/raid1/www/Hosts/bankrupt/TCR_Public/110119.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, January 19, 2011, Vol. 15, No. 18
Headlines
400 WALNUT: Plan Outline Hearing Scheduled for January 25
702 SERRANO: Wants to Get Back Property From Receiver
AFFILIATED MEDIA: Eyeing Merger with Freedom Comms., Other Papers
AMERICAN INT'L: JPMorgan, Goldman, BofA & Deutsche to Lead IPO
AMR CORP: Sues Chicago to Block O'Hare Improvements
ANGIOTECH PHARMACEUTICALS: Extends Deadlines Under Support Pact
APPLIED DNA: Sells $750,000 Senior Secured Notes
ARROW TRUCKING: Trustee Gets Approval to Leave Facility in Tulsa
BLOCKBUSTER INC: Shareholders Demand Meeting to Replace Board
BLOCKBUSTER INC: Coca-Cola Replaces Universal in Committee
BLOCKBUSTER INC: Opposes Equity Holders' Rule 2004 Exam
BLUEKNIGHT ENERGY: Solus Alternative Discloses 7.2% Equity Stake
BRUNSCHWIG & FILS: Lead Bidder Kravet to Provide DIP Financing
CAESARS ENTERTAINMENT: P. Murphy Leaves, Returns to Wentworth
CAMPANA FAMILY: Files Schedules of Assets & Liabilities
CAMPANA FAMILY: Section 341(a) Meeting Scheduled for Feb. 8
CANO PETROLEUM: Regains Compliance for NYSE Amex Listing
CAPITOL BANCORP: Joseph Reid Discloses 8.28% Equity Stake
CASPIAN SERVICES: Hansen Barnett Raises Going Concern Doubt
CATHOLIC CHURCH: Milw. Appeal on Insurance Ruling Put on Hold
CATHOLIC CHURCH: Unaatuq Wants to Enforce Pilgrim Springs Order
CHINA TEL GROUP: ZTE Purchase Orders Treated Confidential
CORUS BANKSHARES: Bankruptcy Court Stays Suit Against FDIC
CROATAN SURF: Files Plan of Reorganization & Disclosure Statement
CROATAN SURF: Asks for Court's Permission to Use Cash Collateral
CROATAN SURF: Files Schedules of Assets & Liabilities
CYCLE COUNTRY: Auditor Issues Going Concern Qualification
DARRYL PALMER: $13,000 Owed to Colel Excepted From Discharge
DAVIE YARDS: Obtains Feb. 18 Extension of CCAA Stay Order
DAYBREAK OIL: Incurs $451,000 Net Loss in November 30 Quarter
DOLL & DOLL: Bankr. Court Denies Bank's Bid to Enforce Orders
EDWARD J NAWOROL: Disclosure Statement Approval Remains Pending
EMIVEST AEROSPACE: Files Schedules of Assets and Liabilities
FAIR FINANCE: Ch. 7 Trustee Sues Founder's Kin to Recoup $1.2MM
FIDDLER'S CREEK: Can Borrow Up to $7,300,441 from Gulf Bay
FIRST DATA: To Consolidate Operations of North American Business
FLINT TELECOM: Files Amended Annual Report for Fiscal 2010
FLINT TELECOM: Gets OK for its 1 for 20 Reverse Stock Split
FOX HILL: Wants to Assume Management Agreement With Harbor Group
FRANK PARSONS: Taps Weinsweigadvisors as Financial Advisor
FRANK PARSONS: Wants SSG Capital as Investment Banker
FRANK PARSONS: Wants to Hire DCA as Claims & Noticing Agent
FREEDOM COMMS: Affiliated Media Unit Eyes Consolidation
GOLDEN CHAIN: Files Schedules of Assets & Liabilities
GOLDEN CHAIN: Section 341(a) Meeting Scheduled for Feb. 17
GREAT ATLANTIC & PACIFIC: Incurs $199-Mil. Net Loss in Dec. 4 Qtr.
GREAT ATLANTIC & PACIFIC: Committee Retains Milbank as Counsel
GREAT ATLANTIC & PACIFIC: Committee Taps Conflicts Counsel
GREAT ATLANTIC & PACIFIC: Committee Has FTI as Fin'l Advisor
GREAT ATLANTIC & PACIFIC: Wins Nod to Pay Employee Obligations
HARVEST OAKS: Court Rules on Objection to CSMC Claim
HSH DELAWARE: U.S. Trustee Lone Objector to Chapter 11 Plan
INNKEEPERS USA: Five Mile and Lehman May Acquire New Equity
INNOLOG HOLDINGS: Joe Kelley Resigns as Director
KAANAM LLC: Hotel's Summary Judgment Motion Granted Against Owner
KAISER GROUP: Can't Avoid Arbitration of Nova Hut Dispute
LEHMAN BROTHERS: Newport Wants Amtrol Shares Segregated
LEHMAN BROTHERS: Nomura Wants Deposition in Japan
LEHMAN BROTHERS: Workers Revive Lawsuit Over Retiree Plan
LEHMAN BROTHERS: Notes Investor Awarded $2.2MM in Arbitration
MESA AIR: Files Memorandum in Support of Plan Confirmation
MESA AIR: Addresses Plan Confirmation Objections
MESA AIR: Seeks Approval of Non-Material Plan Modifications
MOLECULAR INSIGHT: Files Schedules of Assets and Liabilities
MURRAY HILL: Said to Be in Default on Shorenstein Mezzanine Debt
NEXTMART INC: Significant Losses Prompt Going Concern Doubt
NORTHWESTERN STONE: Files Schedules of Assets and Liabilities
NUGEN HOLDINGS: Webb & Company Raises Going Concern Doubt
NUTRACEA: Settles with SEC on Alleged Accounting Irregularities
PEACOCK GAP: Mid-February Hearing Set for Syufy Takeover
PJM ENTERPRISES: Avoidance Suit Against IRS Goes to Trial
RICHARD RUBIO: Court Dismisses Chapter 11 Case
RWD REAL ESTATE: Bankr. Court Denies Bank's Bid to Enforce Orders
SUMMIT METALS: 3rd Cir. Affirms Ruling on Richardson Claims
TALON THERAPEUTICS: Extends CEO's Employment Until December
TAMARACK RESORT: Seeking Reconsideration of Case Dismissal
TAMARACK RESORT: Prospective Buyer Vows to Go Ahead With Sale
TERRESTAR NETWORKS: Wins OK for Deloitte as Tax Advisor
TERRESTAR NETWORKS: Master Fund Acquires Series B Stock
TERRESTAR NETWORKS: Berlin NGO Expresses Interest in Satellite
TOUSA INC: Committee Seeks February 17 Plan Outline Hearing
TRIBUNE CO: DBTCA Wants $2.9MM Claim Allowed for Voting Purposes
TRIBUNE CO: LDTC Wants $6.3MM Claim Allowed for Voting Purposes
TRIBUNE CO: Wilmington Trust Wants PHONES Claims Estimated
TRIBUNE CO: To Pay Attorneys' Fees of 88 Employees
TWAIN CONDOMINIUMS: Obtains Interim OK for Use of Cash Collateral
TWAIN CONDOMINIUMS: Amends Schedules of Assets and Liabilities
UNITED CONTINENTAL: Sues Chicago to Block O'Hare Improvements
VISICON SHAREHOLDERS: Has Until Feb. 3 to Propose Chapter 11 Plan
VYTERIS INC: David DiGiacintor Resigns as Director
WASHINGTON MUTUAL: TruPS Holders Appeal From Plan Ruling
WESTMORELAND COAL: Plans to Offer $150MM of Senior Secured Notes
WESTMORELAND COAL: Amends Note Purchase Agreement With Tontine
WOODLAND PINES: Has Until March 9 to Propose Chapter 11 Plan
WOODLAND PINES: Taps Gibson Nakamura as Bankruptcy Counsel
WOODLAND PINES: Files Schedules of Assets and Liabilities
* Standard & Poor's Says No Global Corporate Defaults in 2011 Yet
* U.S. High Yield 2011 Default Rate at 1.5%-2%, Fitch Projects
* Starwood Capital Buys Non-Peforming Loans at Deep Discount
* Upcoming Meetings, Conferences and Seminars
*********
400 WALNUT: Plan Outline Hearing Scheduled for January 25
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
will convene a hearing on January 25, 2011, at 10:30 a.m., to
consider adequacy of the Disclosure Statement explaining 400
Walnut Associates, L.P.'s proposed Plan of Reorganization.
The Debtor will begin soliciting votes on the Plan following
approval of the adequacy of the information in the Disclosure
Statement.
As reported in the Troubled Company Reporter on November 8, 2010,
according to the Disclosure Statement, the implementation of the
Plan will address these components: (i) Plan funding; (ii)
management of the property; (iii) the cure of the Debtor's default
under the 4th Walnut note; (iv) the extension of the monthly
installments of principal and interest under the 4th Walnut note,
for an additional five years; and (v) the refinance of the
property to pay allowed secured claim of 4th Walnut on or before
March 1, 2016.
Subject to the Plan being confirmed, 400 Walnut and shareholder
and limited partner John J. Turchi, Jr., will place into a reserve
account to be established by the Disbursing Agent cash sufficient
to make payments required on the Effective Date to the classes as
set forth in the Plan.
Under the Plan, Reorganized 400 Walnut will have sufficient funds
to make all necessary payments and to continue operations.
Unsecured creditors affiliated with 400 Walnut will receive a cash
flow note, without interest that will provide for no payments
until all secured creditors and administrative claimants are paid.
The current equity holders will retain their interests in the
Debtor.
A full-text copy of the Black-lined Disclosure Statement is
available for free at:
http://bankrupt.com/misc/400WALNUT_blacklinedDS.pdf
About 400 Walnut
400 Walnut Associates, L.P., owns the Green Tree Apartment
Building, a 67 unit luxury apartment building with one commercial
unit located on an approximate 0.23 acre site at 400-414 Walnut
Street, Philadelphia.
400 Walnut filed for Chapter 11 bankruptcy protection on July 23,
2010 (Bankr. E.D. Pa. Case No. 10-16094). Aris J. Karalis, Esq.,
and Robert W. Seitzer, Esq., at Maschmeyer Karalis P.C., represent
the Debtor. The Company estimated assets and debts at $10 million
to $50 million in its Chapter 11 petition.
Affiliates 23S23 Construction, Inc. (Bankr. E.D. Pa. Case No. 09-
12652) and Carriage House Condominiums, LP (Case No. 09-12647)
filed separate Chapter 11 petitions in April 2009.
702 SERRANO: Wants to Get Back Property From Receiver
-----------------------------------------------------
702 Serrano Property, LLC, asks the U.S. Bankruptcy Court for the
Central District of California to compel Mark Weinstein, the
state-court appointed receiver, to turn over to the Debtor
property of the Debtor's bankruptcy estate.
The Debtor is the new owner of the luxury condominium complex
known as "Serrano Place" that is located within the heart of
Koreatown, Los Angeles, California. Although the Debtor became
the legal owner of the Property on December 10, 2010, and
commenced the bankruptcy case and immediately informed the
Receiver of the bankruptcy filing, the Debtor has been denied by
the Receiver access to the Property and other property which
belongs to the Debtor. The Receiver was appointed by a state
court judge in a proceeding commenced by Urban Commons Serrano,
LLC.
The Debtor says that an expedited hearing is warranted and
necessary due to the Receiver's refusal to comply with the clear
requirements of Section 543 of the U.S. Bankruptcy Code, which
requires the Receiver to turnover property of the estate to the
Debtor upon the commencement of a bankruptcy case. The Receiver
has failed to do so, despite multiple requests, and the Receiver's
continued possession and control of property of the estate has
prevented the Debtor from gaining any access to the Property, to
administer the estate and comply with the Debtor's obligations
under the Bankruptcy Code, the Bankruptcy Rule and the Local
Bankruptcy Rules.
"As a result of the Receiver's intentional and knowing violation
of the provisions of Section 543 of the Bankruptcy Code, as part
of this bankruptcy filing, the Debtor has not yet been able to
provide full and complete information as to creditors which may
assert claims in this estate, and understand clearly the current
situation with the Property. By way of example and not
limitation, based on some financial data which was finally
delivered by the Receiver to the Debtor yesterday, on January 12,
2011, it appears that between the period from November 2010
through January 2011, the Receiver collected rental income of
approximately $78,000, while the rent roll information previously
obtained by the Debtor from NBGI Homes, Inc. (the prior owner of
the Property) indicates that, for the affected three month period,
rents of approximately $150,000 should have been collected. There
has been no explanation from the Receiver as to why the rent
actually collected for this period is only approximately one-half
of what should have been collected," The Debtor states.
The Debtor says that it is further aware of a rumor that Jae
Chong, the principal of NBGI Homes, Inc., has tried to collect
rents directly from the tenants. According to the Debtor, there
is no information from the Receiver as to the validity of this
rumor, and, if it is in fact true, what actions, if any, the
Receiver has taken to remedy this problem. The financial data
also reflects that on December 14, 2010, the Receiver wire
transferred $40,000 to Urban Commons. The Debtor does not believe
that there was any legal basis for the Receiver to do this. In
addition, the Receiver appears to be incurring fees of over $5,000
per month, which does not appear to be reasonable to the Debtor.
The Debtor asks the Court that the Receiver be held in contempt of
for knowingly refusing to comply with the clear mandates of the
Bankruptcy Code, and should be compelled to pay all of the legal
fees and costs associated with the Debtor's efforts to obtain
possession of the Property from the Receiver, including attorneys'
fees and costs associated with making the demands for turnover,
preparing this Turnover Motion, the Ex Parte Motion and all
related papers, and appearing at the hearing thereon.
About 702 Serrano
Los Angeles, California-based 702 Serrano Property, LLC, filed for
Chapter 11 bankruptcy protection on January 6, 2011 (Bankr. C.D.
Calif. Case No. 11-10746). Monica Y. Kim, Esq., at Levene, Neale,
Bender, Yoo & Brill, L.L.P., serves as the Debtor's bankruptcy
counsel. The Debtor estimated its assets and debts at $10 million
to $50 million.
Affiliate NGBI Homes (Bankr. C.D. Calif. Case No. 10-30683) filed
a separate Chapter 11 petition on May 23, 2010.
AFFILIATED MEDIA: Eyeing Merger with Freedom Comms., Other Papers
-----------------------------------------------------------------
Russell Adams, writing for The Wall Street Journal, reports that a
person familiar with the matter said MediaNews Group Inc., is
eyeing a merger with Freedom Communications Inc. and possibly
several other newspaper companies.
MediaNews is the publisher of more than 50 daily U.S. newspapers
including the Denver Post. Its holding company is Affiliated
Media Inc., which filed for bankruptcy protection and emerged in
March under the ownership of a group of lenders including
investment firm Alden Global Capital.
Alden is also part of a group of lenders that owns Freedom
Communications, following emergence from its own bankruptcy in
April.
Mr. Adams reports that the person familiar with the matter said
Alden wants to roll at least some of its various newspaper
holdings into a single company.
Alden also was part of a group of investors that won the auction
for the Philadelphia Inquirer and the Philadelphia Daily News. It
also holds a stake in Journal Register Co.
According to Mr. Adams, a spokesman for Freedom said the company's
board has been exploring its strategic options for months and has
been approached by "a number of strategic buyers." He declined to
comment on details of that process, which he said is ongoing.
About Affiliated Media
Denver, Colorado-based Affiliated Media, Inc., is the holding
company for the MediaNews Group family of newspapers, the nation's
second-largest newspaper publisher by circulation and owner of 54
daily newspapers, over 100 non-daily newspapers, as well as Web
sites, television and radio broadcasters that serve markets in 12
states.
The Company filed for Chapter 11 bankruptcy protection on
January 22, 2010 (Bankr. D. Delaware Case No. 10-10202). Hughes
Hubbard & Reed LLP, served as the Debtor's general bankruptcy
counsel, while Daniel B. Butz, Esq., at Morris, Nichols, Arsht &
Tunnell LLP, served as the Debtor's co-bankruptcy counsel. Carl
Marks Advisory Group LLC acted as the Debtor's restructuring
advisor; Rothschild Inc., the Debtor's financial advisor; and Epiq
Bankruptcy Solutions, LLC, the Debtor's claims agent. The Company
listed $100 million to $500 million in assets and $500 million to
$1 billion in liabilities.
The Hon. Kevin J. Carey confirmed the Company's plan of
reorganization on March 4, 2010, less than six weeks after the
bankruptcy filing. The Company had reached agreement pre-
bankruptcy with its lenders on terms of the plan, which reduces
the Company's debt from $930 million to $165 million and involves
no management change or change of control of the Company.
The Plan gives holders of senior notes aggregating $583.1 million
88% of the common stock, the proceeds of $150 million secured term
loan and certain cash payments. Holders of general unsecured
claims retain their claims or would be paid in full. Holders of
$326 million in subordinated notes would receive warrants to
purchase stock of the reorganized company. Holders of equity
interests were wiped out.
Affiliated Media emerged from Chapter 11 protection in March 2010.
About Freedom Communications
Freedom Communications, headquartered in Irvine, Calif., is a
national privately owned media company operating print
publications, broadcast television stations and interactive
businesses. The company's print portfolio includes approximately
100 daily and weekly publications, plus ancillary magazines and
other specialty publications. The broadcast company's stations --
five CBS, two ABC network affiliates and one CW affiliate -- reach
more than 3 million households across the country. The Company's
news, information and entertainment websites complement its print
and broadcast properties.
Freedom Communications filed for Chapter 11 on Sept. 1, 2009
(Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway
Stargatt & Taylor, and Latham & Watkins LLP served as Chapter 11
counsel. Houlihan, Lokey, Howard & Zukin, Inc., served as
financial advisors while AlixPartners LLC served as restructuring
consultants. Logan & Co. served as claims and notice agent.
Freedom Communications had $757,000,000 in assets against debts of
$1,077,000,000 as of July 31, 2009.
The Bankruptcy Court confirmed Freedom Communications' Plan of
Reorganization on March 9, 2010. The Plan became effective
April 30, 2010. The Plan, which was supported by the Steering
Committee of the Company's secured lenders and the Official
Committee of Unsecured Creditors, eliminated $450 million of debt
from Freedom's balance sheet.
AMERICAN INT'L: JPMorgan, Goldman, BofA & Deutsche to Lead IPO
--------------------------------------------------------------
Serena Ng and Randall Smith, writing for The Wall Street Journal,
report that people familiar with the matter said American
International Group Inc. and the U.S. Treasury have chosen these
four Wall Street banks to jointly lead their first large offering
of AIG shares in the coming months for a cut-rate fee:
-- J.P. Morgan Chase & Co.,
-- Goldman Sachs Group Inc.,
-- Bank of America Corp., and
-- Deutsche Bank AG
The sources said the banks were picked from a pool of 10 banks
that last week pitched for lead roles in the share sale.
The sources told the Journal the fee that banks have been asked to
accept on the coming offering is about 0.5%, or $5 million on
every $1 billion in shares sold.
According to the Journal, the sources said it isn't clear if all
the banks have accepted that figure, which would be below the 0.75
percentage point fee that banks charged on General Motors Co.'s
initial public offering in 2010. Still, according to the Journal,
the potential size of the AIG sale -- which bankers last week
predicted could exceed $20 billion and could potentially rank as
the biggest offering in U.S. history -- could make the assignment
lucrative to the banks. If $25 billion in AIG shares are sold,
banks stand to collect $125 million at a 0.5% fee.
The Journal says the banks and AIG are expected to start mapping
out a strategy for marketing AIG's shares at investor roadshows in
the coming weeks.
About AIG
American International Group, Inc. -- http://www.aig.com/-- is an
international insurance organization with operations in more than
130 countries and jurisdictions. AIG companies serve commercial,
institutional and individual customers through one of the most
extensive worldwide property-casualty networks of any insurer. In
addition, AIG companies are leading providers of life insurance
and retirement services around the world. AIG common stock is
listed on the New York Stock Exchange, as well as the stock
exchanges in Ireland and Tokyo.
In September 2008, AIG experienced a liquidity crunch when its
credit ratings were downgraded below "AA" levels by Standard &
Poor's, Moody's Investors Service and Fitch Ratings. AIG almost
collapsed under the weight of bad bets it made insuring mortgage-
backed securities. The Company, however, was bailed out by the
Federal Reserve, but even after an initial infusion of
$85 billion, losses continued to grow. The later rescue packages
brought the total to $182 billion, making it the biggest federal
bailout in U.S. history.
AIG has been working to protect and enhance the value of its key
businesses, execute an orderly asset disposition plan, and
position itself for the future. AIG has sold a number of its
subsidiaries and other assets to pay down loans received from the
U.S. government, and continues to seek buyers of its assets.
AMR CORP: Sues Chicago to Block O'Hare Improvements
---------------------------------------------------
The Wall Street Journal's Susan Carey reports that United
Continental Holdings Inc. and AMR Corp., parent of American
Airlines, sued the city of Chicago, Ill., in Cook County Circuit
Court on Tuesday to block it from selling bonds and beginning work
this spring on the second phase of an airfield expansion project
at Chicago's O'Hare International Airport. The carriers fear the
project will raise their costs.
According to the report, United and AMR asked the state court for:
-- a declaration that their O'Hare lease agreements give them
the rights to disapprove airport capital expenditures
funded with the proceeds of general airport revenue bonds;
and
-- injunction to prevent Chicago from beginning the work,
which includes the construction of two new runways and the
extension of another runway.
The total cost of the project is estimated at $3.36 billion.
The Journal says United and American control about 85% of the
traffic at O'Hare. The Journal also notes O'Hare is the nation's
second-busiest airport behind Hartsfield-Jackson Atlanta
International Airport.
The report notes United and American warned Chicago Mayor Richard
M. Daley in a letter on Friday that the new debt required to fund
the work "would burden us and our customers with costs we simply
cannot afford to pay for a project we do not need, and will not
need for many years."
The Journal relates Chicago on Monday filed a preliminary offering
statement for $1 billion of debt backed by federal grants and
passenger-fee income. According to the report, United and
American contend that the second phase of the project is supposed
to be funded by general airport revenue bonds, over which they
claim their airport leases give them decision-making power.
According to the Journal, Rosemarie Andolino, commissioner of the
Chicago Department of Aviation, said the city believes it has the
legal right to secure funding for the airport project. The city
is willing to discuss this matter with O'Hare airlines but "timing
is essential" for the project, she said, declining further comment
on the litigation.
The Journal says Mayor Daley told reporters last week that the
public would lose if the project stalled. "We are not building the
runways for the airlines today," he said, according to the Chicago
Tribune. "We are building the runways for passengers so there's
no delays in bad weather."
About United Continental
United Continental Holdings, Inc. (NYSE: UAL) --
http://www.UnitedContinentalHoldings.com/, http://www.united.com/
and http://www.continental.com/-- is the holding company for both
United Airlines and Continental Airlines. Together with United
Express, Continental Express and Continental Connection, these
airlines operate a total of approximately 5,800 flights a day to
371 airports throughout the Americas, Europe and Asia from their
hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles,
New York, San Francisco, Tokyo and Washington, D.C. United and
Continental are members of Star Alliance, which offers more than
21,200 daily flights to 1,172 airports in 181 countries worldwide
through its 28 member airlines. United's and Continental's more
than 80,000 employees reside in every U.S. state and in many
countries around the world.
United Continental carries 'B2' corporate family and probability
of default ratings, with stable outlook, from Moody's, 'B' issuer
credit ratings, with stable outlook, from Standard & Poor's, and
'B-' issuer default rating from Fitch.
UAL Corp filed for Chapter 11 protection on Dec. 9, 2002 (Bankr.
N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc
Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba,
Esq., at Kirkland & Ellis, represented the Debtors in their
restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein
Nath & Rosenthal LLP represented the Official Committee of
Unsecured Creditors. Judge Eugene R. Wedoff confirmed a
reorganization plan for United on Jan. 20, 2006. The Company
emerged from bankruptcy on Feb. 1, 2006.
At June 30, 2010, UAL had $20.134 billion in total assets against
total current liabilities of $8.573 billion, long-term debt of
$6.281 billion, long-term obligations under capital leases of
$1.01 billion, other liabilities and deferred credits of
$7.022 billion, and a stockholders' deficit of $2.756 billion.
About AMR Corporation
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company's balance sheet at Sept. 30, 2010, showed
$25.36 billion in total assets, $8.94 billion in total
liabilities, $9.01 in billion of long-term debts, $503.0 million
in obligations under capital lease, $7.41 billion pension and
post-retirement benefits, $3.14 billion in other liabilities, and
a stockholders' deficit of $3.64 billion.
* * *
AMR carries a 'CCC' issuer default rating from Fitch Ratings. It
has 'Caa1' corporate family and probability of default ratings
from Moody's. It has 'B-' corporate credit rating from Standard &
Poor's.
In November 2010, Standard & Poor's Ratings Services revised its
outlook on AMR Corp. and its major operating subsidiary, American
Airlines Inc., to stable from negative, based on AMR's improved
operating performance, which has bolstered credit quality. S&P
also affirmed its 'B-' corporate credit rating and most issue
ratings on the two companies and lowered selected ratings on
American's enhanced equipment trust certificates.
ANGIOTECH PHARMACEUTICALS: Extends Deadlines Under Support Pact
---------------------------------------------------------------
Angiotech Pharmaceuticals, Inc., announced that it has reached an
agreement with the holders of a majority of the outstanding 7.75%
Senior Subordinated Notes to extend certain deadlines outlined in
the previously announced Recapitalization Support Agreement dated
October 29, 2010, and amended on November 29, 2010 and December
15, 2010. Seventy-three percent of the holders of the
Subordinated Notes initially executed the Support Agreement and
support has increased such that presently 84% of the holders of
the Subordinated Notes have agreed to be bound by the Support
Agreement.
Under the Support Agreement, the Consenting Noteholders have
agreed to exchange their Subordinated Notes for common stock in
the Company. Qualifying holders of the Subordinated Notes
participating in the Exchange Offer would receive their pro rata
share of up to 93.5% of the common stock of Angiotech issued and
outstanding following the completion of the recapitalization
transaction, subject to potential dilution. The Support Agreement
provided that, as a condition precedent to the implementation of
the Exchange Offer, Noteholders comprising at least 98% of the
outstanding aggregate principal amount of the Subordinated Notes
must consent to the Exchange Offer.
Under the Third Extension Agreement, the date by which Angiotech
must commence the Exchange Offer or otherwise commence
implementation of the recapitalization has been extended to
January 28, 2011. Additionally, the date by which the Minimum
Exchange Offer Threshold must be achieved has been extended to
February 28, 2011. Certain other deadlines in the Support
Agreement with respect to the Exchange Offer and the
recapitalization have been extended.
CCAA Restructuring
As the Company disclosed in October 2010, the Company may be
required to pursue the recapitalization transaction pursuant to a
plan of arrangement under the Canada Business Corporations Act or
a plan of compromise or arrangement under the Companies' Creditors
Arrangement Act or other court proceedings.
The Company has also entered into an agreement with holders of a
majority of the Company's existing Senior Floating Rate Notes due
2013 to extend to January 28, 2011 the date by which Angiotech
must commence the exchange offer outlined in the previously
announced Floating Rate Note Support Agreement dated October 29,
2010 and amended on November 29, 2010 and December 15, 2010.
Under the terms of the FRN Support Agreement, Angiotech will offer
to exchange Existing Floating Rate Notes for new floating rate
notes. The exchange offer will be open to all qualifying holders
of the Existing Floating Rate Notes. The New Floating Rate Notes
will be secured by a second lien over the assets and property of
the Company and certain of its subsidiaries and will otherwise be
issued on substantially the same terms and conditions as the
Existing Floating Rate Notes other than amendments to certain
covenants in respect of the incurrence of additional indebtedness,
liens and change of control.
About Angiotech Pharmaceuticals
Based in Vancouver, British Columbia, in Canada, Angiotech
Pharmaceuticals, Inc. (NASDAQ: ANPI; TSX: ANP) --
http://www.angiotech.com/-- is a global specialty pharmaceutical
and medical device company. Angiotech discovers, develops and
markets innovative treatment solutions for diseases or
complications associated with medical device implants, surgical
interventions and acute injury.
The Company's balance sheet at Sept. 30, 2010, showed
US$326.80 million in total assets, US$60.30 million in current
liabilities, and US$622.16 million in non-current liabilities and
a stockholders' deficit of US$622.16 million.
In early December 2010, Angiotech said it has reached an agreement
with the holders of 76% of its 7.75% Senior Subordinated Notes to
extend certain deadlines outlined in their Recapitalization
Support Agreement dated October 29, 2010. Seventy-three%
of the holders of the Subordinated Notes executed the Initial
Support Agreement and presently, 85% of the holders of the
Subordinated Notes have consented to the Initial Support
Agreement. On November 29, 2010, Angiotech and the Trustee, at the
direction of a majority of the holders of its Subordinated Notes,
extended the grace period applicable to interest payments due on
the Subordinated Notes before an event of default occurs, with
such grace period applicable to the $9.7 million semi-annual
interest payment that was due on the Subordinated Notes on
October 1, 2010 extended until December 30, 2010.
In November 2010, Moody's Investors Service downgraded the
probability of default rating of Angiotech to Ca/LD from Ca and
affirmed the Corporate Family Rating at Ca. The company's other
existing debt ratings were affirmed. The outlook is developing.
The assignment of the Ca/LD is the conclusion of the 30-day grace
period in which the company missed the original interest payment
of $9.7 million on its 7.75%, $250 million senior subordinated
notes due Oct. 1, 2010. Moody's treats the failure to meet the
original contractual terms as a limited default.
APPLIED DNA: Sells $750,000 Senior Secured Notes
------------------------------------------------
On January 7, 2011, Applied DNA Sciences, Inc., issued and sold a
$750,000 principal amount senior secured convertible note bearing
interest at a rate of 10% per annum to an "accredited investor,"
as defined in regulations promulgated under the Securities Act of
1933, as amended.
The Note is convertible, in whole or in part, at any time, at the
option of the noteholder, into either (A) such number of shares of
the Company's common stock, $0.001 par value per share, determined
by dividing (i) the principal amount of the Note, together with
any and all accrued and unpaid interest and penalties, by (ii) a
conversion price of $ 0.05529, which is equal to a 20% discount to
the average volume, weighted average price of the Company's Common
Stock for the ten trading days prior to issuance or (B) securities
issued in any Subsequent Financing at a conversion price equal to
80% of the price per Subsequent Security paid by investors for
Subsequent Securities in a Subsequent Financing. A "Subsequent
Financing" is the sale by the Company or an affiliate thereof of
securities at any time after January 7, 2011 and prior to the
earlier of (i) a Qualified Financing or (ii) January 7, 2012. The
noteholder may convert its Notes in whole in connection with any
one Subsequent Financing or in part in connection with one or more
Subsequent Financings.
The Note will be automatically converted upon the earlier of (I)
January 7, 2012 and (II) the completion of a Qualified Financing
at the election of the noteholder into either (A) shares of Common
Stock at the Common Conversion Price, (B) Subsequent Securities at
a conversion price equal to 80% of the Subsequent Financing Price,
or (C) securities issued in a Qualified Financing at a conversion
price equal to 80% of the price per Qualified Financing Security
paid by investors for the Qualified Financing Securities in the
Qualified Financing. A "Qualified Financing" is the sale by the
Company or an affiliate thereof of securities resulting in gross
proceeds in a single transaction equal to or in excess of $10
million.
Upon any Change in Control, the noteholder has the right to
require the Company to redeem the Note, in whole or in part, at a
redemption price equal to the Change of Control Redemption Price.
The Note contains certain events of default that are customarily
included in financing of this nature. If an event of default
occurs, the noteholder may require the Company to redeem the Note,
in whole or in part, at a redemption price equal to the Event of
Default Redemption Price.
Pursuant to a joinder agreement, the noteholder became party to
the registration rights agreement, dated as of July 15, 2010, with
the Company, pursuant to which the Company has agreed to prepare
and file a registration statement with the Securities Exchange
Commission to register under the Securities Act of 1933, as
amended resales from time to time of the Conversion Shares issued
or issuable upon conversion or redemption of the Note. The
Company is required to file a registration statement within 45
days of receiving a Demand Registration Request, and to cause the
registration statement to be declared effective within 45 days.
The Company will be required to pay penalties to the noteholder in
the event that these deadlines are not met.
The Note bears interest at the rate of 10% per annum and is due
and payable in full on January 7, 2012. Until the principal and
accrued but unpaid interest under the Note is paid in full, or
converted into Conversion Shares pursuant to its terms, the
Company's obligations under the Note will be secured by a lien on
all assets of the Company and the assets of APDN (B.V.I.) Inc.,
the Company's wholly-owned subsidiary, in favor of Etico Capital,
LLC, as Collateral Agent for the Purchasers named therein pursuant
to security agreements dated as of the date of July 15, 2010, to
which the noteholder became party pursuant to joinder agreements.
