place because all the Debtors have confirmed and consummated their plans of reorganization and because the Bankruptcy Court had previously annulled the stay in its entirety to allow the Nevada Action to proceed. Accordingly, the Tropicana LV Defendants specifically ask Judge Carey to award them the amount of fees and costs incurred as a result of the filing of the Complaint -- including all fees and costs associated with the filing of their Dismissal/Abstention Motion, the Sanction Motion and all related proceedings -- upon the submission of a declaration setting forth the amounts. James O. Johnston, Esq., a partner at Hennigan, Bennet & Dorman LLP, counsel of the Tropicana LV Defendants, submitted a declaration in support of the Sanction Motion. In his declaration, he noted that, as of September 30, 2010, the Icahn Plaintiffs have not withdrawn the Complaint. Briefing on Sanction Motion Stayed In a related development, the Icahn Plaintiffs and the Tropicana LV Defendants entered into a Court-approved stipulation staying the briefing on the Sanction Motion pending resolution of the Defendants' Complaint Dismissal Motion. Icahn Plaintiffs Object to Motion to Dismiss Contrary to the repeated misrepresentations in the Defendants' Motion to Dismiss the Complaint, the Icahn Adversary Complaint is neither a "collateral attack" on the recent provisional order issued by the Nevada court nor an attempt to "forum shop" the newly arisen and manufactured dispute over the ownership of the trademarks, Justin R. Alberto, Esq., at Bayard, P.A., in Wilmington, Delaware, argues. Rather, Mr. Alberto says on behalf of the Icahn Plaintiffs, the Adversary Complaint merely seeks to stop the Defendants' improper attempt to achieve a sub rosa plan modification in the Nevada court -- conduct that contravenes the Court's prior orders and undermines the integrity of prior bankruptcy proceedings. "The Defendants' Motion to Dismiss the Complaint is baseless," Mr. Alberto asserts. Among other things, the Defendants ask the Bankruptcy Court to adjudicate scores of disputed factual issues, in contravention of the black-letter standard that the allegations in the Complaint must be accepted as true on a motion to dismiss, he relates. The Defendants also make numerous misrepresentations of fact and law concerning the liens described in the Cash Collateral Order and the Confirmation Order, Mr. Alberto contends. He specifically points out that: (a) The Defendants "blatantly" rewrite the Orders to characterize the liens as contingent upon "whatever interests in property, if any, the OpCo Debtors had available to pledge as collateral for the loans," which is not what the Orders state. Rather, the Orders expressly find that the liens are "valid, binding, perfected, [and] enforceable" on the Tropicana Trademarks. (b) The Defendants argue that the Cash Collateral Order should be nullified on the basis of allegations that the order lacked due process and sufficient evidence, and that there were conflicted management and legal counsel representing the Debtors. Even if these factual arguments could be accepted on a motion to dismiss -- and they cannot -- the Defendants' allegations are demonstrably false. (c) The Defendants pretend that the parties intentionally carved out the reservation of rights referenced in the Confirmation Order to preserve a supposed then-existing dispute between the parties concerning ownership. In reality, there was never a dispute concerning ownership -- which the Defendants conceded was "plainly answered" Prepetition -- and the Reservation of Rights pertained solely to the alleged right to use the Tropicana Trademarks. Moreover, the Defendants' arguments to excuse their violation of the automatic stay are misleading and without merit, Mr. Alberto emphasizes. He points out that the Defendants do not, and cannot, dispute that they sought ownership of the Tropicana Trademarks before March 8, 2010, when the automatic stay expired. The Defendants also have no explanation for disregarding their own multiple representations to the Bankruptcy Court that they were not seeking any property from Plaintiff Tropicana Entertainment Inc.'s predecessors in the Nevada Action, Mr. Alberto argues. With respect to the Defendants' argument regarding the automatic stay, Mr. Alberto asserts that, among other things, (i) the Bankruptcy Court's order annulled the stay solely "with respect to the Trademark Action" and "related proceedings," and (ii) the Defendants did request a declaration of ownership in their summary judgment papers, which violated the automatic stay. "An expiration of an automatic stay does not operate to retroactively validate improper conduct," Mr. Alberto