/raid1/www/Hosts/bankrupt/TCRLA_Public/110404.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, April 4, 2011, Vol. 12, No. 66
Headlines
A R G E N T I N A
ARTES GRAFICAS: Creditors' Proofs of Debt Due April 18
BANCO MACRO: Moody's Gives Positive Outloook on 'D' Bank Rating
ROBINSA SA: Requests for Opening of Bankruptcy Proceedings
SOCIEDAD INDUSTRIAL: Creditors' Proofs of Debt Due June 1
B R A Z I L
BRASKEM SA: S&P Raises Corporate Credit Rating From 'BB+'
COMPANHIA ENERGETICA: S&P Raises Corp. Credit Rating From 'BB+'
LEXICON UNITED: Delays 2010 Report Due to Foreign Operations
C A Y M A N I S L A N D S
ARMADILLO MANAGEMENT: Shareholders' Final Meeting Set for April 28
CABS CAPITAL: Creditors' Proofs of Debt Due April 27
DASH LEASING: Creditors' Proofs of Debt Due April 28
DTAP CAPITAL: Shareholders' Final Meeting Set for April 28
DTAP CAPITAL: Shareholders' Final Meeting Set for April 28
EAGLE IAM: Shareholders' Final Meeting Set for May 18
FORUM GROUP: Creditors' Proofs of Debt Due April 19
KBC ALPHA: Creditors' Proofs of Debt Due April 28
N.T.S. LIMITED: Creditors' Proofs of Debt Due April 25
QUANTITATIVE TACTICAL: Creditors' Proofs of Debt Due April 13
QUANTITATIVE ULTRA: Creditors' Proofs of Debt Due April 13
QUANTITATIVE ULTRA: Creditors' Proofs of Debt Due April 13
REGENT EUROPEAN: Creditors' Proofs of Debt Due April 28
ST MARGARETS: Creditors' Proofs of Debt Due April 28
SUNWESTERN INVESTMENT: Shareholder to Hear Wind-Up Report on May 5
J A M A I C A
CASH PLUS: Hearing on PriceWaterhouseCoopers' Claims Put Off
DIGICEL GROUP: OUR & FTC To Look Into Claro Merger
M E X I C O
CEMEX SAB: S&P Assigns 'B' Rating to $800 Mil. Floating Notes
COMMERCIAL VEHICLE: 2011 Bonus Plan for Executives Approved
GREENBRIER COS: Commences Cash Tender Offer of 8-3/8% Sr. Notes
GREENBRIER COS: Intends to Offer $200MM Conv. Sr. Notes Due 2018
GREENBRIER COS: Amends Rights Agreement With Computershare
GREENBRIER COS: James Cruckshank Disposes of 734 Common Shares
P U E R T O R I C O
BORDERS GROUP: Inks First Amendment to $505-Mil. DIP Agreement
BORDERS GROUP: Proposes to Modify Trade Terms With Vendors
BORDERS GROUP: Committee Proposes Vendor Information Protocol
BORDERS GROUP: Proposes to Tap Deloitte for Consulting Services
BORDERS GROUP: Proposes Ernst & Young as Auditor
HORIZON LINES: Bonds Fall; Company Said to Weigh Bankruptcy
HORIZON LINES: S&P Cuts Corporate to 'CCC' on Possible Breach
MORGANS HOTEL: Two Directors Disclose Shares/Warrants Ownership
X X X X X X X X
* BOND PRICING: For the Week March 21 to March 25, 2011
- - - - -
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A R G E N T I N A
=================
ARTES GRAFICAS: Creditors' Proofs of Debt Due April 18
------------------------------------------------------
Susana Noemi Mosquera, the court-appointed trustee for Artes
Graficas Cosgraf SRL's bankruptcy proceedings, will be verifying
creditors' proofs of claim until April 18, 2011.
Ms. Mosquera will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 26 in Buenos Aires, with the assistance of Clerk
No. 51, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
The Trustee can be reached at:
Susana Noemi Mosquera
Rivadavia 1210
Argentina
BANCO MACRO: Moody's Gives Positive Outloook on 'D' Bank Rating
---------------------------------------------------------------
Moody's Investors Service has changed to positive from stable the
outlook on Banco Macro S.A.'s D bank financial strength rating, as
well as on its Ba2 global local-currency deposit rating. The
global long- and short-term foreign-currency deposit ratings of
Caa1 and Not Prime were affirmed.
Ratings rationale
At the same time, Moody's Latin America has changed to positive
from stable the outlook on Macro's national scale local currency
deposit rating of Aa1.ar. The national scale foreign currency
deposit rating of Ba1.ar was affirmed. Moody's also changed the
outlook on the peso-linked note rated Ba2 and Aa1.ar in the global
and Argentina's National Scale, respectively. The foreign
currency debt ratings remained unchanged.
Moody's has also changed to positive from stable the outlook on
Banco del Tucum n's D bank financial strength rating, as well as
on its Ba2 global local-currency deposit rating. The global long-
and short-term foreign-currency deposit ratings of Caa1 and Not
Prime were affirmed. Moody's Latin America changed to positive
from stable the outlook on Tucum n's national scale local-currency
deposit rating of Aa1.ar. The national scale foreign-currency
deposit rating of Ba1.ar was affirmed.
Moody's said the change in outlook is supported by Macro's
strengthened business franchise that has boosted its consolidated
financial fundamentals, including profitability and asset quality.
Thanks to successive acquisitions, including several provincial
banks, Banco Macro is currently the second largest domestically
owned private bank in Argentina, with US$7 billion in assets (6%
market share) and a nationwide footprint of 404 branches,
especially in the northwestern region of Argentina.
Moody's noted that serving as the financial agent for four
Argentine provinces has provided Macro access to low-cost, stable
funding sources, as well as to a broad client base that, in large
part, is composed of the provinces' civil servants. The bank's
profitability, therefore, has been sustained by healthy net
interest margins and is predominantly derived from growing lending
activity with the retail segment and a solid base of inexpensive
deposits.
Non-performing loans, which showed deterioration during 2009, are
trending down, also aided by the robust loan growth reported in
2010. Management has indicated its intention to further expand
Macro's loan book by leveraging its consumer client base, a move
that will be closely monitored. Moody's note, however, that
Macro's capitalization ratio and reserve coverage appear
sufficient to absorb potential losses even under stress scenarios.
The rating also incorporates Moody's expectation of an increasing
diversification of Macro's assets and liabilities to mitigate its
public-sector exposure, which is above that of its peers. This is
explained by the share of loans and deposits by provincial
governments, as well as by the government owned pension fund,
ANSES, which holds a sizable 31% stake in Macro's capital.
Moody's Ba2 global local-currency deposit rating derives from
Macro's baseline credit assessment of Ba2. The rating does not
benefit from any uplift from Moody's assessment of systemic
support.
Banco Macro is a universal bank headquartered in Buenos Aires,
Argentina, and it had assets of ARS30.8 billion (approximately
US$7.7 billion) and deposits for ARS20.9 billion (US$5.3 billion)
as of December 2010.
The outlook for these ratings of Macro and Tucum n were changed to
positive from stable:
* Bank Financial Strength Rating of D
* Long- and short-term global local-currency deposit ratings of
Ba2
* Long-Term National Scale Local-Currency Deposit Rating of Aa1.ar
* Long term Global Local Currency Debt Rating: Ba2
* Long-Term National Scale Local-Currency Debt Rating of Aa1.ar
These ratings were affirmed:
* Long- and short-term global foreign-currency deposit ratings of
Caa1 and Not Prime
* Long -Term National Scale Foreign Currency Deposit Rating of
Ba1.ar
* Long term Global foreign currency senior debt rating of B2
* Long Term National Scale Foreign Currency senior Debt Rating of
Aa3.ar
* Long term Global foreign currency subordinated debt rating of B2
* Long Term National Scale Foreign Currency subordinated Debt
Rating of Aa3.ar
ROBINSA SA: Requests for Opening of Bankruptcy Proceedings
----------------------------------------------------------
Robinsa SA requested the opening bankruptcy proceedings.
The company has reported assets of $2.88 million and liabilities
of $3.17 million.
SOCIEDAD INDUSTRIAL: Creditors' Proofs of Debt Due June 1
---------------------------------------------------------
Estudio Rego-Saavedra, the court-appointed trustee for Sociedad
Industrial Argentina SA's reorganization proceedings, will be
verifying creditors' proofs of claim until June 1, 2011.
The trustee will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 12 in Buenos Aires, with the assistance of Clerk
No. 24, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
Creditors will vote to ratify the completed settlement plan during
the assembly on March 16, 2012.
The Trustee can be reached at:
Estudio Rego-Saavedra
Arenales 2552
Argentina
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B R A Z I L
===========
BRASKEM SA: S&P Raises Corporate Credit Rating From 'BB+'
---------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on Brazil-based petrochemical company
Braskem S.A. to 'BBB-' from 'BB+'. At the same time, S&P raised
its Brazil national scale ratings on Braskem to 'brAAA' from
'brAA+'. The outlook is stable.