In connection with the sale of the Note, the Company paid
placement agent commissions and discounts aggregating $75,500. In
addition, the placement agent was issued a warrant with a seven-
year term to purchase 10% of the Notes sold.
The issuance of the Note and the Warrant, was completed in
reliance upon the exemption from registration provided for by
Section 4(2) of the Securities Act and by Rule 506 of Regulation D
promulgated under the Securities Act. The noteholder represented
to the Company in a subscription agreement that it is an
"accredited investor" as that term is defined in Rule 501 of
Regulation D.
Maturity Date Extension of Prior Notes
Concurrently with the above issuance and sale of the Note, the
maturity dates of the senior secured convertible notes issued to
accredited investors by the Company on July 15, 2010, which terms
were reported on the Company's Current Report on Form 8-K filed
with the SEC on July 15, 2010, was extended to the later of (i)
the maturity date of the Note or (ii) the maturity date of any
other notes to be issued in connection with a financing of up to
$3,000,000 aggregate principal amount of senior secured
convertible notes by the Company by January 31, 2011.
About Applied DNA
Stony Brook, N.Y.-based Applied DNA Sciences, Inc., is principally
devoted to developing DNA embedded biotechnology security
solutions in the United States.
The Company's balance sheet at September 30, 2010, showed
$1.41 million in total assets, $3.01 in total liabilities, and a
stockholders' deficit of $1.60 million.
RBSM LLP, in New York, expressed substantial doubt about Applied
DNA Sciences' ability to continue as a going concern. The
independent auditors noted that the Company has suffered recurring
losses and does not have significant cash or other material
assets, nor does it have an established source of revenues
sufficient to cover its operations.
ARROW TRUCKING: Trustee Gets Approval to Leave Facility in Tulsa
----------------------------------------------------------------
The Associated Press reports that a federal bankruptcy judge has
granted a request from Arrow Trucking's bankruptcy trustee Patrick
J. Malloy to allow the Company to abandon its former corporate
offices and training facility in west Tulsa.
The AP notes the properties had been listed for sale at $3 million
by Coldwell Banker Commercial since July. "We never had an offer.
Because the mortgage is for both properties, you have to sell them
together. The problem with the office space is that it is a huge
space. Not that many people would want it," the AP quotes the
trustee as stating.
According to the AP, the trustee sought an order allowing the
Company to give up the two properties to the mortgage holder, City
National Bank of Phoenix, Arizona, because the mortgage principal
and interest of $3,104,260 exceeds the value of the property and
maintenance costs continue to mount.
About Arrow Trucking
Tulsa-based Arrow Trucking is a 61-year-old trucking business that
suspended operations Dec. 22, 2009. Arrow Trucking filed a
Chapter 7 bankruptcy liquidation petition Jan. 8, 2010, listing
assets and liabilities at between $100 million and $500 million.
According to Land Line Magazine, since the bankruptcy filing, more
than $4 million has been recovered for the bankruptcy estate. An
auction on July 20 for Arrow Trucking's 26-acre maintenance
facility netted $1.6 million from the buyer, a unit of Miller
Truck Lines of Stroud, Oklahoma.
BLOCKBUSTER INC: Shareholders Demand Meeting to Replace Board
-------------------------------------------------------------
Shareholders of Blockbuster Inc., led by Jasbir Sandhu, filed
papers in the U.S. Bankruptcy Court for the Southern District of
New York demanding that the company call a meeting to replace its
Board of Directors prior to the filing of the Company's plan of
reorganization.
The Debtors are required under their DIP Credit Agreement to file
a conforming plan of reorganization by January 14, 2011. The
Debtors' original Plan Filing Deadline under the DIP Credit
Agreement was November 30, 2010, and was subsequently moved to
December 15, and then to January 14.
However, no plan or disclosure statement has been filed by the
Debtors with the Court as of press time. No disclosure has also
been made with the U.S. Securities and Exchange Commission
concerning any further amendment to the DIP Credit Agreement that
further extends the Plan Filing Deadline.
Blockbuster's exclusive right to file a plan will expire on
January 21, 2011.
According to Home Media Magazine, the shareholder group --
composed of more than 300 individual Blockbuster shareholders --
claims to represent more than 69 million shares of common A and B
stock in the pre-bankruptcy Blockbuster.
Last October, Mr. Sandhu wrote a letter to the Court accusing Carl
Icahn, a major shareholder of Blockbuster, and James W. Keyes, the
company's incumbent chief executive officer, of manipulating
Blockbuster's Chapter 11 filing. In that letter, Mr. Sandhu
demanded, among other things, the full disclosure of Blockbuster's
recapitalization effort and the review of all relevant events of
Blockbuster's board of directors for the past two years.
Replacement of Board
In the recent request captioned "Request to Exercise the
Shareholders Right," Mr. Sandhu, on behalf of himself and other
shareholders "from across the globe," demanded that Blockbuster
convene a shareholders' meeting to replace these directors:
(1) James W. Keyes, chairman and chief executive officer;
(2) Dennis McGill, executive vice president and chief
financial officer;
(3) Rod McDonald, vice president, secretary and general
counsel; and
(4) Gary J. Fernandes, director.
Mr. Sandhu asserts that their request clearly demonstrates the
"Vote of No Confidence" in the existing Board of Directors.
The Shareholders believe that the new Board of Directors should be
elected to explore restructuring options outside the bankruptcy
court, he said.
The Shareholders have serious doubts on the competence and
creditability of Mr. Keyes and the Board of Directors, Mr. Sandhu
continues. He asserts that the Court should not allow
Blockbuster's management to submit any Plan until there is a
resolution to the outstanding adversary proceeding commenced by
Lyme Regis Partners LLC against Carl Icahn and other Icahn
entities.
"Blockbuster should not be allowed to submit any Reorganization
Plan until the shareholders have exercised their rights to call
for the Shareholders' Meeting to replace the Board of Directors,"
Mr. Sandhu tells Judge Lifland.
"Prior to bankruptcy, Blockbuster had turned down the request for
a shareholder meeting for re-voting on the 'class conversion &
reverse [stock] split' measures required to maintain the NYSE
listing," Mr. Sandhu alleges. He adds, among other things, that
the current Board of Directors did nothing in the months preceding
the Chapter 11 filing to protect the Shareholders' rights, and
neither did the Board ever inform the Shareholders about the
strategic options Blockbuster had.
"Shareholders believe that the board had demonstrated incompetency
in managing the company and estate," Mr. Sandhu points out.
The Shareholders assert that they see much value in Blockbuster,
and believe that the current Board of Directors failed to present
these facts prior to filing for bankruptcy:
(a) The Store, Channel of Revenue. After filing for Chapter
11, Debtors have indicated that they are in the process of
testing the final and most promising portion of a plan,
which will return the stores to a level of profitability
and that it will drive the implementation of the
transformation to other channels of profitable revenue;
(b) The By Mail, Channel of Revenue. After filing for Chapter
11, Blockbuster started making progress in the process of
regaining the customer base of the By Mail Channel of
revenue and is heavily advertising for these customers at
this time;
(c) The Blockbuster Express NCR Kiosk, Channel of Revenue.
The revenue from this channel has been deferred to a
future date and the probable amount of that revenue has
not been revealed by management. Shareholders believe
that this future revenue is large enough to service a
large portion of future debt burden; and
(d) The future Digital Transactional Video on Demand, Channel
of Revenue. The digital strategy is the area of potential
revenue that the new owners of equity see as the most
valuable area and will be focused on in the coming years.
Digital initiatives are integral to the transformation of
its business, and that the digital channel will play a
principal role in the success of the restructured entity
upon exit from Chapter 11.
A copy of Mr. Sandhu's request, including the list of
Shareholders, is available for free at:
http://bankrupt.com/misc/BBI_Sandhu_Request_01112011.pdf
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.
The Official Committee of Unsecured Creditors has retained Cooley
LLP as its counsel.
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: Coca-Cola Replaces Universal in Committee
----------------------------------------------------------
Tracy Hope Davis, the U.S. Trustee for Region 2, amended the list
of members of the Official Committee of Unsecured Creditors in the
Chapter 11 cases of Blockbuster Inc., and its debtor affiliates.
In the amended list, Universal Studios Home Entertainment LLC is
replaced by Coca-Cola Enterprises, Inc., as a Creditors Committee
member. Both are among Blockbusters' 50 largest unsecured
creditors.
Accordingly, the Creditors Committee consists of these members, as
of October 1, 2010:
1. The Bank of New York Mellon Trust Company, N.A.
101 Barclay Street - 8 West
New York, New York 10286
Attention: Stuart Rothenberg, Vice President
Tel: (212) 298-1977
Fax: (212) 667-9465
2. Scott Siegel
1 Granada Lane
Atlantic Beach, New York 11509
3. David A. Segal
3523 McKinney Avenue #611
Dallas, Texas 75204
4. Coca-Cola Enterprises, Inc.
Customer Financial Services Center
521 Lake Kathy Drive
Brandon, Florida 33510-3981
Attention: Richard Stiteler, Corporate Director
of Credit and Risk Management
Tel: (813) 569-3708
Fax: (813) 569-3868
5. Integrated Process Technologies
also known as aka FM Facility Maintenance
10 Columbus Blvd. - 4th Floor
Hartford, Connecticut 06106
Attention: James Reavey, President/CEO
Tel: (860) 466-7404
Fax: (860) 466-7418
6. AT&T Services, Inc.
One AT&T Way - Room 3A218
Bedminster, New Jersey 07921
Attention: James W. Grudus, General Attorney
Tel: (908) 234-3318
Fax: (832) 213-0157
7. Weingarten Realty
2600 Citadel Plaza Drive - Suite 125
Houston, Texas 77008
Attention: Jenny J. Hyun, Vice President/
Associate General Counsel
Tel: (713) 866-6057
Fax: (713) 880-6146
8. Developers Diversified Realty Corp.
3300 Enterprise Parkway
Beachwood, Ohio 44122
Attention: Eric C. Cotton, Associate General Counsel
Tel: (216) 755-5500
Fax: (216) 755-1615
9. Centro Properties Group
420 Lexington Avenue
New York, New York 10170
Attention: Michael Moss - Executive Vice President
Tel: (212) 869-3000
Fax: (212) 302-4776
The Bank of New York Mellon, Coca-Cola, Integrated Process
Technologies, AT&T, and Developers Diversified are among
Blockbusters' 50 largest unsecured creditors, holding these
claims:
The Bank of New York Mellon $315,121,589
AT&T 2,732,933
Integrated Process 1,987,339
Developers Diversified 1,245,523
Coca-Cola Enterprises 703,412
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.
The Official Committee of Unsecured Creditors has retained Cooley
LLP as its counsel.
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: Opposes Equity Holders' Rule 2004 Exam
-------------------------------------------------------
Blockbuster Inc. and its units ask the Bankruptcy Court to deny
the Ad Hoc Committee of Equity Security Holders' request for
permission to conduct an examination pursuant to Rule 2004 of the
Federal Rules of Bankruptcy Procedure because the request is
inappropriate.
"To the extent the Ad Hoc Equity Committee has identified
potential investors with the interest and wherewithal to pursue an
investment in or transaction with the Debtors that will maximize
the value of the Debtors' estates, the Debtors are ready and
willing to enter into appropriate confidentiality agreements with
such potential investors and allow them to conduct appropriate due
diligence at their own expense," Stephen Karotkin, Esq., at Weil,
Gotshal & Manges LLP, in New York, tells the Court.
There is no basis, factually or legally, for the appointment of an
equity committee in the cases, Mr. Karotkin contends. Similarly,
he insists, no valid basis exists for permitting that constituency
to conduct unfettered discovery into sensitive information
regarding Blockbuster's business. He alleges that the request
seeks information irrelevant to the administration of the cases.
It would be completely inappropriate to burden the estates and,
therefore, the ultimate recoveries of creditors, with the costs
and expenses necessarily attendant to the appointment of an equity
committee, let alone some baseless and inappropriate discovery
requests that are likely duplicative, Mr. Karotkin contends. He
adds that the Ad Hoc Committee should not be permitted to use Rule
2004 as a backdoor means of trying to secure recoveries for their
constituency via a "scorch and burn" litigation methodology.
The Rule 2004 Request
As reported in the Troubled Company Reporter on Dec. 29, 2010, the
Ad Hoc Committee of Equity Security Holders seeks the Bankruptcy
Court's permission to conduct an examination of Blockbuster Inc.
and its units pursuant to Rule 2004 of the Federal Rules of
Bankruptcy Procedure.
The Ad Hoc Committee consists of over 35 individual non-
institutional equity security holders of the Debtors.
Collectively, the Ad Hoc Committee members hold over 27.5 million
shares of the Debtors' equity securities. Most of the Ad Hoc
Committee members have held their shares for at least six months.
Paul Rachmuth, Esq., at Gersten Savage LLP, in New York, relates
that the Debtors have represented in various filings in the
bankruptcy proceeding that the value of their estates are less
than their debts, citing the Debtors' letter response to a
shareholder's request to form an official committee of equity
security holders, dated November 24, 2010. Specifically, the
Letter Response explains that nearly $1.2 billion in claims will
need to be satisfied before equity holders can receive a
distribution.
Contrary to the Debtors' assertions, the Ad Hoc Committee believes
that the value of the Debtors' enterprises is worth considerably
more than the $1.2 billion value line set by the Debtors. In
fact, the Ad Hoc Committee has had detailed discussions with many
potential investors, who also believe in this value of the
Debtors, Mr. Rachmuth contends.
Unfortunately, Mr. Rachmuth asserts, the public information
available to the Ad Hoc Committee is sufficiently opaque so as to
make an accurate valuation -- and hence an investment decision --
impossible. Accordingly, the Ad Hoc Committee is seeking certain
discrete, limited information from the Debtors that will allow it
and potential investors the ability to render an accurate
valuation of the estates. He insists that the Ad Hoc Committee's
document request is narrowly tailored to allow it to make the
necessary valuation calculations.
The documents sought are of the type regularly maintained by
companies, like the Debtors, Mr. Rachmuth says. Accordingly,
production of the documents requested will not cause any undue
hardship on the Debtors, he explains.
"The information requests are specific to the information needs we
have received from strategic partners currently evaluating
Blockbuster as an equity investment," according to a statement
from a shareholders' group, Reuters Legal reports.
A hearing will be held on January 20, 2011, to consider the
request. Objections are due on January 13
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.
The Official Committee of Unsecured Creditors has retained Cooley
LLP as its counsel.
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)
BLUEKNIGHT ENERGY: Solus Alternative Discloses 7.2% Equity Stake
----------------------------------------------------------------
In a Schedule 13D filing with the Securities and Exchange
Commission on January 13, 2011, Solus Alternative Asset Management
LP disclosed that it beneficially owns 1,570,000 shares of common
stock of Blueknight Energy Partners, L.P. representing 7.2% of the
shares outstanding. Each of Solus GP LLC and Christopher Pucillo
also owns 1,570,000 shares.
As of November 5, 2010, there were 21,727,724 common units
outstanding of the Company as reported in its Quarterly Report on
Form 10-Q for the fiscal quarter ended September 30, 2010.
About Blueknight Energy
Blueknight Energy Partners, L.P. (Pink Sheets: BKEP)
-- http://www.bkep.com/-- provides integrated terminalling,
storage, processing, gathering and transportation services for
companies engaged in the production, distribution and marketing of
crude oil and asphalt product. It provides services for the
customers, and its only inventory consists of pipeline linefill
and tank bottoms necessary to operate the assets. It has three
operating segments: crude oil terminalling and storage services,
crude oil gathering and transportation services, and asphalt
services.
The Company's balance sheet at Sept. 30, 2010, showed
$295.96 million in total assets, $444.02 million in current
liabilities, $4.69 million in long-term payable to related
parties, and a partners' deficit of $152.75 million.
* * *
PricewaterhouseCoopers LLP, in Tulsa, Okla., in its report on the
Partnership's financial statements for the year ended December 31,
2009, expressed substantial doubt about its ability to continue as
a going concern. The independent auditors noted that the
Partnership has substantial long-term debt, a deficit in partners'
capital, and significant litigation uncertainties.
BRUNSCHWIG & FILS: Lead Bidder Kravet to Provide DIP Financing
--------------------------------------------------------------
Olivier Peardon, President and Chief Executive Officer of
Brunschwig & Fils, disclosed that the family-owned company has
filed for Chapter 11 restructuring and, concurrently, that Kravet,
a fourth generation family company, one of the largest privately
held distributors of fabrics and home furnishings with locations
worldwide, has agreed to buy Brunschwig & Fils subject to a
competitive bid process.
Kravet has agreed to provide financing to ensure that Brunschwig &
Fils can continue as a financially sound trading partner during
this time of reorganization.
Mr. Peardon stated, "The restructuring is a business decision that
will not affect the quality of our products, or present and future
orders. This restructuring will improve our services and supply
chain flow. Our relationships with the lines we represent remain
intact and the Brunschwig & Fils Design Studio is creating new
patterns for future release."
Brunschwig & Fils is an internationally respected brand that, for
the past 110 years, has been the preeminent destination for luxury
fabrics, wall coverings, trims, lighting, furniture and
accessories.
Kravet, throughout its 93 years in business, has firmly
established itself as a distributor of high-end brands such as Lee
Jofa and GP&J Baker.
About Brunschwig & Fils
Over one hundred and ten years ago, Brunschwig & Fils was founded
as a tapestry weaving mill in Aubusson and Bohain, France.
Brunschwig & Fils designs and distributes traditional and
contemporary decorative fabrics, wall coverings, trimmings,
upholstered furniture, lamps, tables, mirrors and accessories.
All design is performed in-house at the Studio in the Decoration &
Design Building, NYC and they work with 150 mills around the
world. The company is headquartered in White Plains, NY with 21
national and international showrooms. Additionally, there are
agents and distributors in 24 countries.
Brunschwig & Fils filed for Chapter 11 protection (Bankr. S.D.N.Y.
Case No. 11-22036) in White Plains, New York on Jan. 12, 2011.
Alan D. Halperin, Esq., at Halperin Battaglia Raicht LLP, in New
York, represents the Debtor in its chapter 11 effort. The Debtor
estimated assets and debts of $1 million to $10 million in its
Chapter 11 petition.
CAESARS ENTERTAINMENT: P. Murphy Leaves, Returns to Wentworth
-------------------------------------------------------------
On January 14, 2011, Peter E. Murphy, President-Strategy and
Development of the Caesars Entertainment Corporation, left the
Company to return to Los Angeles and his founding role at
Wentworth Capital Management, effective immediately.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
-- http://www.caesars.com/-- is one of the world's largest casino
companies, with annual revenue of $4.2 billion, 20 properties on
three continents, more than 25,000 hotel rooms, two million square
feet of casino space and 50,000 employees. Caesars casino resorts
operate under the Caesars, Bally's, Flamingo, Grand Casinos,
Hilton and Paris brand names. The Company has its corporate
headquarters in Las Vegas.
Harrah's announced its re-branding to Caesar's on mid-November
2010. Harrah's carries 'Caa3' long term corporate family and
probability of default ratings, with 'positive' outlook, from
Moody's Investors Service. It has a 'B-' issuer credit rating,
with 'stable' outlook, from Standard & Poor's.
Caesars Entertainment Inc. carries a 'Ca' long term rating from
Moody's.
CAMPANA FAMILY: Files Schedules of Assets & Liabilities
-------------------------------------------------------
Campana Family, LLC, has filed with the U.S. Bankruptcy Court for
the District of Arizona its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $10,966,000
B. Personal Property $111,036
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $3,238,061
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $3,449
----------- -----------
TOTAL $11,077,036 $3,241,510
A copy of the Schedules of Assets & Liabilities is available for
free at http://bankrupt.com/misc/CAMPANAFAMILY_sal.pdf
Scottsdale, Arizona-based Campana Family, LLC, filed for Chapter
11 bankruptcy protection on January 8, 2011 (Bankr. D. Ariz. Case
No. 11-00530). Brian W. Hendrickson, Esq., at The Hendrickson Law
Firm PLLC, serves as the Debtor's bankruptcy counsel.
CAMPANA FAMILY: Section 341(a) Meeting Scheduled for Feb. 8
-----------------------------------------------------------
The U.S. Trustee for Region 14 will convene a meeting of Campana
Family, LLC's creditors on February 8, 2011, at 3:00 p.m. The
meeting will be held at the US Trustee Meeting Room, 230 N. First
Avenue, Suite 102, Phoenix, AZ (341-PHX).
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Scottsdale, Arizona-based Campana Family, LLC, filed for Chapter
11 bankruptcy protection on January 8, 2011 (Bankr. D. Ariz. Case
No. 11-00530). Brian W. Hendrickson, Esq., at The Hendrickson Law
Firm PLLC, serves as the Debtor's bankruptcy counsel. In its
Schedules of Assets and Liabilities, the Debtor disclosed
$11,077,036 in total assets and $3,241,510 in total debts.
CANO PETROLEUM: Regains Compliance for NYSE Amex Listing
--------------------------------------------------------
Cano Petroleum, Inc., disclosed that on January 14, 2011, it
received notification from NYSE Amex LLC indicating the Exchange
has determined that Cano has made a reasonable demonstration of
its ability to regain compliance with Section 704 of the NYSE Amex
LLC Company Guide and therefore granted Cano an extension to
regain compliance with Section 704 by May 10, 2011. Cano will be
subject to periodic review by the Exchange to determine whether it
is making progress consistent with the plan. If the Exchange
determines that Cano is not achieving progress consistent with the
plan or Cano does not regain compliance with the continued listing
standards by May 10, 2011, then Cano could be delisted from the
Exchange.
On November 10, 2010, Cano had received a notice from the Exchange
specifying that Cano did not meet one of the Exchange's continued
listing standards in that it failed to hold its 2009 annual
meeting of stockholders prior to June 30, 2010. On December 9,
2010, Cano provided to the Exchange its plan to regain compliance
with the continued listing standards by May 10, 2011.
About Cano Petroleum
Cano Petroleum, Inc., is an independent Texas-based energy
producer with properties in the mid-continent region of the United
States. Cano's primary focus is on increasing domestic production
from proven fields using enhanced recovery methods. Cano trades
on the NYSE Amex Stock Exchange under the ticker symbol CFW.
The Company's balance sheet at Sept. 30, 2010, showed
$258.64 million in total assets, $127.59 million in total
liabilities, and stockholders' equity of $131.05 million.
As reported by the Troubled Company Reporter on September 28,
2010, the Company said if it is unable to successfully execute one
of its strategic alternatives, restructure its existing
indebtedness, obtain further waivers or forbearance from its
existing lenders or otherwise raise significant additional
capital, it is unlikely that it will be able to meet its
obligations as they become due and to continue as a going concern.
As a result, the Company will likely file for bankruptcy or seek
similar protection. Moreover, it is possible that the Company's
creditors may seek to initiate involuntary bankruptcy proceedings
against it or against one or more of its subsidiaries, which would
force it to make a defensive voluntary filing of its own.
CAPITOL BANCORP: Joseph Reid Discloses 8.28% Equity Stake
---------------------------------------------------------
In an amended Schedule 13G filing with the Securities and Exchange
Commission on January 13, 2011, Joseph D. Reid disclosed that he
beneficially owns 1,882,506 shares of common stock of Capitol
Bancorp Ltd., representing 8.28% of the shares outstanding. As of
October 31, 2010, there were 21,622,856 total shares of common
stock of the Company outstanding.
About Capitol Bancorp Limited
Capitol Bancorp Limited (NYSE: CBC) is a $4.2 billion national
community banking company, with a network of bank operations in 14
states. Founded in 1988, Capitol Bancorp Limited has executive
offices in Lansing, Mich., and Phoenix, Ariz.
The Company's balance sheet at Sept. 30, 2010, shows
$4.23 billion in total assets, $4.16 billion in total liabilities,
and equity of $77.68 million.
In September 2009, Capitol and its second-tier bank holding
companies entered into a written agreement with the Federal
Reserve Bank of Chicago under which Capitol has agreed, among
other things, to submit to the Reserve Bank a written plan to
maintain sufficient capital at Capitol on a consolidated basis and
at Michigan Commerce Bank (as a separate legal entity on a stand-
alone basis); and a written plan to enhance the consolidated
organization's risk management practices, a strategic plan to
improve the consolidated organization's operating results and
overall condition and a cash flow projection.
Certain of Capitol's bank subsidiaries have entered into formal
agreements with their applicable regulatory agencies. Those
agreements provide for certain restrictions and other guidelines
and/or limitations to be followed by the banks.
In 2009, Capitol commenced the deferral of interest payments on
its various trust-preferred securities, as is permitted under the
terms of the securities, to conserve cash and capital resources.
The payment of interest may be deferred for periods up to five
years. During such deferral periods, Capitol is prohibited from
paying dividends on its common stock (subject to certain
exceptions) and is further restricted by Capitol's written
agreement with the Federal Reserve Bank of Chicago. Accrued
interest payable on such securities approximated $18.1 million at
June 30, 2010.
CASPIAN SERVICES: Hansen Barnett Raises Going Concern Doubt
-----------------------------------------------------------
Caspian Services, Inc., filed on January 13, 2011, its annual
report on Form 10-K for the fiscal year ended September 30, 2010.
Hansen, Barnett & Maxwell P.C., in Salt Lake City, Utah, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company is
in violation of certain loan covenants which allows for the
lenders to exercise acceleration features and declare the loans
and accrued interest immediately due and payable. Should any of
these parties determine to exercise their acceleration rights, the
Company would not have sufficient funds to repay any of the loans.
At September 30, 2010, the Company also had negative working
capital of $50.3 million.
The Company reported a net loss of $34.2 million on $47.6 million
of revenues for fiscal 2010, compared with net income of
$4.5 million on $98.2 million of revenues for fiscal 2009.
The Company's balance sheet at September 30, 2010, showed
$117.3 million in total assets, $86.2 million in total
liabilities, and stockholders' equity of $31.1 million.
A full-text copy of the Form 10-K is available for free at:
http://researcharchives.com/t/s?723c
Salt Lake City, Utah-based Caspian Services, Inc., provides
diversified oilfield services to the oil and gas industry in
western Kazakhstan.
CATHOLIC CHURCH: Milw. Appeal on Insurance Ruling Put on Hold
-------------------------------------------------------------
An appeal filed by the Archdiocese of Milwaukee in the Wisconsin
Supreme Court was put on hold following the Archdiocese's filing
of its bankruptcy case.
In November 2010, a Wisconsin appeals court affirmed circuit court
rulings, which denied insurance coverage of the claims relating to
clergy sexual abuse filed against the Archdiocese.
The Archdiocese wants the Supreme Court to review the November
2010 Decision, however, attorneys for the insurers told the
Supreme Court in a letter that they would not file a response
without approval of the United States Bankruptcy Court for the
Eastern District of Wisconsin because the response might violate
the automatic stay under Section 362 of the Bankruptcy Code,
Annysa Johnson of the Journal Sentinel reports.
The Archdiocese may ask the Bankruptcy Court for relief from the
automatic stay to be able to continue the appeal, but David Muth,
Esq., at Quarles & Brady LLP, refused to reveal if the Archdiocese
would seek that relief, Journal Sentinel says. Quarles & Brady is
one of the firms that the Archdiocese is seeking to employ as its
special counsel.
At issue in the consolidated appeal is whether commercial general
liability insurance coverage exists for the plaintiffs' claims of
negligent misrepresentation against the Archdiocese. The
consolidated appeal consists of appeals based on lawsuits
involving clergy sexual abuse survivors, the Archdiocese and its
insurers. The Archdiocese appeals the conclusion of the trial
courts that insurance coverage does not exist under a commercial
general liability policy issued by OneBeacon Insurance Company
because the actions underlying the complaints stemming from clergy
sexual abuse constitute volitional acts, not accidents that would
be covered under the policy.
The appeals court concluded that the trial courts were correct in
their determinations that coverage for the negligent
misrepresentation claims does not exist because the
representations made by the Archdiocese constitute "volitional
acts," and they cannot be considered "occurrences" within the
meaning of the CGL policy.
On January 4, 2011, the Archdiocese sought bankruptcy protection
in the Bankruptcy Court becoming the eighth American Catholic
diocese to do so. On the first Saturday and Sunday following the
Petition Date, a prerecorded audio compact disc was played for
parishioners attending masses. The CD contains Archbishop Jerome
E. Listecki's explanation regarding the bankruptcy and his apology
to the victims of sexual abuse.
About the Archdiocese of Milwaukee
The Diocese of Milwaukee was established on November 28, 1843, and
was elevated to an Archdiocese on February 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No.
11-20059) on January 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Unaatuq Wants to Enforce Pilgrim Springs Order
---------------------------------------------------------------
Unaatuq, LLC, asks the U.S. Bankruptcy Court for the District of
Alaska to enforce certain orders and to determine the validity of
Unaatuq's interest in the Pilgrim Springs Property, which it
bought from the Catholic Bishop of Northern Alaska for
$1.9 million.
To recall, Louis H. and Nancy Green commenced an action in state
court asserting quiet title to the Pilgrim Springs Property. The
Diocese of Fairbanks asked for the dismissal of the quiet title
action due to violation of the automatic stay. The Greens and
their attorney, Bryon E. Collins, Esq., were also sanctioned
because of their violation of the stay.
On April 26, 2010, the Bankruptcy Court approved the sale of the
Pilgrim Springs Property to Unaatuq following an auction. The
Sale Order provides that "as of Closing, all Interests existing on
the Pilgrim Springs Property before the Closing have been
unconditionally released, discharged and terminated. . .."
Robert H. Hume, Jr., Esq., at Landye Bennett Blumstein LLP, in
Anchorage, Alaska -- bobh@lbblawyers.com -- relates that the order
confirming the Diocese of Fairbanks' Plan of Reorganization
expressly authorized the sale of the Pilgrim Hot Springs. The
Plan also provides that the Reorganized Debtor "will be vested
with all of the property of the Estate free and clear of all
Claims, liens, encumbrances, charges and other interests of
Creditors."
Mr. Hume contends that the Greens did not attend or file an
objection to the sale of Pilgrim Hot Springs at the March 5, 2010
hearing. He also asserts that the Greens did not object to the
confirmation of the Plan or appeal the Confirmation Order.
However, on December 7, 2010, the Greens filed a complaint in the
Superior Court for the State of Alaska at Nome, case no. 2NO-10-
306 CI, against Kawerak Inc., Mary's Igloo Native Corporation,
White Mountain Native Corporation, Norton Sound Economic
Development Corporation (NSEDC), Sitnasuak Native Corporation, and
Bering Straights Native Corporation -- doing business as and all
members of Unaatuq LLC.
Mr. Hume argues that the members of Unaatuq do not have, by virtue
of being members of Unaatuq, any ownership interest in the assets
or property of Unaatuq generally or Pilgrim Hot Springs
specifically.
The State Court Complaint seeks to establish that the Greens own
the Pilgrim Hot Springs by adverse possession. The relief sought
and the form and substance of the complaint are substantially
identical to the relief sought and the form and substance of the
complaint filed by the Greens against the Diocese in violation of
the automatic stay.
The conduct by the Greens and Mr. Collins in filing the new state
court litigation asserting that the Greens own Pilgrim Hot Springs
violates the Sale Order and the Confirmation Order, Mr. Hume
contends. He points out that Unaatuq is entitled to an order
enforcing the Sale Order and the Confirmation Order, determining
and declaring that the Greens have no right, title or interest in
Pilgrim Hot Springs or claim against Unaatuq.
Accordingly, Unaatuq asks the Bankruptcy Court to:
-- enforce the Sale Order, Confirmation Order and Plan by
ordering the Greens to immediately dismiss the new state
court litigation with prejudice;
-- determine and declare that the Greens have no valid right,
title or interest to the Pilgrim Springs Property, and
pursuant to Rule 7070 of the Federal Rules of Bankruptcy
Procedure, divest any title of the Greens in Pilgrim Hot
Springs and vesting title to Pilgrim Hot Springs in
Unaatuq;
-- enjoin the Greens from asserting any right, title or
interest in or to Pilgrim Hot Springs by virtue of adverse
possession, prescriptive easement or other means based on
facts occurring prior to April 26, 2010;
-- remove any cloud on Unaatuq's title to Pilgrim Hot Springs
created by or in favor of the Greens;
-- award to Unaatuq its attorney fees and costs incurred in
connection with the adversary proceeding and the new state
court litigation; and
-- award sanctions as may be appropriate to deter the Greens
and their counsel from repetition of their conduct or
similar conduct.
