/raid1/www/Hosts/bankrupt/TCR_Public/080916.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, September 16, 2008, Vol. 12, No. 221
Headlines
ADELPHIA COMM: Judge Remands Grid Interest Case to Bankr. Court
ADELPHIA COMM: To Distribute Additional Securities to Creditors
ADELPHIA COMM: Trust Issues 2007 Federal Income Tax Information
ADELPHIA COMM: Trust Files 1st & 2nd Quarter Reports for 2008
AEI CORP: Moody's Withdraws 'B2' Rating on Proposed $250MM Notes
AGRARIO LLC: Touch & Flame Wants to Renovate Former Property
AMERICAN HOME: Stipulates with WaMu on Cure Amount for Contracts
AMERICAN INTERNATIONAL: Housing Market Woes Cue Moody's Downgrades
AMERICAN INTERNATIONAL: Fitch Cuts ID and Outstanding Debt Ratings
AMIGOS WATERFORD: Voluntary Chapter 11 Case Summary
ANWAR ABDULLA: Voluntary Chapter 11 Case Summary
ASARCO LLC: Court Okays Alvarez & Marsal as Testifying Experts
ASARCO LLC: Settlement Agreement With El Paso Gets Court's Nod
ASARCO LLC: Seeks Court Okay on Settlement With Texas Commission
ASARCO LLC: Asks Court to Approve Solicitation Procedures
ASARCO LLC: Pima County Objects to Confirmation of Reorg. Plan
ASHLAND INC: Moody's Rates Proposed $500MM Credit Facility 'Ba1'
ASHLAND INC: S&P Keeps Negative Watch on Pending Hercules Deal
ATARI INC: Nasdaq to Complete Delisting of Stocks
BANK OF AMERICA: Merrill Lynch Deal Cues S&P to Lower Ratings
BANK OF AMERICA MORTGAGE: Fitch Cuts Class 30-B-4 to 'B'
BARBEQUES GALORE: Closes $15-Mil. Asset Sale to Grand Hall
BEATRICE BIODIESEL: Wants to Convert Case to Chapter 7 Liquidation
BHM TECHNOLOGIES: Wants to Reject C&A Guelph Purchase Order
BHM TECHNOLOGIES: AlixPartners Ascertains Disinterestedness
BLUE BELL: Collateral Slide Prompts Fitch to Lower Four Ratings
BLUEGRASS ABS: Fitch Cuts Ratings on Eight Classes of Notes
BOSCOV'S INC: Court Approves Capstone as Financial Advisor
BOSCOV'S INC: Court OKs Lehman Brothers as Investment Bankers
BOSCOV'S INC: Can Hire Hilco Real as Real Estate Consultant
BOSCOV'S INC: Court OKs $1.45MM Bonus Payments to Top Executives
BUFFALO MOLDED: Court Converts Chapter 11 Case to Chapter 7
BUILDING MATERIALS: June 29 Balance Sheet Upside-Down by $81.1MM
CARDIAC MANAGEMENT: Auction of Assets Set October 2
CASHEL ROCK: Moody's Cuts $25.65MM 'Baa2' Notes Rating to 'Ba1'
CD 2005-C1: S&P Junks Ratings on Two Classes of Certificates
CDO REPACK: Moody's Downgrades Baa3 $11.1MM Notes Rating to C
COLLINS & AIKMAN: Claim Against BHM Technologies Challenged
COLORADO SPRINGS HOUSING: S&P Holds 'B' Rating; Outlook Positive
CREDIT AND REPACKAGED: Moody's Trims $268.75MM Notes Rating to Ba2
CREDIT AND REPACKAGED: Moody's Cuts $268.75MM Notes Rating to Ba3
CUPERTINO SQUARE: Case Summary & 20 Largest Unsecured Creditors
CYPHERMINT INC: Trustee Selling Substantially All Assets
DERECKTOR SHIPYARDS: May Reject Deal to Build Catamaran Boat
DOUBLE JJ: Court Okays October 30 Auction Sale of Resort
DRIGGS FARMS: Court Okays Sale to Land-O-Sun Dairies
EASIX FINANCE: Fitch Trims Two Notes Ratings to 'C/DR6' from 'B'
EASTERN CONCRETE: Case Summary & 20 Largest Unsecured Creditors
FORTUNOFF: Completes Liquidation, Court Dismisses Chapter 11 Cases
FREMONT GENERAL: Panel May Employ Solon Group as Financial Advisor
FREMONT GENERAL: Panel May Employ Klee Tuchin as Counsel
GOODY'S CLOTHING: Texas Authorities Object to Plan Confirmation
GREEKTOWN CASINO: Opens 25,000 Square Feet of New Gaming Space