"The upgrade reflects Braskem's improving cash flow metrics and
liquidity, as well as S&P's expectations that the company will
report higher and more resilient credit metrics in the future
because of its dominant market position in Brazil, a diversified
feedstock mix, favorable supply contracts, and operating synergies
with acquired Quattor," said Standard & Poor's credit analyst
Alexandre Menezes. Braskem has delivered operating and financial
improvements ahead of S&P's expectations because of its successful
integration of Quattor's assets. S&P believes these factors allow
Braskem to strengthen credit metrics and maintain an intermediate
financial profile that is compatible with the rating. Despite
positive market fundamentals in the intermediate term, Braskem
remains exposed to industry cyclicality, the effect of market
and economic conditions on demand for petrochemical products, and
some margin fluctuation due to volatile raw material and product
prices -- even more so with the currently volatile oil price
environment.
S&P has also revised its analytical approach and will cease
treating Braskem as a government-related entity, given that S&P
assess its importance and role as limited and the Brazilian
government doesn't directly own Braskem, but owns it through
Petroleo Brasileiro S.A. (BBB-/Stable/--). Still, S&P's analysis
encompasses the relationship between Braskem and Petrobras, both
commercial and as a shareholder, under S&P's parent-subsidiary
criteria.
Braskem's business profile is satisfactory. Although it competes
with imports, the company benefits from a dominant position in the
Brazilian petrochemical market as the sole local producer of
polyethylenes and polypropylene in the country and a leading
player in polyvinyl chloride. Its favorable feedstock contracts,
close commercial relationships with its fragmented customer base,
and strong distribution capabilities allow Braskem to sell
products at a good profitability, a condition that further
improved with the Quattor acquisition. Braskem's ability to
report sound and more stable margins is evidence of its improved
business position.
Additionally, as it is ramping up utilization rates at Quattor and
capturing synergies stemming from full integration of its assets,
Braskem's profitability is becoming more resilient. A more-
balanced feedstock mix (between naphtha, ethane, and refinery
propylene), even more flexibility to efficiently plan production
at its several plants, economies of scope and scale, and other
operating synergies also bode well for Braskem's performance in
the intermediate term. Finally, S&P expects market conditions to
remain favorable in the next couple of years as S&P projects
demand to remain firm in Brazil and global petrochemical prices
should remain consistent with limited supply expansion.
The stable outlook reflects S&P's expectations that operating
results will keep improving as Braskem captures synergies out of
acquired assets and favorable market conditions allow for revenue
and cash flow expansion. S&P project FFO to total debt and debt
to EBITDA to reach 20%-25% and 3.0x, respectively, by year-end
2011 and 25%-30% and 2.5x, respectively, by 2012. S&P could lower
the ratings if Braskem's liquidity weakens or if it diverges from
expected financial improvement, with adjusted total debt to EBITDA
above 3.0x and FFO to adjusted total debt below 20%. Given that
the ratings already factor credit metric improvements, S&P
believes a positive rating revision is unlikely in the
intermediate term but would be warranted if Braskem further
improves its financial profile, with FFO to total debt
consistently above 40%.
COMPANHIA ENERGETICA: S&P Raises Corp. Credit Rating From 'BB+'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on Companhia Energetica de Pernambuco to
'BBB-' from 'BB+' on the global scale and to 'brAAA' from 'brAA+'
on the Brazil national scale. The outlook on the corporate credit
rating is stable. At the same time, S&P affirmed the 'BBB-'
ratings on Neoenergia S.A. and its other subsidiaries Companhia de
Eletricidade do Estado da Bahia and Companhia Energetica do Rio
Grande do Norte, with a stable outlook.
"The rating action on CELPE reflects the continuous improvements
in its operations, with a declining trend in electricity losses,
as a result of significant investments made by the company," said
Standard & Poor's credit analyst Luisa Vilhena. "At the same
time, the company has registered improvements in its capital
structure while maintaining consistent cash flow protection
metrics in recent years due to strong cash generation. In S&P's
view, the combination of these factors improves CELPE's business
and financial risk profiles, which are aligned with the profiles
of Neoenergia, Coelba, and Cosern."
The ratings on Neoenergia S.A. and its subsidiaries reflect its
resilient financial performance, strong growth prospects for its
concession areas, stable regulatory framework, and prudent
financial policy. In S&P's view, these factors mitigate the
group's challenges in implementing its significant investment plan
for the next five years, which includes large generation projects.
The group has the exclusive concession to distribute electricity
in the states of Bahia, Rio Grande do Norte, and Pernambuco, where
electricity demand is projected to remain strong, and the customer
base is primarily residential. (Residential customers represent
more than 30% of the group's gross revenues.) Conversely, the
group's concession areas require large investments to maintain
efficient services and to expand the infrastructure network.
Despite some uncertainties about a new tariff reset methodology
(which will only affect Neoenergia by 2013) and about the renewal
of old power generation concession contracts (to which the group
is not exposed), the fairly predictable and stable Brazilian
electric sector's regulatory framework is an important component
of S&P's assessment of the group's business risk profile.
LEXICON UNITED: Delays 2010 Report Due to Foreign Operations
------------------------------------------------------------
Lexicon United Incorporated notified the U.S. Securities and
Exchange Commission that it is unable to file its Form 10-K for
the period ended Dec. 31, 2010, within the prescribed time period
without unreasonable effort or expense due to the complexity of
certain of its foreign operations. The Company anticipates that
it will file its Form 10-K within the grace period provided by
Exchange Act Rule 12b-25.
About Lexicon United
Austin, Tex.-based Lexicon United Incorporated and its subsidiary,
ATN Capital e Participacoes Ltd., a Brazilian limited company, are
engaged in the business of purchasing, managing and collecting
defaulted consumer receivables for its own account and managing,
collecting and servicing portfolios of defaulted and charged-off
account receivables for large financial institutions in Brazil.
These receivables are acquired from consumer credit originators,
primarily credit card issuers in Brazil.
As reported in the Troubled Company Reporter on May 25, 2010,
Meyler & Company, LLC, in Middletown, N.J., 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 continues to have negative cash flows from
operations, recurring losses from operations, and has a
stockholders' deficit.
The Company's balance sheet at Sept. 30, 2010, showed $3.02
million in total assets, $3.11 million in total liabilities,
and a stockholders' deficit of $86,505.
==========================
C A Y M A N I S L A N D S
==========================
ARMADILLO MANAGEMENT: Shareholders' Final Meeting Set for April 28
------------------------------------------------------------------
The shareholders of Armadillo Management Ltd. will hold their
final meeting on April 28, 2011, at 8:30 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers Corporate Services Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
CABS CAPITAL: Creditors' Proofs of Debt Due April 27
----------------------------------------------------
The creditors of Cabs Capital Limited are required to file their
proofs of debt by April 27, 2011, to be included in the company's
dividend distribution.
The company commenced liquidation proceedings on March 18, 2011.
The company's liquidator is:
Walkers SPV Limited
c/o Anthony Johnson
Telephone: (345) 914-6314
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9005
Cayman Islands
DASH LEASING: Creditors' Proofs of Debt Due April 28
----------------------------------------------------
The creditors of Dash Leasing Two Limited are required to file
their proofs of debt by April 28, 2011, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on March 16, 2011.
The company's liquidator is:
Marc Randall
c/o Maples Liquidation Services (Cayman) Limited
P.O. Box 1093, Boundary Hall
Grand Cayman KY1-1102
Cayman Islands
DTAP CAPITAL: Shareholders' Final Meeting Set for April 28
----------------------------------------------------------
The shareholders of DTAP Capital Macro Limited will hold their
final meeting on April 28, 2011, at 8:45 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers Corporate Services Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
DTAP CAPITAL: Shareholders' Final Meeting Set for April 28
----------------------------------------------------------
The shareholders of DTAP Capital Offshore Master Partners Ltd.
will hold their final meeting on April 28, 2011, at 9:00 a.m., to
receive the liquidator's report on the company's wind-up
proceedings and property disposal.
The company's liquidator is:
Walkers Corporate Services Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
EAGLE IAM: Shareholders' Final Meeting Set for May 18
-----------------------------------------------------
The shareholders of Eagle Iam Limited will hold their final
meeting on May 18, 2011, at 10:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Westport Services Ltd.
c/o Bonnie Willkom
Telephone: (345) 949 5122
Fax: (345) 949 7920
P.O. Box 1111, Grand Cayman KY1-1102
Cayman Islands
FORUM GROUP: Creditors' Proofs of Debt Due April 19
---------------------------------------------------
The creditors of Forum Group Ltd. are required to file their
proofs of debt by April 19, 2011, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on February 28, 2011.
The company's liquidator is:
Dean C. Desantis
799 Sanctuary Drive
Boca Raton, Florida 33431
U.S.A
Telephone: 1 561 447 9055
Fax: 1 561 447 9035
KBC ALPHA: Creditors' Proofs of Debt Due April 28
-------------------------------------------------
The creditors of KBC Alpha Master Fund SPC are required to file
their proofs of debt by April 28, 2011, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on March 18, 2011.
The company's liquidator is:
Marc Randall
c/o Maples Liquidation Services (Cayman) Limited
P.O. Box 1093, Boundary Hall
Grand Cayman KY1-1102
Cayman Islands
N.T.S. LIMITED: Creditors' Proofs of Debt Due April 25
------------------------------------------------------
The creditors of N.T.S. Limited are required to file their proofs
of debt by April 25, 2011, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on March 3, 2011.