About the Diocese of Fairbanks
The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/--
filed for Chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska
Case No. 08-00110). Susan G. Boswell, Esq., at Quarles & Brady
LLP represents the Debtor in its restructuring efforts. Michael
R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's
local counsel and Cook, Schuhmann & Groseclose Inc. as its special
counsel. Judge Donald MacDonald, IV, of the United States
Bankruptcy Court for the District of Alaska presides over
Fairbanks' Chapter 11 case. In its schedules, the Debtor
disclosed total assets of $13,316,864 and total liabilities of
$1,838,719 as of the Petition Date.
The Bankruptcy Court entered its order confirming the "Debtor's
and the Official Committee of Unsecured Creditors' Third Amended
and Restated Joint Plan of Reorganization for the Catholic Bishop
of Northern Alaska" on February 17, 2010. The effective date of
the Plan occurred on March 19, 2010.
In November 2010, Judge Donald MacDonald IV entered a final decree
and order closing the Chapter 11 case of the Catholic Bishop of
Northern Alaska.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CHINA TEL GROUP: ZTE Purchase Orders Treated Confidential
---------------------------------------------------------
China Tel Group, Inc. submitted an application under Rule 24b-2
requesting confidential treatment for information it excluded from
the Exhibits to a Form 8-K filed on November 23, 2010.
The 8-K filing relates to agreements that became effective Nov.
22, 2010, between Perusat S.A., a majority owned subsidiary of
China Tel Group, Inc., a Nevada corporation and China Tel, and ZTE
Corporation, a Peoples Republic of China corporation and its
subsidiary ZTE Corporation Peru, a Republic of Peru corporation.
The agreements include a National WiMAX Equipment Contract between
Perusat, S.A. and ZTE Corporation, a Service Contract for Perusat
National WiMAX Project between Perusat, S.A. and ZTE Corporation
Peru and various annexes to each contract and purchase orders for
a portion of equipment and services to be provided in the near
future. China Tel sought confidential treatment of the portions
of these equipment and service contracts and purchase orders in
connection with the ZTE agreements:
* National WiMAX Equipment Contract between Perusat, S.A. and
ZTE Corporation;
* Service Contract for Perusat National WiMAX Project between
Perusat, S.A. and ZTE Corporation Peru;
* Purchase Order PZ2010080501WMX-1 (Equipment);
* Purchase Order PZ2010080501SEN-1 (Services); and
* Purchase Order PZ2010080501SEN-2 (Services).
Based on representations by China Tel that this information
qualifies as confidential commercial or financial information
under the Freedom of Information Act, 5 U.S.C. 552(b)(4), the
Division of Corporation Finance has determined not to publicly
disclose it. Accordingly, excluded information from the Exhibits
will not be released to the public until Nov. 23, 2015.
About China Tel
Based in San Diego, California, and Shenzhen, China, China Tel
Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/--
provides high speed wireless broadband and telecommunications
infrastructure engineering and construction services. Through its
controlled subsidiaries, the Company provides fixed telephony,
conventional long distance, high-speed wireless broadband and
telecommunications infrastructure engineering and construction
services. ChinaTel is presently building, operating and deploying
networks in Asia and South America: a 3.5GHz wireless broadband
system in 29 cities across the People's Republic of China with and
for CECT-Chinacomm Communications Co., Ltd., a PRC company that
holds a license to build the high speed wireless broadband system;
and a 2.5GHz wireless broadband system in cities across Peru with
and for Perusat, S.A., a Peruvian company that holds a license to
build high speed wireless broadband systems.
The Company's balance sheet at June 30, 2010, showed $8.9 million
in total assets, $26.2 million in total liabilities, and a
stockholders' deficit of $17.3 million.
Mendoza Berger & Company, LLP, in Irvine, Calif., expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's 2009 results. The
independent auditors noted that the Company has incurred a net
loss of $56.0 million for 2009, cumulative losses of
$165.4 million since inception, a negative working capital of
$68.8 million and a stockholders' deficit of $63.2 million, and
that the Company's viability is dependent upon its ability to
obtain future financing and the success of its future operations.
CORUS BANKSHARES: Bankruptcy Court Stays Suit Against FDIC
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a lawsuit by Corus Bankshares Inc. against the
Federal Deposit Insurance Corp. has been frozen by the bankruptcy
judge until a district judge rules whether claims by the bank
holding company should be heard in district court.
Mr. Rochelle recounts that Corus Bankshares, whose bank subsidiary
was taken over by regulators in September 2009, filed a complaint
in bankruptcy court against the FDIC in June contending that it
owns $258 million in tax refunds also sought by the FDIC.
According to Mr. Rochelle, the FDIC responded by arguing that the
lawsuit and another by Corus are nothing more than disguised
appeals from the FDIC's denial of Corus' claims in the failed
bank's receivership. The bankruptcy judge in Chicago ruled last
week that the lawsuit shouldn't proceed until the district judge
decides which court should hear and decide the disputes. The last
papers on withdrawal of the references will be filed in February.
Mr. Rochelle relates that in the lawsuit against the FDIC, Corus
describes how it paid taxes for all affiliated companies under a
tax-sharing agreement. Corus contends that the agreement gives
the FDIC, as the bank's receiver, nothing more than an unsecured
claim for the bank's share of refunds. Corus argues that the
agreement didn't create a trust relationship with the result that
all tax refunds are part of the holding company's bankrupt estate.
About Corus Bankshares
Chicago, Illinois-based Corus Bankshares, Inc., is a bank holding
company. Its lone operating unit, Corus Bank, N.A., was closed
on September 11, 2009, by regulators, and the Federal Deposit
Insurance Corporation was named receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with MB Financial Bank, National Association, Chicago,
Illinois, to assume all of the deposits of Corus Bank.
The Company sought Chapter 11 protection on (Bankr. N.D. Ill.
Case No. 10-26881) June 15, 2010. Kirkland & Ellis LLP's
James H.M. Sprayregen, Esq., David R. Seligman, Esq., and Jeffrey
W. Gettleman, Esq., serve as the Debtor's bankruptcy counsel.
Kinetic Advisors is the Company's restructuring advisor. Plante &
Moran is the Company's auditor and accountant. Kilpatrick
Stockton LLP's Todd Meyers, Esq., and Sameer Kapoor, Esq.; and
Neal Gerber & Eisenberg LLP's Mark Berkoff, Esq., Deborah Gutfeld,
Esq., and Nicholas M. Miller, Esq., represent the official
committee of unsecured creditors. As of June 15, 2010, the
Company disclosed $314,145,828 in assets and $532,938,418 in
liabilities.
CROATAN SURF: Files Plan of Reorganization & Disclosure Statement
-----------------------------------------------------------------
Croatan Surf Club, LLC, has filed a Plan of Reorganization and
disclosure statement with the U.S. Bankruptcy Court for the
Eastern District of North Carolina.
The Plan proposes a 100% repayment of all unsecured debts.
On the effective date, the Debtor will assume the existing
management agreement between the Debtor and Village Realty. From
and after the effective date, management fees will be paid as and
when due in accordance with the management agreement. Management
fees accrued and unpaid as of the effective date will be paid by
the Reorganized Debtor as funds become available to make the
payments. From and after the effective date, the manager will
collect rents from the leasing of the condominium units comprising
the project and, consistent with prior practices, deliver net
rental proceeds to the Debtor as and when required pursuant to the
terms of the management agreement. All net rental proceeds will
be deposited into the debtor-in-possession account to be
established by the effective date and maintained in accordance
with and for the purposes set forth in the Plan.
Copies of the Plan and disclosure statement are available for free
at:
http://bankrupt.com/misc/CROATAN_SURF_plan.pdf
http://bankrupt.com/misc/CROATAN_SURF_ds.pdf
Treatment of Claims
The Debtor anticipates paying all administrative claims and
unsecured priority claims in full during the pendency of the Plan.
With respect to classified claims:
Classification Treatment
-------------- ---------
Class 1 - Unsecured Priority -- will be paid current from net
Tax Claim of North Carolina rental proceedings derived from
Department of Revenue the project, or if the proceeds
aren't sufficient to pay the
claims, then the claims will be
paid in full on the fifth
anniversary from the effective
date; the obligation will accrue
interest at the rate of 3%
Class 2 - Unsecured Priority
Tax Claim of the Internal
Revenue Service -- will be paid current from the
net rental proceedings derived
from the project, or if the
proceeds aren't sufficient to
pay the claims, then the claims
will be paid in full on the
fifth anniversary from the
effective date; the obligation
will accrue interest at the rate
of 3%
Class 3 - Unsecured Priority Tax
Claim of the Employment Security
Commission -- will be paid current from the
net rental proceedings derived
from the project, or if the
proceeds aren't sufficient to
pay the claims, then the claims
will be paid in full on the
fifth anniversary from the
effective date; the obligation
will accrue interest at the rate
of 3%
Class 4 - Claim of Dare County
for Ad Valorem Taxes Owing on
the Unsold Condominium Units
at the Project -- will be paid current from the
net rental proceedings derived
from the project, or if the
proceeds aren't sufficient to
pay the claims, then the claims
will be paid in full on (i) the
sale of a particular condominium
unit against which taxes are
owed, or (ii) the third
anniversary from the effective
date; the obligation will accrue
interest at the rate of 3%
Class 5 - Current Postpetition
Claims of Creditors Entitled to
Payment of Current Operating
Expenses -- will be paid first from the net
rental proceedings derived from
the project and second from
excess net proceeds from
condominium unit sales after
payment of the applicable
release price to the lender and
mezzanine lender under the terms
of the Plan respecting Classes 6
and 7; these expenses may also
be paid from the proceeds of
adversary action, if any.
Class 6 - Secured Claims of
the Lender -- when condominium units at the
project are sold, payments of
principal will be made on the
reset obligation; when payments
of principal are made, the reset
obligation will be re-
calculated, as applicable, and
the corresponding resulting
monthly interest payments will
be re-calculated; if not sooner
paid as a result of condominium
unit sales, all outstanding
principal, interest and charges
will be due and payable on the
date occurring five years from
the effective date
Class 7 - Secured Claims of
the Mezzanine Lender -- when condominium units at the
project are sold, payments of
principal will be made on the
mezzanine reset obligation; when
payments of principal are made,
the mezzanine reset obligation;
when payments of principal are
made, the reset obligation will
be re-calculated, as applicable,
and the corresponding resulting
monthly interest payments will
be re-calculated; if not sooner
paid as a result of condominium
unit sales, all outstanding
principal, interest and charges
will be due and payable on the
date occurring five years from
the effective date
Class 8 - Claims of Croatan Surf
Club Condominium Association,
Inc., Which is Property Owners
Association -- holders would have a statutory
lien for any unpaid dues,
assessments, or other charges;
the Debtor will continue to pay
the monthly dues owing the
holders as they come due;
payments will be funded from the
net rental proceeds derived from
the project
Class 9 - Remaining Claims of
All Creditors, Excluding Claims
Held by Insiders -- will accrue interest at the
federal judgment interest rate,
estimated to be 3% as of the
date of the filing of the Plan;
will be paid in full on the
extended maturity date
Class 10 - Claims Held by
Insiders -- will accrue interest at the
federal judgment interest rate;
will be paid in full on the
extended maturity date
Class 11 - Claims of Members
of the Debtor: Clarence E. Dean
and Kelly Ann Dean, Kenneth J.
Termini, Jeremiah Shanahan,
Robert E. Coburn and
Denise Coburn, BKDean
Properties, LLC, Coburn
Properties, Shanahan Properties,
LLC, and Tall Dune
Holdings, LLC -- will retain their membership
interests in the Debtor; in the
event that a cramdown is needed
with respect to the claims of
secured or unsecured creditors,
the members derivative interests
in the proceeds of the adversary
action will be contributed by
the members in order to maintain
the membership interests
About Croatan Surf
Kill Devil Hills, North Carolina-based Croatan Surf Club, LLC,
owns 35 condominiums in Dare County, North Carolina. It filed for
Chapter 11 bankruptcy protection on January 10, 2011 (Bankr. E.D.
N.C. Case No. 11-00194). Walter L. Hinson, Esq., at Hinson &
Rhyne, P.A., serves as the Debtor's bankruptcy counsel. According
to its schedules, the Debtor disclosed $26,151,718 in total assets
and $19,350,000 in total debts.
CROATAN SURF: Asks for Court's Permission to Use Cash Collateral
----------------------------------------------------------------
Croatan Surf Club, LLC, seeks authority from the U.S. Bankruptcy
Court for the Eastern District of North Carolina to use cash
collateral until December 2012.
On December 20, 2007, the Debtor entered into a lending
arrangement with Royal Bank America for the construction of the
development. The amount owing to RBA is approximately
$19 million. Pursuant to the loan documents, RBA arguably retains
a security interest in all the Debtor's accounts, inventory,
equipment and general intangibles.
Walter L. Hinson, Esq., at Hinson & Rhyne, P.A., explains that the
Debtor needs access to cash collateral 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/CROATAN_SURF_budget.pdf
The Debtor is anticipating a continuation of operations by way of
its proposed reorganization. The Debtor believes that in order to
maintain existing operations, and retain maximum value of its real
estate, the Debtor will be required to incur certain operating
expenses. Other than through the collection of the outstanding
rentals, the Debtor has no other source of readily available cash
with which to operate its business.
The Debtor estimates that it will require necessary funds for
operating and other expenses until a confirmation of the Debtor's
plan. The Debtor hopes to have a plan confirmed no later than the
second quarter of 2011.
The Debtor will maintain a debtor-in-possession bank account into
which it will deposit all cash, checks and other cash items.
The Debtor represents that a reorganization and continuation of
its operations will generate the greatest source of funds for
creditors, including secured creditors. The Debtor requires
immediate access to current sources of cash collateral in order to
allow it to continue operations.
Kill Devil Hills, North Carolina-based Croatan Surf Club, LLC,
owns 35 condominiums in Dare County, North Carolina. It filed for
Chapter 11 bankruptcy protection on January 10, 2011 (Bankr. E.D.
N.C. Case No. 11-00194). Walter L. Hinson, Esq., at Hinson &
Rhyne, P.A., serves as the Debtor's bankruptcy counsel. In its
schedules, the Debtor disclosed $26,151,718 in total assets and
$19,350,000 in total debts.
CROATAN SURF: Files Schedules of Assets & Liabilities
-----------------------------------------------------
Croatan Surf Club, LLC, has filed with the U.S. Bankruptcy Court
for the Eastern District of North Carolina its schedules of assets
and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $25,200,000
B. Personal Property $951,718
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $19,350,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $0
----------- -----------
TOTAL $26,151,718 $19,350,000
A copy of the Schedules of Assets and Liabilities is available for
free at http://bankrupt.com/misc/CROATAN_SURF_sal.pdf
Kill Devil Hills, North Carolina-based Croatan Surf Club, LLC,
owns 35 condominiums in Dare County, North Carolina. It filed for
Chapter 11 bankruptcy protection on January 10, 2011 (Bankr.
E.D.N.C. Case No. 11-00194). Walter L. Hinson, Esq., at Hinson &
Rhyne, P.A., serves as the Debtor's bankruptcy counsel.
CYCLE COUNTRY: Auditor Issues Going Concern Qualification
---------------------------------------------------------
Cycle Country Accessories Corp. disclosed that its financial
statements for the fiscal year ended September 30, 2009 included
in the Company's Annual Report on Form 10-K, filed on January 18,
2011, contained a going concern qualification from its independent
registered public accounting firm, Boulay, Heutmaker, Zibell &
Co., P.L.L.P.
This announcement is required by NYSE Amex Company Guide Section
610(b), which requires separate disclosure of receipt of an audit
opinion containing a going concern qualification. This
announcement does not represent any change or amendment to the
Company's financial statements or to its Annual Report on Form 10-
K for the fiscal year ended September 30, 2009.
About Cycle Country
Cycle Country is the recognized industry leader in the innovation,
design, sales, and manufacturing of custom fitting accessories for
utility and all-terrain vehicles (UTVs and ATVs), under the brand
name of Cycle Country Accessories. Products include snowplows,
mowers, 3-point hitches and implements, storage, bed lifts, brush
guards and more.
The Company also produces a line of specialty products for golf
cars, lawn and garden equipment and motor sports vehicles under
the brand name of Plazco.
DARRYL PALMER: $13,000 Owed to Colel Excepted From Discharge
------------------------------------------------------------
Darryl Palmer owes $28,778.66, plus post-judgment interest, to
plaintiffs Bethany Cole1 and her grandmother, Barbara Cockerille,
as a result of a final judgment entered by the Circuit Court of
Jefferson County, West Virginia. The Plaintiffs seek to except
this amount from the Debtor's anticipated Chapter 11 discharge
pursuant to 11 U.S.C. Secs. 523(a)(2)(A) and/or (6).
In a January 14, 2011 Memorandum Opinion, Bankruptcy Judge Patrick
M. Flatley held that $6,185 of the debt owed to the Plaintiffs,
plus $6,750 in attorney fees and $511 of the costs awarded, and
post-judgment interest at the statutory rate of 7%, will be
excepted from the Debtor's anticipated discharge.
The case is Bethany Cole and Barbara Cockerille, v. Darryl Edmond
Palmer, Adv. Pro. No. 09-84 (Bankr. N.D. W.Va.). A copy of the
Court's January 14 Memorandum Opinion is available at
http://is.gd/lozpx5from Leagle.com.
Darryl Edmond Palmer filed his Chapter 11 voluntary petition
(Bankr. N.D. W.Va. Case No. 09-1476) on June 30, 2009.
DAVIE YARDS: Obtains Feb. 18 Extension of CCAA Stay Order
---------------------------------------------------------
Davie Yards has obtained an order from the Quebec Superior Court
extending the stay of proceedings ordered by the Court to
February 18, 2011, the whole pursuant to the Companies' Creditors
Arrangement Act. The extension will allow Davie to negotiate an
agreement with a potential investor, to work on a response to the
request for proposal to become one of the two selected shipyards
under the National Shipbuilding Procurement Strategy, and to
develop and eventually submit a plan of arrangement to its
creditors under CCAA.
Davie has received three expressions of interest from potential
investors. During the last weeks, potential investors have
conducted a due diligence process at the yard and Davie is now
clarifying the intentions of the potential investors to be able to
continue discussing on an exclusive basis with one of them
shortly. Davie is also working on the qualification process to
become a dedicated shipyard for the construction of large ships
under the NSPS.
About Davie Yards
Davie Yards Inc. owns and operates the Davie yard in Quebec. With
over 185 years of operating experience, the shipyard is the
largest in Canada and among the largest and most sophisticated in
North America. The Corporation has a focus on building large and
complex offshore service vessels and rigs, and other sophisticated
vessels for commercial and governmental use.
DAYBREAK OIL: Incurs $451,000 Net Loss in November 30 Quarter
-------------------------------------------------------------
Daybreak Oil and Gas, Inc., filed its quarterly report on Form
10-Q, reporting a net loss of $451,002 on $259,064 of revenue for
the three months ended November 30, 2010, compared with a net loss
of $468,200 on $119,481 of revenue for the corresponding period
last year.
The Company's balance sheet at November 30, 2010, showed
$3.4 million in total assets, $3.3 million in total liabilities,
and stockholders' equity of $76,173.
MaloneBailey, LLP, in Houston, expressed substantial doubt about
the Company's ability to continue as a going concern, following
the Company's results for the fiscal year ended February 28, 2010.
The independent auditors noted that the Company suffered losses
from operations and has negative operating cash flows.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?723d
Spokane, Wash.-based Daybreak Oil and Gas, Inc. (OTC BB: DBRM)
-- http://www.daybreakoilandgas.com/-- is an independent oil and
gas company engaged in the exploration, development and production
of oil and gas in California. The Company is headquartered in
Spokane, Washington with an operations office in Friendswood,
Texas. Daybreak has over 22,000 acres under lease and a seismic
option on an additional 14,000 acres in the San Joaquin Valley of
California.
DOLL & DOLL: Bankr. Court Denies Bank's Bid to Enforce Orders
-------------------------------------------------------------
Darryl Palmer owes $28,778.66, plus post-judgment interest, to
plaintiffs Bethany Cole1 and her grandmother, Barbara Cockerille,
as a result of a final judgment entered by the Circuit Court of
Jefferson County, West Virginia. The Plaintiffs seek to except
this amount from the Debtor's anticipated Chapter 11 discharge
pursuant to 11 U.S.C. Secs. 523(a)(2)(A) and/or (6).
In a January 14, 2011 Memorandum Opinion, Bankruptcy Judge Patrick
M. Flatley held that $6,185.005 of the debt owed to the
Plaintiffs, plus $6,750.23 in attorney fees and $510.75 of the
costs awarded, and post-judgment interest at the statutory rate of
7%, will be excepted from the Debtor's anticipated discharge.
The case is Bethany Cole and Barbara Cockerille, v. Darryl Edmond
Palmer, Adv. Pro. No. 09-84 (Bankr. N.D. W.Va.). A copy of the
Court's January 14 Memorandum Opinion is available at
http://is.gd/lozpx5from Leagle.com.
Darryl Edmond Palmer filed his Chapter 11 voluntary petition
(Bankr. N.D. W.Va. Case No. 09-1476) on June 30, 2009.
EDWARD J NAWOROL: Disclosure Statement Approval Remains Pending
---------------------------------------------------------------
Bankruptcy Judge Nancy V. Alquist on Friday signed off on a
stipulation extending Beltway Capital, LLC's deadline to file a
response to the disclosure statement explaining Edward J.
Naworol's Chapter 11 exit plan. That deadline was extended to
Tuesday, January 18, 2011.
In his Chapter 11 petition, the Debtor disclosed owing $267,374.84
to Beltway, his largest unsecured creditor.
A copy of the Stipulation dated January 14, 2011, is available at
http://is.gd/4orfs2from Leagle.com.
Counsel for Beltway may be reached at:
Michael C. Bolesta, Esq.
GEBHARDT & SMITH LLP
One South Street, Suite 2200
Baltimore, MD 21202
Telephone: 410-385-5071
Based in Bel Air, Maryland, Edward John Naworol filed for Chapter
11 bankruptcy (Bankr. D. Md. Case No. 09-31049) on October 30,
2009. Ronald J. Drescher, Esq. -- ecf@drescherlaw.com -- at
Drescher & Associates in Baltimore, Maryland, serves as bankruptcy
counsel. In his petition, the Debtor estimated $1 million to
$10 million in both assets and debts.
EMIVEST AEROSPACE: Files Schedules of Assets and Liabilities
------------------------------------------------------------
Emivest Aerospace Corporation filed with the U.S. Bankruptcy Court
for the District of Delaware its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $11,428,490
B. Personal Property $69,271,742
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $47,387,558
E. Creditors Holding
Unsecured Priority
Claims $660,555
F. Creditors Holding
Unsecured Non-priority
Claims $29,285,433
---------- -----------
TOTAL $80,700,232 $77,333,546
A copy of the Debtor's schedules of assets and liabilities is
available for free at http://bankrupt.com/misc/emivest.sal.pdf
About Emivest Aerospace
Emivest Aerospace Corporation -- http://www.sj30jet.com/-- is a
U.S.-based aircraft manufacturing company and a subsidiary of
Emirates Investment & Development PSC. Emivest Aerospace
Corporation produces the SJ30 light jet.
Emivest Aerospace Corporation filed for Chapter 11 protection on
Oct. 20, 2010 (Bankr. D. Del. Case No. 10-13391). Emivest
estimated assets and debts between $50 million and $100 million.
Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in
Wilmington, Delaware, serves as counsel to the Debtor.
FAIR FINANCE: Ch. 7 Trustee Sues Founder's Kin to Recoup $1.2MM
---------------------------------------------------------------
David Barras, writing for WISH-TV, reports that the Fair Finance
Chapter 7 bankruptcy trustee filed a lawsuit Friday against Dana
and Jeffrey Osler, Indianapolis businessman Tim Durham's sister
and brother-in-law, to recover $1.2 million allegedly owed to Fair
Finance.
According to the report, the lawsuit is part of the ongoing effort
to try and recover some of the more than $200 million lost by more
than 5,000 investors in Fair Finance.
The Oslers operate Geist Sports Academy. The WISH-TV report says
Jeffrey Osler was a director or officer of a number of Mr.
Durham's companies including Indianapolis-based Obsidian, which
was raided by the FBI. According to the report, the Fair Finance
trustee's lawsuit claims Mr. Osler received a $200,000 line of
credit from Fair Finance in July 2002 that was never paid back.
That line of credit ballooned over the years to its current level
of more than $911,000, excluding taxes and penalties. The Fair
Finance trustee claims that in 2005, Ms. Osler personally
guaranteed the loan and efforts to get her to pay it haven't
worked.
About Fair Finance
Akron, Ohio-based investment company Fair Finance Co. was closed
following a November 2009 raid by the U.S. Federal Bureau of
Investigation. Fair Finance's owner, Indiana businessman Timothy
S. Durham, a Republican political contributor whose holdings
include National Lampoon Inc., has been targeted in lawsuits and
investigations over claims he funded a luxurious lifestyle with
the proceeds of a Ponzi scheme.
Three creditors -- Nick Spada, Jacques Dunaway, and Robert Ripley
-- filed on February 8, 2010, a petition to send Fair Finance to
Chapter 7 liquidation (Bankr. N.D. Oh. Case No. 10-50494). David
Mucklow, Esq., serves as counsel to the petitioners. Brian Bash
was appointed bankruptcy trustee.
A motion to appoint a trustee filed by the petitioning creditors
said that Mr. Durham and co-owner James Cochran took $176 million
in loans transferred from the investment fund into Fair Holdings
LLC and DC Investments LLC. They used the money to fund
$220 million in other loans, according to the filing.
FIDDLER'S CREEK: Can Borrow Up to $7,300,441 from Gulf Bay
----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, has
granted Fiddler's Creek, LLC, and GB Peninsula, Ltd., permission,
on a fifth interim basis, to obtain Senior Secured Post-Petition
Financing from Gulf Bay Capital, Inc., in one or more interim
initial advances in an aggregate amount not to exceed the amounts
set forth in a budget for the thirteen (13) week period ended
March 2, 2011 (the "Fifth Interim Period") for a maximum borrowing
of $7,300,441 when combined with the borrowings authorized by the
Court pursuant to the First Interim Order, dated March 10, 2010,
the Second Interim Order, dated April 30, 2010, the Third Interim
Order, dated July 26, 2010, and the Fourth Interim Order, dated
October 7, 2010, which maximum borrowing is after application of
the repayments thereof authorized by separate orders of the Court.
All of the Debtors, except for Fiddler's Creek, LLC, and GB
Peninsula, Ltd., are Guarantors of the DIP Loan.
The advance approved pursuant to this Fifth Interim Order will be
in addition to the borrowings authorized by the Court by separate
orders in connection with the separate debtor-in-possession loan
from Textron Financial Corporation to FC Golf, Ltd.
Certain of the Debtors are also authorized to use cash collateral
from the operation of the Textron Collateral (namely the Creek
Course) and the cash generated from the operation of the Iberia
Collateral (namely the Tarpon Club and the restaurant facilities
at the Marco Beach Ocean Resort).
The Debtors prepetition secured creditors are: (i) AmSouth n/k/a
Regions Bank; (ii) Fifth Third Bank; (iii) Textron Financial
Corporation; (iv) Iberia Bank, as successor to Orion Bank; (v)
KeyBank National Association; (vi) Mellon United National Bank;
(vii) Colonnade, as successor to Tomen America; and (viii) Florida
Financial Investments, Inc. Each of the Prepetition Secured
Lenders asserts a mortgage lien on property owned by one or more
of the Debtors. The mortgage liens asserted by the Prepetition
Secured Lenders do not overlap, as each such Prepetition Secured
Lender financed a separate parcel of land and improvements
contained within the overall Fiddler's Creek development.
Effective immediately upon the entry of this Fifth Interim Order,
the DIP Lender is granted, pursuant to subsections 364(c)(2),
(c)(3), and 364(d) of the Bankruptcy Code (i) first priority liens
on and first priority senior security interests in all now owned
and hereafter acquired Collateral of each Debtor that are not
encumbered by any liens (other than any liens for special
assessments in favor of the CDDs); (ii) a first priority lien and
security interest, pursuant to section 364(c)(3) of the Bankruptcy
Code, on all tangible and intangible assets and property of the
Debtors that are not encumbered by Pre-Petition Liens in favor of
the Prepetition Secured Lenders, which liens and security
interests granted to the DIP Lender would, however, be junior only
to Permitted Liens; and (iii) priming first priority liens on and
priming first priority security interests pursuant to section
364(d) of the Bankruptcy Code (the "Priming Lien") in favor of DIP
Lender in all Collateral of Debtors that are subject to any
PrePetition Liens in favor of the Prepetition Secured Lenders.
Except with respect to the Carve-Out (for the payment of
professional fees and disbursements of professionals retained
pursuant to sections 327 or 1103(a) of the Bankruptcy Code) during
the Fifth Interim Period pending the entry of a Final Order, all
DIP Obligations will be an allowed super priority administrative
expense claim with priority in the Chapter 11 Cases under
sections 364(c)(1), 503(b) and 507(b) of the Bankruptcy Code and
otherwise over all administrative expense claims and unsecured
claims against the Debtors and their estates, now existing or
hereafter arising.
A further hearing to consider entry of the Final Order and final
approval of the DIP Loan or a continued interim order is scheduled
before the Honorable Judge K. Rodney May, U.S. Bankruptcy Judge,
in Court room 9B, Sam. M. Gibbons, United States Courthouse
Federal Building, 47 801 N. Florida Avenue, Tampa, Florida at
1:30 p.m.(Eastern Time) on February 28, 2011.
Any party in interest objecting to the entry of a proposed Final
Order or further Interim Order will file written objections with
the Clerk of the Court no later than noon on February 24, 2011.
A copy of the Fifth Interim Order is available for free at:
http://bankrupt.com/misc/fiddler'screek.5thInterimOrder.pdf
About Fiddler's Creek
Fiddler's Creek, LLC, and its affiliates each owns, operates or is
otherwise affiliated with the premier, fully integrated, master
planned residential community known as "Fiddler's Creek" in
southwestern Florida. Fiddler's Creek is located in Collier
County, Florida, approximately 12 miles southeast of the city of
Naples and six miles north of Marco Island. The Fiddler's Creek
development is comprised of nearly 4,000 zoned acres of prime land
in Naples, Florida, and is planned for and capable of
accommodating up to 6,000 residences upon projected build-out,
which is estimated to be in 2020. Fiddler's Creek contains five
distinctive neighborhoods known as: Fiddler's Creek, Veneta,
Aviamar, Marsh Cove and Meadow Run.
Fiddler's Creek filed for Chapter 11 bankruptcy protection on
February 23, 2010 (Bankr. M.D. Fla. Case No. 10-03846). Paul J.
Battista, Esq., at Genovese Joblove & Battista, P.A., serves as
general bankruptcy counsel. Judge Alexander L. Paskay presides
over the case. The Company estimated assets and debts at
$100 million to $500 million.
FIRST DATA: To Consolidate Operations of North American Business
----------------------------------------------------------------
On January 13, 2011, First Data Corporation announced that it will
consolidate the operations and management of its North American
business and its business outside North America through the
leadership of two executives. Edward A. Labry III, the current
Executive Vice President and President, Retail and Alliance
Services for First Data, will assume the role of President, First
Data - North America. First Data has begun a search for an
executive to lead its business outside of North America. In the
interim, Executive Vice President John Elkins will lead First
Data's business in the Asia Pacific, Europe and the Middle East,
and Latin America regions.
First Data also announced that Kevin J. Schultz, Executive Vice
President and President, Financial Services for First Data, is
retiring effective January 31, 2011. Mr. Schultz will be eligible
for benefits under First Data's Severance/Change in Control
Policy, as amended by Amendment No. 1 to the Policy, which were
included as Exhibit 10.27 of First Data's Annual Report on Form
10-K filed on March 13, 2008 and Exhibit 10.27 of First Data's
Annual Report on Form 10-K filed on March 25, 2009. First Data
also expects to pay Mr. Schultz an additional $360,000 subject to
Mr. Schultz not soliciting First Data's customers and employees
following his retirement, and fulfilling his other obligations
under the Policy. Additionally, First Data expects that its
parent company, First Data Holdings Inc., will repurchase 30,000
shares of vested restricted stock units and 183,333 shares of
common stock of Holdings held by Mr. Schultz at the fair market
value of the stock pursuant to the Management Stockholder's
Agreement between Holdings and Mr. Schultz, a form of which was
included as Exhibit 10.10 to First Data's Annual Report on Form
10-K filed on March 11, 2010.
About First Data
Based in Atlanta, Georgia, First Data Corporation, with over
$10 billion of revenue for the 12 months ended June 30, 2010,
provides commerce and payment solutions for financial
institutions, merchants, and other organizations worldwide.