HERCULES INC: S&P Retains Negative Watch on Pending Ashland Deal
HINES HORTICULTURE: May Employ Kirkland & Ellis as Counsel
HINES HORTICULTURE: May Employ Young Conaway as Local Counsel
HINES HORTICULTURE: May Hire Miller Buckfire as Investment Banker
HIOCEAN REALTY: Case Transferred to Long Island Bankruptcy Court
IL LUGANO: Section 341(a) Meeting Slated for September 29
INDYMAC TRUST: Moody's Cuts Ratings on 119 Tranches from 21 Deals
INMAN SQUARE: Fitch Junks Ratings on Three Classes of Notes
JEFFERSON COUNTY: Rejects Banks' Plan to Increase Taxes
JHT HOLDINGS: Court Sets October 17 Claims Bar Date
JUPITER HIGH-GRADE: Fitch Cuts $13.94MM Class C Notes Rating to C
KEY DEVELOPERS: Bid for Condominium Projects Starts at $17MM
KLEROS PREFERRED: Fitch Takes Rating Actions on Five Note Classes
LEHMAN BROTHERS: Goes Belly-Up In Biggest Bankruptcy Ever
LEHMAN BROTHERS: European Unit Placed Into Administration
LEHMAN BROTHERS: Wants Bankruptcy Stay Enforced on Creditors
LEHMAN BROTHERS: Case Summary & 30 Largest Unsecured Creditors
LEHMAN BROTHERS: Fitch Puts Ratings at 'D' After Bankruptcy Filing
LEHMAN BROTHERS: Parent's Bankruptcy Cues Fitch to Review Units
LEHMAN BROTHERS: Fitch Cuts Ratings of Units, Keeps Neg. Watch
LEHMAN BROTHERS: Moody's Junks Debt Ratings; To Undertake Review
LEHMAN BROTHERS: S&P Downgrades Credit Rating to 'SD' from 'A'
MAGNA ENTERTAINMENT: $40MM Loan Maturity Date Extended to Oct. 15
MAGNA STORAGE: Voluntary Chapter 11 Case Summary
MAGNOLIA CAR WASH: Voluntary Chapter 11 Case Summary
MARTY'S SHOES: Hurt by Retail Downturn, Files for Bankruptcy
MARTY'S SHOES: Case Summary & 21 Largest Unsecured Creditors
MERRILL LYNCH: Fitch Changes Watch to Evolving After BofA Deal
MERRILL LYNCH: Moody's Might Raise Rating After BofA Deal
MICHAEL SEBASTIAN: Case Summary & 20 Largest Unsecured Creditors
MIDWEST AIR: ALPA Allocates $2MM to Support Pilots Cause
MILLENNIUM TRANSIT: Section 341(a) Meeting Slated for September 25
MONROE CENTER: Case Summary & 19 Largest Unsecured Creditors
MORGAN STANLEY: S&P Lowers Class O Certs. Rating to CCC+ from B-
MOTOR COACH: Files for Chapter 11 Bankruptcy Protection
MOTOR COACH: Case Summary & 30 Largest Unsecured Creditors
NATIONAL CITY: Hires LeKachman to Liquidate $20BB in Assets
NETBANK INC: Court Okays Second Amended Liquidation Plan
ORKNEY RE: Moody's Junks Ratings on Two Classes of 30-Year Notes
PORTOLA PACKAGING: Plan Confirmation Hearing Slated for October 6
QUEBECOR WORLD: Court OKs Five Engagement Letters with KPMG LLP
QUEBECOR WORLD: Wants Plan Filing Period Extended Until January 31
QUEBECOR WORLD: Wants KPMG Canada to Give Tax Consulting Services
RANCHO MANANA: Discloses $46,200,000 in Liabilities
RITCHIE RISK: Court Approves Chapter 11 Liquidation Plan
S & A RESTAURANT: Trustee Can Retain NRC Realty as Sales Agent
S & A RESTAURANT: Trustee Endorses Lain Faulkner as Accountant
SEMGROUP LP: Final Hearing on $250 Million DIP Financing Tomorrow
SEMGROUP LP: U.S. Trustee Appoints Chapter 11 Examiner
SEMGROUP LP: Taps PA Consulting as Industry Consulants
SHARPER IMAGE: Wants Chapter 7 Conversion Motion Denied
SILVER STATE: Nasdaq Delists Common Stock, Files Form 25 with SEC
QUEBECOR WORLD: Amends Sr. Secured Superpriority DIP Credit Deal
STRUCTURED ASSET: S&P Corrects Class A-4 Loan Rating from BB to A
SYNTAX-BRILLIAN: Nasdaq Delists Securities, Files Form 25 with SEC
TAYFAL REAL: Case Summary & 6 Largest Unsecured Creditors