The company's liquidator is:
Trident Liquidators (Cayman) Ltd
Mrs. Eva Moore
Trident Trust Company (Cayman) Limited
Telephone: (345) 949 0880
Fax: (345) 949 0881
P.O. Box 847, George Town
Grand Cayman KY1-1103
Cayman Islands
QUANTITATIVE TACTICAL: Creditors' Proofs of Debt Due April 13
-------------------------------------------------------------
The creditors of Quantitative Tactical Fund Master Ltd. are
required to file their proofs of debt by April 13, 2011, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on March 17, 2011.
The company's liquidator is:
Mourant Ozannes Cayman Liquidators Limited
c/o Christine Fletcher
Telephone: (+1) 345 949 4123
Fax: (+1) 345 949 4647; or
Mourant Ozannes Cayman Liquidators Limited
c/o Peter Goulden
Telephone: (+1) 345 949 4123
Fax: (+1) 345 949 4647
Harbour Centre, 42 North Church Street
P.O. Box 1348, George Town
Grand Cayman KY1-1108
Cayman Islands
QUANTITATIVE ULTRA: Creditors' Proofs of Debt Due April 13
----------------------------------------------------------
The creditors of Quantitative Ultra Fund Master Ltd. are required
to file their proofs of debt by April 13, 2011, to be included in
the company's dividend distribution.
The company commenced liquidation proceedings on March 17, 2011.
The company's liquidator is:
Mourant Ozannes Cayman Liquidators Limited
c/o Christine Fletcher
Telephone: (+1) 345 949 4123
Fax: (+1) 345 949 4647; or
Mourant Ozannes Cayman Liquidators Limited
c/o Peter Goulden
Telephone: (+1) 345 949 4123
Fax: (+1) 345 949 4647
Harbour Centre, 42 North Church Street
P.O. Box 1348, George Town
Grand Cayman KY1-1108
Cayman Islands
QUANTITATIVE ULTRA: Creditors' Proofs of Debt Due April 13
----------------------------------------------------------
The creditors of Quantitative Ultra Fund, Ltd. are required to
file their proofs of debt by April 13, 2011, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on March 17, 2011.
The company's liquidator is:
Mourant Ozannes Cayman Liquidators Limited
c/o Christine Fletcher
Telephone: (+1) 345 949 4123
Fax: (+1) 345 949 4647; or
Mourant Ozannes Cayman Liquidators Limited
c/o Peter Goulden
Telephone: (+1) 345 949 4123
Fax: (+1) 345 949 4647
Harbour Centre, 42 North Church Street
P.O. Box 1348, George Town
Grand Cayman KY1-1108
Cayman Islands
REGENT EUROPEAN: Creditors' Proofs of Debt Due April 28
-------------------------------------------------------
The creditors of Regent European Securities (Cayman) Limited are
required to file their proofs of debt by April 28, 2011, to be
included in the company's dividend distribution.
The company commenced liquidation proceedings on March 16, 2011.
The company's liquidator is:
Marc Randall
c/o Maples Liquidation Services (Cayman) Limited
P.O. Box 1093, Boundary Hall
Grand Cayman KY1-1102
Cayman Islands
ST MARGARETS: Creditors' Proofs of Debt Due April 28
----------------------------------------------------
The creditors of St Margarets Leasing Limited are required to file
their proofs of debt by April 28, 2011, to be included in the
company's dividend distribution.
The company commenced liquidation proceedings on March 16, 2011.
The company's liquidator is:
Marc Randall
c/o Maples Liquidation Services (Cayman) Limited
P.O. Box 1093, Boundary Hall
Grand Cayman KY1-1102
Cayman Islands
SUNWESTERN INVESTMENT: Shareholder to Hear Wind-Up Report on May 5
------------------------------------------------------------------
The shareholder of Sunwestern Investment Company (1988) Ltd. will
receive on May 5, 2011, at 10:30 a.m., the liquidators' report on
the company's wind-up proceedings and property disposal.
The company's liquidators are:
David Preston
Beverly Bernard
c/o Isabel Mason
Telephone: 949-7755
Fax: 949-7634
=============
J A M A I C A
=============
CASH PLUS: Hearing on PriceWaterhouseCoopers' Claims Put Off
------------------------------------------------------------
The RJR News reports that the Supreme Court has moved the hearing
on PriceWaterhouseCoopers' claims to May 3.
As reported by the Troubled Company Reporter-Latin America on
March 31, 2011, the RJR News said that Cash Plus liquidator Hugh
Wildman was set to challenge on March 31 the claims made by
PriceWaterhouseCoopers, the entity hired to conduct the
receivership through a team headed by Kevin Bandoian. According
to the RJR News, PricewaterhouseCoopers claimed approximately
$220 million for its 2008 work for Cash Plus, and asked the court
for authorization to seize and sell assets to meet their claims
for payments.
The RJR News relates that Mr. Wildman will ask the court to rule
that the appointment of PriceWaterhouseCoopers as receiver-manager
was improper and therefore ineffective.
Citing sources, the RJR News reports that Mr. Wildman has not seen
any substantive record of accounting and legal work done or the
fees associated with the work. According to the RJR News, some of
PriceWaterhouseCoopers' claims are allegedly inconsistent with
prevailing rates. Mr. Wildman wants to get a proper record of all
documents obtained by PriceWaterhouseCoopers during the period of
receivership, the RJR News states.
Cash Plus Limited is an investment club in Jamaica. It collapsed
in 2007 after the Financial Services Commission moved to regulate
its operations. The company is a financial arm of the Cash Plus
Group of Companies, a business conglomerate established in 2002 by
mortgage banker Carlos Hill. The company offers its participants
the opportunity to participate in the group's ventures which
include mergers and numerous acquisitions.
In April 2008, the Supreme Court of Jamaica placed Cash Plus in
receivership. Cash Plus admitted that it wouldn't be able to pay
its lenders until April 14, 2008. The firm has 40,000 lenders
with loans totaling JM$4 billion. Cash Plus was unable to repay
its investors. The Financial Services Commission said it was
informed by the attorney acting on behalf of Cash Plus that the
investment club lacked the funds to start the repayment of the
principal and interest owing to its investors.
PricewaterhouseCoopers' accountant, Kevin Bandoian, was appointed
as joint receiver-manager for Cash Plus.
DIGICEL GROUP: OUR & FTC To Look Into Claro Merger
--------------------------------------------------
The Office of Utilities Regulation and the Fair Trading Commission
will be seeking to get details of the deal from Digicel and Claro
on their planned merger, the Jamaica Observer reports, citing
Daryl Vaz, the information, telecommunications and special
projects minister, said that he is consulting with the Office of
Utilities Regulation and the Fair Trading Commission on the
Digicel-Claro merger.
According to the Jamaica Observer, Minister Vaz said he has
instructed OUR to meet with Dicigel and Claro. "It's a commercial
arrangement and therefore we would never want for the Government
to drag its feet. I am hoping that in short order we can get to
the stage where a decision can be made," the report quoted
Minister Vaz as saying.
As reported by the Troubled Company Reporter-Latin America on
March 23, 2011, RadioJamaica said that Digicel signed the
agreement with America Movil. The deal will also see Digicel
selling its business in El Salvador and Honduras to America Movil,
according to RadioJamaica. The RJR News relates that
telecommunication company LIME Jamaica has asked the government,
the Office of Utilities Regulations, and the Fair Trading
Commission to assess the deal. LIME said that assessment should
be done before approval of the deal is given by the relevant
minister, the RJR News states.
Digicel Group Limited -- http://www.digicelgroup.com/-- is
renowned for competitive rates, unbeatable coverage, superior
customer care, a wide variety of products and services and state-
of-the-art handsets. By offering innovative wireless services and
community support, Digicel has become a leading brand across its
31 markets worldwide.
Digicel is incorporated in Bermuda and now has operations in 31
markets worldwide. Its Caribbean and Central American markets
comprise Anguilla, Antigua & Barbuda, Aruba, Barbados, Bermuda,
Bonaire, the British Virgin Islands, the Cayman Islands, Curacao,
Dominica, El Salvador, French Guiana, Grenada, Guadeloupe, Guyana,
Haiti, Honduras, Jamaica, Martinique, Panama, St Kitts & Nevis,
St. Lucia, St. Vincent & the Grenadines, Suriname, Trinidad &
Tobago and Turks & Caicos. The Caribbean company also has
coverage in St. Martin and St. Barths. Digicel Pacific comprises
Fiji, Papua New Guinea, Samoa, Tonga and Vanuatu.
* * *
As of January 14, 2010, the company continues to carry Moody's
"Caa1" senior unsecured debt rating.
===========
M E X I C O
===========
CEMEX SAB: S&P Assigns 'B' Rating to $800 Mil. Floating Notes
-------------------------------------------------------------
Standard & Poor's Rating Services said that it assigned its 'B'
senior secured debt rating to Cemex S.A.B de C.V.'s proposed
issuance of $800 million in floating-rate long-term notes due
2015. At the same time, S&P is affirming its 'B' global scale and
'mxBB+' national scale long-term corporate credit and senior
secured debt ratings on Cemex.
"S&P's ratings on Cemex and its key subsidiaries (Cemex Inc.,
Cemex Mexico S.A. de C.V., and Cemex Espana S.A.) are constrained
by its highly leveraged financial risk profile, reflecting the
company's high debt levels and less-than-adequate liquidity
position," said Standard & Poor's credit analyst Laura Martinez.