As reported by the Troubled Company Reporter on November 23, 2010,
Moody's Investors Service expects First Data's new debt
instruments will likely be rated Caa1 assuming that 50% of the old
notes are exchanged. The final ratings and Loss Given Default
assessments will be determined ultimately by the allocation
between the new and old notes upon completion of the debt
exchange.
The last rating action was on August 11, 2010, when Moody's
assigned a B1 rating to First Data's new $500 million senior
secured first lien notes and affirmed the company's B3 CFR and
existing ratings with a stable outlook.
The TCR also reported November 23, 2010, that Fitch Ratings
expects to assign a 'CCC/RR6' rating to First Data's proposed
issuance of up to $2.75 billion in second lien notes as part of
its exchange offer.
Moody's Investors Service assigned Caa1 ratings to First Data
Corp.'s new $2 billion 8.25% Senior Second Lien Notes due 2021,
$1 billion PIK Toggle Senior Second Lien Notes due 2022, and
$3 billion 12.625% Senior Unsecured Notes due 2021. Moody's
also affirmed the company's existing ratings with a stable
outlook.
FLINT TELECOM: Files Amended Annual Report for Fiscal 2010
----------------------------------------------------------
Flint Telecom Group, Inc., filed on January 13, 2011, an amended
annual report on Form 10-K/A for the fiscal year ended June 30,
2010. The Company did not disclose the reasons which necessitated
the filing of the amendment, though an examination of the amended
balance sheet as of June 30, 2010, showed that changes were made
on the liabilities and capital side of the balance sheet.
At June 30, 2010, the Company's amended balance sheet showed
$1,675,122 in total assets, $13,066,017 in total liabilities,
$4,515,379 in redeemable equity securities, and a stockholders'
deficit of $15,906,274.
As originally filed, the Company's balance sheet at June 30, 2010,
showed $1,675,122 in total assets, $13,066,017 in total
liabilities, and a stockholders' deficit of $11,390,895.
There were no changes in the Company's income statement.
A full-text copy of the Form 10-K/A is available for free at:
http://researcharchives.com/t/s?7239
The Company also filed an amendment to its quarterly report for
the three months ended September 30, 2010.
The Company's amended balance sheet at September 30, 2010, showed
$2,162,773 in total assets, $14,837,892 in total liabilities,
$4,627,476 in redeemable equity securities, and a stockholders'
deficit of $17,302,586.
As originally filed, the Company's balance sheet at September 30,
2010, showed $2,162,773 in total assets, $14,837,892 in total
liabilities, and a stockholders' deficit of $12,675,119.
A full-text copy of the Form 10-Q/A is available for free at:
http://researcharchives.com/t/s?6f80
About Flint Telecom
Overland Park, Kan.-based Flint Telecom Group, Inc. (OTC BB: FLTT)
-- http://www.flinttelecomgroup.com/-- delivers next-generation
IP communications Products and Services. As part of the Company's
ongoing emphasis on streamlining its operations and reaching
sustainable profitability, during the year ended June 30, 2010,
the Company shut down and disposed of four operating companies:
CVC Int'l, Phone House Inc. of Florida, Dial-Tone Communications
and Starcom Alliance.
The Company's balance sheet as of September 30, 2010, showed
$2.16 million in total assets, $14.84 million in total
liabilities, and a stockholders' deficit of $12.68 million.
As reported in the Troubled Company Reporter on October 26, 2010,
L.L, Bradford & Company, LLC, in Las Vegas, Nev., expressed
substantial doubt about Flint Telecom's ability to continue as a
going concern, following the Company's results for the fiscal year
ended June 30, 2010. The independent auditors noted that the
Company has suffered losses from operations, negative cash flows
from operations and current liabilities exceed current assets.
FLINT TELECOM: Gets OK for its 1 for 20 Reverse Stock Split
-----------------------------------------------------------
On January 13, 2011, Flint Telecom Group, Inc. received approval
from the Financial Industry Regulatory Authority clearing its 1
for 20 reverse stock split of its issued and outstanding common
shares. The Company's issued and outstanding common shares were
decreased from 818,277,527 to 40,913,876.
About Flint Telecom
Overland Park, Kan.-based Flint Telecom Group, Inc. (OTC BB: FLTT)
-- http://www.flinttelecomgroup.com/-- delivers next-generation
IP communications Products and Services. As part of the Company's
ongoing emphasis on streamlining its operations and reaching
sustainable profitability, during the year ended June 30, 2010,
the Company shut down and disposed of four operating companies:
CVC Int'l, Phone House Inc. of Florida, Dial-Tone Communications
and Starcom Alliance.
The Company's balance sheet as of September 30, 2010, showed
$2.16 million in total assets, $14.84 million in total
liabilities, and a stockholders' deficit of $12.68 million.
As reported in the Troubled Company Reporter on October 26, 2010,
L.L, Bradford & Company, LLC, in Las Vegas, Nev., expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's results for the fiscal year
ended June 30, 2010. The independent auditors noted that the
Company has suffered losses from operations, negative cash flows
from operations and current liabilities exceed current assets.
FOX HILL: Wants to Assume Management Agreement With Harbor Group
----------------------------------------------------------------
Fox Hill Mutual Homes, Inc., asks for authorization from the U.S.
Bankruptcy Court for the Eastern District of Virginia to assume
the Management Agreement dated January 6, 2011, between the Debtor
and Harbor Group Management Co.
Pursuant to the Order Appointing Receiver entered in the
Receivership, and as set forth in a prior management agreement
dated September 10, 2009, HG Receiver, LLC engaged HG Management
to manage the day-to-day operations and activities of the Complex.
By its terms, the prior management agreement expires upon
termination of the Receivership. The Receivership expired at
5:00 p.m. on January 7, 2011.
The Debtor requests that it be permitted to continue working with
HG Management.
Under the Management Agreement, the monthly management fee is
$8,000 or 5% of Complex monthly Gross Receipts, whichever is
greater. The Agreement terminates upon the soonest of:
(i) January 6, 2012; (ii) sale of the property; (iii) order of the
Court; (iv) by either party for any or no reason upon 30 days
written notice; and (v) for material default by either party, upon
notice.
HG Management is entitled to receive a termination fee of $8,000
if the Management Agreement is terminated on or before January 6,
2012, for reasons other than the default of HG Management.
Creditor BWF-FHM Loan, LLC, objects to the assumption of the
property management agreement. BWF says that, among other things,
the Debtor's motion alleges that the receivership expired at
5:00 p.m. on January 7, 2011, but it didn't. On September 12,
2009, the receiver took possession of the Debtor's property.
BWF is represented by Kaufman and Canoles.
Hampton, Virginia-based Fox Hill Mutual Homes, Inc., filed for
Chapter 11 bankruptcy protection on January 6, 2011 (Bankr. E.D.
Va. Case No. 11-50038). Karen M. Crowley, Esq., at Crowley,
Liberatore, & Ryan, P.C., serves as the Debtor's bankruptcy
counsel. The Debtor estimated its assets at $10 million to
$50 million and debts at $1 million to $10 million.
FRANK PARSONS: Taps Weinsweigadvisors as Financial Advisor
----------------------------------------------------------
Frank Parsons Inc. asks for authorization from the U.S. Bankruptcy
Court for the District of Maryland to employ WeinsweigAdvisors LLC
as financial advisor, nunc pro unc to the Petition Date.
WeinsweigAdvisors will, among other things:
a. assist the Debtor in obtaining debtor in possession
financing;
b. assist the Debtor in the preparation of financial related
disclosures required by the Court, including the Monthly
Operating Reports and schedules and statements of
financial affairs;
c. assist with the implementation and oversight of cash
management procedures; and
d. assist and advise the Debtor with respect to the
identification of core business assets and the disposition
of assets or liquidation of unprofitable operations.
For the services of Marc Weinsweig, WeinsweigAdvisors will be
compensated at a fixed weekly fee of $8,750. Should additional
temporary assistance be necessary, WeinsweigAdvisors will be
compensated at an hourly rate of $250 for the services of
Christopher Stevens or an alternative staff agreeable to
management of the Debtor. WeinsweigAdvisors will not add
additional staff to the engagement without the Debtor's prior
approval. In the event the Debtor secures DIP financing, a fee of
0.5% of the commitment arranged by WeinsweigAdvisors not to exceed
$25,000, will be earned and paid upon court approval of the DIP
agreement. The Debtor will also pay WeinsweigAdvisors a
Completion Fee of $25,000 if the Debtor consummates, within 180
days of filing, a plan of reorganization or going concern sales
transaction. WeinsweigAdvisors will be reimbursed for its
reasonable out-of-pocket expenses incurred in connection with this
assignment, including travel, lodging, telephone, duplication,
computer research, and messenger charges. In addition,
WeinsweigAdvisors will be reimbursed by the Debtor for the
reasonable fees and expenses of its counsel incurred in connection
with the enforcement of the agreement.
Marc Weinsweig, a principal at WeinsweigAdvisors, assures the
Court that the firm is a "disinterested person" as that term
defined in Section 101(14) of the Bankruptcy Code.
Hanover, Maryland-based Frank Parsons, Inc. --
http://www.frankparsons.com/-- aka Frank Parsons Paper Company
Inc., is the largest employee-owned, business products,
technology, and office supplies company in the United States,
offering more than 180,000 products from companies such as Avery,
Fujifilm, Hewlett Packard, IBM, Sony, Xerox, Xiotech, and more.
Frank Parsons is an approved contractor on the GSA Schedule and an
authorized AbilityOne Distributor. The company holds several
environmental certifications, including FSC, SFI, and PEFC.
Frank Parsons filed for Chapter 11 bankruptcy protection on
January 6, 2011 (Bankr. D. Md. Case No. 11-10338). Gary H.
Leibowitz, Esq., and Irving Edward Walker, Esq., at Cole Schotz
Meisel Forman & Leonard, PA, serve as the Debtor's bankruptcy
counsel. The Debtor has also tapped SSG Capital as an investment
banker to explore strategic options. The Debtor estimated its
assets and debts at $10 million to $50 million.
FRANK PARSONS: Wants SSG Capital as Investment Banker
-----------------------------------------------------
Frank Parsons Inc. asks for authorization from the U.S. Bankruptcy
Court for the District of Maryland to employ SSG Capital Advisors,
LLC, as investment banker, nunc pro tunc to the Petition Date.
SSG will, among other things:
a. prepare an information memorandum describing the Debtor,
its historical performance and prospects, including
existing contracts, marketing and sales, labor force, and
management and anticipated financial results of the
Debtor;
b. assist the Debtor in developing a Key Employee Incentive
Plan, and testify in Court as it relates to the KEIP;
c. assist the Debtor in developing a list of suitable
potential buyers who will be contacted on a confidential
basis after approval by the Debtor; and
d. coordinate the execution of confidentiality agreements for
potential buyers wishing to review the information
memorandum.
For its services, SSG will be paid:
a. an initial fee of $25,000, due upon execution of its
engagement agreement with the Debtor;
b. monthly fees of $20,000 per month payable on the first of
each month thereafter during the engagement term;
c. in the event of a financial restructuring, a fee of
$400,000;
d. upon the closing of a sale, a fee, payable in cash, in
federal funds via wire transfer or certified check, at,
and as a condition of closing of such Sale equal to
$200,000, plus 5% of total consideration in excess of
$5 million. In the event of a sale to W.B. Mason, where
no other party has come forward with a bona fide offer,
the Sale Fee due SSG will be reduced by $100,000.
However, in no event will the sale fee due SSG be less
Than $200,000 even in the event of a sale to W.B. Mason
with no additional offers; and
e. in addition to the foregoing fees, whether or not a
transaction is consummated, and in addition to the fees
noted which may be payable to SSG hereunder, a
reimbursement to SSG upon demand for all of SSG's
reasonable out-of-pocket expenses incurred in connection
with the subject matter of the engagement.
J. Scott Victor, a managing director and founding partner of SSG,
assures the Court that the firm is a "disinterested person" as
that term defined in Section 101(14) of the Bankruptcy Code.
About Frank Parsons
Hanover, Maryland-based Frank Parsons, Inc. --
http://www.frankparsons.com/-- aka Frank Parsons Paper Company
Inc., is the largest employee-owned, business products,
technology, and office supplies company in the United States,
offering more than 180,000 products from companies such as Avery,
Fujifilm, Hewlett Packard, IBM, Sony, Xerox, Xiotech, and more.
Frank Parsons is an approved contractor on the GSA Schedule and an
authorized AbilityOne Distributor. The company holds several
environmental certifications, including FSC, SFI, and PEFC.
Frank Parsons filed for Chapter 11 bankruptcy protection on
January 6, 2011 (Bankr. D. Md. Case No. 11-10338). Gary H.
Leibowitz, Esq., and Irving Edward Walker, Esq., at Cole Schotz
Meisel Forman & Leonard, PA, serve as the Debtor's bankruptcy
counsel. The Debtor has also tapped Weinsweig Advisors LLC as a
restructuring advisor. The Debtor estimated its assets and debts
at $10 million to $50 million.
FRANK PARSONS: Wants to Hire DCA as Claims & Noticing Agent
-----------------------------------------------------------
Frank Parsons Inc. asks for authorization from the U.S. Bankruptcy
Court for the District of Maryland to employ Delaware Claims
Agency, LLC, as claims and noticing agent.
DCA will, among other things:
a) notify potential creditors of the filing of the Chapter 11
case and of the setting of the first meeting of creditors;
b) prepare and serve notices, pleadings, and orders in this
Chapter 11 case;
c) assist with preparation of Schedules and Statements; and
d) file affidavits of service for all mailings, including a
copy of each notice, a list of persons to whom such notice
was mailed, and the date mailed.
DCA will be paid based on the rates of its professionals:
Senior Consultants $150
Technical Consultants $125
Associate Consultants $100
Processors and Coordinators $65
A copy of DCA's services agreement with the Debtor is available
for free at:
http://bankrupt.com/misc/FRANK_PARSONS_claimsagentservicespact.pdf
Joseph L. King, Esq., Vice President of DCA, assures the Court
that the firm is a "disinterested person" as that term defined in
Section 101(14) of the Bankruptcy Code.
Hanover, Maryland-based Frank Parsons, Inc. --
http://www.frankparsons.com/-- aka Frank Parsons Paper Company
Inc., is the largest employee-owned, business products,
technology, and office supplies company in the United States,
offering more than 180,000 products from companies such as Avery,
Fujifilm, Hewlett Packard, IBM, Sony, Xerox, Xiotech, and more.
Frank Parsons is an approved contractor on the GSA Schedule and an
authorized AbilityOne Distributor. The company holds several
environmental certifications, including FSC, SFI, and PEFC.
Frank Parsons filed for Chapter 11 bankruptcy protection on
January 6, 2011 (Bankr. D. Md. Case No. 11-10338). Gary H.
Leibowitz, Esq., and Irving Edward Walker, Esq., at Cole Schotz
Meisel Forman & Leonard, PA, serve as the Debtor's bankruptcy
counsel. The Debtor has also tapped Weinsweig Advisors LLC as a
restructuring advisor and SSG Capital as an investment banker to
explore strategic options. The Debtor estimated its assets and
debts at $10 million to $50 million.
FREEDOM COMMS: Affiliated Media Unit Eyes Consolidation
-------------------------------------------------------
Russell Adams, writing for The Wall Street Journal, reports that a
person familiar with the matter said MediaNews Group Inc., is
eyeing a merger with Freedom Communications Inc. and possibly
several other newspaper companies.
MediaNews is the publisher of more than 50 daily U.S. newspapers
including the Denver Post. Its holding company is Affiliated
Media Inc., which filed for bankruptcy protection and emerged in
March under the ownership of a group of lenders including
investment firm Alden Global Capital.
Alden is also part of a group of lenders that owns Freedom
Communications, following emergence from its own bankruptcy in
April.
Mr. Adams reports that the person familiar with the matter said
Alden wants to roll at least some of its various newspaper
holdings into a single company.
Alden also was part of a group of investors that won the auction
for the Philadelphia Inquirer and the Philadelphia Daily News. It
also holds a stake in Journal Register Co.
According to Mr. Adams, a spokesman for Freedom said the company's
board has been exploring its strategic options for months and has
been approached by "a number of strategic buyers." He declined to
comment on details of that process, which he said is ongoing.
About Affiliated Media
Denver, Colorado-based Affiliated Media, Inc., is the holding
company for the MediaNews Group family of newspapers, the nation's
second-largest newspaper publisher by circulation and owner of 54
daily newspapers, over 100 non-daily newspapers, as well as Web
sites, television and radio broadcasters that serve markets in 12
states.
The Company filed for Chapter 11 bankruptcy protection on
January 22, 2010 (Bankr. D. Delaware Case No. 10-10202). Hughes
Hubbard & Reed LLP, served as the Debtor's general bankruptcy
counsel, while Daniel B. Butz, Esq., at Morris, Nichols, Arsht &
Tunnell LLP, served as the Debtor's co-bankruptcy counsel. Carl
Marks Advisory Group LLC acted as the Debtor's restructuring
advisor; Rothschild Inc., the Debtor's financial advisor; and Epiq
Bankruptcy Solutions, LLC, the Debtor's claims agent. The Company
listed $100 million to $500 million in assets and $500 million to
$1 billion in liabilities.
The Hon. Kevin J. Carey confirmed the Company's plan of
reorganization on March 4, 2010, less than six weeks after
the bankruptcy filing. The Company had reached agreement
pre-bankruptcy with its lenders on terms of the plan, which
reduces the Company's debt from $930 million to $165 million and
involves no management change or change of control of the Company.
The Plan gives holders of senior notes aggregating $583.1 million
88% of the common stock, the proceeds of $150 million secured term
loan and certain cash payments. Holders of general unsecured
claims retain their claims or would be paid in full. Holders of
$326 million in subordinated notes would receive warrants to
purchase stock of the reorganized company. Holders of equity
interests were wiped out.
Affiliated Media emerged from Chapter 11 protection in March 2010.
About Freedom Communications
Freedom Communications, headquartered in Irvine, Calif., is a
national privately owned media company operating print
publications, broadcast television stations and interactive
businesses. The company's print portfolio includes approximately
100 daily and weekly publications, plus ancillary magazines and
other specialty publications. The broadcast company's stations --
five CBS, two ABC network affiliates and one CW affiliate -- reach
more than 3 million households across the country. The Company's
news, information and entertainment websites complement its print
and broadcast properties.
Freedom Communications filed for Chapter 11 on Sept. 1, 2009
(Bankr. D. Del. Case No. 09-13046). Attorneys at Young Conaway
Stargatt & Taylor, and Latham & Watkins LLP served as Chapter 11
counsel. Houlihan, Lokey, Howard & Zukin, Inc., served as
financial advisors while AlixPartners LLC served as restructuring
consultants. Logan & Co. served as claims and notice agent.
Freedom Communications had $757,000,000 in assets against debts of
$1,077,000,000 as of July 31, 2009.
The Bankruptcy Court confirmed Freedom Communications' Plan of
Reorganization on March 9, 2010. The Plan became effective
April 30, 2010. The Plan, which was supported by the Steering
Committee of the Company's secured lenders and the Official
Committee of Unsecured Creditors, eliminated $450 million of debt
from Freedom's balance sheet.
GOLDEN CHAIN: Files Schedules of Assets & Liabilities
-----------------------------------------------------
Golden Chain, Inc., has filed with the U.S. Bankruptcy Court for
the Central District of California its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $10,000,000
B. Personal Property $539,890
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $300,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $112,048
----------- -----------
TOTAL $10,539,890 $412,048
A copy of the schedules is available for free at:
http://bankrupt.com/misc/GOLDEN_CHAIN_sal.pdf
San Jacinto, California-based Golden Chain, Inc., filed for
Chapter 11 bankruptcy protection on January 10, 2011 (Bankr. C.D.
Calif. Case No. 11-10793). Thomas J. Polis, Esq., at Polis &
Associates, APLC, serves as the Debtor's bankruptcy counsel.
GOLDEN CHAIN: Section 341(a) Meeting Scheduled for Feb. 17
----------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of Golden
Chain, Inc.'s creditors on February 17, 2011, at 2:30 p.m. The
meeting will be held at Room 200C, 3685 Main Street, 2nd Floor,
Riverside, CA 92501.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
San Jacinto, California-based Golden Chain, Inc., filed for
Chapter 11 bankruptcy protection on January 10, 2011 (Bankr. C.D.
Calif. Case No. 11-10793). Thomas J. Polis, Esq., at Polis &
Associates, APLC, serves as the Debtor's bankruptcy counsel.
According to its schedules, the Debtor disclosed $10,539,890 in
total assets and $412,048 in total debts.
GREAT ATLANTIC & PACIFIC: Incurs $199-Mil. Net Loss in Dec. 4 Qtr.
------------------------------------------------------------------
The Great Atlantic & Pacific Tea Company announced fiscal 2010
third quarter results, and provided an update on its comprehensive
financial and operational restructuring, which is designed to
restore the Company to long-term financial health.
Third Quarter 2010 Financial Results
Sales for the third quarter were $1.8 billion versus $2.0 billion
in last fiscal year's third quarter. Comparable store sales
decreased 4.9 percent.
For the third quarter, reported loss from continuing operations
was $181 million versus last year's third quarter reported loss
from continuing operations of $502 million. EBITDA was negative
$94 million for the third quarter versus negative $413 million for
the last fiscal year's third quarter. Excluding certain non-cash
and non-operating items, net adjusted EBITDA was $20 million
versus $44 million for last fiscal year's third quarter.
The Company has access to $800 million in Debtor-in-Possession
(DIP) financing, which enables it to continue paying local
suppliers, vendors, employees and others in the ordinary course of
business.
Sam Martin, President and Chief Executive Officer, said, "We saw
modest improvement in certain of our third quarter financial
results due to the steps we've taken to implement our turnaround
plan and the continued dedication of our talented Associates.
Chapter 11 will allow us to restructure our debt, reduce our
structural costs, and address our legacy issues. With access to
a significant amount of liquidity, we are making strategic
decisions that will enable us to complete our turnaround and
emerge with a new capital structure and an enhanced ability to
provide value to our customers."
Turnaround Plan
As announced on December 12, 2010, the Company filed voluntary
petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of New York. On
December 13, 2010, the Bankruptcy Court granted the Company's
motions seeking approval of various "first day orders" on an
interim basis, with such orders becoming final on January 10,
2011. The relief granted in these orders ensures that the Company
has the ability to operate during the Chapter 11 cases. In this
regard, the Bankruptcy Court approved the Company's $800 million
DIP financing facility provided by JPMorgan Chase & Co. Of the
total DIP facility, a $350 million term loan was immediately
funded. On January 10, 2011, the Court granted final approval of
the entire DIP facility, providing the Company with access to the
remaining $450 million of the $800 million DIP facility.
With the protection of the Bankruptcy Code and a new management
team in place, the Company continues to implement and accelerate
the basic elements of the turnaround plan announced last October,
including:
* Reducing structural and operating costs;
* Improving the A&P value proposition for customers; and
* Enhancing the customer experience in stores.
Mr. Martin continued, "With our restructuring underway, our stores
have operated normally with fully stocked shelves and the
excellent service our customers expect. I'm pleased that our
Associates have continued to deliver great value and service to
our customers every day, especially during the busy holiday period
and with the additional challenge posed by last month's blizzard."
A full-text copy of A&Ps 2010 third quarter results on Form 10-Q
is available for free at http://ResearchArchives.com/t/s?7237
The Great Atlantic & Pacific Tea Company, Inc.
Unaudited Consolidated Balance Sheet
As of December 4, 2010
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $92,411
Restricted cash 1,730
Accounts receivable, net of allowance for
doubtful accounts of $5,759 at 12/4/2010 148,340
Inventories, net 454,621
Prepaid expenses and other current assets 46,061
--------------
Total current assets 743,163
Non-current assets:
Property:
Property owned, net 1,238,831
Property leased under capital leases, net 65,948
--------------
Property, net 1,304,779
Goodwill 110,412
Intangible assets, net 126,763
Other assets 138,470
--------------
Total assets $2,423,587
==============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $171,467
Current portion of obligations under
capital leases 13,653
Current portion of real estate liabilities 1,238
Accounts payable 196,322
Book overdrafts 50,922
Accrued salaries, wages and benefits 126,104
Accrued taxes 35,619
Other accruals 305,192
--------------
Total current liabilities 900,517
Non-current liabilities:
Long-term debt 816,830
Long-term obligations under capital leases 124,714
Long-term real estate liabilities 418,372
Deferred real estate income 86,518
Other financial liabilities 3,705
Other non-current liabilities 954,182
--------------
Total liabilities 3,304,838
--------------
Series A redeemable preferred stock - no par
value $1,000 redemption value; authorized -
700,000 shares issued - 175,000 shares 137,792
Stockholders' deficit:
Common stock - $1 par value; authorized -
260,000,000 shares; issued and outstanding -
56,280,414 shares at 12/4/2010 56,280
Additional paid-in capital 511,313
Accumulated other comprehensive loss (78,860)
Accumulated deficit (1,507,776)
--------------
Total stockholders' deficit (1,019,043)
--------------
Total liabilities and stockholders' deficit $2,423,587
==============
The Great Atlantic & Pacific Tea Company, Inc.
Unaudited Consolidated Statement of Operations
For the 12 Weeks Ended December 4, 2010
(in thousands)
Sales $1,793,805
Cost of merchandise sold (1,259,568)
--------------
Gross margin 534,237
Store operating, general & administrative expense (635,586)
Goodwill, trademark and long-lived
asset impairment (42,036)
--------------
Loss from operations (143,385)
Non-operating (loss) income (213)
Interest expense, net (40,038)
--------------
Loss from continuing operations before
income taxes (183,636)
Benefit from income taxes 2,953
--------------
Loss from continuing operations (180,683)
Discontinued operations:
Loss from operations of discontinued businesses,
net of tax of $0 (18,687)
Gain on disposal of discontinued businesses,
net of tax of $0 -
--------------
Loss from discontinued operations (18,687)
--------------
Net loss ($199,370)
==============
The Great Atlantic & Pacific Tea Company, Inc.
Unaudited Consolidated Statement of Cash Flows
For the 40 Weeks Ended December 4, 2010
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($475,687)
Adjustments to reconcile net loss to net cash
used in operating activities 304,094
Other changes in assets and liabilities:
Decrease in receivables 17,803
Decrease (increase) in inventories 10,467
Increase in prepaid expenses and
other current assets (12,968)
Increase in other assets (10,203)
(Decrease) increase in accounts payable (29,201)
Decrease in accrued salaries, wages
and benefits, and taxes (28,977)
Increase in other accruals 44,128
Increase (decrease) in other
non-current liabilities 1,300
Other operating activities, net (1,020)
--------------
Net cash used in operating activities (180,264)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property (62,854)
Proceeds from disposal of property 38,186
Proceeds from flood insurance 6,410
Proceeds from sale of joint venture -
Decrease in restricted cash 303
Proceeds from maturities of marketable securities -
--------------
Net cash used in investing activities (17,955)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 800
Principal payments on long-term borrowings (201)
Proceeds under revolving lines of credit 619,500
Principal payments on revolving lines of credit (636,384)
Proceeds under line of credit -
Principal payments on line of credit -
Proceeds from issuance of preferred stock -
Proceeds from long-term real estate liabilities -
Principal payments on long-term real
estate liabilities (980)
Proceeds from sale-leaseback transaction 89,830
Principal payments on capital leases (9,140)
(Decrease) increase in book overdrafts (9,543)
Deferred financing fees (5,206)
Dividends paid on preferred stock (10,500)
Proceeds from stock options exercised 28
--------------
Net cash provided by financing activities 38,204
Net (decrease) increase in cash, cash equivalents (160,015)
Cash & cash equivalents, beginning of period 252,426
--------------
Cash & cash equivalents, end of period $92,411
==============
A&P also filed with the U.S. Securities and Exchange Commission a
copy of its GAAP Earnings for the 12 and 40 weeks ended December
4, 2010, and other financial documents. Full-text copies of
these documents are available without charge at
http://ResearchArchives.com/t/s?7236
About A&P
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific (A&P) is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
The Great Atlantic & Pacific Tea Company, Inc., and its affiliates
filed petitions under Chapter 11 of the U.S. Bankruptcy Code on
December 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White
Plains.
As of September 11, 2010, the Debtors reported total assets of
$2.5 billion and liabilities of $3.2 billion.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant.
Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by A&P and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
GREAT ATLANTIC & PACIFIC: Committee Retains Milbank as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors for the Chapter 11
cases of The Great Atlantic & Pacific Tea Company, Inc., and its
debtor- affiliates seeks the Bankruptcy Court's authority to
retain Milbank, Tweed, Hadley & McCloy LLP as its legal counsel
effective December 21, 2010.
The Creditors Committee said it selected Milbank Tweed because of
its "extensive knowledge and expertise in the areas of law
relevant to the Debtors' Chapter 11 cases."
As legal counsel, Milbank Tweed is tasked to provide these
services:
(a) advise the Creditors Committee with respect to its rights,
powers and duties in the Chapter 11 cases;
(b) assist and advise the Creditors Committee in its
consultations, meetings and negotiations with the Debtors
and all other parties regarding the administration of
their cases;
(c) assist the Creditors Committee in analyzing the claims and
interests of the Debtors' stakeholders, and in negotiating
with those stakeholders;
(d) assist with the Creditors Committee's investigation of the
acts, conduct, assets, liabilities and financial condition
of the Debtors and the operation of their businesses;
(e) assist the Creditors Committee in its analysis of, and
negotiations with, the Debtors or any third party related
to, among other things, financings, asset disposition
transactions, compromises of controversies, and the terms
of a Chapter 11 plan or plans for the Debtors;
(f) assist and advise the Creditors Committee with respect to
its communications with the general creditor body
regarding significant matters in the cases;
(g) represent the Creditors Committee at all hearings and
other proceedings;
(h) review and analyze all motions, applications, orders,
statements of operations and schedules and other pleadings
filed with the Court and advise the Creditors Committee as
to their propriety;
(i) assist the Creditors Committee in preparing pleadings and
applications in furtherance of its interests and
objectives; and
(j) perform other legal services as may be necessary or as may
be requested by the Creditors Committee.
In exchange for its services, Milbank Tweed will be paid on an
hourly basis and will be reimbursed for its expenses. The firm's
hourly rates are:
Professionals Hourly Rates
------------- ------------
Partners $750 - $1,050
Counsel $725 - $925
Associates/Senior Attorneys $295 - $695
Legal Assistants $165 - $285
Dennis Dunne, Esq., a partner in the Financial Restructuring
Group of Milbank Tweed, assures the Court that his firm does not
represent any other entity having an adverse interest in
connection with the Debtors' bankruptcy cases.
The Court will hold a hearing on February 1, 2011, to consider
approval of Milbank Tweed's employment. The deadline for filing
objections is January 25, 2011.
About A&P
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific (A&P) is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
The Great Atlantic & Pacific Tea Company, Inc., and its affiliates
filed petitions under Chapter 11 of the U.S. Bankruptcy Code on
December 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White
Plains.
As of September 11, 2010, the Debtors reported total assets of
$2.5 billion and liabilities of $3.2 billion.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant.
Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by A&P and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
GREAT ATLANTIC & PACIFIC: Committee Taps Conflicts Counsel
----------------------------------------------------------
The Official Committee of Unsecured Creditors for the Chapter 11
cases of The Great Atlantic & Pacific Tea Company, Inc., and its
debtor-affiliates seeks court approval to retain Lowenstein
Sandler PC as its conflicts counsel effective December 30, 2010.
The Creditors Committee tapped the services of Lowenstein Sandler
because of its "extensive knowledge, expertise, and experience in
the areas of law" relevant to the Debtors' Chapter 11 cases.
As conflicts counsel, Lowenstein Sandler will represent the
Creditors Committee in matters where a conflict prevents its lead
counsel, Milbank, Tweed, Hadley & McCloy LLP, from representing
the panel.
Lowenstein Sandler will be paid on an hourly basis and will be
reimbursed for its expenses. The hourly rates for the firm's
professionals are:
$440 to $825 partners
$235 to $575 other attorneys including associates
and counsel positions
$145 to $215 paraprofessionals.
Kenneth Rosen, Esq., a member at Lowenstein Sandler, assures the
Court that his firm does not represent or hold an interest
adverse to the Debtors' estate and that it is a "disinterested
person" as that term is defined under Section 101(14) of the
Bankruptcy Code.
The Court will hold a hearing on February 1, 2011, to consider
approval of Lowenstein Sandler's employment. The deadline for
filing objections is January 25, 2011.
About A&P
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific (A&P) is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
The Great Atlantic & Pacific Tea Company, Inc., and its affiliates
filed petitions under Chapter 11 of the U.S. Bankruptcy Code on
December 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White
Plains.
As of September 11, 2010, the Debtors reported total assets of
$2.5 billion and liabilities of $3.2 billion.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant.
Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by A&P and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
GREAT ATLANTIC & PACIFIC: Committee Has FTI as Fin'l Advisor
------------------------------------------------------------
The Official Committee of Unsecured Creditors of The Great
Atlantic & Pacific Tea Company, Inc., and its debtor affiliates
seeks the Court's permission to retain FTI Consulting, Inc.,
together with its wholly owned subsidiaries, agents, independent
contractors and employees, as financial advisor to the Creditors
Committee, nunc pro tunc to December 21, 2010.
As financial advisor, FTI will assist the Creditors Committee:
-- in the review of financial related disclosures required by
the Court, including the schedules of assets and
liabilities, the statement of financial affairs and monthly
operating reports;
-- with information and analyses required pursuant to the
Debtors' debtor-in-possession financing, including the
preparation for hearings regarding the use of cash
collateral and DIP financing;
-- with the assessment and monitoring of the Debtors'
short-term cash flow, liquidity, prepetition payments and
operating results;
-- with the review of supply chain issues, including critical
vendor payments, reclamation claims, claims under Section
503(b)(9) of the Bankruptcy Code, and set offs;
-- with the review of the Debtors' corporate structure and the
analysis of intercompany transactions;
-- regarding the evaluation of employee related-motions and
issues, including severance plans, bonus program, employee
retention programs and pensions;
-- with a review of any tax issues associated with
claims/stock trading, preservation of net operating losses,
plans of reorganization, and asset sales;
-- in reviewing the Debtors' business plan, including
assessment of revenue enhancement and cost saving
opportunities, store level profitability, capital
expenditures and liquidity;
-- with a review of the Debtors' cost/benefit evaluations with
respect to the affirmation or rejection of various
executory contracts and leases;
-- in the evaluation and analysis of avoidance actions,
including fraudulent conveyances and preferential
transfers;
-- in the review of the claims reconciliation process and
estimation; and
-- in the evaluation and analysis of the plan of
reorganization, or liquidation, and the disclosure
statement.
FTI will also attend at meetings and assist in discussions with
the Debtors, banks, other secured lenders, the Creditors
Committee and any other official committees organized in the
Chapter 11 Cases, the U.S. Trustee, and other parties-in-
interest.
Mark Gross of C&S Wholesale Grocers, Inc., and co-chairman of the
Creditors Committee, tells the Court that FTI is not owed any
amounts with respect to prepetition fees and expenses.
Subject to Court approval and in accordance with Section 328(a)
of the Bankruptcy Code, FTI will be paid a fixed monthly
compensation of $250,000 per month for the first three months and
$225,000 per month thereafter, and a completion fee of
$2,500,000, plus reimbursement of actual and necessary expenses.
As a material part of the consideration for the agreement of FTI
to furnish services, the Creditors Committee asks that these
indemnification provisions be approved:
(a) The Debtors are authorized to indemnify, and will
indemnify, FTI for any claims arising from, related to, or
in connection with FTI's engagement, but not for any claim
arising from, related to, or in connection with FTI's
postpetition performance of any services other than those
in connection with the engagement, unless those
postpetition services and indemnification are approved by
the Court;
(b) The Debtors will have no obligation to indemnify FTI for
any claim or expense that is either:
* judicially determined to have arisen primarily from
FTI's bad faith, gross negligence or willful misconduct;
or
* settled prior to a judicial determination as to FTI's
bad faith, gross negligence or willful misconduct, but
determined by the Court to be a claim or expense for
which FTI is not entitled to receive indemnity under the
terms of the Application; and
(c) If, before the earlier of (i) the entry of an order
confirming a Chapter 11 plan in the cases, and (ii) the
entry of an order closing the Cases, FTI believes that it
is entitled to the payment of any amounts by the Debtors
on account of the Debtors' indemnification obligations
under the Application, including the advancement of
defense costs, FTI must file an application in the Court,
and the Debtors may not pay any amounts to FTI before the
entry of an order approving the payment.
Samuel Star, senior managing director at FTI, assures the Court
that FTI is a "disinterested person," as that term is defined in
Section 101(14) of the Bankruptcy Code.
About A&P
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific (A&P) is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
The Great Atlantic & Pacific Tea Company, Inc., and its affiliates
filed petitions under Chapter 11 of the U.S. Bankruptcy Code on
December 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White
Plains.
As of September 11, 2010, the Debtors reported total assets of
$2.5 billion and liabilities of $3.2 billion.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant.
Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by A&P and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
GREAT ATLANTIC & PACIFIC: Wins Nod to Pay Employee Obligations
--------------------------------------------------------------
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern
District of New York issued a final order authorizing The Great
Atlantic & Pacific Tea Company Inc. and its affiliated debtors to
pay and honor all prepetition employee obligations, to continue
the programs and maintain funding in the ordinary course of
business on account of:
(a) unpaid compensation, deductions and payroll taxes,
management incentive plan, temporary employee compensation
and independent contractor compensation;
(b) reimbursable expenses, American Express Corporate Card
expenses, relocation program expenses;
(c) employee benefit programs and the union employee benefit
programs; and
(d) the 401(k) savings plan and the multiemployer pension
plans.
In a January 12, 2011 order, Judge Drain directed the Debtors to
provide the Official Committee of Unsecured Creditors and the
postpetition secured lenders' administrative agent with prior
notice of any change which increases payments on account of the
management incentive plan, the severance plan or any increases in
payments related to pension obligations.
The Debtors were also authorized to "modify, change and
discontinue any of the employee obligations and the policies
related thereto" and to fulfill those obligations in the ordinary
course of business during the Chapter 11 cases in their sole
discretion without the need for further court approval.
The Debtors estimate that they owe about $18.15 million to full-
time and part-time employees on account of accrued wages and
salaries earned prepetition. Meanwhile, as much as $71,000 is
owed to independent contractors, and about $9,000 to Unitemp
Temporary Personnel.
About A&P
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific (A&P) is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
The Great Atlantic & Pacific Tea Company, Inc., and its affiliates
filed petitions under Chapter 11 of the U.S. Bankruptcy Code on
December 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White
Plains.
As of September 11, 2010, the Debtors reported total assets of
$2.5 billion and liabilities of $3.2 billion.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant.
Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by A&P and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
HARVEST OAKS: Court Rules on Objection to CSMC Claim
----------------------------------------------------
Bankruptcy Judge Stephani W. Humrickhouse denied, in part, and
sustained, in part, Harvest Oaks Drive Associates, LLC's objection
to a claim filed by CSMC 2006-C5 Strickland Road, LLC, through its
special servicer, LNR Partners, LLC. The Debtor's claim objection
is denied to the extent that CSMC's claim seeks to recover
interest at the default rate from the date of the payment default
on August 11, 2009, and is allowed to the extent CSMC's claim
seeks recovery of interest at the default rate from August 2006
through the date of the payment default.
CSMC is a successor-in-interest to Column Financial, Inc., the
original mortgage lender and holder of a promissory note from
Harvest Oaks in the principal amount of $13,475,000. The Debtor
has been in default on its payments since August 11, 2009.
A copy of the Court's January 14, 2011 order is available
at http://is.gd/5MZRPsfrom Leagle.com.
About Harvest Oaks
Raleigh, North Carolina-based Harvest Oaks Drive Associates, LLC,
is engaged in the business of leasing retail shopping space.
Harvest Oaks Drive Associates filed for Chapter 11 bankruptcy
protection (Bankr. E.D.N.C. Case No. 10-03145) on April 21, 2010.
Trawick H Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., assists the
Company in its restructuring effort. The Company disclosed
$15,832,000 in assets and $14,634,161 in debts in its Schedules of
Assets & Liabilities.
HSH DELAWARE: U.S. Trustee Lone Objector to Chapter 11 Plan
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that HSH Delaware GP LLC is facing an objection from the
U.S. Trustee to confirmation of its proposed Chapter 11 plan.
Citing a Jan. 7 opinion in Washington Mutual Inc. reorganization
as precedent, the bankruptcy watchdog for the U.S. Justice
Department says the plan can't release a creditor's claim against
a third party absent affirmative consent by the creditor. The
U.S. Trustee also cites the WaMu opinion to mean that freedom from
suit can only be given to directors, officers and professionals
who worked in the Chapter 11 case. U.S. Bankruptcy Judge Mary F.
Walrath, who wrote the opinion denying confirmation of WaMu's
plan, is the judge presiding over HSH Delaware.
Mr. Rochelle relates that the Debtor negotiated a settlement in
August with lenders owed $550 million. The Plan will convert the
lenders' unpaid fees and expenses into principal owing on the
debt. The maturity will be extended to the end of 2014. The Plan
gives the Company time to sell the equity or the assets. The Plan
was amended last week to permit a merger. If there is a surplus
above the debt to the lenders, the Plan contains an agreed sharing
of the excess between the company and the lenders. Unsecured
creditors are to be paid in full.
Judge Walrath was scheduled to convene a hearing January 18, 2011
at 10:30 a.m., to consider confirmation of HSH Delaware GP LLC's
Plan.
About HSH Delaware
HSH Delaware GP LLC is based in Wilmington, Del. Nine HSH
partnerships were created in 2006 to buy a 26% stake in
HSH Nordbank AG, the world's largest shipping financier, from
WestLB AG for about EUR1.25 billion ($1.76 billion). The
partnerships received unsecured term and revolving loans of
EUR375 million from ABN AMRO bank to fund the purchase of HSH
Nordbank shares.
In September 2009, creditors with claims aggregating $27.8 million
petitioned (Bankr. D. Del. Case No. 09-13145) to send affiliate
HSH Delaware LP into Chapter 7 liquidation. Commerzbank AG,
Lloyds TSB Bank Plc, ABN Amro Bank NV, Calyon, Royal Bank of
Scotland Plc and Landsbanki Islands HF filed the involuntary
Chapter 7 petition.
HSH Delaware filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 10-10187) on January 21, 2010. The
Company estimated its assets and debts at $100 million to
$500 million at the time of the filing.
HSH Delaware's affiliates -- HSH Delaware L.P.; HSH Luxembourg
S.a.r.l.; HSH Luxembourg Coinvest S.a.r.l.; HSH Delaware GP LLC;
HSH Alberta I L.P.; HSH Alberta II L.P.; HSH Alberta V L.P.; HSH
Coinvest (Alberta) L.P.; JCF HSH (DE) GP LP; HSH Delaware L.P.;
HSH Luxembourg S.a.r.l.; and HSH Luxembourg Coinvest S.a.r.l. --
filed separate Chapter 11 petitions.
John Henry Knight, Esq.; Lee E. Kaufman, Esq.; Mark D. Collins,
Esq.; and Robert J. Stearn Jr., Esq., at Richards, Layton &
Finger, P.A., in Wilington, Del., assist the Debtors in their
restructuring effort.
The Debtors' Canadian Counsel is McCarthy Tetrault LLP. The
Debtors' Chief Restructuring Officer is H. Ronald Weissman.
INNKEEPERS USA: Five Mile and Lehman May Acquire New Equity
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Innkeepers USA Trust disclosed the details of a
reorganization structure where Lehman Ali Inc. and Five Mile
Capital Partners LLC will acquire new equity, assuming no better
bid appears at auction. There will be a Feb. 8 hearing to set up
auction procedures and approve agreements underlying the upcoming
reorganization plan.
Mr. Rochelle relates that under the Plan:
* Five Mile and Lehman Ali, a subsidiary of Lehman Brothers
Holdings Inc., together will provide $174.1 million of
equity capital and convert $200.3 million of debt into
equity. Five Mile is the provider of $53 million in
secured financing for the Chapter 11 case, and Lehman
is the holder of $238 million in floating-rate mortgages
on 20 of Innkeepers' 72 properties.
* Midland Loan Services Inc., as servicer for $825 million of
fixed-rate mortgage debt on 45 properties, will emerge from
Chapter 11 with mortgages for $622.5 million on revised
terms.
* Lehman is to receive 50% of the new equity plus $26.2 million
cash in exchange for all its debt. The $70.5 million in
secured loans for the Chapter 11 case will be paid in full.
Midland is supplying debt financing for Lehman's commitment.
* Unsecured creditors are being offered $2.5 million cash if
the class votes for the plan. Secured lenders' deficiency
claims will not participate in the distribution to unsecured
creditors. Also, preference suits against unsecured
creditors will be waived.
* Holders of the 8% preferred stock are offered $5.9 million
cash plus the right to be co-investors for 2% of the new
equity.
* Holders of mortgages on 69 of 72 properties will be paid in
full or have the mortgages modified consensually.
Mr. Rochelle notes that releases are an integral part of the plan
outlined in the agreements filed in bankruptcy court Jan. 14.
Innkeepers' directors and officers, Midland, Five Mile, Lehman,
and Apollo Investment Corp., Innkeepers' current owner, are to
receive releases of claims from the company and creditors.
According to Mr. Rochelle, assuming no other bids at auction, the
Plan will reduce debt by $400 million. Innkeepers says the
transaction proposed by Lehman, Midland and Five Mile has a value
of $1.14 billion covering all of the REIT's properties. With
Lehman and Midland, the Plan is supported by holders of more than
$1 billion of $1.29 billion of pre-bankruptcy secured debt.
Anyone else who makes bid at the auction allowing Innkeepers to
retain all the properties can take advantage of the same financing
that Midland is offering Lehman, so long as financial conditions
are met. To use the Midland financing, Lehman must be paid
$200.3 million cash for its debt.
Mr. Rochelle relates that the auction is to be 45 days after the
hearing for approval of bidding procedures. The commitments from
Lehman and Midland have a March 31 deadline for bankruptcy court
approval. June 30 is the deadline for confirmation of the
reorganization plan. If secured lenders like the Lehman-Midland
bid at the auction, they must bid cash, not their existing debt.
Any competing bid must be at least $362.2 million cash, to cover
all the items in the Lehman-Midland sponsored plan, plus an
overbid.
Innkeepers is urging all third parties to bid for all the hotels.
Innkeepers has a fiduciary out if piecemeal bids end up being the
best offer. However, the Midland financing isn't available for a
piecemeal bid, and neither Midland nor Lehman is required to
support the winner of an auction whose bid doesn't encompass the
entire enterprise.
The motion describes negotiations with a bidder referred to only
as Bidder D, whose identity is being kept secret. In December,
Innkeepers originally picked Bidder D as having the best offer.
Midland, Five Mile, and Lehman then improved their offer and
supplanted Bidder D to become the stalking horse. Early in the
case, the bankruptcy judge refused to approve a proposal where
equity in reorganized Innkeepers would have been shared by Lehman
and Apollo.
About Innkeepers USA Trust
Innkeepers USA Trust is a self-administered Maryland real estate
investment trust with a primary business focus on acquiring
premium-branded upscale extended-stay, mid-priced limited service,
and select-service hotels.
Innkeepers, through its indirect subsidiaries, owns and operates
an expansive portfolio of 72 upscale and mid-priced extended-stay
and select-service hotels, consisting of approximately 10,000
rooms, located in 20 states across the United States.
Apollo Investment Corporation acquired Innkeepers in June 2007.
Innkeepers USA Trust and a number of affiliates filed for
Chapter 11 on July 19, 2010 (Bankr. S.D.N.Y. Case No. 10-13800).
Paul M. Basta, Esq., at Kirkland & Ellis LLP, in New York; Anup
Sathy, P.C., Esq., Marc J. Carmel, Esq., at Kirkland & Ellis in
Chicago; and Daniel T. Donovan, Esq., at Kirkland & Ellis in
Washington, DC, serve as counsel to the Debtors. AlixPartners is
the restructuring advisor and Marc A. Beilinson is the chief
restructuring officer. Moelis & Company is the financial advisor.
Omni Management Group, LLC, is the claims and notice agent. The
petition estimated assets and debts of more than $1 billion as of
the bankruptcy filing.
The Company's consolidated assets for 2009 totaled approximately
$1.5 billion. As of July 19, 2010, the Company and its affiliates
have incurred approximately $1.29 billion of secured debt.
INNOLOG HOLDINGS: Joe Kelley Resigns as Director
------------------------------------------------
On January 10, 2011 Joe Kelley resigned as a director of Innolog
Holdings Corporation. Mr. Kelley's resignation was not as a
result of a disagreement with the Company on any matter relating
to its operations, policies or practices. Mr. Kelley was the
chairperson of the Company's Compensation Committee.
About Innolog Holdings
Fairfax, Virginia-based Innolog Holdings Corporation is a holding
company designed to make acquisitions of companies in the
government services industry. The Company's first acquisition,
Innovative Logistics Techniques, Inc., is a solutions oriented
provider of logistics services primarily to agencies of the U.S.
government, but also to state and local agencies and to private
businesses.
The Company's balance sheet at September 30, 2010, showed
$1.19 million in total assets, $7.74 million in total liabilities,
all current, and a stockholders' deficit of $6.55 million.
"The Company has sustained substantial operating losses in the
prior year and increasing losses in the current periods, and has a
stockholders' deficit of $6.54 million and $2.49 million at
September 30, 2010, and December 31, 2009, respectively," the
Company said in its Form 10-Q for the quarter ended Sept. 30,
2010. "There are many delinquent claims and obligations, such as
payroll taxes, employee income tax withholdings, employee benefit
plan contributions, loans payable and accounts payable, that could
ultimately cause the Company to cease operations."
KAANAM LLC: Hotel's Summary Judgment Motion Granted Against Owner
-----------------------------------------------------------------
Radisson Hotels International, Inc., a Delaware corporation, v.
KaanAm, LLC, a New York limited liability company, and Milind K.
Oza, an individual, Case No. 09-CV-1575 (D. Minn.), is a breach-
of-contract action against franchisee, KaanAm, LLC, and its owner
and guarantor, Milind K. Oza. Radisson seeks summary judgment
that defendants must pay past-due franchise fees, liquidated
damages for lost future revenue, and attorney's fees.
District Judge Patrick J. Schiltz grants summary judgment to
Radisson on its claims against Oza. But because KaanAm filed for
Chapter 11 bankruptcy protection after the hearing on Radisson's
motion, the Court cannot grant summary judgment to Radisson on its
claims against KaanAm.
KaanAm and Radisson entered into a 20-year license agreement in
October 2007 under which KaanAm would operate a Radisson hotel in
Jamestown, New York.
A copy of the Court's January 12, 2011 Order is available at
http://is.gd/BT4QFffrom Leagle.com.
Radisson is represented in the case by:
Kirk W. Reilly, Esq.
Jason J. Stover, Esq.
GRAY, PLANT, MOOTY, MOOTY & BENNETT, P.A.
500 IDS Center
80 South 8th St.
Minneapolis, MN 55402
Telephone: 612-632-3305
Facsimile: 612-632-4305
E-mail: kirk.reilly@gpmlaw.com
jason.stover@gpmlaw.com
The defendants are represented in the case by:
Michael A. Weber, Esq.
WEBER LAW GROUP, P.A.
900 IDS Center
80 South 8th Street
Minneapolis, MN 55402
Telephone: 612-455-4582
E-mail: mweber@mweberlaw.com
KaanAm, LLC, dba Clarion Hotel Jamestown and Conference Center, in
Jamestown, New York, filed for Chapter 11 bankruptcy (Bankr. W.D.
N.Y. Case No. 10-14038) on September 17, 2010. Judge Carl L.
Bucki presides over the case. Arthur G. Baumeister, Jr., Esq. --
abaumeister@amigonesanchez.com -- at Amigone, Sanchez, Mattrey &
Marshall LLP in Buffalo, New York, serves as the Debtor's counsel.
In its petition, the Debtor estimated $1 million to $10 million in
both assets and debts.
KAISER GROUP: Can't Avoid Arbitration of Nova Hut Dispute
---------------------------------------------------------
Bankruptcy Judge Mary F. Walrath denied the request of Kaiser
Group International, Inc., and its debtor-affiliates under Fed. R.
Civ. P. 60(b)(6) for relief from a 2004 district court order,
which stayed its adversary proceeding against Nova Hut a.s.
relating to the construction of a steel mill in the Czech
Republic, and granted Nova Hut's motion to compel arbitration.
Nova Hut's successor, Arcelormittal Ostrava, opposed the Rule
60(b)(6) motion.
Judge Walrath also granted Nova Hut's request for attorneys' fees
and costs.
In 1997, Nova Hut and ICF Kaiser Netherlands B.V., a non-debtor
wholly owned subsidiary of Kaiser Group, entered into an agreement
whereby Kaiser Netherlands agreed to design and construct phase I
of a steel mill at Nova Hut's facility in Ostrava, Czech Republic.
Under the Agreement, the steel mill constructed by Kaiser
Netherlands was required to pass a mandatory quality and quantity
standards performance test. Kaiser International guaranteed
Kaiser Netherlands' performance and pledged its assets as
collateral for a performance letter of credit, which required
annual renewal. Nova Hut financed the project with funds loaned
to it by IFC. In exchange, IFC was provided a conditional
assignment of Nova Hut's rights under the Agreement and the
guarantee.
The Debtors sued in April 2001, alleging breach of contract and
seeking a return of the $11.1 million drawn on the Performance
Letter of Credit. The Debtors also alleged claims for engineering
and financial services provided to Nova Hut ($510,000) and for
return of a contingency fee and warranty reserve ($5.25 million).
On March 18, 2004, the District Court stayed the adversary
proceeding and granted Nova Hut's request to compel arbitration.
On June 29, 2005, the Bankruptcy Court ordered arbitration of the
Debtors' claims against IFC as well.
On January 2, 2004, Kaiser Netherlands filed a Request for
Arbitration with the International Chamber of Commerce,
International Court of Arbitration. Kaiser Netherlands asserted
claims against Nova Hut for the wrongful draw on the Letter of
Credit ($11.1 million), the project development costs ($510,000),
and the fee and warranty reserve ($5.25 million). Nova Hut
asserted counterclaims against Kaiser Netherlands for breach of
the Agreement.
On April 26, 2006, the Arbitral Tribunal issued a 333-page
decision and final award concluding that Kaiser Netherlands had
failed to build the steel mill in accordance with the performance
requirements of the Agreement and that, therefore, Nova Hut was
entitled to draw on the Letter of Credit. The Arbitral Tribunal
granted Kaiser Netherlands' claims for $510,000 in project
development costs and $3.5 million for the contingency fee and
warranty reserve.
In her ruling, Judge Walrath observed that the Debtors, for more
than five years, have sought to avoid the consequences of the
District Court's order and their obligations to arbitrate.
Judge Walrath pointed out that the Debtors opposed all the motions
to send their disputes with Nova Hut and the IFC to arbitration.
When that failed, the Debtors sought to obtain discovery in
Bankruptcy Court to which it would otherwise not be entitled under
the arbitration rules. After those efforts failed, the Debtors
delayed filing any arbitration proceeding for almost five years.
"In the interim, the arbitration filed by Kaiser Netherlands was
resolved, unfavorably to them. In an apparent effort to avoid
losing in arbitration again, the Debtors now seek to be relieved
of the effects of the District Court's Order by filing the instant
motion based on mischaraterizations of legal positions asserted by
Nova Hut in the Arbitral Tribunal," Judge Walrath said.
Judge Walrath held that the Debtors' conduct warrants sanctions,
saying the Debtors' actions have unduly multiplied the
proceedings.
"Hopefully, the imposition of sanctions will cause the Debtors to
cease this improper activity, which wastes not only counsel's time
but the Court's as well," Judge Walrath said.
The case is Kaiser Group International, Inc., et al., v. Nova Hut
a.s. and International Finance Corporation, Adv. Pro. No. 01-928
(Bankr. D. Del.). A copy of Judge Walrath's January 14, 2011
Opinion is available at http://is.gd/RVyOyjfrom Leagle.com.
On June 9, 2000, Kaiser Group International, Inc., and 38 of
its domestic subsidiaries voluntarily filed for protection under
Chapter 11 (Bankr. D. Del. Case Nos. 00-2263 through 00-2301).
Kaiser Group International emerged from chapter 11 under a Second
Amended Plan of Reorganization declared effective on December 18,
2000.
LEHMAN BROTHERS: Newport Wants Amtrol Shares Segregated
-------------------------------------------------------
Newport Global Opportunities Fund L.P. asks the Court to compel
the LBI Trustee to sign an affidavit that Newport's 3,663,125
shares of Amtrol Holdings Inc. common stock previously held by
Lehman Brothers Inc. in segregated, safekeeping, at the request
of Newport, are lost.
Newport relates that, prior to September 15, 2008, it instructed
LBI to transfer all of its securities held by LBI, including
the Amtrol Shares, to Credit Suisse Securities (USA) LLC, but,
for unknown reasons, the transfer did not occur prior to
September 15, 2008. Newport says it is undisputed that it is
the only LBI customer with a claim for the Amtrol Shares.
Newport, in a separate request, seeks permission to file its
motion in a redacted form and a certain exhibit containing
confidential information exchanged between Newport and LBI under
seal.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Nomura Wants Deposition in Japan
-------------------------------------------------
Lehman Brothers Holdings Inc. has asked the U.S. Bankruptcy Court
for the Southern District of New York for an informal conference
to resolve a dispute over where the deposition of Nomura
Securities Co. Ltd.'s officials should take place.
The move came after Nomura Securities allegedly refused to
produce witnesses for deposition outside of Japan. LBHI,
meanwhile, wants the Tokyo-based firm to agree to bring those
witnesses to New York.
In a letter to Judge James Peck, Jayant Tambe, Esq., at Jones
Day, in New York, related that LBHI expressed concern that the
deposition won't be completed before the "fact discovery
deadline" of May 18, 2011, if the dispute is not resolved
immediately.
The Lehman lawyer said the deposition must be held in New York
given that the facilities available for taking depositions on
consular premises in Japan must be booked six months in advance,
and have limited electronic devices.
LBHI is holding a deposition of Nomura officials in connection
with the lawsuit it filed against the firm for allegedly
overstating its claims against the company. Nomura Securities
filed claims demanding more than $40 million.
Mr. Tambe further said that Nomura Securities' assertion that a
defendant should be deposed in its principal place of business
dos not mean that it is already entitled to have its witnesses
deposed in Japan.
In a letter to Judge James Peck, Nomura Securities said there is
no legal basis for the issuance of a court order directing the
firm's witnesses to be deposed in New York especially that LBHI
has not sent a notice of or identified any witness for
deposition.
"The general rule is that the location of a deposition of a
defendant and its employees is their principal place of business
or district of residence," Nomura Securities said in the letter.
The firm also dismissed LBHI's contention that holding a
deposition in Japan is an "enormous burden," pointing out that
LBHI's counsel has taken depositions in Japan before.
As reported in the May 5, 2010 edition of the Troubled Company
Reporter, Lehman Brothers Holdings Inc. and Lehman Brothers
Special Financing Inc. filed adversary proceeding seeking separate
redress against Nomura International plc and Nomura Securities
Co. Ltd. for their egregious inflation by hundreds of millions of
dollars of the proofs of claim they filed under penalty of
perjury against LBSF and LBHI.
Nomura International's Claim Nos. 17198 and 17199 demand more
than $720 million from Debtors under a terminated ISDA Master
Agreement with LBSF, dated as of October 16, 1992. Nomura
Securities' Claim Nos. 17202 and 17203 demand more than
$40 million from Debtors under a terminated ISDA Master Agreement
with LBSF, dated as of September 21, 2000.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Workers Revive Lawsuit Over Retiree Plan
---------------------------------------------------------
Former employees of Lehman Brothers Holdings Inc. are attempting
to revive a lawsuit against its directors who allegedly invested
their retirement savings in stock at the same time the company
was using an accounting trick to cover up its financial
condition, The Wall Street Journal reported.
In court papers, the employees said new revelations about
accounting irregularities and LBHI's exposure to subprime
mortgages support their claim that the company should not have
bought its own stock for an employee retirement fund between
March and September 2008.
Among the new revelations made by the former employees is the
claim that senior Lehman officials knew about the so-called "Repo
105 transactions" and should have made the retirement-plan
fiduciaries aware of the risk created by those deals, WSJ
reported.
A repo transaction is an artificial sale and buy-back deal that
enabled Lehman to hide billions of debts from regulators and
allowed the company to look healthier and less risky when it
reported quarterly financial data.
The employees said those responsible for the retirement plan
should have known the Repo 105 transactions rendered the
company's financial statements "materially inaccurate" and should
have advised the plan of the risk.
"Since even those outside the company questioned the validity of
Lehman's financial statements as early as March 2008, it is
utterly implausible that the director defendants neither knew nor
should have uncovered the truth about the accounting
improprieties," the employees said in court papers, which offered
supporting evidence for the lawsuit they filed early last year.
That initial lawsuit, which had been dismissed last year, said
the directors and the committee overseeing employee-retirement
programs were aware or should have been aware of LBHI's impending
collapse and should have directed the fund to invest the
employees' cash elsewhere instead of allowing the Lehman Brothers
Savings Plan to acquire the company's stock.
The former employees' allegations rely heavily on the report made
by an examiner who conducted an investigation into LBHI's
bankruptcy filing.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Notes Investor Awarded $2.2MM in Arbitration
-------------------------------------------------------------
In another clear signal that Lehman Notes investors may be able to
recoup their losses, a FINRA Arbitration Panel sided this week
with a wealthy couple who bought Lehman "100% principal protected"
notes and other Lehman structured notes from UBS.
Even better news for investors who have suffered Lehman losses is
FINRA's ruling that UBS must not only buy back the notes at their
original cost from Thomas and Christine Montamed, but it must also
pay six percent interest dating back to April 2008, when UBS sold
the couple $2.2 million in Lehman products.
The Montameds bought $1.65 million worth of Lehman "100% Principal
Protection Absolute Return Barrier Notes" and $550,000 of "Return
Optimization Securities" weeks after the Bear Stearns collapse and
less than six months before Lehman Brothers filed for bankruptcy.
Chris Vernon, whose law firm Vernon Healy has represented
investors with nearly $10 million in Lehman notes losses thus
far, said UBS has aggressively sold Lehman products to investors
seeking a safe haven for their money.
"It is for this reason that the term "Principal Protected" is such
an effective and deceptive sales tool to describe structured notes
such as the Lehman notes sold by UBS," Mr. Vernon said.
Mr. Vernon also said UBS used investors such as the Montameds as a
source of funding to shore up failing Lehman Brothers.
"By the latter half of 2007 and well before the 2008 sale involved
in the Motamed case, the credit crisis was well underway and
Lehman's stock price fell," Mr. Vernon said. "At the same time,
Lehman's credit default swap spread -- the cost to insure a loan
to Lehman against default -- increased dramatically. Both the
stock and loan insurance price trends continued through the
February -- June 2008 time period, when UBS sold Lehman notes to
the Motameds."
UBS pitched Lehman notes as "safe" investments in which investors'
principal investment would be protected from losses, even after
warning signs surrounding Lehman's faltering financial outlook had
already begun to surface within securities industry circles that
included UBS, according to Vernon Healy's investigation.
The so-called "principal protected" notes as well as other
structured notes promoted by UBS, were in fact risky, unsecured
loans to Lehman Brothers, according to multiple claims filed by
Vernon Healy on behalf of investors. These risks were realized
when Lehman Brothers' bankruptcy in September 2008 left investors
such as the Montameds, who held Lehman notes and other Lehman
structured products, standing at the back of the line with other
unsecured creditors.
Mr. Vernon said Wall Street's practice of dumping bad products on
Main Street investors continues despite condemnation of this
practice in decades past.
"Wall Street firms periodically use their own clients -- including
many fixed income investors -- as a dumping ground for defective
products they cook up in their home offices and then pitch
worldwide to their financial advisors and clients," Mr. Vernon
said.
This practice continues because it is so profitable for brokerage
firms such as UBS to engage in these unsavory practices,
Mr. Vernon said. But his larger concern is that the current
structured product version of this practice simultaneously enables
the financial industry to borrow billions of dollars from main
street investors with no collateral. As a result, the brokerage
firms not only profit from creating and selling these structured
notes, they also effectively receive loans from their own clients
on terms so favorable that professional lenders would never
consider them.
About Vernon Healy
Vernon Healy is a Naples, Florida law firm that already
represents UBS investors in Florida and multiple other states in
the U.S. Vernon Healy's ongoing investigation of Lehman
structured note sales in the United States has now expanded to
sales of Lehman structured notes in Europe as well as the sales
of other types of structured products sold in the U.S, such as
"reverse convertibles," which UBS refers to as "Yield
Optimization Notes."
The attorneys at Vernon Healy have decades of experience
representing investors who are victims of stock fraud and stock
losses due to broker fraud and brokerage firm fraud and
misconduct. Vernon Healy securities attorneys are experienced in
securities arbitration and business litigation and assist clients
in recovering losses caused by all manner of financial fraud and
negligence.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MESA AIR: Files Memorandum in Support of Plan Confirmation
----------------------------------------------------------
Mesa Air Group, Inc., and its debtor affiliates submitted to the
U.S. Bankruptcy Court for the Southern District of New York a
memorandum of law in support of confirmation of their Second
Amended Joint Plan of Reorganization pursuant to Section 1129 of
the Bankruptcy Code.