TIGRIS CDO: Collateral Deterioration Cues Fitch to Cut Ratings
TRIAD FIN'L: Run-Off Mode Cue Moody's to Confirm Caa2 Rating
TROPICAL BREEZE: Case Summary & 20 Largest Unsecured Creditors
TUPPERWARE BRANDS: Moody's Lifts Ratings on Sustained Performance
TYSON FOODS: Fitch Lifts Three Ratings from 'BB+' to 'BBB-'
TYSON FOODS: S&P Holds 'BB' Corp. Credit and Removes Neg. Watch
UNO RESTAURANT: End Discussions With Bondholders, Pays Interest
VICORP RESTAURANTS: Eau Claire, Wisconsin Outlet Closes
VITERRA INC: Moody's Assigns 'Ba1' Corporate Family Rating
VTA OKLAHOMA: Case Summary & 15 Largest Unsecured Creditors
WACHOVIA BANK: S&P Affirms Low-B Ratings on 18 Certificates
WASHINGTON MUTUAL: Fitch Cuts Ratings on Continued Asset Pressures
WASHINGTON MUTUAL: S&P Cuts Counterparty Credit Rating to 'BB-/B'
WCI COMMUNITIES: Committee Taps Pachulski Stangs as Co-Counsel
WCI COMMUNITIES: Committee Taps Akin Gum as Co-Counsel
WCI COMMUNITIES: FTI Consulting Approved as Bankruptcy Advisor
WCI COMMUNITIES: Wants to File Schedules Until November 2
W.R. GRACE: Wants Court to Disallow $100 Mil. Interest Payments
W.R. GRACE: Court Approves 2008-2010 Incentive Plan
W.R. GRACE: Wants to Acquire Interest in NewCo for $2 Million
XELR8 HOLDINGS: Has Until October 6 to Submit Amex Compliance Plan
* Fitch Says U.S. CREL CDO Delinquencies Rise Modestly in August
* Federal Reserve Takes Steps to Stabilize Market
* Ms. Vrato Joins Garden City's Business Reorganization Division
* LeClairRyan Names Richard Bowerman as Connecticut Office Leader
* Large Companies with Insolvent Balance Sheets
*********
ADELPHIA COMM: Judge Remands Grid Interest Case to Bankr. Court
---------------------------------------------------------------
The Hon. John G. Koeltl of the U.S. District Court for the
Southern District of New York vacated a May 15, 2006 ruling by the
Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the
Southern District of New York on the additional grid interest
claims in Adelphia Communications Corporation's bankruptcy case.
Judge Koeltl remanded the case to the Bankruptcy Court for further
proceedings on the waiver and estoppel arguments.
Wachovia Bank N.A., Bank of America, N.A., Citibank, N.A.,
JPMorgan Chase Bank, N.A., Bank of Montreal, and Bank of Nova
Scotia appealed Judge Gerber's May 15, 2006 ruling on the
disallowance of claims for additional "grid interest" asserted by
the Agents.
Wachovia Bank and the other Appellants are administrative agents
under the Century-TCI Credit Agreement and the Parnassos Credit
Agreement.
As explained in the Bankruptcy Court's ruling, the Credit
Agreements calculate the non-default rate of interest based on
the sum of a floating "Base Rate" and an "Applicable Margin."
The "Applicable Margin" is in turn determined by reference to a
grid, where the 'Applicable Margin" increases as a function of
the borrower's "Leverage Ratio." Under the Agreements, the
borrower is required to deliver to the Administrative Agent
periodic compliance certificates reporting the borrower's
"Leverage Ratio" along with related financial information. The
financial statements are to be prepared in compliance with GAAP
and "present fairly in all material respects" the financial
condition and results of operations of the borrower. The
provision of inaccurate financial information in a Compliance
Certificate constitutes an Event of Default under the Agreements.