The ratings also reflect the relatively high concentration of its
cash-flow generation in a few key operating markets despite
geographic diversification. These factors are partially mitigated
by the satisfactory business risk profile, given the group's
leading position in the global cement, concrete, aggregates, and
ready-mix businesses; proven operating turnaround experience; and
operating efficiency. S&P has equalized the ratings on Cemex
Mexico, Cemex Inc., and Cemex Espana because of the strategic
importance of each of these subsidiaries to the group.
The stable outlook reflects S&P's expectation that Cemex's cash-
flow generation will improve somewhat in 2011, and that Cemex will
reach adjusted total debt-to-EBITDA and FFO-to-total debt ratios
of around 8.1x and 6.7%, respectively, by the end of 2011. More
important, an increase in free cash-flow generation may allow the
company to prepay a portion of the large bank maturities of 2013
and 2014. S&P could raise the rating if the company improves its
total debt-to-EBITDA ratio to less than 5x and its FFO-to-total
debt ratio to more than 12%. S&P believes this could result from
a significant increase in volumes in its operations in the U.S.
and more robust cement and aggregates sales in other markets. A
negative action is possible if the company's volumes remain flat
or decline, leading to a further deterioration in its liquidity
and financial performance, or if a covenant breach becomes a risk.
COMMERCIAL VEHICLE: 2011 Bonus Plan for Executives Approved
-----------------------------------------------------------
The compensation committee of the board of directors of Commercial
Vehicle Group, Inc., approved the Commercial Vehicle Group, Inc.
2011 Bonus Plan on Feb. 24, 2011.
Each executive officer is eligible to participate in the Plan.
The Plan includes both a "Company Factor" and an "Individual
Factor."
The "Company Factor" component is tied to the Company's
achievement of EBITDA, a non-GAAP financial measure calculated by
adding interest, taxes, depreciation and amortization to net
income, and adjusted by the Compensation Committee to eliminate
the effects of gains and losses on forward exchange contracts,
non-recurring gains and losses or other income or expenses not
foreseen at the time the 2011 Bonus Plan was approved.
The "Individual Factor" is tied to strategic, operating and cost
initiatives specific to the executive's job scope. The 2011 Bonus
Plan reflects the following formula for calculating the annual
cashincentive payment: salary will be multiplied by the "Target
Factor" multiplied by the "Company Factor" achievement multiplied
by the "Individual Factor" achievement.
The target incentive bonus opportunity under the 2011 Bonus Plan
for Mervin Dunn was set at 90% of his base salary. The target
incentive bonus opportunity for Messrs. Chad Utrup, Gerald
Armstrong and Kevin Frailey was set at 75% of their base salary.
The target incentive bonus opportunity for Gordon Boyd was set at
40% of his base salary.
A full-text copy of the Bonus Plan is available for free at:
http://ResearchArchives.com/t/s?744f
About Commercial Vehicle Group
New Albany, Ohio-based Commercial Vehicle Group, Inc., (Nasdaq:
CVGI) supplies fully integrated system solutions for the global
commercial vehicle market, including the heavy-duty truck market,
the construction and agricultural markets, and the specialty and
military transportation markets. The Company has facilities
located in the United States in Arizona, Indiana, Illinois, Iowa,
North Carolina, Ohio, Oregon, Tennessee, Virginia and Washington
and outside of the United States in Australia, Belgium, China,
Czech Republic, Mexico, Ukraine and the United Kingdom.
* * *
Commercial Vehicle carries a 'Caa2' Corporate Family Rating and
'Caa2/LD' Probability of Default Rating from Moody's. It has
'CCC+' issuer credit ratings from Standard & Poor's.
In mid-October 2010, Moody's Investors Service upgraded Commercial
Vehicle Group, Inc.'s Corporate Family Rating to Caa1 from Caa2,
and revised the ratings outlook to positive from negative. These
positive actions recognize the continuing improvement in the build
rates for commercial vehicles and the realized benefits of the
company's operating and capital restructurings. According to
Moody's, the Caa1 CFR reflects modest size, high debt leverage,
and exposure to highly cyclical commercial vehicle end markets.
Demand for commercial vehicle components is sensitive to both
economic cycles and regulatory implementation schedules.
GREENBRIER COS: Commences Cash Tender Offer of 8-3/8% Sr. Notes
---------------------------------------------------------------
The Greenbrier Companies, Inc., has commenced a cash tender offer
for any and all of its outstanding 8-3/8% Senior Notes due 2015
pursuant to the terms and conditions set forth in an Offer to
Purchase and Consent Solicitation Statement, dated March 30, 2011.
In connection with the Tender Offer, Greenbrier is also soliciting
consents from the holders of the Notes for certain proposed
amendments to the indenture governing the Notes. Holders that
validly tender their Notes will be deemed to have delivered their
Consent to the proposed amendments. Holders may not tender their
Notes without delivering their Consents to the proposed amendments
and may not deliver Consents without tendering their Notes. The
primary purpose of the Consent Solicitation and the proposed
amendments is to eliminate substantially all of the restrictive
covenants and certain events of default.
The Tender Offer will expire at 8:00 a.m., New York City time, on
Wednesday, April 27, 2011, unless extended or earlier terminated
by Greenbrier. Holders of Notes who validly tender and do not
validly withdraw their Notes and validly deliver and do not
validly revoke their Consents at or prior to 5:00 p.m., New York
City time, on Tuesday, April 12, 2011, will receive the total
consideration of $1,031.67 per $1,000 in principal amount of the
Notes. The purchase price for the Notes tendered at or prior to
the Consent Payment Deadline includes an early consent payment of
$10 per $1,000 in principal amount of the Notes. Any Notes
validly tendered after the Consent Payment Deadline but on or
prior to the Expiration Date will be purchased at a purchase price
of $1,021.67 per $1,000 in principal amount of the Notes. In both
cases, tendering holders will also receive accrued and unpaid
interest from the last interest payment date for the Notes to, but
not including, the early settlement date or the settlement date,
as applicable. Holders may not withdraw tendered Notes and may
not revoke delivered Consents after the Consent Payment Deadline.
The Tender Offer will be subject to the satisfaction of certain
conditions, including, among other things, Greenbrier receiving
the proceeds from the issuance of $200 million aggregate principal
amount of the Company's senior convertible notes due 2018 in
connection with the Company's anticipated private placement of the
New Notes. If any of the conditions is not satisfied, Greenbrier
is not obligated to accept for payment, purchase or pay for, and
may delay the acceptance for payment of, any tendered Notes, in
each event subject to applicable laws, and may terminate the
Tender Offer. Furthermore, in order for the proposed amendments
to the indenture governing the Notes to become effective, at least
a majority in principal amount of the outstanding Notes must
deliver Consents.
Copies of the tender offer documents can be obtained by contacting
D.F. King & Co., Inc., the Information Agent for the Tender Offer
and Consent Solicitation, at (800) 628-8536 (toll free) or (212)
269-5550 (collect). D.F. King & Co., Inc., also has been appointed
to act as the Depositary Agent for the Tender Offer and Consent
Solicitation.
BofA Merrill Lynch is acting as Dealer Manager and Solicitation
Agent for the Tender Offer and Consent Solicitation. Questions
concerning the Tender Offer and Consent Solicitation may be
directed to BofA Merrill Lynch at (888) 292-0700 or collect at
(980) 388-9217.
None of Greenbrier, including its Board of Directors, the Dealer
Manager and Solicitation Agent, the Depositary Agent, the
Information Agent, the Trustee for the Notes or any other person,
has made or makes any recommendation as to whether holders of the
Notes should tender, or refrain from tendering, all or any portion
of their Notes pursuant to the Tender Offer and deliver their
Consent, or refrain from delivering their Consent pursuant to the
Consent Solicitation, and no one has been authorized to make such
a recommendation. Holders of the Notes must make their own
decisions as to whether to tender their Notes and deliver their
Consent.
About Greenbrier Cos.
Based in Lake Oswego, Oregon, The Greenbrier Companies Inc.
operates in three primary business segments: manufacturing,
refurbishment and parts, and leasing and services. The
manufacturing segment, operating from four facilities in the
United States, Mexico and Poland, produces double-stack intermodal
railcars, conventional railcars, tank cars and marine vessels.
The refurbishment & parts segment performs railcar repair,
refurbishment and maintenance activities in the United States and
Mexico. The leasing & services segment owns roughly 8,000
railcars and provides management services for roughly 225,000
railcars.
The Company's balance sheet as of Nov. 30, 2010, showed
$1.1 billion in total assets, $812.7 million in total assets and
$296.5 million in total equity.
* * *
Greenbrier carries a 'Caa1' corporate family rating from Moody's
Investors Service and a Speculative Grade Liquidity
Rating of SGL-3. In August 2010, Moody's said Greenbrier's rating
outlook is negative in consideration of the continued sluggish
demand for new railcars and the company's need to address
certain refinancing needs.
Greenbrier carries 'B-' issuer credit ratings from Standard &
Poor's Ratings Services. S&P said in May 2010 that the ratings on
Greenbrier reflect the company's fair business risk profile
stemming from the cyclicality of the freight car manufacturing
industry; the dramatic decline in demand for new railcars as a
result of slower economic growth and weaker carloadings; and
limited customer diversity. The Company, according to S&P, also
has a highly leveraged financial risk profile, marked by increased
debt balances as a result of acquisitions completed in recent
years.