The Second Amended Plan is the product of extensive, good-faith
negotiations between the Debtors and the Official Committee of
Unsecured Creditors regarding the treatment of general unsecured
claims, among other things, the Debtors maintain. The Plan, the
Debtors note, is supported by the Creditors' Committee and US
Airways, Inc.
The Court approved the Debtors' Disclosure Statement and
solicitation procedures on November 23, 2010. The Plan
confirmation hearing is scheduled on January 14, 2011, at
9:00 a.m., Eastern time. The hearing was previously scheduled at
10:00 a.m.
The Plan complies with the applicable provisions of the
Bankruptcy Code, Bankruptcy Rules, and Local Bankruptcy Rules,
Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP,
in New York, asserts.
Among other things, the Plan effectuates a reorganization of the
Debtors through the ultimate corporate parent's -- Reorganized
Mesa Air Group -- issuance of new notes and new common stock and
warrants to applicable parties. The Plan also provides for an
internal reorganization, which will preserve the Debtors'
business operations and going concern value, Ms. Grassgreen
relates.
She further notes that the Plan incorporates the terms of the US
Airways Code-Share Tenth Amendment, which provides for an
extension of the Debtors' code-share agreement with their largest
customer, as well as the various fleet restructuring agreements
reached during these cases.
Holders of Interests will neither receive nor retain any property
under the Plan. The Plan will be funded by way of the Debtors'
cash on hand, revenues from ordinary course operations and
proceeds of asset sales. There will be no substantive
consolidation of the Debtors' Estates under the Plan, Ms.
Grassgreen relates.
As consideration for entry into the US Airways Code-Share Tenth
Amendment, US Airways will receive 10% of the New Common Stock,
and the Management Equity Pool will be reserved for distribution
under the management/employee equity incentive plan that will be
established by the Reorganized Board, Ms. Grassgreen continues.
Plan Complies with Section 1129 Requirements
Ms. Grassgreen, on behalf of the Debtors, stepped Judge Martin
Glenn through the requirements of Sections 1122, 1123, and 1129
of the Bankruptcy Code, necessary for a confirmation of the
Debtors' Plan:
(a) The Plan properly classifies Claims and Interests as
required under Section 1122. Given that the Debtors will
not be substantively consolidated, each Class is divided
into subclasses representing the specific Debtor against
which the Claim is asserted. A Claim or Interest is
placed in a Class only if that Claim or Interest is
substantially similar to other Claims or Interests within
that Class.
(b) The Plan complies with Section 1123(a) in that it:
-- designates Classes of Claims and Interests as required
by Section 1123(a)(1). Administrative Claims, Priority
Tax Claims and Secured Tax Claims are not classified
because these claims must receive the treatment
specified in the Bankruptcy Code and cannot otherwise
be impaired;
-- specifies the Classes that are unimpaired as required
under Section 1123(a)(2);
-- sets forth the treatment of Claims and Interests as
required under Section 1123(a)(3);
-- provides for the same treatment of each Claim or
Interest, in each respective Class and subclass,
satisfying Section 1123(a)(4);
-- provides for adequate means for its implementation,
satisfying Section 1123(a)(5). Among other things, the
Plan provides for the continuation of the separate
legal existence of each Debtor as a Reorganized Debtor
or Liquidating Debtor, as applicable, and funding from
and after the Effective Date;
-- provides that the Post-Effective Date Debtors' Charter
Documents will be deemed amended to prohibit the
issuance by the Reorganized Debtors and the Liquidating
Debtors of non-voting securities to the extent required
under Section 1123(a)(6), subject to further amendment
of the documents as permitted by applicable law. The
Plan complies with the requirements of Section
1123(a)(6); and
-- provides that the existing officers of all the
Reorganized Debtors will remain in their existing
positions, satisfying Section 1123(a)(7).
(c) The Plan includes provisions that are permissible under
Section 1123(b), including:
-- Classes of Claims are either impaired or unimpaired as
provided in Section 1123(b)(1);
-- As provided under Section 1123(b)(2), the Plan provides
for the assumption of all executory contracts and
unexpired leases listed in the Plan Supplement. The
remaining executory contracts and unexpired leases are
rejected; and
-- Section 1123(b)(3) provides that a plan may provide for
settlement or retention of any claim or interest
belonging to the debtor. The Plan provides that the
Debtors and the Creditors' Committee have waived the
right to pursue Avoidance Actions under Section 547 of
the Bankruptcy Code. The Plan also further provides
that all other Causes of Action or Defenses are
reserved, unless they are expressly waived by the
Debtors.
(d) The Plan complies with the requirements of Section
1129(a)(2). The Plan complies with the disclosure and
solicitation requirements of Sections 1125 and 1126 of the
Bankruptcy Code.
(e) The Plan has been proposed in good faith and not by any
means forbidden by law, satisfying Section 1129(a)(3).
(f) The Plan provides that payments made by the Debtors for
services or costs and expenses are subject to Court
approval, satisfying Section 1129(a)(4).
(g) The Plan complies with Section 1129(a)(5). Among other
things, the Plan provides that the existing executive
officers of the Reorganized Debtors are expected to remain
in their existing positions.
(h) Section 1129(a)(6) is inapplicable to the Debtors, whose
rates are subject to the jurisdiction of any governmental
regulatory agency.
(i) The Plan is in the best interests of the Debtors'
creditors and interest holders, satisfying Section
1129(a)(7).
(j) The Plan has been accepted by certain impaired classes,
satisfying the requirements of Section 1129(a)(8).
Holders of Claims Classes 1(a)-(l) and holders of Secured
Aircraft Claims in Classes 2(a)-(l) are unimpaired under
the Plan and, pursuant to Section 1126(f) of the
Bankruptcy Code, are conclusively presumed to have
accepted the Plan.
Classes 2(a)-(l) Secured Claims, Classes 3(a)-(l) General
Unsecured Claims, Classes 4(a)-(l) De Minimis Convenience
Claims, Classes 5(a)-(b) 510(a) Subrogation Claims, and
Classes 6(a)-(l) 2012 Noteholder Claims are the impaired
Classes of Claims eligible to vote on the Plan, with the
exception of certain Allowed Secured Aircraft Claims in
Class 2, which are unimpaired. The results of these votes
will be set forth in the Tabulation Declarations, which
are yet to be filed.
Holders of Claims in Classes 7(a)-(l) will not receive
any distributions under the Plan and, therefore, are
deemed to have rejected the Plan. As to Classes 7(a)-(l)
and other Classes that reject the Plan, if any, the Plan
may be confirmed under the "cram down" provisions of
Section 1129(b) of the Bankruptcy Code.
(k) The Plan provides for payment in full of all Allowed
Priority Claims. Section 1129(a)(9) is satisfied.
(l) The Debtors believe that the tabulation declarations will
reflect that at least one impaired Class voted to accept
the Plan, thus satisfying Section 1129(a)(10).
(m) The Plan is not likely to be followed by liquidation or
the need for further financial reorganization. The Plan
is feasible, satisfying Section 1129(a)(11).
(n) The Plan provides that all fees and charges payable have
been or will be paid in cash on the Effective Date and
thereafter as may be required. The Plan satisfies the
requirements of Section 1129(a)(12).
(o) Sections 1129(a)(13), (14), (15), and (16) are
inapplicable.
(p) The Plan also satisfies the "cram down" requirements of
Section 1129(b) with respect to rejecting Classes. The
Debtors submit that the Plan does not discriminate
unfairly and is fair and equitable with respect to all
Classes.
The Debtors submit that the Plan should be confirmed.
About Mesa Air Group
Mesa currently operates 130 aircraft with approximately 700 daily
system departures to 127 cities, 41 states, Canada, and Mexico.
Mesa operates as Delta Connection, US Airways Express and United
Express under contractual agreements with Delta Air Lines, US
Airways and United Airlines, respectively, and independently as
Mesa Airlines and go! Mokulele. This operation links Honolulu to
the neighbor island airports of Hilo, Kahului, Kona and Lihue. The
Company, founded by Larry and Janie Risley in New Mexico in 1982,
has approximately 3,500 employees.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing
assets of $976 million against debt totaling $869 million as of
Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MESA AIR: Addresses Plan Confirmation Objections
------------------------------------------------
Mesa Air Group Inc. and its units submitted an omnibus reply to
the objections and informal responses to the confirmation of their
Second Amended Joint Plan of Reorganization.
The Plan has the support of the Official Committee of Unsecured
Creditors, certain of the Debtors' key aircraft finance parties,
US Airways, Inc., and United Airlines, Inc., the Debtors
reiterate. The Debtors' extended code-share agreement with US
Airways and US Airways' support of the Plan require the
confirmation of the Plan by January 17, 2011, Debra I.
Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, in New
York, notes.
As has been their practice throughout their bankruptcy cases, the
Debtors have worked with the parties that have filed formal
objections and those that presented informal clarifications to
certain provisions of the Plan, and have resolved or made changes
to the Plan with respect to 35 of 40 Responses.
According to Ms. Grassgreen, five of the unresolved Responses
relate to disputes regarding (i) the cure amount or
enforceability of attorneys' fees due to aircraft finance parties
under the controlling agreements, or (ii) the scope of agreements
to be assumed and cure amounts. The Debtors will seek to
consensually resolve the disputes after confirmation, she informs
the Court.
If the cure disputes are not resolved, they will be heard on
January 26, 2011, pursuant to the cure objection procedure
outlined in the Plan. The single remaining substantive objection
is the subject of a separate pretrial brief, Ms. Grassgreen says.
A summary chart of the non-material modifications made to the
Plan as a result of the Responses is available at no charge at:
http://bankrupt.com/misc/Mesa_SummaryConfObjReso011111.pdf
Debtors File Pretrial Memorandum in Response to
BF Holdings' Confirmation Objection
On January 12, 2011, the Debtors filed a memorandum of law in
response to BF Claims Holdings I, LLC's objection to confirmation
of the Debtors' Second Amended Joint Plan of Reorganization and
approval of the related Plan Supplement.
BFCH or BF Holdings's objection is on account of $115,000,000 in
claims against Mesa Air Group, Inc. and Mesa Airlines, Inc.,
which were purchased by Kitty Hawk Onshore Fund LP, Kitty Hawk
Master Fund Ltd., Kitty Hawk Master Fund II Ltd., and Brigade
Leveraged Capital Structures Fund Ltd., each of which is a Cayman
Island-exempted company, according to Debra I. Grassgreen, Esq.,
at Pachulski Stang Ziehl & Jones LLP, in New York.
BF Holdings objects to six corporate governance provisions in the
Plan and to the selection of the Board of Directors designees.
In response, the Debtors have made a number of changes to the
Corporate Governance Mechanisms, Ms. Grassgreen informs the
Court.
The Debtors and the Official Committee of Unsecured Creditors,
with the consent of US Airways, Inc., have agreed to modify the
Corporate Governance Mechanisms:
* The term of the Shareholders Agreement has been shortened
from the earlier of five years, when 80% of the New
Warrants are exercised, or following an initial public
offering, to the earlier of three years or when 80% of the
New Warrants are exercised;
* The Shareholders Agreement will apply to all Class 3
Creditors, rather than only to those holding 5% or more of
New Common Stock;
* A shareholders' meeting will be required within 15 months
of the Effective Date and annually thereafter;
* The threshold required to call a special shareholders'
meeting has been reduced from a majority to the lesser of
25% of Mesa Air Group's shares determined on a fully
diluted basis or 50% of Mesa Air Group's shares; and
* Shareholder consent will be required for certain key
changes to the Bylaws.
Absent the Shareholders Agreement, US Airways and the U.S.
Citizens that have Allowed Claims on the Effective Date would
receive a windfall in the form of voting power that is grossly
disproportionate to their actual claim holdings. To address this
inequity, the Plan, as modified, requires that Creditors execute
and be bound by the Shareholders Agreement, Ms. Grassgreen
relates.
The Shareholders Agreement does not take away any valid right or
interest from Brigade or any other Creditor -- it simply prevents
U.S. citizens from receiving more voting power post-confirmation
than they are otherwise entitled to on account of their
proportionate claim holdings for a limited period of time, Ms.
Grassgreen explains. Thus, rather than "entrench" the Board, the
Shareholders Agreement implements the Bankruptcy Code's paramount
goal of equality of distribution, she tells the Court.
The Plan and the Corporate Governance Mechanisms were the subject
of extensive good faith, arms-length negotiations between the
Debtors, the Creditors' Committee, US Airways, and key aircraft
finance parties. Each of the corporate governance provisions has
a valid and appropriate business purpose and complies with
applicable Nevada corporate law, according to Ms. Grassgreen.
In light of these facts, BF Holdings' bald assertions that the
Corporate Governance Mechanisms were "designed to entrench the
Committee's Board designees" have absolutely no factual support.
Furthermore, BF Holdings has not presented any evidence in
support of its assertion that the Corporate Governance Mechanisms
are extraordinary, Ms. Grassgreen points out.
There is nothing about the Corporate Governance Mechanisms that
renders the Plan unconfirmable. BF Holdings' objection should be
overruled, she asserts.
Creditors' Committee Files Pretrial Brief
in Response to BF Holdings' Confirmation Objection
The Official Committee of Unsecured Creditors, on January 12,
2011, also filed a pretrial brief in reply to the objection of BF
Claims Holdings I LLC, stating that the assertions of BFCH or BF
Holdings provide no basis to prevent confirmation of the Plan
under the Bankruptcy Code.
The Debtors and the Creditors' Committee worked together in an
effort to solve the myriad of complex problems they were faced
with, the Committee relates. Tackling the issues brought and
Debtors and the Creditors' Committee together and in the end,
they agreed that a stand alone, debt for equity plan was in the
best interest of creditors, the Creditors' Committee's counsel,
Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York,
tells the Court.
The major issue with such a plan was the need to balance the
equality of like creditors under the Bankruptcy Code with the
strict foreign ownership prohibitions of the Federal Aviation
Administration. The proposed Plan essentially presents a hybrid
debt for equity structure, which accomplishes the necessary
balance without discrimination against either the domestic or
foreign creditors, according to Mr. Miller.
Mr. Miller contends that BF Holdings' objection is "an attempt by
a creditor -- who will likely hold, if its claims are allowed,
less than 5% of the [fully diluted] equity of the Reorganized
Debtors -- to have a seat on the Reorganized Debtors' Board of
Directors and dictate the provisions of the Debtors' corporate
governance documents, when they have no right under bankruptcy or
corporate law to do so."
The dissatisfaction of one minority creditor -- which only
recently acquired its claims -- with the Creditors' Committee's
and the Debtors' sound choices provides no basis to prevent
confirmation of the Plan, Mr. Miller argues.
While an unusual requirement, the Shareholders Agreement was
necessitated by the large number of foreign creditors that are
unable to hold voting securities in the Debtors due only to
restrictions imposed by the FAA. Without the Shareholders
Agreement, small economic stakeholders would be able to control
the discretion of the Reorganized Debtors, Mr. Miller tells the
Court. He avers that the Shareholders Agreement is no different
from voting trusts, which have been previously approved by
bankruptcy courts as a reasonable restriction on shareholder
voting rights.
The corporate governance provisions are provisions that were in
the Debtors' Charter and Bylaws before the Petition Date, and are
not nearly as rare as BF Holdings paints them to be, Mr. Miller
says. He notes that the three other companies where BF Holdings
currently holds a 5% or greater ownership all have corporate
governance provisions similar to what it complains of at this
time.
Notwithstanding the reasonable nature of the corporate governance
provisions, the Creditors' Committee and the Debtors have agreed
to modify several of the provisions that BF Holdings complains of
in an effort to address the concerns, Mr. Miller informs the
Court.
While the Creditors' Committee believes that the Bylaws as
drafted are fair and reasonable, it consulted with the Debtors
and determined to make these changes to the Bylaws to address BF
Holdings' concerns:
* The Bylaws will be amended to provide that an initial
shareholders meeting will be held not later than 15 months
following the Effective Date of the Debtors' Plan of
Reorganization, and thereafter every 12 months.
* The Bylaws will be amended to provide that shares
representing the lesser of (i) 25% of the fully diluted
equity of Reorganized Mesa, and (ii) 50% of the shares
entitled to vote at the meeting may call a special
shareholders meeting.
* The Bylaws will be amended to reduce the required
shareholder approval to amend the Bylaws from 66-2/3% to a
majority of shares issued, outstanding and entitled to
vote and to provide that the Board may not, without also
obtaining shareholder approval, modify the provisions of
the Bylaws regarding annual or special meetings, or the
requisite approval of amendments to the Bylaws.
These modifications should remove any doubt that ultimate control
of the Reorganized Debtors will remain where it belongs -- with
the shareholders. The Bylaws and other corporate governance
documents contain reasonable provisions negotiated by the Debtors
and the Creditors' Committee to permit the Board and Company to
operate on a day-to-day basis and to ensure the fair treatment of
all stakeholders, Mr. Miller asserts.
The Creditors Committee believes that the Plan will produce the
highest and best possible recovery for the Debtors' economic
stakeholders and, therefore, fully supports the Plan.
Upon information and belief, all voting classes of creditors
approved the Plan, Mr. Miller notes. The Debtors will be filing
the appropriate Declaration with the voting results.
BF Holdings Files Pretrial Memorandum
in Support of Confirmation Objection
BF Claims Holdings I LLC, in its January 12, 2011 pretrial
memorandum in support of its objection to the confirmation of the
Debtors' Second Amended Joint Plan of Reorganization, asserts
that absent substantive revisions to provisions related to the
corporate governance of the Debtors' post-emergence business, the
Plan fails to meet the Bankruptcy Code requirements for
confirmation.
On behalf of BFCH or BF Holdings, John R. Ashmead, Esq., at
Seward & Kissel LLP, in New York, argues that the Plan provides
for disparate and discriminating treatment for claimants within
the same class; permits the issuance of non-voting equity
securities; and contains provisions wholly inconsistent with both
public policy and the interests of the Debtors' creditors.
Moreover, the combined corporate governance mechanisms
articulated in the Plan and the supplemental Plan Supplement will
effectively strip the future shareholders of their rightful
voting power, Mr. Ashmead tells the Court. These provisions not
only silence the voice of any creditor-cum-shareholder, but also
entrench the majority of the initial board of directors, the
members of which lack any economic stake in the business of the
post-emergence Debtors, he contends.
In a separate filing, BF Holdings submitted to the Court its
witness list, deposition designations, and exhibit list for the
hearing scheduled for January 14, 2011.
The Debtors also submitted an index of exhibits and a witness
list for the January 14, 2011 evidentiary hearing on the
objection of BF Holdings.
Stipulations Resolving Confirmation Responses
The Debtors filed, and asked the Court to approve, four
stipulations resolving certain Responses.
* Stipulation and Agreement with Respect to Treatment of the
CRJ Equipment Trust Secured Claim under the Debtors' Plan
of Reorganization and Cure of Default among Mesa Airlines,
Inc., and CRJ Equipment Trust 2004 and Wells Fargo Bank,
N.A.
* Stipulation with Respect to Proposed Assumption of
Aircraft Lease Agreement with RASPRO Trust 2005 between
Mesa Airlines, Inc. and RASPRO Trust 2005.
* Settlement Agreement and Mutual Release Regarding the Cure
Amounts and Withdrawal of Claims of Sabre among Mesa
Airlines, Inc., and Sabre, Inc., Sabre Travel
International Limited, and Sabre Travel Network.
* Stipulation with Respect to Treatment and Withdrawal of
Proof of Claim Nos. 1134, 1125, and 1136 among Mesa Air
Group, Inc., et al., and Compass Bank, N.A.
Among other things, the Debtors agree to the payment of certain
amounts and to include certain language in the proposed
confirmation order to their Plan regarding certain issues.
Copies of the stipulations are available at no charge at:
http://bankrupt.com/misc/Mesa_4StipsConfResp011111.pdf
About Mesa Air Group
Mesa currently operates 130 aircraft with approximately 700 daily
system departures to 127 cities, 41 states, Canada, and Mexico.
Mesa operates as Delta Connection, US Airways Express and United
Express under contractual agreements with Delta Air Lines, US
Airways and United Airlines, respectively, and independently as
Mesa Airlines and go! Mokulele. This operation links Honolulu to
the neighbor island airports of Hilo, Kahului, Kona and Lihue. The
Company, founded by Larry and Janie Risley in New Mexico in 1982,
has approximately 3,500 employees.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing
assets of $976 million against debt totaling $869 million as of
Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MESA AIR: Seeks Approval of Non-Material Plan Modifications
-----------------------------------------------------------
Mesa Air Group Inc. and its units seek approval of certain non-
material modifications to the Plan to reflect, among other things,
(i) clarifications regarding the scope or application of certain
Plan provisions, (ii) clarifications and resolutions in response
to certain informal responses or requests received by the Debtors,
(iii) consensual resolution of certain filed objections to
confirmation of the Plan or the Plan Supplement, and (iv) the
correction of scrivener's errors.
The proposed modifications do not alter the classification of
claims and, therefore, do not implicate the classification
requirements of Section 1122 of the Bankruptcy Code. In
addition, the proposed modifications do not affect compliance
with the requirements of Section 1123, Debra I. Grassgreen, Esq.,
at Pachulski Stang Ziehl & Jones LLP, in New York, assures the
Court. The modifications satisfy the requirements of Section
1127(a), she says.
Ms. Grassgreen notes that only modifications that are "material"
require solicitation. Additional disclosure or solicitation of
votes is not required. The modifications should be approved and
the Plan, with the modifications, should be deemed accepted, she
asserts.
Contemporaneous with the filing of their Omnibus Reply, the
Debtors are filing and serving the parties that have requested
notice in these cases and the parties that have filed objections
to the Plan or presented an informal Response, a blacklined
version of the Plan and Plan Supplement reflecting the changes to
the version of the Plan that was distributed with the Disclosure
Statement and solicitation materials.
Blacklined copies of the Plan and Plan Supplement are available
at no charge at:
http://bankrupt.com/misc/Mesa_Blacklined2ndAmPlanReso01-2011.pdf
http://bankrupt.com/misc/Mesa_BlacklinePlanSupplement01-2011.pdf
As the Debtors continue to work toward resolution of the
Responses, certain additional modifications may be referenced on
the record during the confirmation hearing, according to Ms.
Grassgreen.
About Mesa Air Group
Mesa currently operates 130 aircraft with approximately 700 daily
system departures to 127 cities, 41 states, Canada, and Mexico.
Mesa operates as Delta Connection, US Airways Express and United
Express under contractual agreements with Delta Air Lines, US
Airways and United Airlines, respectively, and independently as
Mesa Airlines and go! Mokulele. This operation links Honolulu to
the neighbor island airports of Hilo, Kahului, Kona and Lihue. The
Company, founded by Larry and Janie Risley in New Mexico in 1982,
has approximately 3,500 employees.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing
assets of $976 million against debt totaling $869 million as of
Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MOLECULAR INSIGHT: Files Schedules of Assets and Liabilities
------------------------------------------------------------
Molecular Insight Pharmaceuticals, Inc., filed with the U.S.
Bankruptcy Court for the District of Massachusetts its schedules
of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- ------------
A. Real Property $1,700,000
B. Personal Property $19,872,579
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $201,794,051
E. Creditors Holding
Unsecured Priority
Claims 484
F. Creditors Holding
Unsecured Non-priority
Claims $676,192
----------- ------------
TOTAL $21,572,579 $202,470,727
A copy of the Debtor's schedules of assets and liabilities is
available for free at:
http://bankrupt.com/misc/MolecularInsight.SAL.pdf
About Molecular Insight
Cambridge, Massachusetts-based Molecular Insight Pharmaceuticals,
Inc., is a clinical-stage biopharmaceutical company that provides
services on the detection and treatment of various forms of cancer
and other life-threatening diseases. The Debtor disclosed
$36,453,000 in total assets and $198,829,000 in total debts as of
September 30, 2010.
Molecular Insight filed for Chapter 11 bankruptcy protection on
December 9, 2010 (Bankr. D. Mass. Case No. 10-23355). Alan L.
Braunstein, Esq., at Riemer & Braunstein, LLP, serves as
the Debtor's local Massachusetts counsel. Kramer Levin Naftalis &
Franklin LLP serves as the Debtor's lead bankruptcy counsel.
Foley & Lardner LLP is the Debtor's bankruptcy counsel. CRT
Capital Group LLC is the Debtor's financial advisor. Tatum LLC, a
division of SFN Professional Services LLC, is the Debtor's
financial consultant. Omni Management Group, LLC, is the claims,
and balloting agent.
MURRAY HILL: Said to Be in Default on Shorenstein Mezzanine Debt
----------------------------------------------------------------
Theresa Agovino, writing for Crain's New York Business, reports
that Murray Hill Properties has defaulted on its loan at 1180
Sixth Ave., sources said, and it has tapped a real estate
investment bank, The Carlton Group, to help salvage its
investment.
Shorenstein Properties owns the mezzanine debt on the 23-story,
400,000-square-foot property. According to Ms. Agovino, sources
said Shorenstein has told real estate executives it may foreclose.
Ms. Agovino says Robert Underhill, Shorenstein's head of capital
transactions, declined to comment.
Murray Hill President Norman Sturner denied the reports,
categorically. "Murray Hill Properties has not defaulted on its
loans for 1180 Sixth Ave.," he said, according to Ms. Agovino.
Ms. Agovino relates sources said Carlton's chairman, Howard
Michaels, is out looking for about $245 million. Mr. Michaels and
Murray Hill Chairman Neil Siderow did not return calls for
comment.
Ms. Agovino relates Murray Hill acted with The Carlyle Group in
the acquisition of 1180 Sixth Ave. The firm also recently bought
509 Fifth Ave. for $32 million.
Murray Hill owns four office towers in Manhattan and one in
Westchester.
NEXTMART INC: Significant Losses Prompt Going Concern Doubt
-----------------------------------------------------------
NextMart, Inc., filed on January 13, 2011, its annual report on
Form 10-K for the fiscal year ended September 30, 2010.
Bernstein & Pinchuk LLP, in New York, expressed substantial doubt
about NextMark, Inc.'s ability to continue as a going concern.
The independent auditors noted that the Company has incurred
significant losses from operations for the two years ended
September 30, 2010, and has a working capital deficiency.
As of September 30, 2010, the Company is in default under its
convertible debt settlement agreement. As of the date of the
filing of the quarterly report, the Company is in default of its
amendment on convertible debt settlement agreement signed on
October 22, 2010.
The Company reported a net loss of $10.1 million on $0 revenue for
fiscal 2010, compared with a net loss of $8.9 million on $98,852
of revenue for fiscal 2009.
The Company's balance sheet at September 30, 2010, showed
$1.4 million in total assets, $3.6 million in total liabilities,
and a stockholders' deficit of $2.2 million.
A full-text copy of the Form 10-K is available for free at:
http://researcharchives.com/t/s?723b
Beijing, PRC-based NextMart, Inc., was originally incorporated
under the laws of Minnesota in 1972 and was previously known as SE
Global Equity. In May 2007, the Company reincorporated into the
State of Delaware and changed its name to NextMart, Inc. The
Company plans to leverage the art event and art media advertising
and marketing channels acquired from Beijing Chinese Art
Exposition's Media Co., Ltd. ("CIGE"), a leading Chinese art
services, events and media company, to offer unique art related
marketing and advertising services targeting China's wealthy
consumers.
NORTHWESTERN STONE: Files Schedules of Assets and Liabilities
-------------------------------------------------------------
Northwestern Stone, LLC, filed with the U.S. Bankruptcy Court for
the Western District of Wisconsin its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $14,335,000
B. Personal Property $10,903,172
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $10,451,313
E. Creditors Holding
Unsecured Priority
Claims $140,962
F. Creditors Holding
Unsecured Non-priority
Claims $1,488,353
----------- ------------
TOTAL $25,238,172 $12,080,628
A copy of the Debtor's schedules of assets and liabilities is
available for free at:
http://bankrupt.com/misc/NorthwesternStone.SAL.pdf
About Northwestern Stone
Middleton, Wisconsin-based Northwestern Stone, LLC, operates a
gravel quarry business at four separate locations: one in
Sauk County (Swiss Valley Road, Prairie de Sac), and three in Dane
County (4373 Pleasant View Road, Middleton, 6166 Ramford Court,
Springfield, and 3060 Getz Road, Springdale). It filed for
Chapter 11 bankruptcy protection on December 16, 2010 (Bankr. W.D.
Wis. Case No. 10-19137). Timothy J. Peyton, Esq., who has an
office in Madison, Wisconsin, serves as the Debtor's bankruptcy
counsel. The Debtor estimated its assets and debts at $10 million
to $50 million.
NUGEN HOLDINGS: Webb & Company Raises Going Concern Doubt
---------------------------------------------------------
NuGen Holdings, Inc., filed on January 13, 2010, its annual report
on Form 10-K for the fiscal year ended September 30, 2010.
Webb & Company, P.A., in Boynton Beach, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has a net loss of $1,642,086, an accumulated deficit of
$4,532,289, and negative cash flows from operations of $1,492,451.
The Company reported a net loss of $1,642,086 on $432,989 of
revenues for fiscal 2010, compared with a net loss of $322,509 on
$796,847 of revenue for fiscal 2009.
The Company's balance sheet at September 30, 2010, showed
$1,402,544 in total assets, $1,247,295 in total liabilities, and
stockholders' equity of $155,249.
A full-text copy of the Form 10-K is available for free at:
http://researcharchives.com/t/s?723e
Ashburn, Va.-based NuGen Holdings, Inc., is, through its NuGen
subsidiary, engaged in the development, design, and marketing of a
technology related to creating a permanent magnet electrical motor
systems.
NUTRACEA: Settles with SEC on Alleged Accounting Irregularities
---------------------------------------------------------------
NutraCea has reached a settlement with the Securities and Exchange
Commission regarding an investigation into alleged accounting
irregularities.
NutraCea has settled the case without admitting or denying the
charges. No financial or regulatory penalties were assessed
against the Company.
In the fall of 2008, the Audit Committee of NutraCea's Board of
Directors initiated an investigation into accounting
irregularities surfaced by the Company's internal staff. Later
that year, NutraCea's Audit Committee referred the matter to the
SEC and an informal investigation was initiated. In February
2009, the SEC's informal investigation was converted into a formal
investigation, resulting in the filing of shareholder and
derivative lawsuits that were eventually granted class action
status.
In March 2009, the Board accepted former CEO Brad Edson's
resignation and appointed Jim Lintzenich as Interim CEO. W. John
Short joined the company in July 2009 and was appointed Chairman
and CEO in the fourth quarter. On November 10, 2009 NutraCea
filed for protection under Chapter 11 of the US Bankruptcy Code.
The Company exited Chapter 11 on November 30, 2010.
Commenting on the settlement with the SEC, Short said, "We are
pleased to have resolved this matter. It has been a time consuming
and expensive process. During the course of the SEC
investigation, our management and Board of Directors have
cooperated fully with the SEC. At the same time, we took a number
of initiatives to strengthen our Company as we worked toward
emergence from Chapter 11 including:
The engagement of special counsel during the SEC investigation to
assist in developing and implementing best practices in corporate
governance, compliance and internal control policies and
procedures.
In April 2010, John Quinn, a highly experienced professional with
over 30 years of public accounting experience, joined NutraCea's
Board as head of the Audit Committee.
In June 2010, Dale Belt, a dual registered CPA with broad
experience in financial management and restructuring, joined the
Company as Chief Financial Officer and Chief Accounting Officer."
Short continued, "Overall, we have made dramatic improvements in
our internal processes and controls while significantly
strengthening our staff. None of the management or accounting
staff investigated by the SEC remain with the company.
"While there is still much to be done, our recent emergence from
Chapter 11 and this settlement with the SEC, will allow us to
redirect significant management and financial resources toward
building a profitable and sustainable business for our
shareholders and other constituencies."
About NutraCea
Phoenix, Arizona-based NutraCea is a world leader in production
and utilization of stabilized rice bran. NutraCea holds many
patents for stabilized rice bran production technology and
proprietary products derived from SRB. NutraCea's proprietary
technology enables the creation of food and nutrition products to
be unlocked from rice bran, normally a waste by-product of
standard rice processing.
Nutracea filed for Chapter 11 bankruptcy protection November 10,
2009 (Bankr. D. Ariz. Case No. 09-28817). S. Cary Forrester,
Esq., at Forrester & Worth, PLLC, represents the Debtor. The
Company estimated assets at $50 million to $100 million and debts
at $10 million to $50 million.
NutraCea has emerged from Chapter 11 bankruptcy protection
effective November 30, 2010.