The Bankruptcy Court found that:
-- the claims for additional grid interest were without merit
because the Credit Agreements did not provide for the
recalculation of grid interest in the event of the delivery
of false compliance certificates to the Administrative
Agents;
-- the default interest was the Administrative Agents'
exclusive remedy under the Credit Agreements; and
-- the claims for additional grid interest filed by the
Administrative Agents were not secured claims under Section
506(b) of the Bankruptcy Code.
Judge Gerber held that the Administrative Agents were limited to
restitutionary damages with respect to any tort remedies that
they might have, which would not include additional grid
interest.
Following the confirmation of the Chapter 11 Plans of Adelphia
Communications Corporation and its debtor affiliates, four of the
Appellants withdrew their appeal. Only the Bank of Nova Scotia,
as the administrative agent under the Parnassos Credit Agreement,
and Citibank, as administrative agent under the Century-TCI
Credit Agreement, continued the litigation of the Appeal.
The Appeal was assigned to Judge Koeltl.
The Appellants wanted the District Court to review whether the
Bankruptcy Court erred in finding the Administrative Agents were
not entitled to additional "grid interest." The main issues
presented on appeal, therefore, are:
(1) whether the Appellants were entitled to grid interest
based on the borrowers' actual financial condition, as
opposed to the financial condition reported on false
compliance certificates; and
(2) whether under the terms of the Agreements, the parties
agreed that the Appellants would be limited to the remedy
of default interest in the event that false compliance
certificates were presented to the Administrative Agents.
Upon review, the District Court found that the Administrative
Agents are entitled to grid interest based on the Borrowers'
actual leverage ratio -- and not the leverage ratio reflected in
a materially false document delivered to the Administrative
Agents. Judge Koeltl held that the lack of a provision for a
retroactive recalculation of the Applicable Margin in the event
that inaccurate compliance certificates were delivered to the
Administrative Agents does not preclude a finding in favor of the
Administrative Agents' entitlement to additional grid interest.
The Credit Agreements provided for default interest as a remedy
for the delivery of inaccurate compliance certificates, the
District Court acknowledged. "[T]he Agreements, [however]
contain language that suggests that default interest was not
intended to be an exclusive remedy [in the event of a breach],"
Judge Koeltl pointed out. "Furthermore, the Agreements contain
'no-waiver' clauses such the Appellants' exercise of their right
to default interest could not be interpreted as a waiver of their
right to prepetition non-default interest at the appropriate
rate," he added.
Therefore, the District Court found that the default interest is
not an exclusive remedy under the Credit Agreements for the
delivery of false compliance certificates. The Administrative
Agents are entitled to recover standard expectancy damages for
the Borrowers' breaches of their contractual obligation to report
accurate Leverage Ratios in the compliance certificates
delivered, Judge Koeltl held. "The [Administrative Agents']
claim for additional grid interest is an allowable claim under
Section 502(b) [of the Bankruptcy Code]."
Judge Koeltl also disagreed with the Bankruptcy Court's ruling
that the additional grid interest claims were not secured claims
under Section 506(b) of the Bankruptcy Code.
Judge Koeltl also found that the Bankruptcy Court is the proper
court to address the arguments of waiver and estoppel given the
Bankruptcy Court's familiarity with the conduct of the parties
and the proceedings relating to the DIP financing. The Debtors
argued that the Administrative Agents should be precluded from
asserting their rights with respect to additional grid interest
claims on the grounds of equitable and judicial estoppel based on
the Administrative Agents' conduct during the negotiations, and
the language, of the Final DIP Order; but the Bankruptcy Court
declined to rule on that argument.
A full-text copy of Judge Koeltl's Memorandum of Opinion and
Order is available for free at:
http://bankrupt.com/misc/ACOM_WachoviaAppealMemorandumOpinion.pdf
About Adelphia Comms
Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation (OTC: ADELQ) -- http://www.adelphia.com/--
is a cable television company. Adelphia serves customers in 30
states and Puerto Rico, and offers analog and digital video
services, Internet access and other advanced services over its
broadband networks. The company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr &
Gallagher represents the Debtors in their restructuring efforts.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision LLC. The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642). Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates' chapter 11
cases.