makes clear. The Defendants' motion in the alternative for the Bankruptcy Court to abstain is equally unavailing, Mr. Alberto continues, noting that courts routinely deny motions to abstain where the matter necessarily involves the interpretation of its own prior orders, and the issues in dispute pertain to the administration of the estate -- which is precisely the case here. The Defendants' Motion to Dismiss and, in the alternative, Motion to Abstain, should be denied, Mr. Alberto asserts. He maintains that the Bankruptcy Court's prior Orders should be enforced. David R. Baum, Esq., a partner at SNR Denton US LLP; and Marc Rubinstein, Tropicana Entertainment, Inc. senior vice president for Law and Administration and secretary, each filed a declaration in support of the Icahn Plaintiffs' Objection to the Motion to Dismiss. In a separate filing, the Icahn Plaintiffs ask the Court for leave to exceed the page limit with respect to their Objection. Icahn Plaintiffs Object to Request for Judicial Notice The Icahn Plaintiffs acknowledge that the Bankruptcy Court may take judicial notice of the existence of certain statements that were made in a brief or on the record. However, the Defendants' Motion to Dismiss should be denied to the extent any document is offered for the truth of the facts recited in the Icahn Plaintiffs' Objection to the Motion, Justin R. Alberto, Esq., at Bayard, P.A., in Wilmington, Delaware, asserts. "[I]t is well-established that a 'district court can take judicial notice of judicial proceedings to demonstrate the existence of the same, but not for the truth of the facts asserted,'" Mr. Alberto says. He asserts that the Defendants should not be permitted to use the judicial notice doctrine to transform the Provisional Nevada Order's tentative findings into "some form of a conclusive judgment with preclusive effect." The June 9, 2010 Nevada Provisional Order denied the Defendants' motion for summary judgment and indicated that the Nevada court needed direction from the Bankruptcy Court concerning bankruptcy issues that might bar the Defendants' request for a declaration of ownership, Mr. Alberto points out. The Defendants have also asked the Bankruptcy Court to take judicial notice of other documents to resolve certain disputed factual issues. Those issues cannot be resolved through judicial notice, Mr. Alberto says. About Tropicana Entertainment Tropicana Entertainment LLC and its units owned eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada, and Atlantic City, New Jersey. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08- 10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation from the Bankruptcy Court of a reorganization plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of Investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Effective March 8, Tropicana Entertainment successfully emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have obtained approval of a separate Chapter 11 plan. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have merged into Adamar of NJ In Liquidation, LLC. The merger and name change is in accordance with an Amended and Restated Purchase Agreement, which governs the sale and transfer of the operations of the Tropicana Casino and Resort - Atlantic City, including substantially all of the New Jersey Debtors' assets, to Tropicana Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana AC Sub Corp., free and clear of any and all liens, claims and encumbrances. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the chapter 11 restructuring proceedings commenced by Tropicana Entertainment LLC and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). TRUVO USA: Wins Confirmation of Exit Plan After Settlement ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Truvo Luxemburg Sarl won confirmation from the U.S. bankruptcy judge of its proposed plan of reorganization. As reported in the Troubled Company Reporter on October 7, Truvo Group struck a deal with its unsecured creditors that would give them a greater recovery when the Company exits from Chapter 11 protection. The revised proposal: -- increases to EUR20 million ($27.4 million) from EUR15 million the amount to be divvied up among holders of Truvo's high-yield bonds; and -- entitles the high-yield bondholders to: * warrants good for a higher percentage of the reorganized Truvo's shares than they would have previously received; and * cash good for 7.5% of Truvo's U.S. tax proceeds, if that money is available. The TCR reported that the holders of the high-yield notes will get the better recovery only if they vote for Truvo's new bankruptcy- exit plan. Truvo's committee of unsecured creditors, which is