PEACOCK GAP: Mid-February Hearing Set for Syufy Takeover
--------------------------------------------------------
Jessica Bernstein-Wax, writing for Marin Independent Journal,
reports that Judge Thomas Carlson of the U.S. Bankruptcy Court for
the Northern District of California will hold a hearing mid-
February to consider Syufy Enterprises' bid to take over the
Peacock Gap Country Club and Spa.
"Assuming that the plan is confirmed, we would become the new
owners," said Andrew McCullough, Syufy's general counsel,
according to the Independent Journal. "We're really excited about
this. We think it's going to be a wonderful opportunity to take
this asset that's just been languishing and make it into something
the community can be proud of."
According to the report, Mr. McCullough said Syufy plans to finish
the building, which is open to the elements, and put a cafe and
pro shop there. Syufy will then evaluate how many of the other
construction plans to complete.
Peacock Gap Properties LLC is current owner of the 50-year-old,
semi-private 18-hole golf course in East San Rafael. The
Independent Journal report it filed for bankruptcy after starting
a renovation project but running out of cash part-way through.
The Chapter 11 bankruptcy petition was filed December 30, 2009.
The report relates Syufy purchased Peacock Gap's nearly
$11.5 million debt to Nara Bank of Los Angeles in 2010 to avert
foreclosure of the property. Syufy also gave the owners a
$150,000 loan to cover operating costs until the sale is
finalized.
Rajiv Parikh is the court-appointed interim manager of the Peacock
Gap.
Scott McNutt, Esq., represents Peacock Gap Properties in the
bankruptcy proceedings.
PJM ENTERPRISES: Avoidance Suit Against IRS Goes to Trial
---------------------------------------------------------
Robert E. Eggmann, the Chapter 7 Trustee for PJM Enterprises of
Marion, Inc., filed a complaint on June 28, 2010, to avoid
$8,158.44 in transfers from the Debtor to the Illinois Department
of Revenue under 11 U.S.C. Sec. 547(b) and recover the sums for
the benefit of the estate. The Defendant filed a motion for
summary judgment on October 6, 2010.
The Court denied the motion for summary judgment. In order to
receive the right to the levied funds after the levy has been
uncontested for 20 days, as the Defendant seeks, the Defendant
must first make a proper demand upon the taxpayer and allow the
taxpayer 10 days to respond to the demand. If the Department
receives no response in these 10 days, only then may the
Department levy the taxpayer's accounts "held by a financial
organization." Once the demand period has expired and the funds
have been levied, the taxpayer has another 20 days to contest the
levy. The Plaintiff does not dispute that 20 days passed after
the Defendant levied the Debtor's account without any kind of
response from the Debtor. Nevertheless, there is no fact before
the Court that the Defendant made a proper demand upon the Debtor
before levying, as required by 35 ILL. COMP. STAT. 5/1109.
Whether or not a proper demand was made by the Defendant upon the
Debtor is a fact material to the determination of whether the
Debtor's rights in the levied funds were extinguished by inaction.
The Court cannot grant the Defendant summary judgment because
there is a genuine issue regarding this material fact.
The case is Robert E. Eggmann, Trustee, v. Illinois Department of
Revenue, Adv. Pro. No. 10-4062 (Bankr. S.D. Ill.). A copy of
Bankruptcy Judge Kenneth J. Meyers' January 14, 2011 Opinion is
available at http://is.gd/qS6J9Zfrom Leagle.com.
PJM Enterprises of Marion, Inc., PJM filed its Chapter 11 petition
on June 26, 2008 (Bankr. S.D. Ill. Case No. 08-40976). Darrell W.
Dunham, Esq., represented the Debtor in its restructuring efforts.
The Debtor estimated assets and debts of $1 million to $10 million
when it filed for bankruptcy. The case was converted to one under
Chapter 7 on February 20, 2009.
RICHARD RUBIO: Court Dismisses Chapter 11 Case
----------------------------------------------
Bankruptcy Judge Alan S. Trust dismissed the Chapter 11 case of
Richard and Eileen Rubio. The United States Trustee sought
dismissal or, in the alternative, conversion of the case to
Chapter 7. The Rubios objected. The U.S. Trustee cited the
Rubios's postpetition losses and inability to reorganize, and
their failure to timely file monthly operating reports.
A copy of the Court's January 13, 2011 Decision and Order is
available at http://is.gd/uzRuLzfrom Leagle.com.
About the Rubios, Coachworks & Tuscan Sun
Richard Rubio is the 100% shareholder of Westhampton Coachworks,
Ltd., and 98% shareholder of Westhampton Classic Cars d/b/a
Manhattan Motorcars of the Hamptons. Mr. Rubio is also the former
president of Tuscan Sun Ristorante, Inc. d/b/a Annona. Richard
Rubio and his wife, Eileen, filed for Chapter 11 bankruptcy
(Bankr. E.D.N.Y. Case No. 09-75163) on July 13, 2009. The U.S.
Trustee has not appointed a Committee of Unsecured Creditors
pursuant to 11 U.S.C. Sec. 1102(a) for the Rubios.
Westhampton Coachworks Ltd. and Westhampton Classic Cars d/b/a
Manhattan Motorcars of the Hamptons filed for Chapter 11
bankruptcy protection (Bankr. E.D. N.Y. Case Nos. 09-73008 and
09-73009) on April 29, 2009. Kenneth A. Reynolds, Esq., at
McBreen & Kopko, assisted the Debtors in their restructuring
efforts.
Tuscan Sun Ristorante, Inc., operated an Italian restaurant in the
Hamptons area of Long Island, New York, under the name Annona.
Tuscan Sun filed a Chapter 11 petition (Bankr. E.D.N.Y. Case
10-73391) on May 6, 2010. The Debtor did not indicate its
estimated assets in its Petition but estimated its debts as
between $100,001 and $500,000. In its schedules, the Debtor
listed more than $90,000 in personal property assets. The U.S.
Trustee was unable to appoint an official unsecured creditors
committee.
Judge Trust presides over the related debtors' cases. Each of
these related debtors became the subject of motions to dismiss or
convert filed by the U.S. Trustee in their cases. On November 29,
2010, the Court issued its Decision and Order converting the
Tuscan case to Chapter 7. On December 21, 2010, the Court issued
its Decision and Order converting the Coachworks and Classic Cars
cases to Chapter 7.
RWD REAL ESTATE: Bankr. Court Denies Bank's Bid to Enforce Orders
-----------------------------------------------------------------
Bankruptcy Judge John T. Laney, III, denied motions to enforce
orders filed by Bank of the West, Trinity Division, in In re Doll
& Doll Motor Company and In re RWD Real Estate, LLC, but granted
relief from the stay to the extent that the stay is in place as to
Doll & Doll Motor Company.
The two cases are companion cases because Robert Doll is the CEO
and sole equity security holder of Doll & Doll Motor Company and
the sole member of RWD Real Estate, LLC, and because the disputed
property is involved in both cases. On January 29, 2010, the
Court authorized both Debtors to sell their respective assets free
and clear of liens. The asset sales in the two cases contemplated
a sale of Doll & Doll's auto dealership in conjunction with the
sale of the sole-asset real estate of RWD so that the new owner(s)
could operate another dealership on the real estate. The ultimate
purchaser of Doll & Doll's assets was SE Columbus Automotive, LLC,
and the ultimate purchaser of RWD's real estate was Esfahani Real
Estate Holdings, LLC.
The property at issue is equipment and hardware purchased by Doll
& Doll in early 2009 and financed by the Bank for $438,626.38.
The Bank retained a security interest in the equipment for the
amount financed.
The Bank argues that the financed items are not fixtures because
the items were not intended to be fixtures and because the items
can be detached without damage to the underlying real estate, and
thus the items did not pass to Esfahani through the sale order.
The Bank asked for (1) entry of an order compelling SE Columbus
Automotive or Esfahani to turn over the financed items or permit
the Bank to remove items; (2) entry of a judgment against SE
Columbus Automotive or Esfahani in an amount equal to the fair
market rental value of the items for the period SE Columbus
Automotive or Esfahani has possessed and enjoyed the use of the
items; and (3) for relief from the automatic stay in the Doll &
Doll case.
Esfahani argues that (1) the items are fixtures that passed
through the terms of the sale order; (2) the Bank's motions were
procedurally improper because the Bank attempts to collaterally
attack a final judgment -- an order confirming a sale of assets --
through improper procedural means and because the Bank seeks a
money judgment without an adversary proceeding; (3) the Bank sat
on its rights by waiting 10 months after the sale order to file
its motions; (4) the Bank's remedy is to enforce its rights
against the proceeds of the sale; and (5) the financing statement
and accompanying waiver did not give proper notice to subsequent
purchasers.
Judge Laney held that the sale of RWD's real estate was to be sold
in conjunction with Doll & Doll's personal property for the
express purpose of using the personal property and real estate
together to operate a new automobile dealership. Mr. Esfahani --
the equity owner of Esfahani Real Estate Holdings, LLC -- was a
highly interested observer in the negotiations between SE Columbus
Automotive and Doll & Doll for the purchase of Doll & Doll's
assets. Moreover, Esfahani and SE Columbus Automotive have common
ownership, and they even share the same counsel in these two
cases. The counsel that negotiated for the very equipment at
issue during the sale of the Doll & Doll assets is the same
counsel now arguing that the items are fixtures in In re RWD Real
Estate, LLC. It is inconceivable that Esfahani was unaware of the
Bank's interest in the equipment.
The cases are Bank of the West, by and through its division,
Trinity, v. Doll & Doll Motor Company d/b/a Rob Doll Nissan and SE
Columbus Automotive, LLC, Case No. 09-41138 (Bankr. M.D. Ga.); and
Bank of the West, by and through its division, Trinity, v. RWD
Real Estate, LLC, and Esfahani Real Estate Holdings, LLC, Case No.
09-41061 (Bankr. M.D. Ga.). A copy of the Court's January 14,
2011 Memorandum Opinion is available at http://is.gd/IONXHtfrom
Leagle.com.
SUMMIT METALS: 3rd Cir. Affirms Ruling on Richardson Claims
-----------------------------------------------------------
Ambrose M. Richardson, III, seeks, pursuant to 11 U.S.C. Sec.
503(b), administrative expense priority treatment in a District of
Delaware bankruptcy case for what he characterizes as fees and
costs that he has incurred since 1995 in connection with numerous
legal proceedings involving Richard E. Gray and several corporate
entities Mr. Gray has owned or controlled. Mr. Gray filed a
bankruptcy petition on behalf of Summit Metals, Inc., in December
1998. In February 2005, Mr. Richardson filed an application in
that case seeking administrative expense priority status under
11 U.S.C. Sec. 503(b) for $877,000 in expenses and fees relating
to his involvement in the proceedings. The U.S. Trustee, the
Chapter 11 Trustee in the case, and the committee representing
Summit's unsecured creditors, all opposed the application.
In December 2007, the Bankruptcy Court issued an order granting in
part and denying in part Mr. Richardson's application. Mr.
Richardson appealed the order to the District Court, which
affirmed. He timely filed a pro se appeal to the United States
Court of Appeals for the Third Circuit. The U.S. Trustee and the
Chapter 11 Trustee filed briefs in opposition.
The Third Circuit held that the District Court correctly applied
the relevant legal standards, and affirmed for substantially the
reasons stated by that Court. "Simply put, we have nothing to add
to the careful opinion of District Judge Robinson affirming the
thoughtful analysis of Bankruptcy Judge (now Chief Judge) Carey,"
Circuit Judge Thomas L. Ambro, who wrote the Opinion, said.
The Third Circuit panel consists of Circuit Judges Ambro and D.
Michael Fisher, and Juan R. Sanchez, District Court Judge for the
Eastern District of Pennsylvania, sitting by designation. A copy
of the Third Circuit's Opinion dated January 14, 2011, is
available at http://is.gd/UOroUqfrom Leagle.com.
Headquartered in Mountainside, New Jersey, Summit Metals, Inc.,
filed for chapter 11 protection on Dec. 30, 1998 (Bankr. D. Del.
Case No. 98-2870). Joanne B. Wills, Esq., at Klehr, Harrison,
Harvey, Branzburg LLP, represented the Debtor. Francis A. Monaco,
Jr., was appointed chapter 11 Trustee on Sept. 17, 2004. Joe
Bodnar, Esq., at Monzack & Monaco, served as counsel to the
Trustee. Defunct law firm Wolf, Block, Schorr & Solis-Cohen LLP
represented the Official Committee of Unsecured Creditors.
TALON THERAPEUTICS: Extends CEO's Employment Until December
-----------------------------------------------------------
On January 6, 2011, Talon Therapeutics, Inc. and Steven R.
Deitcher, M.D., the Company's President and Chief Executive
Officer, entered into a letter agreement extending the term of the
Employment Agreement between the Company and Dr. Deitcher dated
June 6, 2008. Pursuant to the Letter Agreement, the term of the
Employment Agreement was extended to December 31, 2011. In
addition, the Letter Agreement provides that Dr. Deitcher will be
entitled to increased levels of term life and long-term disability
insurance coverage.
The Company has also promoted Craig W. Carlson to be its Senior
Vice President, Chief Financial Officer. Mr. Carlson was
previously Vice President, Chief Financial Officer.
On January 11, 2011, the Company and Anne E. Hagey, M.D., the
Company's Vice President, Chief Medical Officer, entered into an
agreement and release. Pursuant to the Separation Agreement, the
parties agreed that Dr. Hagey will resign her employment with the
Company effective as of March 31, 2011. Under the Separation
Agreement, and in lieu of any compensation that was otherwise
payable to Dr. Hagey pursuant to the letter agreement between the
Company and Dr. Hagey dated March 16, 2008, the Company agreed to
continue paying Dr. Hagey's base salary and health insurance
premiums through March 31, 2011, and to pay to Dr. Hagey a
severance payment of one month of her base salary in the gross
amount of $28,750. The Separation Agreement also provides that
each party is releasing the other from all claims each may have
against the other. In accordance with federal law, Dr. Hagey has
7 days in which to rescind her release, which action would nullify
the Separation Agreement.
About Talon Therapeutics
Talon Therapeutics Inc. fka Hana Biosciences, Inc., is a
biopharmaceutical company dedicated to developing and
commercializing new, differentiated cancer therapies designed to
improve and enable current standards of care. The company's lead
product candidate, Marqibo, potentially treats acute lymphoblastic
leukemia and lymphomas. The Company has additional pipeline
opportunities some of which, like Marqibo, improve delivery and
enhance the therapeutic benefits of well characterized, proven
chemotherapies and enable high potency dosing without increased
toxicity.
TAMARACK RESORT: Seeking Reconsideration of Case Dismissal
----------------------------------------------------------
Michael Calcagno, writing for KBOI TV, reports that Tamarack
Resort LLC is asking the Bankruptcy Court to reconsider its
decision dismissing the case.
According to KBOI TV, Tamarack CEO Jean-Pierre Boespflug said,
"There was suggestion of liquidation which would fetch six to
eight million dollars."
The report notes that, without bankruptcy protection, the
$650 million resort could be sold piece by piece. KBOI TV says
with a new buyer, Green Valley Holdings, and a concrete purchase
agreement this time around, a motion for reconsideration could
change everything.
"We owe a lot of people a lot of money and the way to resolve that
is having a good new buyer paying a very fair price," Mr.
Boespflug said, according to the report.
Green Valley is offering $40 million for the resort. KBOI TV
notes the offer is a far cry from the $300 million owed to
creditors but better than dismantling and selling the resort off
for much, much less.
As reported by the Troubled Company Reporter on January 12, 2011,
The Associated Press said Judge Terry Myers dismissed Tamarack's
Chapter 11 bankruptcy case, sending it back to state court where
foreclosure proceedings may eventually proceed to a sheriff's
sale. Eagle, Idaho-based Green Valley, told the AP the decision
could complicate a sale, though it's still committed to buying and
resurrecting the vacation development. Matthew Hutcheson, a
founder of Green Valley, said his group would work with creditors
on a transaction in state court to complete the sale.
The AP reported that CEO Boespflug said keeping the case in
Chapter 11 protection offers the clearest and easiest path for
disposing Tamarack's assets as a whole while paying at least some
money to creditors, including a lender consortium led by Credit
Suisse Group that is owed more than $350 million combined.
Credit Suisse had asked the Court to convert Tamarack's case into
Chapter 7 liquidation or send it back to state court to begin
foreclosure. Credit Suisse argued Mr. Boespflug had proven
himself incapable of managing the property or finding a buyer.
The AP said that a 4th District Court judge in Idaho will
determine determining who among the resort's secured creditors is
first in line to be repaid.
About Tamarack Resort
Tamarack Resort LLC, a golf and ski resort in Valley County,
Idaho, was sent to Chapter 7 after creditors submitted an
involuntary petition (Bankr. D. Idaho Case No. 09-03911). The
petitioning creditors include an affiliate of Bank of America
Corp. owed $4.7 million.
On April 9, 2010, Bankruptcy Judge Terry Myers signed an order
converting Tamarack Resort LLC's involuntary chapter 7 case to a
chapter 11 reorganization.
The project's 27.5% owner, VPG Investments Inc., filed for Chapter
11 reorganization in 2008, only to have the petition dismissed in
October 2008 at the request of the secured creditor, Credit
Suisse, Caymans Islands Branch. VPG was controlled by Mexican
businessman Alfredo Miguel Afif. Credit Suisse, the agent for the
secured lenders, characterized VPG's Chapter 11 case as "a classic
example of a bad faith filing" made "solely as a litigation
tactic" to stop foreclosure.
TAMARACK RESORT: Prospective Buyer Vows to Go Ahead With Sale
-------------------------------------------------------------
Dow Jones' DBR Small Cap reports that the co-founder of Tamarack
Resort LLC's would-be buyer says his company remains undeterred by
a judge's recent decision to dismiss the Idaho ski destination's
bankruptcy case. "We are totally committed to saving Tamarack,"
the report quoted Mr. Givens, co-founder of Green Valley Holdings
LLC, as saying.
"We're not backing away from that." Green Valley Holdings was in
line to purchase Tamarack's assets with a $40 million offer,
having entered into a letter of intent with the resort. But
before Tamarack could introduce the asset purchase agreement in
court Tuesday, Judge Terry L. Meyers of the U.S. Bankruptcy Court
in Boise issued a roadblock: a ruling in favor of lender Credit
Suisse Group, dismissing the Chapter 11 proceedings. Despite the
change of course, Givens said Green Valley remains intent on
buying the Idaho resort, he added.
"We don't see [the ruling] as a setback, we just see it as a
different playing field, a different surface to work on,"
Mr. Givens in an interview, the report adds.
The Jan. 12, 2011 edition of the Troubled Company Reporter on
January 12, 2011, reported that Judge Terry Myers dismissed
Tamarack Resort's bankruptcy case from federal Chapter 11
protection, sending it back to state court where foreclosure
proceedings may eventually proceed to a sheriff's sale.
About Tamarack Resort
Tamarack Resort LLC, a golf and ski resort in Valley County,
Idaho, was sent to Chapter 7 after creditors submitted an
involuntary petition (Bankr. D. Idaho Case No. 09-03911). The
petitioning creditors include an affiliate of Bank of America
Corp. owed $4.7 million.
On April 9, 2010, Bankruptcy Judge Terry Myers signed an order
converting Tamarack Resort LLC's involuntary chapter 7 case to a
chapter 11 reorganization.
The project's 27.5% owner, VPG Investments Inc., filed for Chapter
11 reorganization in 2008, only to have the petition dismissed in
October 2008 at the request of the secured creditor, Credit
Suisse, Caymans Islands Branch. VPG was controlled by Mexican
businessman Alfredo Miguel Afif. Credit Suisse, the agent for the
secured lenders, characterized VPG's Chapter 11 case as "a classic
example of a bad faith filing" made "solely as a litigation
tactic" to stop foreclosure.
TERRESTAR NETWORKS: Wins OK for Deloitte as Tax Advisor
-------------------------------------------------------
TerreStar Networks Inc. and its units won the Bankruptcy Court's
authority to employ Deloitte Tax LLP as their tax service
provider, nunc pro tunc to the Petition Date.
The Debtors note that they previously employed Deloitte Tax to
provide tax-related services and thus, the firm has garnered
considerable knowledge concerning the Debtors and is already
familiar with the Debtors' business affairs to the extent
necessary for the scope of the firm's proposed and anticipated
services.
As the Debtors' tax service provider, Deloitte Tax will:
-- advise the Debtors in their work with their counsel and
financial advisors on the cash tax effects of restructuring
and bankruptcy and the post-restructuring tax profile,
including plan of reorganization tax costs;
-- advise the Debtors regarding the restructuring and
bankruptcy emergence process from a tax perspective,
including the tax work plan;
-- advise the Debtors on the cancellation of debt income for
tax purposes under Internal Revenue Code section 108;
-- advise the Debtors on post-bankruptcy tax attributes
available under the applicable tax regulations and the
reduction of attributes based on the Debtors' operating
projections, including a technical analysis of the effects
of Treasury Regulation Section 1.1502-28 and the interplay
with IRC sections 108 and 1017;
-- advise the Debtors on potential effect of the Alternative
Minimum Tax in various post-emergence scenarios;
-- advise the Debtors on the effects of tax rules under IRC
Sections 382(l)(5) and (l)(6) pertaining to the post-
bankruptcy net operating loss carryovers and limitations on
their utilization and the Debtors' ability to qualify for
IRC Section 382(l)(5);
-- advise the Debtors on net built-in gain or net built-in
loss position at the time of "ownership change", including
limitations on use of tax losses generated from post-
restructuring or post-bankruptcy asset or stock sales;
-- advise the Debtors as to the proper treatment of
postpetition interest for state and federal income tax
purposes;
-- advise the Debtors as to the proper state and federal
income tax treatment of prepetition and postpetition
reorganization costs including restructuring-related
professional fees and other costs, the categorization and
analysis of the costs, and the technical positions related
thereto;
-- advise the Debtors in their evaluation and modeling of the
tax effects of liquidating, disposing of assets, merging or
converting entities as part of the restructuring, including
the effects on federal and state tax attributes, state
incentives, apportionment and other tax planning;
-- advise the Debtors on state income tax treatment and
planning for restructuring or bankruptcy provisions in
various jurisdictions including cancellation of
indebtedness calculation, adjustments to tax attributes and
limitations on tax attribute utilization;
-- advise the Debtors on responding to tax notices and audits
from various taxing authorities;
-- assist the Debtors with identifying potential tax refunds
and advise the Debtors on procedures for tax refunds from
tax authorities;
-- advise the Debtors on income tax return reporting of
bankruptcy issues and related matters;
-- advise the Debtors in their review and analysis of the tax
treatment of items adjusted for financial reporting
purposes as a result of "fresh start" accounting as
required for the emergence date of the U.S. financial
statements in an effort to identify the appropriate tax
treatment of adjustments to equity; and other tax basis
adjustments to assets and liabilities recorded;
-- assist in documenting as appropriate, the tax analysis,
development of the Debtors' opinions, recommendation,
observations, and correspondence for any proposed
restructuring alternative tax issue or other tax matter
described above;
-- advise the Debtors regarding other state or federal income
tax questions that may arise in the course of this
engagement, as requested by the Debtors, and as may be
agreed to by Deloitte Tax;
-- advise the Debtors in their efforts to calculate tax basis
in the stock in each of the Debtors' subsidiaries or other
entity interests; and
-- advise the Debtors with their evaluation of any original
issue discount or applicable high yield discount obligation
provision s that may be associated with the new debt
instruments instituted in connection with the restructuring
or bankruptcy filing.
In addition, Deloitte Tax will assist the Debtors with federal
and state income tax compliance matters and assist the Debtors
with federal and state tax provision matters.
The Debtors will pay Deloitte Tax according to the firm's regular
hourly rates in addition to reimbursements for necessary out-of-
pocket expenses.
Hourly rates for Deloitte Tax professionals are:
Partner, Principal, or Director $640 to $730
Senior Manager $565 to $590
Manager $490 to $515
Senior $365 to $390
Staff $280 to $305
Gregory Anderson, a director of Deloitte Tax, assures the Court
that his company is a "disinterested person" as the term is
defined under 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: Master Fund Acquires Series B Stock
-------------------------------------------------------
In a Form 4 filing with the U.S. Securities and Exchange
Commission, Harbinger Capital Partners Master Fund I, Ltd.,
reported that it acquired on January 3, 2011, about 2,000 shares
of 5.25% Preferred Convertible Series B Stock issued by TerreStar
Corp.
Harbinger Master Fund is deemed to beneficially own 124,835
shares of the TerreStar Series B Stock following the reported
transaction, according to the SEC filing dated January 5.
The Series B Stock may also be deemed to be indirectly
beneficially owned by Harbinger Capital Partners LLC, the
investment manager of the Master Fund, Harbinger Holdings, LLC,
the manager of Harbinger LLC, Philip Falcone, the managing member
of Harbinger Holdings, and the portfolio manager of the Master
Fund.
The Series B Stock is convertible into common stock at any time
on a one-to-thirty basis, and has no expiration date.
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: Berlin NGO Expresses Interest in Satellite
--------------------------------------------------------------
Ahumanrights.org, a new non-government and non-profit
organization based in Berlin, has placed a bid for a
communications satellite owned by TerreStar Corporation,
according to Neal Ungerleider of Fast Company.
The satellite, called TerreStar-1, is a communications satellite
located above Papua New Guinea.
Ahumanright is said to be soliciting $150,000 in online
donations, developing a business plan, and planning on the
purchase of TerreStar-1 in cooperation with the government of
Papua New Guinea, Mr. Ungerleider relates.
The NGO is reportedly planning to use TerreStar-1 for free, low-
speed, wireless internet to some parts in Asia, Siberia, and
Polynesia.
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: Committee Seeks February 17 Plan Outline Hearing
-----------------------------------------------------------
On January 12, 2011, the Official Committee of Unsecured Creditors
of TOUSA, Inc., and its affiliated Debtors, asked the U.S.
Bankruptcy Court for the Southern District of Florida to set a
February 17, 2011 hearing date to consider approval of the
disclosure statement explaining its proposed Joint Plan of
Liquidation for the Debtors. The Committee filed on December 10,
2010, amended versions of its proposed Plan and Disclosure
Statement for the Debtors.
As reported in the Troubled Company Reporter on July 21, 2010, the
Creditors Committee filed a Chapter 11 plan and explanatory
disclosure statement for TOUSA on July 16, 2010. The Plan assumes
appellate courts uphold a judgment the Committee won in October
where the bankruptcy judge ruled that a bailout and refinancing in
mid-2007 of a joint venture in Transeastern Properties Inc.
resulted in 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.
The Official Committee of Unsecured Creditors filed a Chapter 11
plan and explanatory disclosure statement for Tousa on July 16,
2010.
TRIBUNE CO: DBTCA Wants $2.9MM Claim Allowed for Voting Purposes
----------------------------------------------------------------
Deutsche Bank Trust Company Americas, successor indenture trustee
under the 1992 Indenture, the 1995 Indenture and the 1997
Indenture, asks the Court to temporarily allow its expense claim
as a Class 1F Claim aggregating $2,900,000 for voting purposes.
DBTCA filed Claim Nos. 3525, 3526, 3627, 3528, 3531 and 3532
against the Debtors. Each of the Claims expressly asserted the
contractual right to recover fees, costs and all other amounts due
or incurred by DBTCA in its role as Indenture Trustee under the
Indentures.
DBTCA relates that, as of December 31, 2010, it has incurred fees
and expenses for not less than $2,900,000 in its capacity as
Indenture Trustee under the Senior Notes. This amount includes
legal fees and disbursements and fees incurred by DBTCA in
connection with its role as Indenture Trustee under the Senior
Notes.
The Official Committee of Unsecured Creditors asks the Court to
deny the Motion or, at most, allow the claims, consistent with the
Court's order establishing, among other things procedures for
solicitation and tabulation of votes, at $1. The Committee
asserts that the request of DBTCA for estimation has no merit.
The Committee avers that those claims are properly classified
under the Debtor/Committee/Lender Plan as Class 1E bondholder
claims. The Committee maintains that the Debtor/Committee/Lender
Plan establishes a logical and appropriate classification
structure.
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 Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America 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.
Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to
the Official Committee of Unsecured Creditors. AlixPartners LLP
is the Committee's financial advisor. Landis Rath Moelis &
Company serves as the Committee's investment banker. Thomas G.
Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware,
represents the Committee in connection with the lawsuit filed
against former officers and shareholders for the 2007 LBO of
Tribune.
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: LDTC Wants $6.3MM Claim Allowed for Voting Purposes
---------------------------------------------------------------
Law Debenture Trust Company of New York asks the Court to approve
the classification of its expense claim as Class 1F under the
joint plan of reorganization filed by the Debtors, the Official
Committee of Unsecured Creditors, Oaktree Capital, Management,
L.P., Angelo, Gordon & Co., L.P., and JPMorgan Chase Bank, N.A.,
and if necessary, temporarily allow its expense claim for
$6,300,000 for voting purposes. Law Debenture is the successor
indenture trustee under an indenture dated March 19, 1996 between
Tribune Company and Citibank, N.A. for the 6.61% Debentures due
2027 and the 7-1/4% Debentures due 2096.
On or about June 5, 2009, prior to its resignation as indenture
trustee under the 1996 Indenture, Deutsche Bank Trust Company
Americas filed a proof of claim for the 7-1/4% Debentures for
$148,715,333. The Debtors recorded the claim as Claim No. 3529.
On the same date, DBTCA filed a proof of claim for the 6.61%
Debentures for $86,270,366. The Debtors recorded the claim as
Claim No. 3530.
As successor trustee, Law Debenture is the current holder of Claim
Nos. 3529 and 3530. Each of the Law Debenture Claims expressly
asserts the right to recover fees, costs and all other amounts due
incurred by Law Debenture in its role as Indenture Trustee under
the 1996 Indenture in addition to the stated amounts of principal
accrued interest.
As of December 31, 2010, Law Debenture relates that it has
incurred reasonable fees and expenses for no less than $6,300,000
in its capacity as Indenture Trustee under the Indenture.
According to Law Debenture, this amount includes reasonable legal
fees and disbursements and reasonable fees incurred by it in
connection with its role as Indenture Trustee under the 1996
Indenture.
The Official Committee of Unsecured Creditors asks the Court to
deny the Motion or, at most, allow the claims, consistent with the
Court's order establishing, among other things procedures for
solicitation and tabulation of votes, at $1. The Committee
asserts that the request of Law Debenture for estimation has no
merit. The Committee avers that those claims are properly
classified under the Debtor/Committee/Lender Plan as Class 1E
bondholder claims. The Committee maintains that the
Debtor/Committee/Lender Plan establishes a logical and appropriate
classification structure.
The Debtors also ask the Court to defer rulings on the motion for
estimation and temporary allowance of claims given the strong
likelihood that the Expense Claims will be insufficient to affect
the acceptance of the Debtor/Committee/Lender Plan by Class 1F,
even if they were all temporarily allowed for voting purposes in
Class 1F and voted in their full requested amount to reject the
Debtor/Committee/Lender Plan. According to the Debtors, it is
highly unlikely that the relief sought in the 3018 Motions will
have any impact on Class 1F's acceptance of the
Debtor/Committee/Lender Plan, even if the 3018 Motions are granted
in their entirety.
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 Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America 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.
Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to
the Official Committee of Unsecured Creditors. AlixPartners LLP
is the Committee's financial advisor. Landis Rath Moelis &
Company serves as the Committee's investment banker. Thomas G.
Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware,
represents the Committee in connection with the lawsuit filed
against former officers and shareholders for the 2007 LBO of
Tribune.
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: Wilmington Trust Wants PHONES Claims Estimated
----------------------------------------------------------
Wilmington Trust Company, successor indenture trustee for the
Exchangeable Subordinated Debentures due 2029 in the aggregate
principal amount of $1.2 billion or the "PHONES", ask the Court to
determine (a) the amount of the PHONES claim; and (b) the proper
classification of the PHONES claim in the proposed plans of
reorganization in the bankruptcy case of Tribune Company and its
debtor affiliates.
Wilmington Trust relates that on the eve of the Petition Date,
certain creditors exercised their contractual rights as PHONES
holders. Under their indenture, PHONES holders had the right to
tender their notes to Tribune Co. in exchange for the market value
of two shares of Time Warner stock. According to Wilmington
Trust, the holders of approximately $417,536,319 in principal
amount of PHONES debt informed the prior indenture trustee,
Deutsche Bank Trust Company Americas, that they wished to tender
certain notes and expected to receive $56 million in cash in
return. Tribune did not honor these requests and no payment was
ever made on account of them, Wilmington Trust maintains.
In its proof of claim, Wilmington Trust asserted that the full
amount of the PHONES claim remain outstanding, including the
PHONES Notes Exchange Claims. Some parties-in-interest have
asserted that the tendered PHONES Exchange Claims are subordinated
securities claims that are subordinated to the balance of the
PHONES claims that did not tender. Other parties-in-interest have
suggested that the tendered PHONES claims may even be general
unsecured claims of Tribune Company.