The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended
Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That
plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy
News; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ADELPHIA COMM: To Distribute Additional Securities to Creditors
---------------------------------------------------------------
Adelphia Communications Corporation disclosed subsequent
distributions of $134 million in cash and 1,059,015 shares of TWC
Class A Common Stock to holders of Allowed Claims against the
parent Adelphia Communications Corporation pursuant to the First
Modified Fifth Amended Joint Chapter 11 Plan of Reorganization of
Adelphia Communications Corporation and Certain Affiliated
Debtors, dated as of Jan. 3, 2007, as confirmed. The 1,059,015
shares of TWC Class A Common Stock to be distributed have a fair
market value as of Sept. 8, 2008 (based on the closing price on
that date) of $29 million.
A chart summarizing the distribution of cash and shares of TWC
Class A Common Stock to be made to classes of ACC Claims is
available in the Important Documents section of the Company's web
site at www.adelphiarestructuring.com. The chart does not reflect
additional distributions that may be made over time as a result of
the release of escrows, reserves and holdbacks. The amount and
timing of such distributions as a result of the release of
escrows, reserves and holdbacks are subject to the terms and
conditions of the Plan and numerous other conditions and
uncertainties, many of which are outside the control of Adelphia
and its subsidiaries.
Creditor inquiries regarding distributions under the Plan should
be directed to creditor.inquiries@adelphia.com
A full-text copy of Adelphia's most recent claim distributions is
available for free at:
http://bankrupt.com/misc/ACOM_DistributionstoAllowedClaims.pdf
About Adelphia Comms
Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation (OTC: ADELQ) -- http://www.adelphia.com/--
is a cable television company. Adelphia serves customers in 30
states and Puerto Rico, and offers analog and digital video
services, Internet access and other advanced services over its
broadband networks. The company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr &
Gallagher represents the Debtors in their restructuring efforts.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision LLC. The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642). Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates' chapter 11
cases.
The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended
Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That
plan became effective on Feb. 13, 2007.
ADELPHIA COMM: Trust Issues 2007 Federal Income Tax Information
---------------------------------------------------------------
The Adelphia Recovery Trust related in an August 26, 2008, press
release that it has issued Federal income tax information for the
2007 tax year to beneficiaries.
The ART Declaration of Trust and the Adelphia Plan of
Reorganization require the ART to provide annual Federal income
tax information to the ART's beneficiaries. A copy of the ART's
letter to beneficiaries concerning the ART's 2007 federal income
tax information is available in the "Important Documents-Adelphia
Recovery Trust" section of Adelphia's web site at:
http://www.adelphiarestructuring.com/
Beneficiaries may direct questions to
creditor.inquiries@adelphia.com. However, the ART does not intend
to and will not provide tax advice to beneficiaries. The ART
strongly encourages beneficiaries to consult their own tax
advisors.
The ART also posted in Adelphia's restructuring site its 2007 Tax
Worksheets for holders of:
* CVV Series RF Interests, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/ACOM_TaxWorksheet_RFInterests.pdf
* CVV Series Arahova Interests, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/ACOM_TaxWorksheet_ArahovaInterests.pdf
* CVV Series Frontiervision Interests, a full-text copy of which
is available for free at:
http://bankrupt.com/misc/ACOM_FrontiervisionInterests.pdf
* CVV Series FLP Interests, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/ACOM_TaxWorksheet_FLPInterests.pdf
* CVV Series Olympus Interests, a full-text of which is
available for free at:
http://bankrupt.com/misc/ACOM_TaxWorksheet_OlympusInterests.pdf
* CVV Series ACC-1 Interests, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/ACOM_TaxWorksheet_ACC-1Interests.pdf
* CVV Series ACC-2 Interests, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/ACOM_TaxWorksheet_ACC-2Interests.pdf
* CVV Series ACC-3 Interests, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/ACOM_TaxWorksheet_ACC-3Interests.pdf
About Adelphia Recovery Trust
Adelphia Recovery Trust is a Delaware Statutory Trust that was
formed pursuant to the First Modified Fifth Amended Joint Chapter
11 Plan of Reorganization of Adelphia Communications Corporation
and Certain Affiliated Debtors, which became effective Feb. 13,
2007. The ART holds certain litigation claims transferred
pursuant to the Plan against various third parties and exists to
prosecute the causes of action transferred to it for the benefit
of holders of ART interests.