representing the bondholders, agreed to support the plan and withdraw all litigation regarding it. Full-text copies of the Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/TRUVOUSA_2ndAmendedPlan.pdf http://bankrupt.com/misc/TRUVOUSA_AmendedDS.pdf About Truvo USA Wilmington, Delaware-based Truvo USA LLC is a non-operating subsidiary of Belgium-based Truvo Luxembourg S.a.r.l, which publishes print and online directories through its operating subsidiaries. Truvo USA and other non-operating affiliates filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-13513) on July 1, 2010. The Company estimated $500 million to $1 billion in assets and more than $1 billion in debts in its Chapter 11 petition. Sean A. O'Neal, Esq., and Thomas J. Moloney, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, and Vincent Edward Lazar, Esq., at Jenner & Block LLP, assist the Company in its restructuring effort. Jenner & Block LLP and Simpson Thacher & Bartlett LLP are the Company's special counsel. Houlihan Lokey Howard & Zukin (Europe), Limited, is the Company's restructuring and financial advisor. Truvo Luxembourg and its operating subsidiaries have not sought protection under Chapter 11 protection or any other insolvency regime. TWIN CITY: Cash Collateral Use Hearing Tomorrow ----------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ohio entered an interim order authorizing the Twin City Hospital Corporation to use the cash collateral until October 29, 2010. The Court has set a hearing for October 29, 2010, at 2:00 p.m., to consider further use of the cash collateral. In 2002, the Debtor raised $16,775,000 through the issuance of Hospital Facilities Revenue Bonds. In connection with the issuance of the Series 2007 Bonds, and a certain Indenture of Trust between U.S. Bank National and the County of Tuscarawas, Ohio, the Debtor entered into various prepetition financing agreements, including the Master Trust Indenture, the Supplemental Master Trust Indenture Number One and Mortgage and Security Agreement, the Twin City Hospital Series 2007 Note, the Twin City Subordinated Series 2007 Note, the Agreement of Lease, the Sublease, the Tax Exemption Certificate and Agreement, and the Continuing Disclosure Agreement, together with all amendments thereto and extensions thereof and all security agreements and instruments related thereto. As of the Petition Date, approximately $16,512,813.52 in gross aggregate principal of the Series 2007 Bonds remains outstanding under the Bond Indentures. In 2009, the Debtor executed that certain Promissory Note and Commercial Security Agreement between the Debtor and The Commercial & Savings Bank, permitting the Debtor to draw, at maximum, $250,000 on the Commercial LOC. As of the Petition Date, the Debtor was and continues to be, under the Prepetition Financing Agreements and the Commercial LOC, indebted and liable to the Master Trustee in the aggregate amount of $16,512,813.52 on the Series 2007 Bonds and in the amount of $250,000 on the Commercial LOC. Shawn M. Riley, Esq., at McDonald Hopkins LLC, explains that the Debtor needs the money to fund its Chapter 11 case, pay suppliers and other parties. The Debtor will use the collateral pursuant to a budget, a copy of which is available for free at: http://bankrupt.com/misc/TWIN_CITY_budget.pdf In exchange for using the cash collateral, the Debtor will grant the prepetition secured lenders valid, perfected and enforceable continuing replacement lien and security interest to the extent of any diminution in the prepetition bond collateral or commercial collateral in all assets of the Debtor. As additional adequate protection, the prepetition secured lenders will have a valid, perfected and enforceable continuing supplemental lien and security interest to the extent of any diminution in the prepetition bond collateral or commercial collateral in all assets of the Debtor. The prepetition secured lenders will also have a superpriority administrative expense claim. The Debtor will provide the Indenture Trustee on Tuesday of each week a weekly report indicating all receipts received by and disbursements made by the Debtor in the week ending the prior Friday compared to the budget and detailing any variances of 5% or more on a line-by-line basis from the expenditures and receipts as described in the budget. The Debtors will provide the Indenture Trustee other reports and information as may be requested by the Indenture Trustee. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., represents the Indenture Trustee, while Fitzpatrick, Zimmerman & Rose Co., P.P.A., represents Commercial Savings. About Twin City Hospital Dennison, Ohio-based Twin City Hospital filed for Chapter 11 bankruptcy protection on October 13, 2010 (Bankr. N.D. Ohio Case No. 10-64360). Shawn M. Riley, Esq., at McDonald Hopkins LLC, assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million. UNITED RENTALS: Fitch Assigns 'B' Rating to $750 Mil. Notes ----------------------------------------------------------- Fitch Ratings has assigned a 'B' rating and a Recovery Rating of 'RR6' to United Rentals, (North America) Inc's $750 million issuance of senior subordinated notes. URNA is a wholly-owned subsidiary of United Rentals, Inc. The notes will mature on Sept. 15, 2020, and bear interest at a rate per annum of 8.375%. Interest is payable semi-annually on March 15 and Sept. 15 of each year, commencing March 15, 2011. URNA expects to use the proceeds to redeem $721 million of existing senior subordinated notes and to pay expenses related to the redemption of these securities. URNA's 'B+' Issuer Default Rating and Stable Rating Outlook are unaffected by the assignment of this rating. As indicated in Fitch's 'Recovery Ratings for Financial Institutions' criteria published Dec. 30, 2009, RRs reflect repayment prospects given default. An 'RR6' implies poor recovery prospects of principal and interest estimated to range between 0%-10%. Fitch has assigned this rating: United Rentals, (North America) Inc. -- $750 million senior subordinated notes 'B/RR6' A complete list of current ratings for URI and URNA: United Rentals, Inc. -- Long-term IDR 'B'. United Rentals (North America), Inc. -- Long-term IDR 'B+'; -- Senior secured $1.36 billion ABL facility 'BB/RR1'; -- Senior unsecured debt 'B+/'RR4'; -- Senior subordinated debt 'B'/RR6'. URBAN BRANDS: Gordon Brothers Wins Auction for Ashley Stewart ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Urban Brands Inc., the owner of the Ashley Stewart brand of women's clothing, concluded a 21-hour auction for the assets when an affiliate of Gordon Brothers Group LLC came out on top over three other bidders. The Company said there was "spirited bidding." The price wasn't disclosed. The bankruptcy court in Delaware was scheduled to hold a hearing October 27. About Urban Brands Urban Brands, Inc., operates as a women's specialty retailer. Its products include tops, such as knit tops, shirts and blouses, and tanks and camis; bottoms, which include shorts and capris, skirts, and pants; sweaters; and denim apparel, including denim jeans, skirts, denim sets, and jackets. The company also provides dresses, career and related separates, jackets, intimates, hosiery, swimwear, activewear, linen wear, extended sizes, bras and panties, maxi dresses, ruffles, tunics, and accessories. Urban Brands Inc. sought bankruptcy protection under Chapter 11 (Bankr. D. Del. Case No. 10-13005) on September 21, 2010. The Company estimated assets of $10 million to $50 million and debts of $100 million to $500 million in its Chapter 11 petition. Chun I Jang, Esq., Mark D. Collins, Esq., and Paul N. Heath, Esq., at Richards, Layton Finger, P.A., in Wilmington, Delaware, serve as counsel to the Debtors. BMC Group, Inc., is the claims and notice agent. The DIP Lender is represented by Donald E. Rothman, Esq. -- drothman@riemerlaw.com -- at Riemer & Braunstein LLP. US BANK: Fitch Puts BB- Support Floor Rating on Negative Watch -------------------------------------------------------------- Fitch Ratings has placed the Support and Support Floor ratings of U.S. Bank NA and U.S. Bank NA, ND, on Rating Watch Negative following initial interpretation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its implications for systemically important financial institutions. U.S. Bank NA and U.S. Bank NA, ND's Issuer Default Rating and issue-level ratings are currently above their Support Floor Ratings as the IDR and issue-level ratings reflect the company's stand-alone strength, and do not rely on any implied government support. As such, U.S. Bank NA and U.S. Bank NA, ND's IDR and issue-level ratings are unaffected by the action. The ratings of U.S. Bank NA and U.S. Bank NA, ND's parent company U.S. Bancorp and its other affiliates are also unaffected. Similar actions have been taken for other large U.S. banks. Refer to Fitch's press release dated Oct. 22, 2010, titled 'Fitch: U.S. FI Support Ratings Potentially Impacted by Proposed FDIC Rules' for additional information. Fitch's ratings of banks have always encompassed a view of intrinsic creditworthiness expressed through the Individual rating, while Fitch's view of Support has been expressed separately through its Support framework. Support Ratings communicate Fitch's judgment on whether the bank would receive support from the U.S. Government should this become necessary. The recently