GREENBRIER COS: Intends to Offer $200MM Conv. Sr. Notes Due 2018
----------------------------------------------------------------
The Greenbrier Companies, Inc., intends to offer, subject to
market and other conditions, $200 million aggregate principal
amount of Convertible Senior Notes due 2018. Greenbrier intends
to grant the initial purchasers a 30-day over-allotment option to
purchase up to an additional $15 million aggregate principal
amount of Notes on the same terms and conditions.
Greenbrier intends to use the net proceeds from the offering,
together with additional cash on hand, to (i) purchase any and all
of Greenbrier's outstanding $235 million aggregate principal
amount of its 8 3/8% senior notes due 2015 that are tendered
pursuant to a cash tender offer and consent solicitation, also
announced by Greenbrier, (ii) pay the consent and other fees in
connection with such cash tender offer and consent solicitation
and (iii) redeem or otherwise retire any and all 2015 Notes that
remain outstanding following consummation of the cash tender
offer.
The Notes will be convertible into shares of Greenbrier's common
stock, based on a conversion rate to be determined. Interest on
the Notes will be payable semiannually in arrears on April 1 and
October 1 of each year, beginning on Oct. 1, 2011. The Notes will
mature on April 1, 2018, unless earlier repurchased by the Company
or converted in accordance with their terms prior to such date.
The interest rate, conversion rate, conversion price and other
terms of the Notes will be determined at the time of pricing of
the offering. The Notes will be Greenbrier's senior unsecured
obligations and will rank equally with all of its existing and
future senior unsecured debt and senior to all of its existing and
future subordinated debt.
The Notes will be offered in the United States only to qualified
institutional buyers in accordance with Rule 144A under the
Securities Act of 1933, as amended. The Notes and the shares of
Greenbrier common stock issuable upon conversion of the Notes will
not be registered under the Securities Act or any state securities
laws and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
About Greenbrier Cos.
Based in Lake Oswego, Oregon, The Greenbrier Companies Inc.
operates in three primary business segments: manufacturing,
refurbishment and parts, and leasing and services. The
manufacturing segment, operating from four facilities in the
United States, Mexico and Poland, produces double-stack intermodal
railcars, conventional railcars, tank cars and marine vessels.
The refurbishment & parts segment performs railcar repair,
refurbishment and maintenance activities in the United States and
Mexico. The leasing & services segment owns roughly 8,000
railcars and provides management services for roughly 225,000
railcars.
The Company's balance sheet as of Nov. 30, 2010, showed
$1.1 billion in total assets, $812.7 million in total assets and
$296.5 million in total equity.
* * *
Greenbrier carries a 'Caa1' corporate family rating from Moody's
Investors Service and a Speculative Grade Liquidity
Rating of SGL-3. In August 2010, Moody's said Greenbrier's rating
outlook is negative in consideration of the continued sluggish
demand for new railcars and the company's need to address
certain refinancing needs.
Greenbrier carries 'B-' issuer credit ratings from Standard &
Poor's Ratings Services. S&P said in May 2010 that the ratings on
Greenbrier reflect the company's fair business risk profile
stemming from the cyclicality of the freight car manufacturing
industry; the dramatic decline in demand for new railcars as a
result of slower economic growth and weaker carloadings; and
limited customer diversity. The Company, according to S&P, also
has a highly leveraged financial risk profile, marked by increased
debt balances as a result of acquisitions completed in recent
years.
GREENBRIER COS: Amends Rights Agreement With Computershare
----------------------------------------------------------
The Greenbrier Companies, Inc., and Computershare Trust Company,
N.A.,(formerly EquiServe Trust Company, N.A.) entered into
Amendment No. 4 to the Stockholder Rights Agreement, made and
entered into as of July 13, 2004, by and between the Company and
EquiServe Trust Company, N.A, as amended. The Fourth Amendment,
which was approved by the Company's Board of Directors on
March 28, 2011, clarifies that no initial purchaser will be deemed
a "Beneficial Owner" (within the meaning of the Rights Agreement)
of any common stock of the Company or any securities convertible
into common stock of the Company by reason of acting as an initial
purchaser in a private offering contemplating resales under Rule
144A under the Securities Act of 1933, as amended.
A full-text copy of the Amendment No. 4 to the Stockholders'
Rights Agreement is available for free at http://is.gd/wRereg
About Greenbrier Cos.
Based in Lake Oswego, Oregon, The Greenbrier Companies Inc.
operates in three primary business segments: manufacturing,
refurbishment and parts, and leasing and services. The
manufacturing segment, operating from four facilities in the
United States, Mexico and Poland, produces double-stack intermodal
railcars, conventional railcars, tank cars and marine vessels.
The refurbishment & parts segment performs railcar repair,
refurbishment and maintenance activities in the United States and
Mexico. The leasing & services segment owns roughly 8,000
railcars and provides management services for roughly 225,000
railcars.
The Company's balance sheet as of Nov. 30, 2010, showed
$1.1 billion in total assets, $812.7 million in total assets and
$296.5 million in total equity.
* * *
Greenbrier carries a 'Caa1' corporate family rating from Moody's
Investors Service and a Speculative Grade Liquidity
Rating of SGL-3. In August 2010, Moody's said Greenbrier's rating
outlook is negative in consideration of the continued sluggish
demand for new railcars and the company's need to address
certain refinancing needs.
Greenbrier carries 'B-' issuer credit ratings from Standard &
Poor's Ratings Services. S&P said in May 2010 that the ratings on
Greenbrier reflect the company's fair business risk profile
stemming from the cyclicality of the freight car manufacturing
industry; the dramatic decline in demand for new railcars as a
result of slower economic growth and weaker carloadings; and
limited customer diversity. The Company, according to S&P, also
has a highly leveraged financial risk profile, marked by increased
debt balances as a result of acquisitions completed in recent
years.
GREENBRIER COS: James Cruckshank Disposes of 734 Common Shares
--------------------------------------------------------------
In a Form 4 filing with the U.S. Securities and Exchange
Commission, James W. Cruckshank, SVP, chief accounting officer at
Greenbrier Companies Inc., disclosed that he disposed of 734
shares of common stock of the Company on March 30, 2011 at a price
of $27.2 per share. At the end of the transaction, Mr. Cruckshank
beneficially owned 23,127.223 shares. The sale of shares was
executed pursuant to a sales plan adopted Nov. 29, 2010, and
intended to comply with the requirements of Rule 10b5-1(c)(1)
under the Securities Exchange Act of 1934, as amended.
The amount of securities beneficially owned has been adjusted for
600 shares transferred pursuant to a domestic relations order.
About Greenbrier Cos.
Based in Lake Oswego, Oregon, The Greenbrier Companies Inc.
operates in three primary business segments: manufacturing,
refurbishment and parts, and leasing and services. The
manufacturing segment, operating from four facilities in the
United States, Mexico and Poland, produces double-stack intermodal
railcars, conventional railcars, tank cars and marine vessels.
The refurbishment & parts segment performs railcar repair,
refurbishment and maintenance activities in the United States and
Mexico. The leasing & services segment owns roughly 8,000
railcars and provides management services for roughly 225,000
railcars.
The Company's balance sheet as of Nov. 30, 2010, showed
$1.1 billion in total assets, $812.7 million in total assets and
$296.5 million in total equity.
* * *
Greenbrier carries a 'Caa1' corporate family rating from Moody's
Investors Service and a Speculative Grade Liquidity
Rating of SGL-3. In August 2010, Moody's said Greenbrier's rating
outlook is negative in consideration of the continued sluggish
demand for new railcars and the company's need to address
certain refinancing needs.
Greenbrier carries 'B-' issuer credit ratings from Standard &
Poor's Ratings Services. S&P said in May 2010 that the ratings on
Greenbrier reflect the company's fair business risk profile
stemming from the cyclicality of the freight car manufacturing
industry; the dramatic decline in demand for new railcars as a
result of slower economic growth and weaker carloadings; and
limited customer diversity. The Company, according to S&P, also
has a highly leveraged financial risk profile, marked by increased
debt balances as a result of acquisitions completed in recent
years.
====================
P U E R T O R I C O
====================
BORDERS GROUP: Inks First Amendment to $505-Mil. DIP Agreement
--------------------------------------------------------------
Borders Group, Inc. executed on March 16, 2011, a first amendment
and waiver to its Credit Agreement and the Guaranty and Security
Agreement with lender parties led by GE Capital Markets,
according to the Company's March 22, 2011, filing with the U.S.
Securities and Exchange Commission.
Under the First Amendment, the parties agreed to waive and amend
certain provisions of the Senior Secured, Super-Priority Debtor-
in-Possession Credit Agreement, including the addition of a
language stating that "effective upon entry of the Final DIP
Order, the proceeds of any claims or causes of action to avoid a
transfer of property or an obligation incurred by the Credit
Parties pursuant to Section 549 of the Bankruptcy Code.
Moreover, the carve-out amount is redefined to $6,500,000."
The Debtors previously submitted to the Court on March 10, 2011,
a draft copy of the First Amendment to the DIP Credit Agreement.