About Adelphia Comms
Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation (OTC: ADELQ) -- http://www.adelphia.com/--
is a cable television company. Adelphia serves customers in 30
states and Puerto Rico, and offers analog and digital video
services, Internet access and other advanced services over its
broadband networks. The company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr &
Gallagher represents the Debtors in their restructuring efforts.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision LLC. The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642). Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates' chapter 11
cases.
The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended
Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That
plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy
News; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ADELPHIA COMM: Trust Files 1st & 2nd Quarter Reports for 2008
-------------------------------------------------------------
The Adelphia Recovery Trust has filed with the U.S. Securities
and Exchange Commission its financial reports for the quarter
periods ended March 31, 2008, and June 30, 2008.
The ART's sources of liquidity result from the $25 million
transferred to the ART by Adelphia pursuant to the company's
Chapter 11 Plan on the Effective Date; the successful resolution
of Causes of Action; and earnings on invested cash balances.
Ralph J. Takala, a trustee under the ART, reported that cash
balances at March 31, 2008 of $185.7 million are $160.5 million
higher than March 31, 2007 due to the settlement of the
Tow/Rosensweig and Deloitte and Touche Causes of Action for
$188.2 million offset by operating expenses. Note receivable
balances also were increased $5.1 million from March 31, 2007 to
March 31, 2008 due to the settlement of the Tow/Rosensweig Cause
of Action. Accrued expenses increased from $6.2 million in the
first quarter of 2007 to $8.4 million in the first quarter of
2008 as costs associated with the Causes of Action are
increasing.
Jeffrey A. Brodsky of Quest Turnaround Advisors, LLC, as trust
administrator of the ART, reported that cash balances at June 30,
2008 of approximately $172.0 million are approximately
$17.7 million lower than December 31, 2007 due to a net loss over
the six months ended June 30, 2008, of approximately $11.2 million
and an additional use of cash by operating activities of
approximately $6.5 million, primarily related to reducing accrued
expenses. Other uses of cash from operating activities include
the purchase of prepaid insurance and the accrual of interest on
a settlement receivable.
The significant increase in interest for the quarter ended
June 30, 2008, compared to the quarter of 2007 is due to the
significantly higher invested cash balances provided by the
company's settlement with Deloitte and Touche LLP in August 2007,
Mr. Brodsky noted. The ART added that its operating expenses for
the period ended June 30, 2008 are down slightly compared to the
same period in 2007 due to reduced expenses for litigation
professionals.
Taking into account the increase in interest income, higher
settlement revenues, and reduced operating expenses, the ART
incurred a net loss of $5.4 million for the quarter ended
June 30, 2008, which was $3.8 million lower than the loss for the
quarter ended June 30, 2007.
The ART has no debt, capital or operating lease or other long-
term obligations and has no current plans to incur obligations,
according to Mr. Brodsky.
A full-text copy of the ART's 2008 First Quarter Report is
available for free at http://ResearchArchives.com/t/s?31e2
A full-text copy of the ART's 2008 Second Quarter Report is
available at the SEC at http://ResearchArchives.com/t/s?31e7
Adelphia Recovery Trust
Unaudited Condensed Balance Sheets
As of As of
June 30, 2008 March 31, 2008
------------- --------------
Assets
Cash and cash equivalents $171,979,288 $185,683,082
Prepaid insurance 680,497 831,903
Note & accrued interest receivable 5,193,768 5,096,263
------------ ------------
Total assets $177,853,553 $191,611,248
------------ ------------
Liabilities and net assets
Accrued expenses 1,065,489 9,393,220
------------ ------------
Total liabilities 1,065,489 9,393,220
------------ ------------
Net assets 176,853,553 182,218,028
------------ ------------
Total liabilities and net assets $177,853,553 $191,611,248
============ ============
Adelphia Recovery Trust
Unaudited Condensed Statement of Operations
For the For the
quarter ended quarter ended
June 30, 2008 March 31, 2008
------------- --------------
Revenues
Litigation - court-approved pacts $- $200,206
Litigation - other settlements 850,194 60,000
Interest income 1,101,159 1,689,819
------------- --------------
Total revenues 1,951,353 1,950,025
-------------
--------------
Operating expenses
General and administrative expenses 933,470 515,010
Professional expenses - litigation 5,507,525 6,480,741
Professional expenses - admin. 940,322 724,444