enacted legislative framework and potential regulatory rulemaking primarily affect Fitch's sovereign Support framework. Fitch places these ratings on Rating Watch Negative: U.S. Bank NA U.S. Bank NA, ND -- Support '3'; -- Support Floor 'BB-'. UTSTARCOM INC: Cuts 2010 Revenue Target to $270MM-$280MM -------------------------------------------------------- UTStarcom Inc. lowered the company's full year revenue target range to US$270-280 million, down from the US$325 million target that previous management had articulated. The decision to lower the target range was driven primarily by slower than expected final acceptances and project completions for several large contracts. Jack Lu, newly appointed President and CEO said that, "These kinds of delays can occur in equipment sales-based businesses, and they are among the key factors in our decision to lower our range of targeted revenues. We are working to correct this dynamic by shifting our business model, adding to our existing equipment- sales based business, new service-based opportunities, that can provide more predictable, high margin, recurring revenues. The strategic cooperation in Internet TV which we announced [Thurs]day is an example of this." About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company was founded in 1991 and is headquartered in Alameda, California. The Company's balance sheet at June 30, 2010, showed $813.29 million in total assets, $576.25 million in total liabilities, and stockholders' equity of $237.03 million. * * * In its Form 10-K, the Company noted that it has recorded operating losses in 19 of the 20 consecutive quarters in the period ended December 31, 2009. At December 31, 2009, the Company had an accumulated deficit of $1.067 billion. While operating results are expected to improve in 2010 compared with prior years, management expects the Company to continue to incur losses in 2010. VALHI INC: S&P Puts 'CCC+' Rating on CreditWatch Positive --------------------------------------------------------- Standard & Poor's Ratings Services said that it placed all its ratings, including the 'CCC+' corporate credit ratings, on Dallas, Texas-based Valhi Inc. and its subsidiary, Kronos International Inc. on CreditWatch with positive implications. "The CreditWatch listing reflects S&P's expectation of an improvement in Valhi's financial profile in the near term," said Standard & Poor's credit analyst Henry Fukuchi. "This improvement could warrant a modestly higher rating after S&P's review of the company's near term prospects and industry trend expectations." S&P believes that Valhi should continue to benefit from tight industry conditions and improving demand. If these industry dynamics remain positive for the next few quarters, Valhi's financial profile should improve enough to support a higher rating. S&P expects the end markets related to Ti02 to continue to recover consistent with the overall economy and key end markets related to housing and automotives. Moreover, with limited capacity additions likely in the near term and reduced global capacity as a result of permanent facility closures during the recession, S&P expects Valhi's profitability and financial profile will most likely improve in the next few quarters. The CreditWatch listing also reflects the recent announcement of a stock offering of approximately 7.8 million shares through its subsidiary, Kronos Worldwide. The intended use of the proceeds is for general corporate purposes, which may include possible acquisitions of additional TiO2 facilities that may become available in the future. While the ultimate use of the proceeds may change, S&P expects to review the company's plan, intended use of proceeds, and potential impact on Valhi's overall financial profile as part of S&P's resolution of the CreditWatch listing. The ratings on Valhi reflect the company's highly leveraged financial profile and financial policy concerns, as well as its limited diversity and exposure to cyclical commodity product cycles. Offsetting factors include the currently favorable industry conditions, the company's improved liquidity position, and its well-established position among the leading global TiO2 producers. S&P will resolve the CreditWatch listing after reviewing third- quarter results, business prospects for the next few quarters, and intended use of funds from the anticipated stock offering. VIKING ACQUISITION: Moody's Assigns 'B2' Corp. Family Rating ------------------------------------------------------------ Moody's Investors Service assigned first-time ratings for Viking Acquisition, Inc., the acquirer of the global autocare business of The Clorox Company, including a B2 corporate family and probability