A full-text copy of the First Amendment is accessible for free at
http://ResearchArchives.com/t/s?7582
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner. Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Proposes to Modify Trade Terms With Vendors
----------------------------------------------------------
In the ordinary course of business, Borders Group acquire goods
based on trade credit terms that were negotiated on a vendor-by-
vendor basis. The Debtors had the right to return books and
magazines at the invoiced cost as a credit towards future
invoices from the applicable vendor.
As the Debtors' financial difficulties were publicized, many
vendors refused to provide any trade credit or accept returns.
Instead, vendors began demanding cash in advance or cash on
delivery terms for deliveries to the Debtors. Many publishers
refused to ship the Debtors merchandise under any terms, causing
the Debtors to seek inventory replenishment using alternative
channels.
Before the Petition Date, the Debtors returned approximately 31%
of their merchandise annually for Return Credit.
The Debtors now seek to reduce the amount of goods returned to
vendors to better manage their inventory, Andrew K. Glenn, Esq.,
at Kasowitz, Benson, Torres & Friedman LLP, in New York, tells
the Court. The Debtors also want to return to an ordinary course
business relationship with their vendors, which would include
returning merchandise, he reveals.
To make vendors comfortable with their individual credit
decisions, the Debtors have discussed the imposition of caps on
merchandise to be returned during these Chapter 11 cases,
according to Mr. Glenn. The Debtors, he notes, have also
discussed returning goods acquired prepetition for postpetition
credit for the purchase of new inventory at a value equal to or
greater than the cost value of the returned inventory. These
transactions will be referred to as the Postpetition Credit
Returns.
Accordingly, by this motion, the Debtors seek the Court's
permission to modify the trade terms and return prepetition
merchandise to vendors for postpetition credit.
In an abundance of caution, and at the request of certain vendors
that are requiring the Court's approval as a condition to
providing new trade terms to the Debtors and allowing the Debtors
to assume ordinary course merchandise returns, the Debtors seek
confirmation from the Court that they are authorized to enter
into vendor agreements that may require caps on returned goods --
Return Limits.
The Debtors also seek confirmation from the Court that the
Postpetition Credit Returns will not violate Section 546(h) of
the Bankruptcy Code.
Mr. Glenn contends that Section 546(h) does not apply in the
current case because the Debtors will not "offset the purchase
price of such goods against any claim of the creditor against the
debtor that arose before the commencement of the case."
Nevertheless, to the extent Section 546(h) does apply, the
Debtors seek Court approval to utilize Postpetition Credit
Returns to the extent goods delivered prepetition are returned
for credit solely against future invoices for new inventory at
equal or greater cost value.
Essentially, the Postpetition Credit Returns are in the best
interests of the Debtors' estates because they afford the Debtors
the flexibility to return prepetition goods on the same basis as
postpetition goods, Mr. Glenn asserts. Given that it may be
difficult to differentiate goods based on their date of
acquisition, the Postpetition Credit Returns will not afford
preferential treatment to any creditors, he assures the Court.
The Court will consider the Debtors' request on April 7, 2011.
Objections are due no later March 31.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Committee Proposes Vendor Information Protocol
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in Borders Group
Inc.'s cases seeks a Court order clarifying its requirements and
establishing creditor information protocol to provide access to
information for the Debtors' unsecured creditors under Sections
1102(b)(3) and 1103(c) of the Bankruptcy Code.
The Committee specifically asks Judge Glenn to confirm that
Section 1102(b)(3)(A) does not authorize or require it to provide
access to confidential information or privileged information to
any entity.
To balance the need to maintain the confidentiality of the
Confidential Information and Privileged Information with the
unsecured creditors' need for information regarding the Debtors,
the Committee proposes these procedures for the dissemination of
information to any entity:
(A) The Committee is authorized to:
(a) establish a Web site to make certain information
available to creditors;
(b) make available on the Web site information regarding
the Debtors' Chapter 11 cases, including: (i) the
Petition Date; (ii) the case number; (iii) the contact
information for the Debtors, the Debtors' counsel and
the Committee's counsel and financial advisors; (iv)
the voting deadline with respect to any Chapter 11 plan
filed by the Debtors; (v) access to the claims docket
as and when established by the Debtors or the claims
and noticing agent via internet link if possible; (vi)
access to important filings in the Debtors Chapter 11
cases via internet link if possible; (vii) links to
other relevant websites; and (viii) any other
information that the Committee or its professionals
deems appropriate, subject to the restrictions and
limitations in the proposed order;
(c) establish an e-mail address to allow unsecured
creditors to send questions and comments in connection
with the Debtors' bankruptcy cases; and
(d) review or respond to any email correspondence.
(B) The Committee Parties will not be authorized or required,
pursuant to Section l102(b)(3)(A), to provide access to any
Confidential Information and Privileged Information to any
Entity, absent the specific prior written consent of the
Debtors or a court order. Nonetheless, the Committee is
permitted in its sole discretion to provide access to
Privileged Information to any party so long as that
Privileged Information is neither: (i) Confidential
Information nor (ii) subject to a privilege other than that
which is held or controlled solely by the Committee.
(C) The Debtors will assist the Committee in identifying any
Confidential Information or Privileged Information that is
provided to the Committee or professionals by the Debtors
or their agents or professionals.
(D) If a creditor submits a written request for the Committee
to disclose specific information, the Committee will: (i)
provide a response to the Information Request, including by
providing access to the information requested or the
reasons the Information Request cannot be complied with;
and (ii) if the Information Request involves the Debtors'
Confidential or Privileged Information, provide the Debtors
with (a) notice of the Information Request; and (b) a copy
of the Response.
If the Committee deems to deny the Information Request, the
Requesting Creditor may meet and confer with an authorized
representative of the Committee and the Debtors regarding
the Information Request and the Response, seek to compel
that disclosure for cause pursuant to a motion before the
Court. That motion will be served on at least 20 days'
notice on the Debtors, the U.S. Trustee for Region 2 and
the Committee.
(E) With respect to an Information Request that implicates
Confidential Information of the Debtors, if: (i) the
Committee agrees that the request should be satisfied; or
(ii) the Committee on its own wishes to disclose that
Confidential Information to creditors, then the Committee
may make a demand with regard to Confidential Information
that is information of the Debtors, by submitting a written
request to the Debtors' counsel, stating that the
information will be disclosed in the manner described in
the Demand unless the Debtors object to the Demand within
10 days after the service of the Demand. In the event of
any objection to the disclosure of Confidential
Information, no information will be disclosed except to the
extent provided in an order of the Court that has become
final and non-appealable.
(F) Unless the Court orders otherwise with respect to a Demand,
the Committee will not provide any Confidential Information
of the Debtors to any third party without the third party
executing an appropriate confidentiality agreement that is
acceptable in form and substance to the Debtors and the
Committee.
(G) Subject to any protective order or confidentiality
agreement, any information received by the Committee from
any Entity in connection with an examination pursuant to
Rule 2004 of the Federal Rules of Bankruptcy Procedure or
in connection with any formal discovery conducted pursuant
to the Bankruptcy Rules or the Federal Rules of Civil
Procedure in any contested matter, adversary proceeding or
other litigation will not be governed by the Proposed
Order, but rather by any court order or other agreement
governing the discovery to the extent one exists.
(H) Nothing in the Proposed Order requires the Committee to
provide access to information or solicit comments from any
Entity that has not demonstrated to the satisfaction of the
Committee or to the Court that it holds claims of the kind
described in Section 1102(b)(3).
Counsel to the Committee, Bruce Buechler, Esq., at Lowenstein
Sandler PC, in New York, asserts that granting the Committee's
Motion will ensure that confidential, privileged, proprietary or
material non-public information will not be disseminated to the
detriment of the Debtors' estates or their unsecured creditors;
and will aid the Committee in performing its statutory functions
and duties, including promoting and protecting the interests of
the unsecured creditor body.
The Court will consider the Committee's Motion on April 7, 2011.
Objections are due no later than March 31.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Proposes to Tap Deloitte for Consulting Services
---------------------------------------------------------------
Borders Group and its units seek the Bankruptcy Court's permission
to employ Deloitte Consulting LLP as their consulting services
provider, nunc pro tunc to March 7, 2011.
As the Debtors' consulting services provider, Deloitte Consulting
will provide information technology services and human resources
services:
* Under Information Technology Services, Deloitte Consulting
will:
(a) provide day-to-day advice and assistance to the
Debtors' acting Chief Information Officer and
assist him in assessing the portfolio of information
technology related contracts with the objective of
rationalizing those contracts in light of the Debtors'
bankruptcy filing; and
(b) assist with the Debtors' assessment of the
reasonableness of staffing within the Debtors' IT
function, including understanding and documenting
roles, responsibilities, staff counts and other
demographic information in order to right-size the IT
organization.
* Under Human Resources Services, Deloitte will assist:
(a) with the Debtors' assessment of the near- and long-
term costs and benefits from outsourcing IT;
(b) the Debtors in their review of the current payroll
implementation landscape;
(c) the Debtors in a review of the feasibility of
accelerating the current payroll implementation
timeline and ability to retire legacy applications;
and
(d) the Debtors with a recommendation on a revised payroll
implementation strategy, if needed.
The Debtors will pay Deloitte Consulting's professionals
according to the firm's customary hourly rates, which are:
Title Rate per Hour
----- -------------
Partner, Principal $835
Director $755
Senior Manager $695
Manager $645
Senior Consultant $525
Consultant/Analyst $410
Deloitte Consulting will also be reimbursed for expenses it
incurred or will incur.