------------- --------------
Total operating expenses 7,381,317 7,720,195
------------- --------------
Net loss ($5,429,964) ($5,770,170)
============= ==============
Adelphia Recovery Trust
Unaudited Condensed Statement of Cash Flows
For the six For the
months ended quarter ended
June 30, 2008 March 31, 2008
------------- --------------
Operating activities
Net loss ($11,200,133) ($5,770,170)
Adjustments to reconcile net
loss to net cash used by
operating activities
Insurance founded by Debtor - -
Changes in operating assets
and liabilities:
Prepaid insurance (555,827) (707,233)
receivable
Note and accrued interest (195,011) (97,506)
Accrued expenses (5,754,314) ( 2,573,418)
------------- --------------
Net cash used by
operating activities (17,705,285) (4,001,491)
------------- --------------
Financing activities
Contribution from Debtor - cash - -
------------- --------------
Net cash provided by financing
activities - -
------------- --------------
Net change in cash and
cash equivalents (17,705,285) (4,001,491)
Cash and cash equivalents,
beginning of period 189,684,573 189,684,573
------------- --------------
$171,979,288 $185,683,082
============= ==============
About Adelphia Comms
Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation (OTC: ADELQ) -- http://www.adelphia.com/--
is a cable television company. Adelphia serves customers in 30
states and Puerto Rico, and offers analog and digital video
services, Internet access and other advanced services over its
broadband networks. The company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr &
Gallagher represents the Debtors in their restructuring efforts.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision LLC. The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642). Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates' chapter 11
cases.
The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended
Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That
plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy
News; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
AEI CORP: Moody's Withdraws 'B2' Rating on Proposed $250MM Notes
----------------------------------------------------------------
Moody's Investors Service has withdrawn its B2 rating assigned on
June 20, 2008, for AEI's proposed issuance of $250MM senior
unsecured notes due in 2018. Current market conditions resulted
in unsatisfactory pricing for the proposed debt offering. The
company has decided to withdraw this issue for the present time
and may reinstate its debt offering at a later date.
The withdrawal of this security has no impact on the CFR and PDR
of B1 or the Ba3 or the rating of the senior secured credit
facilities. However, as a result of this change in capital
structure, the LGD Assessment for the senior secured credit
facilities has been revised to LGD3, 39% from LDG3, 34%.
AGRARIO LLC: Touch & Flame Wants to Renovate Former Property
------------------------------------------------------------
The owners of Touch and Flame restaurants, are moving forward with
plans to renovate a downtown building they bought from bankrupt
Agrario, LLC, Matt Wagner of the Springfield (Mo.) Business
Journal reports.
Billy Jalili and his family, who bought the building for $980,000
in June 2008, is renovating the property as a high-end, Vegas-
style nightclub called Zan.
The Jalilis outbid downtown entrepreneur Paul Sundy, co-owner of
Big Whiskeys, Icon Nightclub and Fedora Social House on Park
Central East, in an auction for the Debtor's building, recalls Mr.
Wagner.
Springfield, Missouri-based Agragrio, LLC, operates Aussie Jack's
Steakhouse and The Patton Alley Pub. The Company and two debtor-
affiliates filed for separate Chapter 11 bankruptcy protection on
January 23, 2007, in the United States Bankruptcy Court for the
Western District of Missouri (Lead Case No. 07-60085). David E.
Schroeder, Esq., at David Schroeder Law Offices, PC, represents
the Debtors in their restructuring efforts. The lead debtor
listed $1,000,000 to $10,000,000 in assets and $100,000 to
$1,000,000 in debts.
AMERICAN HOME: Stipulates with WaMu on Cure Amount for Contracts
----------------------------------------------------------------
Washington Mutual Mortgage Securities Corp., American Home
Mortgage Investment Corp., and its debtor-affiliates agree that
the proposed cure amount for the WaMu contracts is $0.
Washington Mutual Mortgage Securities Corp. had objected to the
proposed cure amount of the Debtors. Washington Mutual asserted
that the Debtors owed it $3,819,269 in cure amounts.
Subsequently, the Debtors and Washington Mutual reached an
agreement that resolves the cure amounts issues. They inform the
Court that AH Mortgage Acquisition Co., Inc., purchaser of the
Debtors' loan servicing business, has confirmed that the Debtors
assumed and assigned to it only the servicing agreements
contained within, and the related servicing rights under, certain
WaMu contracts.