of default rating and an SGL-3 Speculative Grade Liquidity Rating. Moody's also assigned a Ba3 rating to the company's proposed $350 million senior secured bank facilities. Moody's ratings are subject to receipt and review of final documentation. The outlook is stable. Proceeds of the proposed bank facilities along with approximately $260 million in common equity contributed by Avista Capital Partners will be used to fund Viking's acquisition of the Global Autocare business from Clorox (rated Baa1). Ratings assigned to Viking include these: -- Corporate Family Rating at B2 -- Probability of Default Rating at B2 -- $50 million senior secured revolving credit facility due 2015 at Ba3 (LGD 2, 26%) -- $300 million senior secured term loan B due 2016 at Ba3 (LGD 2, 26%) -- Speculative Grade Liquidity Rating at SGL-3 -- The outlook is stable This is a first time rating for Viking Acquisition, Inc. Ratings Rationale "Vikings ratings reflect the company's high leverage, relatively small scale and limited product diversification in the highly fragmented and competitive auto-care products business," says Moody's Vice President and Senior Credit Officer. "Moreover, organic growth has been generally weak and the company's strategies to accelerate growth through new product development initiatives and heightened marketing is yet unproven," adds Ms. Hofferber. Despite these constraints, Viking's ratings benefit from the company's strong brand recognition, high profitability, low capital requirements and global distribution capabilities. In addition, the company's historically strong cash flow from operations will be muted by near-term working capital requirements resulting from its spin-off from Clorox. Accordingly, near-term debt reduction is likely to be minimal. Liquidity is adequate with no near-term maturities, however the company will need to utilize its revolver in the next twelve month as its cash flow from operations is not sufficient to cover its working capital requirements. The ratings are also constrained by Viking's ownership by private equity partner, Avista Capital due to Moody's expectation that over time the shareholders will prioritize shareholder-oriented activities, including debt financed acquisitions and/or distributions. Viking's ratings could be upgraded if the company was able to maintain a Debt to EBITDA ratio below 4.5 times and an Interest Coverage ratio above 2.5 times. The degree of any ratings improvement, however, is constrained by the company's relatively small scale, limited product diversification and potential for aggressive financial policies. Conversely, Viking's ratings could be downgraded should it's operating performance deteriorate, or if it made a sizable debt financed acquisition or share repurchases such that its Debt to EBITDA ratio remained above 6.0 times for an extended period and its EBITA to interest expense ratio approached 1.75 times. Viking Acquisition, Inc., based in Oakland, California, is global producer of auto-care products under variety of brands including Armour-All autocare appearance products and STP performance autocare additives. Viking, a business of the Clorox Company (rated Baa1, stable), is being acquired by Avista Capital Partners and management in an all-cash transaction valued at $765 million. The transaction is expected to close in November 2010. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Fahmi Hammad Bankr. C.D. Calif. Case No. 10-54706 Chapter 11 Petition filed October 18, 2010 See http://bankrupt.com/misc/cacb10-54706.pdf In Re H & E Auto Repair, Inc. dba Z& M Auto Express Bankr. C.D. Calif. Case No. 10-54665 Chapter 11 Petition filed October 18, 2010 See http://bankrupt.com/misc/cacb10-54665.pdf In Re Russian Hill Corners, LLC Bankr. N.D. Calif. Case No. 10-34120 Chapter 11 Petition filed October 18, 2010 filed pro se In Re Logos Aviation Services, Inc. Bankr. S.D. Fla. Case No. 10-41699 Chapter 11 Petition filed October 18, 2010 filed pro se In Re Rabalais Interests-S, Inc. Bankr. S.D. Fla. Case No. 10-41674 Chapter 11 Petition filed October 18, 2010 See http://bankrupt.com/misc/flsb10-41674.pdf In Re Gloria Jose Paet aka Gloria J. Paet Bankr. D. Hawaii Case No. 10-03170 Chapter 11 Petition filed October 18, 2010 filed pro se In Re The G & J Paet Irrevocable Trust Bankr. D. Hawaii Case No. 10-03172 Chapter 11 Petition filed October 18, 2010 filed pro se In Re Commercial Buildings Maintenance, Inc. Bankr. D. Md. Case No. 10-33776 Chapter 11 Petition filed October 18, 2010 See http://bankrupt.com/misc/mdb10-33776p.pdf See http://bankrupt.com/misc/mdb10-33776c.pdf In Re Poor Freddie's Auto Center, Inc. Bankr. E.D. N.Y. Case No. 10-78217 Chapter 11 Petition filed