Joseph Krolczyk, a director at Deloitte Consulting, disclosed
that his firm has been providing necessary services to the
Debtors since March 7, 2011, for $400,000 for which the firm
intends to seek payment in its first interim fee application.
Mr. Krolczyk also incorporated in his declaration the disclosures
made by Daniel Maher at Deloitte Tax LLP, an affiliate of
Deloitte Consulting, in connection with the Debtors' Application
to Employ Deloitte Tax.
Notwithstanding those disclosures, Deloitte Consulting is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code, Mr. Krolczyk maintains.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Proposes Ernst & Young as Auditor
------------------------------------------------
Borders Group Inc. and its units seek the Bankruptcy Court's
permission to employ Ernst & Young LLP as their accounting, tax,
and audit services provider, nunc pro tunc to the Petition Date.
As the Debtors' auditor, E&Y LLP will provide the Debtors with
accounting, tax and audit services:
(1) Statement of Work #1 - Business Tax Returns Preparation
E&Y LLP will provide the following services under SOW #1,
subject to the provisions of the related Master Services
Agreement:
* Complete Puerto Rico Corporate Income Tax Return;
* Complete Quarterly Estimated Income Tax Returns;
* Complete 2010 Corporate Annual Report;
* Complete 2011-2012 Volume of Business Tax Declaration;
* Complete 2010 Puerto Rico Personal Property Tax Return;
* Original estimated tax payment computations; and
* Extension requests.
(2) Statement of Work #2 - Fresh Start Accounting
E&Y will provide the following services under SOW #2,
subject to the provisions of the related MSA:
* Review emergence transaction to understand potential
accounting implications;
* Identify relevant existing authoritative guidance or
literature;
* Provide a general interpretation of relevant accounting
standards, including; general provisions and high-level
application to the illustrative fact pattern E&Y LLP
provides;
* Review emergence transaction to understand tax
implications associated with the application of fresh
start accounting;
* Provide general commentary and observations related to
E&Y LLP's detailed work plans to implement fresh start
accounting, as well as highlighting for management the
interdependencies between workstreams and disciplines
that will require active oversight by E&Y LLP's project
management office;
* Provide Fresh-Start Accounting training to management;
* Provide blank templates to be used by management to
facilitate their modeling of goodwill and the emergence
balance sheet based upon the effects of the Plan of
Reorganization and the application of Fresh Start
Accounting;
* Review management's documentation of accounting
conclusions related to its interpretation of the tax
and accounting implications of applying Fresh Start
Accounting; and
* Reviewing other process memos prepared by management
describing the controls put into place over data flows
between departments and to and from the designated
valuation service providers.
(3) U.S. Plan Audit
E&Y LLP will audit and report on the financial statements
and supplemental schedules of the Borders Group, Inc.
Savings Plan for the year ended December 31, 2010, which
are to be included in that Plan's Form 5500 filing with
the Employee Benefits Security Administration of the
Department of Labor and that Plan's Form 11-K filing with
the U.S. Securities and Exchange Commission.
(4) Puerto Rico Plan Audit
E&Y LLP will audit and report on the financial statements
and supplemental schedules of the Borders Group, Inc.
Savings Plan for Employees Working in Puerto Rico for the
year ended December 31, 2010, which are to be included in
that Plan's Form 5500 filing with the Employee Benefits
Security Administration of the Department of Labor.
E&Y LLP intends to charge the Debtors for the services rendered
in these Chapter 11 cases based on its hourly rates for those
services:
SOW #1- Business Tax Returns Preparation
Title Rate per Hour
----- -------------
Partner, Principal and Director $319 to $352
Senior Manager, Manager $243 to 268
SOW #2 - Fresh-start
Title Rate per Hour
----- -------------
Professional Practice Director Partner $500 to $550
Professional Practice Director Manager $300 to $350
Bankruptcy Subject Matter Professional
(Partner) $375 to $400
(Senior Manager) $295
Partner, Principal and Director $319 to $352
Senior Manager, Manager $243 to $268
Senior $154 to $170
Staff $106 to $117
Integrated Audit Engagement Letter
Title Rate per Hour
----- -------------
Professional Practice Director Partner $500 to $550
Professional Practice Director Manager $300 to $350
Bankruptcy Subject Matter Professional
(Partner) $375 to $400
(Senior Manager) $295
Partner, Principal and Director $319 to $352
Senior Manager, Manager $243 to $268
Senior $154 to $170
Staff $106 to $117
U.S. Plan Audit Engagement
Title Rate per Hour
----- -------------
Partner, Principal and Director $319 to $352
Senior Manager, Manager $243 to $268
Senior $154 to $170
Staff $106 to $117
PR Plan Audit Engagement
Title Rate per Hour
----- -------------
Partner, Principal and Director $319 to $352
Senior Manager, Manager $243 to $268
Senior $154 to $170
Staff $106 to $117
The Debtors will also reimburse E&Y for actual and necessary
expenses the firm incurs.
Brian T. Coughlin, a partner at E&Y LLP, discloses that his firm
is represented by Alston & Bird LLP in the Chapter 11 cases of
the Debtors and other bankruptcy cases. E&Y LLP understands that
Alston & Bird anticipates that it may also be asked to appear on
behalf of a significant creditor in the Debtors' bankruptcy
cases.
Before the Petition Date, Ernst & Young Puerto Rico LLC and Ernst
& Young LLP (United Kingdom) provided services to the Debtors or
their non-debtor affiliates, according to Mr. Coughlin. Ernst &
Young (Malaysia) and Ernst & Young LLP (United Kingdom) will not
be providing services to the Debtors or their non-debtor
affiliates during these bankruptcy cases, he tells the Court.
After the Petition Date, E&Y LLP utilized a global services
center operated by Ernst & Young Private Ltd. or EYPL, and EYGBS
(India) Private Ltd. for certain services provided to the
Debtors. The Debtors will not be required to pay for those
minimal postpetition Services provided by E&Y GTC, and E&Y LLP
will not be utilizing E&Y GTC in support of services in the
Debtors' bankruptcy cases going forward, Mr. Coughlin says.
E&Y LLP also intends to subcontract with its affiliate, Ernst &
Young Puerto Rico LLC, in connection with Services under the
Integrated Audit Engagement Letter and SOW #1. E&Y LLP intends
to charge the Debtors for the hourly fees and the expenses
incurred for services performed by E&Y PR.
E&Y has provided or is providing services to parties-in-interest
in matters unrelated to the Debtors' Chapter 11 cases, a schedule
of which is available for free at:
http://bankrupt.com/misc/Borders_E&YPotentialParties.pdf
Mr. Coughlin continues that E&Y LLP has yet to confirm that the
work that it may be doing for, or may have done for Bangor Hydro
Electric Co., City of Clearwater, Cushman & Wakefield, and
Reliant Energy is unrelated to the Debtors and these Chapter 11
cases.
Mr. Coughlin also relates that E&Y LLP is a party or participant
in certain litigation matters involving parties-in-interest in
these Chapter 11 cases, a list of which is available for free at:
http://bankrupt.com/misc/Borders_E&YLitigationMatters.pdf
E&Y LLP was owed $137,766 by the Debtors in respect of services
provided to the Debtors after the Petition Date. During the 90-
day period immediately preceding the Petition Date, the Debtors
paid to E&Y LLP amounts totaling $244,124, of which $190,100
constituted advance payments for fees and expenses not yet
incurred. As of the Petition Date, E&Y LLP was holding a credit
balance of $175,178, which retainer is to be applied by E&Y LLP
in payment of compensation and reimbursement of expenses incurred
during the pendency of the Debtors' Chapter 11 cases.
Mr. Coughlin maintains that E&Y LLP is a "disinterested person"
as the term is defined under Section 101(14) of the Bankruptcy
Code.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
HORIZON LINES: Bonds Fall; Company Said to Weigh Bankruptcy
-----------------------------------------------------------
Horizon Lines Inc. may file for bankruptcy as soon as April,
Jonathan Keehner and Shannon D. Harrington at Bloomberg News
reported, citing three people familiar with the matter.
According to the Bloomberg report, the Company may seek to swap
its debt for equity to avoid bankruptcy, said the people, who
declined to be identified because the talks are private.
Horizon had sought a consent from the holders of its $330 million
of 4.25% Senior Convertible Notes due August 2012 to waive an
event of default that arose from the Company's recent settlement
with the U.S. Department of Justice to resolve the government's
investigation into price fixing in the Puerto Rico trade lane.
However, the holder(s) of the requisite 50% of the outstanding
notes did not consent, which has led to the entirety of the debt
structure being reported as current as of December 26, 2010.
Horizon Lines has warned that if it fails to waive the default, it
may be forced to seek court protection if talks with creditors to
restructure its debt fail. In its Form 10-K for the year ended
Dec. 31, 2010, the Company said, "On May 21, 2011, we expect to be
in covenant default under the indenture relating to our Notes. In
addition, we expect that we will be in covenant default under our
Senior Credit Facility during the third quarter of 2011. The
remedies available to the indenture trustee in the event of
default include acceleration of all principal and interest
payments. Acceleration by the indenture trustee would create a
default in our Senior Credit Facility and other loans and
financing arrangements due to cross default provisions contained
in those agreements. If any of our lenders or the indenture
trustee accelerate the principal and interest payments we may be
forced to seek protection under federal bankruptcy laws."