Wilmington Trust asserts that the allowed amount of the PHONES
Notes Exchange Claims should be resolved at this time because:
(a) the gap between the Debtors' calculation of the total
amount of PHONES Notes Exchange Claims and the amount
calculated by Wilmington Trust is substantial -- greater
than $400 million; and
(b) the competing plans all require resolution of the claim in
order for votes to be apportioned properly.
Parties Respond
Several parties-in-interest filed with the Court responses to the
Motion.
SuttonBrook Capital Management LP relates that prior to the
Petition Date, holders of approximately $417,536,319 in principal
amount of PHONES or the "Former PHONES Holders" exercised their
Exchange Right by surrendering their notes to Deutsche Bank Trust
Company Americas, the predecessor indenture trustee under the
PHONES indenture, in exchange for a proposed payment of
approximately $56 million in cash. SuttonBrook further
understands that while the Former PHONES Holders did all that was
required to effectuate the proposed exchange.
The exchange having been completed but for the payment by Tribune,
the Former PHONES Holders should have a claim in these cases
solely for the unpaid Exchange Payment, SuttonBrook asserts.
Furthermore, that claim should be subordinated under Section
510(b) of the Bankruptcy Code to the claims of PHONES holders who
did not surrender their notes.
SuttonBrook tells the Court that although the Former PHONES
Holders surrendered and DBTCA cancelled, their $417,536,319 of
notes, Wilmington Trust, successor indenture trustee to DBTCA,
filed a proof of claim in the Debtors' cases on behalf of the
PHONES noteholders for $1,196,823,429, plus fees, costs, expenses,
and other charges. The Claim Amount includes not only the
principal and interest due non-tendering PHONES holders as of the
Petition Date, but also the principal and accrued interest on the
Surrendered PHONES.
SuttonBrook holds or controls through affiliated funds or managed
accounts 3,140,236 units, or $493,017,052 in the aggregate
principal amount, of PHONES.
SuttonBrook Capital requests that:
(a) the Surrendered PHONES Claims be reduced and allowed in
the amount of the unpaid Exchange Payment -- approximately
$56 million;
(b)(1) the Surrendered PHONES Claims be classified as
unsecured claims subordinated to the Retained PHONES
Claims under Section 510(b) of the Bankruptcy Code, or, if
not subordinated, (ii) the Surrendered PHONES Claims be
classified as unsecured claims pari passu with the
Retained PHONES Claims; and (c) the Retained PHONES Claims
be allowed in an amount representing the aggregate
principal amount outstanding under the Retained PHONES as
of the Petition Date, plus all accrued interest and other
amounts due under the PHONES as of the Petition Date.
Barclays Bank PLC and Waterstone Capital Management LP hold claims
arising from PHONES which were tendered for exchange on the same
day as Tribune's Petition Date. Barclays and Waterstone aver that
there is no indication in the Indenture Documents that
the act of tendering for exchange reduced the amount of Tendering
Holders' claims to the Exchange Amount. In fact, Barclays and
Waterstone note, various provisions in the Indenture Documents
indicate exactly the opposite -- that the Exchange was only final
once consummated and that the accelerated amount of claims arising
from unconsummated exchanges is, as with other PHONES, the greater
of the Exchange Amount or their face amount.
Thus, the Prepetition Agent asks the Court to enter an order
directing the Debtors and Wilmington Trust Company to reinstate
the cancelled PHONES.
The Official Committee of Unsecured Creditors asks the Court to
deny the Motion or, at most, allow the claims, consistent with the
Court's order establishing, among other things procedures for
solicitation and tabulation of votes, at $1. The Committee
asserts that the request of Wilmington Trust for estimation has no
merit. The Committee avers that those claims are properly
classified under the Debtor/Committee/Lender Plan as Class 1E
bondholder claims. The Committee maintains that the
Debtor/Committee/Lender Plan establishes a logical and appropriate
classification structure.
The Debtors assert that there is no live controversy which
requires immediate attention and that an accelerated determination
of the issues described in the Motion prior to plan confirmation
is neither necessary nor appropriate.
According to the Debtors, determination of the issues raised in
the Motion is not necessary to confirm any of the presently
proposed plans of reorganization for these reasons:
(a) Each of the Competing Plans has ben solicited for votes,
extensive disclosure has been provided therefore, and the
Court has already determined that voting parties have
adequate information to vote for the plans of their
choice.
(b) The relief requested in the Motion should be addressed in
the normal claims process with the PHONES holders
themselves afforded the opportunity to participate in any
adjudication.
(c) The Debtors and many other parties in their case are
presently focused upon addressing a large number of tasks
and issues related to the plan confirmation process.
Diverting attention from confirmation o substantively
address the Motion at this time is not an appropriate uses
of the parties' resources or the Court's time.
(d) Now is not the time to substantively address the issues
raised in the Motion, it is the Debtors' view that, under
the terms of the PHONES Indenture and applicable law, the
Exchange Notes Claims have been reduced by their election
to redeem and that the Exchange Notes Claims remain, at a
minimum, subordinated to those of Tribune Company's
general unsecured creditors.
The Debtors ask the Court to defer rulings on the motion for
estimation and temporary allowance of claims given the strong
likelihood that the Expense Claims will be insufficient to affect
the acceptance of the Debtor/Committee/Lender Plan by Class 1F,
even if they were all temporarily allowed for voting purposes in
Class 1F and voted in their full requested amount to reject the
Debtor/Committee/Lender Plan. According to the Debtors, it is
highly unlikely that the relief sought in the 3018 Motions will
have any impact on Class 1F's acceptance of the
Debtor/Committee/Lender Plan, even if the 3018 Motions are granted
in their entirety.
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 Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America 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.
Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to
the Official Committee of Unsecured Creditors. AlixPartners LLP
is the Committee's financial advisor. Landis Rath Moelis &
Company serves as the Committee's investment banker. Thomas G.
Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware,
represents the Committee in connection with the lawsuit filed
against former officers and shareholders for the 2007 LBO of
Tribune.
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: To Pay Attorneys' Fees of 88 Employees
--------------------------------------------------
Tribune Co. and its units notify all parties-in-interest of their
intent to utilize estate funds for advancements to pay for the
attorneys' fees and expenses incurred by 88 of their current
employees in connection with separate preference complaints filed
against each of the Current Employees by the Official Committee of
Unsecured Creditors, pending agreement by the Debtors' insurers to
advance those fees and expenses.
The Debtors intend to provide the advancement for the Current
Employees until at least the stay involving the preference causes
of action is terminated, or until the insurers who issued coverage
for the Debtors' officers and directors have agreed to pay for
those costs. The Debtors maintain that they will use reasonable
efforts to limit the number of attorneys hired to represent the
Current Employees with respect to the preference causes of action.
The Debtors' certificates of incorporation or bylaws generally
provide for mandatory indemnification and advancement of attorneys
fees for any of their officers who are made a party to a lawsuit
by reason that person's status as an officer of the applicable
Debtor. The Debtors tell the Court that these Current Employees
were named as preference defendants based upon their status as
officers or directors at the time when the applicable transfers
occurred. A number of the Current Employees have requested
advancement of their attorneys' fees in dealing with the
preference actions.
The Debtors relate that they have made demands on their insurance
carriers who have issued director and officer insurance coverage
to advance these attorneys' fees and expenses, but these carriers
have not yet agreed to provide coverage for the Current Employees
with respect to the preference causes of action.
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 Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America 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.
Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to
the Official Committee of Unsecured Creditors. AlixPartners LLP
is the Committee's financial advisor. Landis Rath Moelis &
Company serves as the Committee's investment banker. Thomas G.
Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware,
represents the Committee in connection with the lawsuit filed
against former officers and shareholders for the 2007 LBO of
Tribune.
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)
TWAIN CONDOMINIUMS: Obtains Interim OK for Use of Cash Collateral
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Wisconsin
has granted Twain Condominiums, LLC, permission to use cash
collateral of City National Bank on an interim basis to pay
actual, ongoing, post-petition obligations as identified in a
budget.
As reported in the Troubled Company Reporter on December 30, 2010,
the Debtor had requested the Bankruptcy Court for authority to use
CNB's cash collateral until April 30, 2011. The Debtor said it
needs the money to fund its Chapter 11 case, pay suppliers and
other parties.
A copy of the Budget is available for free at:
http://bankrupt.com/misc/TWAIN_CONDOMINIUMS_budget.pdf
Twain Condominiums, LLC, owns 192 condominium units within the
254-unit Twain Estates condominium complex at Arville Street and
Twain Avenue in Las Vegas, Nevada. The Company filed for
bankruptcy on December 15, 2010 (Bankr. D. Nev. Case No. 10-
33323). Judge Linda B. Riegle presides over the case. Thomas H.
Fell, Esq., at Gordon Silver Attorneys and Counselors at Law,
represents the Debtor. In its schedules, the Debtor disclosed
$25,238,172 in assets and $12,080,628 in liabilities as of the
petition date.
TWAIN CONDOMINIUMS: Amends Schedules of Assets and Liabilities
--------------------------------------------------------------
Twain Condominiums, LLC, has filed with the U.S. Bankruptcy
Court for the District of Nevada an amended schedule of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ---------- -----------
A. Real Property $6,860,000
B. Personal Property $98,279
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $11,620,305
E. Creditors Holding
Unsecured Priority
Claims $503
F. Creditors Holding
Unsecured Non-priority
Claims $237,605
----------- -----------
TOTAL $6,958,279 $11,858,413
A copy of the Schedules of Assets and Liabilities is available for
free at http://bankrupt.com/misc/Twainndominiums.SAL.pdf
Twain Condominiums, LLC, owns 192 condominium units within the
254-unit Twain Estates condominium complex at Arville Street and
Twain Avenue in Las Vegas, Nevada. The Company filed for
bankruptcy on December 15, 2010 (Bankr. D. Nev. Case No. 10-
33323). Judge Linda B. Riegle presides over the case. Thomas H.
Fell, Esq., at Gordon Silver Attorneys and Counselors at Law,
represents the Debtor. The Debtor estimated both assets and debts
of between $10 million and $50 million in its petition.
UNITED CONTINENTAL: Sues Chicago to Block O'Hare Improvements
-------------------------------------------------------------
The Wall Street Journal's Susan Carey reports that United
Continental Holdings Inc. and AMR Corp., parent of American
Airlines, sued the city of Chicago, Ill., in Cook County Circuit
Court on Tuesday to block it from selling bonds and beginning work
this spring on the second phase of an airfield expansion project
at Chicago's O'Hare International Airport. The carriers fear the
project will raise their costs.
According to the report, United and AMR asked the state court for:
-- a declaration that their O'Hare lease agreements give them
the rights to disapprove airport capital expenditures
funded with the proceeds of general airport revenue bonds;
and
-- injunction to prevent Chicago from beginning the work,
which includes the construction of two new runways and the
extension of another runway.
The total cost of the project is estimated at $3.36 billion.
The Journal says United and American control about 85% of the
traffic at O'Hare. The Journal also notes O'Hare is the nation's
second-busiest airport behind Hartsfield-Jackson Atlanta
International Airport.
The report notes United and American warned Chicago Mayor Richard
M. Daley in a letter on Friday that the new debt required to fund
the work "would burden us and our customers with costs we simply
cannot afford to pay for a project we do not need, and will not
need for many years."
The Journal relates Chicago on Monday filed a preliminary offering
statement for $1 billion of debt backed by federal grants and
passenger-fee income. According to the report, United and
American contend that the second phase of the project is supposed
to be funded by general airport revenue bonds, over which they
claim their airport leases give them decision-making power.
According to the Journal, Rosemarie Andolino, commissioner of the
Chicago Department of Aviation, said the city believes it has the
legal right to secure funding for the airport project. The city
is willing to discuss this matter with O'Hare airlines but "timing
is essential" for the project, she said, declining further comment
on the litigation.
The Journal says Mayor Daley told reporters last week that the
public would lose if the project stalled. "We are not building the
runways for the airlines today," he said, according to the Chicago
Tribune. "We are building the runways for passengers so there's
no delays in bad weather."
About United Continental
United Continental Holdings, Inc. (NYSE: UAL) --
http://www.UnitedContinentalHoldings.com/, http://www.united.com/
and http://www.continental.com/-- is the holding company for both
United Airlines and Continental Airlines. Together with United
Express, Continental Express and Continental Connection, these
airlines operate a total of approximately 5,800 flights a day to
371 airports throughout the Americas, Europe and Asia from their
hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles,
New York, San Francisco, Tokyo and Washington, D.C. United and
Continental are members of Star Alliance, which offers more than
21,200 daily flights to 1,172 airports in 181 countries worldwide
through its 28 member airlines. United's and Continental's more
than 80,000 employees reside in every U.S. state and in many
countries around the world.
United Continental carries 'B2' corporate family and probability
of default ratings, with stable outlook, from Moody's, 'B' issuer
credit ratings, with stable outlook, from Standard & Poor's, and
'B-' issuer default rating from Fitch.
UAL Corp filed for Chapter 11 protection on Dec. 9, 2002 (Bankr.
N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc
Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba,
Esq., at Kirkland & Ellis, represented the Debtors in their
restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein
Nath & Rosenthal LLP represented the Official Committee of
Unsecured Creditors. Judge Eugene R. Wedoff confirmed a
reorganization plan for United on Jan. 20, 2006. The Company
emerged from bankruptcy on Feb. 1, 2006.
At June 30, 2010, UAL had $20.134 billion in total assets against
total current liabilities of $8.573 billion, long-term debt of
$6.281 billion, long-term obligations under capital leases of
$1.01 billion, other liabilities and deferred credits of
$7.022 billion, and a stockholders' deficit of $2.756 billion.
About AMR Corporation
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company's balance sheet at Sept. 30, 2010, showed
$25.36 billion in total assets, $8.94 billion in total
liabilities, $9.01 in billion of long-term debts, $503.0 million
in obligations under capital lease, $7.41 billion pension and
post-retirement benefits, $3.14 billion in other liabilities, and
a stockholders' deficit of $3.64 billion.
* * *
AMR carries a 'CCC' issuer default rating from Fitch Ratings. It
has 'Caa1' corporate family and probability of default ratings
from Moody's. It has 'B-' corporate credit rating from Standard &
Poor's.
In November 2010, Standard & Poor's Ratings Services revised its
outlook on AMR Corp. and its major operating subsidiary, American
Airlines Inc., to stable from negative, based on AMR's improved
operating performance, which has bolstered credit quality. S&P
also affirmed its 'B-' corporate credit rating and most issue
ratings on the two companies and lowered selected ratings on
American's enhanced equipment trust certificates.
VISICON SHAREHOLDERS: Has Until Feb. 3 to Propose Chapter 11 Plan
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Ohio
extended The Visicon Shareholders Trust, An Ohio Trust, U/A/D's
exclusive periods to file, and solicit acceptances for, a Plan of
Reorganization until February 3, 2011, and April 4, respectively.
As reported in the Troubled Company Reporter on October 11, 2010,
the Debtor said the extension would give it more time to:
-- reach an agreement with Greenwich Capital Partners, its
secured creditor;
-- submit a successful Plan; and
-- resolve matters with the USAF on compliance with the
Operating Agreement.
Naples, Florida-based The Visicon Shareholders Trust, an Ohio
Trust, filed for Chapter 11 bankruptcy protection on June 8, 2010
(Bankr. S.D. Ohio Case No. 10-33736). Ira H. Thomsen, Esq., who
has an office in Springboro, Ohio, represents the Debtor. The
Debtor estimated assets at $10 million to $50 million and debts at
$1 million to $10 million as of the Petition Date.
VYTERIS INC: David DiGiacintor Resigns as Director
--------------------------------------------------
Effective January 10, 2011, David DiGiacinto has resigned as a
director of Vyteris, Inc., to pursue other business interests.
Mr. DiGiacinto did not submit a written resignation and did not
give any reason for resignation.
In connection with his resignation, options to purchase Company
common stock will be subject to these dispositions:
1. Options to purchase 339,434 shares of common stock, which
have already vested, shall retain their original expiration
date of 10 years from their original issuance dates.
2. Options to purchase 285,820 shares of common stock, which
have not yet vested, shall immediately vest and shall retain
their original expiration date of 10 years from their
original issuance dates.
Additionally, Mr. DiGiacinto is owed $6,000 in directors' fees for
service as a director during 2010 which will be paid
simultaneously with the payment of 2010 directors' fees to the
continuing directors on the Company's Board of Directors.
About Vyteris, Inc.
Based in Fair Lawn, New Jersey, Vyteris, Inc. (formerly Vyteris
Holdings (Nevada), Inc., has developed and produced the first FDA-
approved electronically controlled transdermal drug delivery
system that transports drugs through the skin comfortably, without
needles. This platform technology can be used to administer a
wide variety of therapeutics either directly into the skin or into
the bloodstream. The Company holds approximately 50 U.S. and 70
foreign patents relating to the delivery of drugs across the skin
using an electronically controlled "smart patch" device with
electric current.
According to the Company's 2009 annual report on Form 10-K, Amper,
Politziner & Mattia, LLP, in Edison, N.J., expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company has incurred
recurring losses and is dependent upon obtaining sufficient
additional financing to fund operations and has not been able to
meet all of its obligations as they become due.
The Company's balance sheet at Sept. 30, 2010, showed
$3.62 million in total assets, $19.12 million in total
liabilities, and a stockholders' deficit of $15.49 million.
WASHINGTON MUTUAL: TruPS Holders Appeal From Plan Ruling
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that holders of trust-preferred securities filed an appeal
from one of the rulings by the bankruptcy court on Jan. 7 refusing
to confirm the reorganization of Washington Mutual Inc. The
security holders are appealing from a 20-page opinion where U.S.
Bankruptcy Judge Mary F. Walrath ruled that they no longer have an
interest in the securities because they were automatically
converted into preferred stock of the holding company when the
bank subsidiary was taken over by regulators.
Mr. Rochelle relates that the security holders may attempt to
expedite the appeal so it doesn't become moot when WaMu revises
and confirms an amended plan.
Trust Preferreds' Fraud Claims Fail
The Jan. 17, 2011 edition of the Troubled Company Reporter, citing
WestLaw, reported that Judge Walrath ruled that even assuming that
investors in trust preferred securities issued by securitization
trusts established by a Chapter 11 debtor's wholly owned bank had
fraud claims against the debtor for its nondisclosures in
connection with issuance of the securities, any such fraud claims
were subject to mandatory subordination, as claims for damages
arising from the purchase or sale of a security of the debtor or
an affiliate of the debtor. Judge Walrath also found insufficient
evidence of any fraudulent nondisclosure or of investors' reliance
thereon.
A copy of Judge Walrath's Opinion dated Jan. 7, 2011, in
Washington Mutual, Inc., et al. v. Black Horse Capital LP,
et al., Adv. Pro. No. 10-51387 (Bankr. D. Del.) is available
at http://is.gd/LnkbS0from Leagle.com.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. Fred S. Hodera, Esq., at Akin Gump Strauss Hauer &
Fled LLP in New York City and David B. Stratton, Esq., at Pepper
Hamilton LLP in Wilmington, Del., represent the Official Committee
of Unseucred Creditors. Stephen D. Susman, Esq., at Susman
Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A.,
represent the Equity Committee. Stacey R. Friedman, Esq., at
Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath &
Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which
acquired WaMu's assets prior to the Petition Date.
WESTMORELAND COAL: Plans to Offer $150MM of Senior Secured Notes
----------------------------------------------------------------
Westmoreland Coal Company and certain subsidiaries announced their
intent to offer $150 million of Senior Secured Notes due 2018 in a
private placement. The terms, timing and structure of any
transaction are subject to market and other conditions. There can
be no assurance that any transaction will ultimately be pursued or
that any transaction, if pursued, will be successful.
The net proceeds from the offering of the Notes are expected to be
used to pay all accrued and unpaid dividends on the Company's
Series A preferred stock, to repay certain indebtedness, to retire
approximately $2.5 million of the outstanding principal owed on
the senior secured convertible notes and for general corporate
purposes.
The Notes will be sold only to qualified institutional buyers in
the United States in reliance on Rule 144A under the Securities
Act of 1933, and outside the United States to non-U.S. persons in
reliance on Regulation S under the Securities Act. The proposed
issuance of the Notes will not be registered under the Securities
Act, and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
About Westmoreland Coal
Colorado Springs, Colo.-based Westmoreland Coal Company is an
energy company whose operations include five surface coal mines in
Montana, North Dakota and Texas and two coal-fired power-
generating units with a total capacity of 230 megawatts in North
Carolina. The Company sold 24.3 million tons of coal in 2009.
The Company's two principal operating segments are its coal
segment and its power segment, in addition to two non-operating
segments.
The Company's balance sheet at Sept. 30, 2010, showed
$765.0 million in total assets, $898.75 million in total
liabilities, and a stockholders' deficit of $133.75 million.
As reported in the Troubled Company Reporter on March 15, 2010,
KPMG LLP, in Denver, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that of the Company's recurring losses from
operations, working capital deficit and net capital deficiency.
WESTMORELAND COAL: Amends Note Purchase Agreement With Tontine
--------------------------------------------------------------
Westmoreland Coal Company has entered into an Amendment to Senior
Secured Convertible Note Purchase Agreement with Tontine Partners,
L.P. and Tontine Capital Partners, L.P. whereby Tontine has agreed
to convert a portion of the principal amount of its senior secured
convertible notes into common stock of the Company at a conversion
price of $8.50 per share, subject to the closing of a proposed
financing transaction. The Company has no obligation to complete
the proposed financing transaction. If the financing transaction
closes, Tontine will convert $15,962,541 in principal amount of
the senior secured convertible notes, effective simultaneously
with such closing, into 1,877,946 shares of the Company's common
stock. This conversion, coupled with a cash payment to be paid at
closing, would result in full satisfaction of the senior secured
convertible notes. The conversion is contingent upon the closing
of the proposed financing transaction by February 28, 2011.
A full-text copy of Amendment is available for free at:
http://ResearchArchives.com/t/s?7240
About Westmoreland Coal
Colorado Springs, Colo.-based Westmoreland Coal Company is an
energy company whose operations include five surface coal mines in
Montana, North Dakota and Texas and two coal-fired power-
generating units with a total capacity of 230 megawatts in North
Carolina. The Company sold 24.3 million tons of coal in 2009.
The Company's two principal operating segments are its coal
segment and its power segment, in addition to two non-operating
segments.
The Company's balance sheet at Sept. 30, 2010, showed $765.0
million in total assets, $898.75 million in total liabilities, and
a stockholder's deficit of $133.75 million.
As reported in the Troubled Company Reporter on March 15, 2010,
KPMG LLP, in Denver, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that of the Company's recurring losses from
operations, working capital deficit and net capital deficiency.
WOODLAND PINES: Has Until March 9 to Propose Chapter 11 Plan
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona directed
Woodland Pines, L.L.C., to file a Chapter 11 Plan and an
explanatory Disclosure Statement by March 9, 2011.
Tucson, Arizona-based Woodland Pines, LLC, filed for Chapter 11
bankruptcy protection on November 9, 2010 (Bankr. D. Ariz. Case
No. 10-36218). Scott D. Gibson, Esq., at Gibson, Nakamura &
Green, PLLC, represents the Debtor. The Debtor disclosed
$5,462,728 in assets and $6,256,493 in liabilities as of the
Chapter 11 filing.
WOODLAND PINES: Taps Gibson Nakamura as Bankruptcy Counsel
----------------------------------------------------------
The Hon. James M. Marlar of the U.S. Bankruptcy Court for the
District of Arizona authorized Woodland Pines, L.L.C., to employ
the law firm of Gibson, Nakamura & Green, P.L.L.C. as counsel.
GNG will be representing the Debtor in the Chapter 11 proceedings.
To the best of the Debtor's knowledge, GNG is a ?disinterested
person? as that term is defined in Section 101(14) of the
Bankruptcy Code.
Tucson, Arizona-based Woodland Pines, LLC, filed for Chapter 11
bankruptcy protection on November 9, 2010 (Bankr. D. Ariz. Case
No. 10-36218). Scott D. Gibson, Esq., at Gibson, Nakamura &
Green, PLLC, represents the Debtor. The Debtor disclosed
$5,462,728 in assets and $6,256,493 in liabilities as of the
Chapter 11 filing.
WOODLAND PINES: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Woodland Pines, L.L.C., filed with the U.S. Bankruptcy Court for
the District of Arizona its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $5,000,000
B. Personal Property $462,728
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $5,095,899
E. Creditors Holding
Unsecured Priority
Claims $43,461
F. Creditors Holding
Unsecured Non-priority
Claims $1,117,133
----------- -----------
TOTAL $5,462,728 $6,256,493
Tucson, Arizona-based Woodland Pines, LLC, filed for Chapter 11
bankruptcy protection on November 9, 2010 (Bankr. D. Ariz. Case
No. 10-36218). Scott D. Gibson, Esq., at Gibson, Nakamura &
Green, PLLC, represents the Debtor.
* Standard & Poor's Says No Global Corporate Defaults in 2011 Yet
-----------------------------------------------------------------
Dow Jones' Small Cap reports that the year-to-date global
corporate default tally remains at zero after no issuers
defaulted last week, Standard & Poor's said, compared with the
eight issuers that defaulted during the same period a year ago.
* U.S. High Yield 2011 Default Rate at 1.5%-2%, Fitch Projects
--------------------------------------------------------------
The U.S. high yield par default rate plunged to 1.3% in 2010, the
lowest level since 2007 and just a fraction of 2009's 13.7%,
according to Fitch Ratings. The weighted average recovery rate on
the year's defaulted bonds was 56.7% of par, well above 2009's
34.1% of par.
While the risk of disruptions to the economy and funding remain
ever present, especially given heightened sensitivity to global
imbalances such as sovereign debt problems in Europe, the
sustainability and management of rapid growth in China and other
emerging markets, uncertainty surrounding the pace of U.S.
employment gains, and volatile commodity prices, Fitch believes
that the U.S. high yield default rate will remain low in 2011, on
a par basis ending the year in a range of 1.5%-2%, well below the
long-term average annual default rate of 5.1%. Fitch is
forecasting U.S. GDP growth of 3.2% in 2011.
Both the number of companies defaulting on their bond obligations
and the par value of bonds affected by the defaults fell
dramatically in 2010. The defaulted issuer count fell 77% to 35
from 151 in 2009 and the par value of bonds affected by the
defaults dropped 90% to $11.9 billion from $118.6 billion in 2009.
Far fewer and smaller companies defaulted in 2010 with the average
issuer default affecting $340 million in bonds, less than half the
average tally of $786 million per issuer recorded in 2009.
The decline in defaults in 2010 from a cyclical peak was the most
pronounced on record. In the last recession, the 2002 peak
default rate of 16.4% was followed by a 5% default rate in 2003
and a 1.5% default rate in 2004. In this recent downturn,
defaults surged and contracted more quickly.
Eight sectors produced multiple defaults in 2010, including
banking and finance, broadcasting and media, retail, energy,
healthcare and pharmaceutical, building and materials, gaming,
lodging and restaurants, and metals and mining. Broadcasting and
media had the year's highest industry default rate of 5.5%. The
broadcasting and media default rate was, however, substantially
lower than the 2009 rate of 31.7%.
U.S. speculative grade companies, especially those at the very
bottom of the rating scale and in sectors facing secular as well
as cyclical challenges, were hard hit by the severe and
unpredictable events of late 2008/early 2009. However, for the
resilient group that survived that period, a rebounding economy,
corporate conservatism, and highly accommodative monetary policy
have combined to greatly reduce default pressures. U.S.
speculative grade credit quality in fact steadily improved over
the course of 2010. Fitch recorded a U.S. speculative grade
upgrade to downgrade ratio of 1.7 to 1 in 2010.
Beyond a constructive view of U.S. economic growth, Fitch's 2011
default outlook is shaped by the relative health of the U.S.
corporate sector - many high yield companies, for example, enjoy
considerable cash cushions. Financial data on a sample group of
269 'BB' and 'B' rated companies, shows cash topping short-term
debt by a margin of roughly 1.7 to 1 at the end of the third
quarter of 2010.
Demand for yield product and the support it provided high yield
issuance was a strong contributing factor to the decline in
defaults in 2010. Issuance soared to a record $282 billion in
2010, for the first time pushing the market's size above one
trillion, according to Fitch's U.S. High Yield Default Index data.
Importantly, issuance activity in 2010 moved further down the
rating scale. Fitch's data shows that 12.1% of high yield bonds
sold in 2010 were rated 'CCC' or lower - a pace closer to the
market's year end concentration of 'CCC' issues of 18% - in other
words, these highly levered companies began, in 2010, to get
financing at a rate more commensurate with their relative size. In
contrast, in the risk-averse environment of 2009, only 5.7% of new
issuance was rated 'CCC' or lower.
'It is critical to the default outlook that funding conditions
remain strong in 2011 since the lowest rated and most vulnerable
issuers have only recently begun to fully participate in the
broader refinancing wave,' said Mariarosa Verde, Managing Director
of Fitch Credit Market Research.
The 2010 issuance boom, with roughly two thirds dedicated to
refinancing, allowed companies to lock in attractive borrowing
costs and push out bond and loan maturities - 88% of newly
originated bonds in 2010 mature in 2016 or later.
The pace of distressed debt exchanges (DDEs) relative to overall
default activity slowed in 2010. In 2010, seven, or 20%, of the
year's issuer defaults consisted of debt exchanges, down from 30%
of issuer defaults in 2009. As with 2009, debt exchanges in 2010
produced higher recovery rates than the batch of more traditional
defaults (bankruptcy filings or missed payments) - 88.2% of par
compared with 48.6% of par for non DDEs. In 2009, DDEs recovered
40.6% of par compared with 32.9% for non DDEs.
'Even excluding the impact of DDEs, the median recovery rate on
defaulted bonds in 2010 of 50% of par was twice the 2009 median,
further reducing the bite of defaults in 2010,' said Eric
Rosenthal, Senior Director of Fitch Credit Market Research.
* Starwood Capital Buys Non-Peforming Loans at Deep Discount
------------------------------------------------------------
Mark Heschmeyer, writing for CoStar Realty Information, said last
week that Starwood Capital Group acquired a non-performing
commercial loan portfolio with an outstanding principal balance of
$157 million from a major Midwest regional bank. The portfolio of
loans was purchased for 40 cents on the dollar, representing an
attractive price of 32% of initial capitalization.
The CoStar report says the portfolio consists of 137 commercial
loans with concentrations in Florida, Indiana, Michigan, North
Carolina and Ohio.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Feb. 3-5, 2011
AMERICAN BANKRUPTCY INSTITUTE
Caribbean Insolvency Symposium
Westin Casuarina Resort & Spa, Grand Cayman Island
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 24-25, 2011
AMERICAN BANKRUPTCY INSTITUTE
Valcon
Four Seasons Las Vegas, Las Vegas, Nev.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 4, 2011
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Battleground West
Hyatt Regency Century Plaza, Los Angeles, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 7-9, 2011
AMERICAN BANKRUPTCY INSTITUTE
Conrad Duberstein Moot Court Competition
Duberstein U.S. Courthouse, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 10, 2011
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts - Florida
Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 10-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
SUCL/ Alexander L. Paskay Seminar on
Bankruptcy Law and Practice
Marriott Tampa Waterside, Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 17-19, 2011
AMERICAN BANKRUPTCY INSTITUTE
Byrne Judicial Clerkship Institute
Pepperdine University School of Law, Malibu, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 27-29, 2011
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott, Chicago, IL
Contact: http://www.turnaround.org/
May 5, 2011
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts - New York City
Association of the Bar of the City of New York,
New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
May 6, 2011
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Hilton New York, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 6, 2011
AMERICAN BANKRUPTCY INSTITUTE
Canadian-American Cross-Border Insolvency Symposium
Fairmont Royal York, Toronto, Ont.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Mich.
Contact: http://www.abiworld.org/
July 21-24, 2011
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 27-30, 2011
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Sanctuary at Kiawah Island, Kiawah Island, S.C.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 4-6, 2011
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 14, 2011
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Tampa Convention Center, Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. __, 2011
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
Dublin, Ireland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 3-5, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Grand Hyatt Atlanta, Atlanta, Ga.
Contact: http://www.turnaround.org/
Apr. 19-22, 2012
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2012
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 2-4, 2012
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
November 1-3, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Westin Copley Place, Boston, Mass.
Contact: http://www.turnaround.org/
Nov. 29 - Dec. 2, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
October 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: Dec. 27, 2010
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com by e-mail.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases by individuals and business entities estimating
assets and debts or disclosing assets and liabilities at less than
$1,000,000. The list includes links to freely downloadable images
of the small-dollar business-related 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. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
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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 2011. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***