October 18, 2010 See http://bankrupt.com/misc/nyeb10-78217.pdf In Re Poor Freddie's Mud Hole Inc. Bankr. E.D. N.Y. Case No. 10-78212 Chapter 11 Petition filed October 18, 2010 See http://bankrupt.com/misc/nyeb10-78212.pdf In Re Advanced II, Inc. Bankr. W.D. Pa. Case No. 10-27389 Chapter 11 Petition filed October 18, 2010 See http://bankrupt.com/misc/pawb10-27389p.pdf See http://bankrupt.com/misc/pawb10-27389c.pdf In Re Angel Luis Colon Martinez aka Angel L Colon Martinez Bankr. D. Puerto Rico Case No. 10-09746 Chapter 11 Petition filed October 18, 2010 filed pro se In Re Leonard Anthony Codella Bankr. E.D. Va. Case No. 10-18800 Chapter 11 Petition filed October 18, 2010 filed pro se In Re D. J. Williamson Enterprises, Inc. Bankr. D. Ariz. Case No. 10-33540 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/azb10-33540.pdf In Re Oma Williamson Bankr. D. Ariz. Case No. 10-33538 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/azb10-33538.pdf In Re Paul Allen Park Yolanda Sanchez Park Bankr. D. Ariz. Case No. 10-33616 Chapter 11 Petition filed October 19, 2010 filed pro se In Re Gerald William Filice Bankr. E.D. Calif. Case No. 10-47748 Chapter 11 Petition filed October 19, 2010 filed pro se In Re Clara Drose Bankr. S.D. Calif. Case No. 10-18529 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/casb10-18529.pdf In Re Dancing Bear Development, LP Bankr. D. Colo. Case No. 10-36493 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/cob10-36493p.pdf See http://bankrupt.com/misc/cob10-36493c.pdf In Re Be Right Investments LLC Bankr. S.D. Fla. Case No. 10-41793 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/flsb10-41793.pdf In Re Omni Storage X, L.L.C. Bankr. E.D. La. Case No. 10-13882 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/laeb10-13882.pdf In Re Apple Marine Construction, Inc. Bankr. D. Md. Case No. 10-33891 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/mdb10-33891.pdf In Re Carats, Inc. Bankr. D. Minn. Case No. 10-47785 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/mnb10-47785.pdf In Re Arietta, LLC Bankr. D. Nev. Case No. 10-29722 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/nvb10-29722.pdf In Re Redstone Grille, LLC Bankr. D. Nev. Case No. 10-29723 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/nvb10-29723.pdf In Re RJM Salon and Spa, Inc. Bankr. D. N.J. Case No. 10-42359 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/njb10-42359.pdf In Re Empresas Riozama Inc. Bankr. D. Puerto Rico Case No. 10-09760 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/prb10-09760.pdf In Re Jorge W. Cruz Lopez, Inc. dba Wallyco Micro Molding Bankr. D. Puerto Rico Case No. 10-09773 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/prb10-09773.pdf In Re Michael R. Dunn Timber Cutting, Inc. Bankr. W.D. Wash. Case No. 10-22524 Chapter 11 Petition filed October 19, 2010 See http://bankrupt.com/misc/wawb10-22524.pdf In Re 03 Restaurant Lounge & Nightclub, LLC aka 03 Restaurant Lounge, LLC aka Vive' aka Vive Lounge Bankr. C.D. Calif. Case No. 10-55088 Chapter 11 Petition filed October 20, 2010 See http://bankrupt.com/misc/cacb10-55088.pdf In Re 184 Diamond LLC Bankr. C.D. Calif. Case No. 10-24907 Chapter 11 Petition filed October 20, 2010 See http://bankrupt.com/misc/cacb10-24907.pdf In Re Professional Nurses, Inc. aka Nurses Choice Home Care Bankr. E.D. Calif. Case No. 10-47844 Chapter 11 Petition filed October 20, 2010 filed pro se In Re Heirs, LLC Bankr. S.D. Fla. Case No. 10-41917 Chapter 11 Petition filed October 20, 2010 See http://bankrupt.com/misc/flsb10-41917.pdf In Re Logan Circle Spectrum, LLC dba Halo Lounge dba Mova Lounge Bankr. S.D. Fla. Case No. 10-41914 Chapter 11 Petition filed October 20, 2010 See http://bankrupt.com/misc/flsb10-41914p.pdf See http://bankrupt.com/misc/flsb10-41914c.pdf In Re Tom Kopsch & Associates, Inc. dba Normandy Clinic Bankr. E.D. Mich. Case No. 10-72124 Chapter 11 Petition filed October 20, 2010 See http://bankrupt.com/misc/mieb10-72124p.pdf See http://bankrupt.com/misc/mieb10-72124c.pdf In Re Landhouse Millicent Group LLC Bankr. W.D. N.Y. Case No. 10-14477 Chapter 11 Petition filed October 20, 2010 See http://bankrupt.com/misc/nywb10-14477.pdf In Re Paul D. Renner, Jr. Bankr. E.D. Tenn. Case No. 10-16213 Chapter 11 Petition filed October 20, 2010 See http://bankrupt.com/misc/tneb10-16213.pdf In Re Faroakh Rajkot Bankr. S.D. Texas Case No. 10-39368 Chapter 11 Petition filed October 20, 2010 See http://bankrupt.com/misc/txsb10-39368.pdf In Re P.D.Q., Inc. Bankr. W.D. Va. Case No. 10-72513 Chapter 11 Petition filed October 20, 2010 See http://bankrupt.com/misc/vawb10-72513.pdf ********* 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 ***