Legg Mason Inc. and its Western Asset Management Co. unit,
BlackRock Inc., Pioneer Investment Management Inc. and Angelo
Gordon & Co. own about 85% of the Company's $330 million in 4.25%
convertible notes due August 2012, according to data compiled by
Bloomberg.
The notes dropped 2.25 cents to 77.75 cents on the dollar as of
4:26 p.m. in New York on March 31, according to Trace, the bond-
price reporting system of the Financial Industry Regulatory
Authority. The securities declined from 91.1 cents on March 28,
Trace data show.
The Justice Department settlement and pending civil litigation
"could prevent the company from accessing credit markets" and
refinancing its convertible notes, according to a presentation by
investment bank Houlihan Lokey, which is advising creditors.
Horizon Lines is being advised by Moelis & Co. and Kirkland &
Ellis LLP.
About Horizon Lines
Horizon Lines, Inc., based in Charlotte, North Carolina, through
its wholly-owned indirect operating subsidiary, Horizon Lines,
LLC, currently operates 11 of its 15 Jones Act qualified U.S.
flag container ships in Jones Act liner services between the
continental United States and either Alaska, Hawaii, or Puerto
Rico and five U.S. flag container ships between the Far East,
U.S. west coast and Guam.
Horizon Lines reported a net loss of $57.97 million on
$1.16 billion of operating revenue for the fiscal year ended
Dec. 26, 2010, compared with a net loss of $31.27 million on
$1.12 billion of operating revenue for the fiscal year ended
Dec. 20, 2009.
The Company's balance sheet at Dec. 26, 2010 showed
$785.75 million in total assets, $745.96 million in total
liabilities and $39.79 million in total stockholders' equity.
Ernst & Young LLP, in Charlotte, North Carolina, expressed
substantial doubt about the Company's ability to continue as a
going concern. Ernst & Young noted that there is uncertainty that
Horizon Lines will remain in compliance with certain debt
covenants throughout 2011 and will be able to cure the
acceleration clause contained in the convertible notes.
* * *
As reported in the Troubled Company Reporter on March 8, 2011,
Moody's Investors Service said Horizon Lines, Inc.'s plea
agreement regarding antitrust matters in the Puerto Rico trade
lane is credit negative but does not at this time affect its
'Caa1' Corporate Family or its other debt ratings of Horizon.
The last rating action on Horizon was on May 18, 2010 when Moody's
lowered its ratings, including the corporate family rating to
'Caa1' and maintained the negative outlook.
HORIZON LINES: S&P Cuts Corporate to 'CCC' on Possible Breach
-------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on Horizon Lines Inc. to 'CCC' from 'B'.
At the same time S&P lowered its rating on the company's secured
debt to 'B-' from 'BB-' and lowered its rating on the company's
senior convertible note to 'CC' from 'CCC+'. All ratings remain
on CreditWatch with negative implications, where S&P placed them
on Feb. 24, 2011.
"The downgrade reflects S&P's expectation that the company will
breach its financial covenants under the senior unsecured notes
and the senior secured credit facility later this year," said
Standard & Poor's credit analyst Funmi Afonja. "It also reflects
refinancing risks, with substantially all of the company's debt
maturing in 2012."
On March 28, 2011, Horizon Lines' auditors issued a qualified
opinion on the company's fiscal year ended Dec. 26, 2010 financial
statements, due to expectations of noncompliance with financial
covenants and potential acceleration of debt outstanding, raising
substantial doubt about the company's ability to continue as a
going concern. Due to these expected potential defaults, the
senior secured credit facility and notes are classified in the
balance sheet as current. At March 28, 2011, the funded balance
outstanding under the two instruments was $576.6 million. S&P
believes these developments increase the risk that the company may
seek debt restructuring that Standard & Poor's considers to be a
selective default under its criteria (such as debt exchange for
less than full value or for equity) and raise the risk of
bankruptcy filing.
In resolving the CreditWatch listing, Standard & Poor's will
assess the steps management is taking to refinance its financial
obligations, improve its liquidity prospects, address financial
covenant compliance, and long-term operating prospects.
"S&P could lower the ratings further if S&P sees an increased risk
of a debt restructuring that S&P would classify as a selective
default, of a monetary default, or of a Chapter 11 bankruptcy
filing," said Ms. Afonja.
MORGANS HOTEL: Two Directors Disclose Shares/Warrants Ownership
---------------------------------------------------------------
In a Form 3 filing with the U.S. Securities and Exchange
Commission, Ronald W. Burkle, a director at Morgans Hotel Group
Co., disclosed that he has warrant to buy 12,500,000 shares of
common stock of the Company.
In a separate filing, Jason Taubman Kalisman, a director at the
Company, disclosed that he beneficially owns 4,500,000 shares of
common stock of the Company. OTK Associates, LLC is the
beneficial owner of 4,500,000 shares of common stock in Morgans
Hotel Group Co. Mr. Kalisman, who owns an indirect interest in
OTK, disclaims beneficial ownership of the reported securities
except to the extent of his indirect pecuniary interest therein.
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company reported a net loss of $83.64 million on
$236.37 million of total revenues for the year ended Dec. 31,
2010, compared with a net loss of $101.60 million on $225.05
million of total revenues during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed
$714.77 million in total assets, $716.58 million in total
liabilities, a $12.72 million shareholders' deficit and
$10.92 million noncontrolling interest.
===============
X X X X X X X X
===============
* BOND PRICING: For the Week March 21 to March 25, 2011
-------------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
ARGENTINA
---------
ARGENT- DIS 5.83 12/31/2033 ARS 165.8
ARGENT-PAR 1.18 12/31/2038 ARS 62.5
ARGENT-DIS 7.82 12/31/2033 EUR 70.25
ARGENT-DIS 7.82 12/31/2033 EUR 72
ARGENT-DIS 4.33 12/31/2033 JPY 42
ARGENT-PAR&GDP 0.45 12/31/2038 JPY 8
BODEN 2014 2 9/30/2014 ARS 162
BOGAR 2018 2 2/4/2018 ARS 151
CAYMAN ISLAND
-------------
BANCO BPI (CI) 4.15 11/14/2035 EUR 49.121
BANIF FIN LTD 3 12/31/2019 EUR 18.75
BCP FINANCE BANK 5.01 3/31/2024 EUR 56.783
BCP FINANCE BANK 5.31 12/10/2023 EUR 59.599
BCP FINANCE CO 5.543 EUR 59.83186
BCP FINANCE CO 4.239 EUR 58
BES FINANCE LTD 5.772 2/7/2035 EUR 58.15221
BES FINANCE LTD 5.58 EUR 61.01657
BES FINANCE LTD 4.5 EUR 60.46845
CHINA FORESTRY 7.75 11/17/2015 USD 62
CHINA FORESTRY 7.75 11/17/2015 USD 55
DUBAI HLDNG COMM 6 2/1/2017 GBP 76.14821
EFG ORA FUNDING 1.7 10/29/2014 EUR 65.36897
ESFG INTERNATION 5.753 EUR 59.725
IMCOPA INTL CAYM 10.375 12/16/2014 USD 38
PUBMASTER FIN 6.962 6/30/2028 GBP 53.09666
PUBMASTER FIN 8.44 6/30/2025 GBP 55.724
THPA FINANCE LTD 8.241 3/15/2028 GBP 72.93495
CHILE
-----
AGUAS NUEVAS 3.4 5/15/2012 CLP 1.0996
CGE DISTRIBUCION 3.25 12/1/2012 CLP 39.74357
ESVAL S.A. 3.8 7/15/2012 CLP 37.65094
MASISA 4.25 10/15/2012 CLP 40.4049
VENEZUELA
---------
PETROLEOS DE VEN 12.75 2/17/2022 USD 76.51667
VENEZUELA 7 3/31/2038 USD 55.25
VENEZUELA 7 3/31/2038 USD 54.07785
VENEZUELA 6 12/9/2020 USD 57.35
VENEZUELA 7.65 4/21/2025 USD 59.6
VENEZUELA 8.25 10/13/2024 USD 62.15
VENEZUELA 9.25 5/7/2028 USD 65.75
VENEZUELA 7.75 10/13/2019 USD 66.25
VENEZUELA 9 5/7/2023 USD 67
VENEZUELA 7 12/1/2018 USD 66.75
VENEZUELA 9.25 9/15/2027 USD 68.94757
VENEZUELA 9.25 9/15/2027 USD 71.5
VENEZUELA 5.75 2/26/2016 USD 71.1
VENZOD - 189000 9.375 1/13/2034 USD 66.25
***********
Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-LA 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-LA constitutes an offer or solicitation to buy
or sell any security of any kind. It is likely that some entity
affiliated with a TCR-LA editor holds some position in the
issuers' public debt and equity securities about which we report.
Tuesday's edition of the TCR-LA features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. 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
Thursday's edition of the TCR-LA. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
***********
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-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Valerie U. Pascual, Psyche A. Castillon, Julie Anne G.
Lopez, Ivy B. Magdadaro, Frauline S. Abangan, and Peter A.
Chapman, Editors.
Copyright 2011. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$625 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Christopher Beard at 240/629-3300.
* * * End of Transmission * * *