Accordingly, Washington Mutual agrees that the proposed cure
amount for the WaMu contracts is $0.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a
mortgage real estate investment trust engaged in the business of
investing in mortgage-backed securities and mortgage loans
resulting from the securitization of residential mortgage loans
originated and serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors selected Hahn & Hessen LLP as
its counsel. The Creditors Committee also retained Hennigan,
Bennett & Dorman LLP, as special conflicts counsel. As of March
31, 2007, American Home Mortgage's balance sheet showed total
assets of $20,553,935,000 and total liabilities of
$19,330,191,000.
(American Home Bankruptcy News, Issue No. 45; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN INTERNATIONAL: Housing Market Woes Cue Moody's Downgrades
------------------------------------------------------------------
Moody's Investors Service has downgraded the senior unsecured debt
rating of American International Group, Inc. to A2 from Aa3 in
light of the continuing deterioration in the US housing market and
the consequent impact on the group's liquidity and capital
position due to its related investment and derivative exposures.
The company's long-term and Prime-1 short-term ratings were placed
on review for possible further downgrade.
The company has developed a wide-ranging plan to address capital
and liquidity risks which includes raising funds via secured
borrowings, asset sales and other capital sources. If successful,
these actions would likely stabilize the ratings at current
levels, although significant execution risk exists with respect to
some elements of that plan, especially given the current level of
instability in capital markets. Moody's noted, however, that
further downgrades of the parent and certain operating units are
likely if the immediate liquidity and capital concerns are not
fully addressed. Such downgrades could amount to multiple
notches.
Moody's said that the primary insurance operations are
fundamentally solid but are nevertheless subject to increased
pressure due to investment deterioration and the negative
reputational impact of losses within the group's financial
products business. The holding company downgrade to A2 and
continuing review reflect the losses at certain insurance and
financial products units as well as the severe implications of
those losses -- and continuing exposures -- for capital and
liquidity.
The dislocation in AIG's holding company financial position is
considered by Moody's to be indicative of a risk profile that is
not consistent with a rating in the Aa range, even if near term
stresses on capital and liquidity are successfully remediated.
The current volatility in AIG's stock price and borrowing spreads
have made it more difficult to address the company's immediate
liquidity and capital needs through traditional capital market
issuance; however, the company may be able to address these needs
through alternative means.
The review of AIG's ratings will focus on execution of the
company's pending strategic and financial plans, with specific
emphasis on how effectively they 1) re-establish the company's
robust liquidity position, 2) re-define the group strategy, 3)
contain and reduce risk within the financial products unit, 4) re-
build capitalization, and 5) reduce the risk of reputation damage
to AIG's business in domestic and international markets.
Moody's has also downgraded the ratings of several AIG
subsidiaries, including the Domestic Life Insurance and Retirement
Services companies (DLIRS -- insurance financial strength rating
to Aa3 from Aa2); American Life Insurance Company (IFSR to Aa3
from Aa2); AIG Edison Life Insurance Company (IFSR to Aa3 from
Aa2); AIG UK Limited (IFSR to A1 from Aa3); AIG Capital
Corporation (senior unsecured debt to Baa1 from A2, short-term
debt to Prime-2 from Prime-1); American General Finance
Corporation (senior unsecured debt to A3 from A1, short-term debt
to Prime-2 from Prime-1); and International Lease Finance
Corporation (senior unsecured debt to A3 from A1; short-term debt
to Prime-2 from Prime-1). Nearly all of AIG's subsidiary ratings
remain on review for possible further downgrade.
Moody's affirmed the Aa3 IFS rating of Transatlantic Reinsurance
Company, while lowering the senior unsecured debt rating of
Transatlantic Holdings, Inc. to A3 from A2. The TRH debt rating
previously incorporated one notch of rating uplift from AIG's 59%
ownership stake, but Moody's increasingly assesses TRH on a stand-
alone basis. The rating outlook for TRC and TRH is stable.
AIG remains one of the world's largest and most diversified
insurance firms, said Moody's, with leading market positions in
many business lines and geographic regions. The insurance
financial strength ratings of the major operating units, currently
in the Aa range, reflect their strong intrinsic business and
financial profiles as well as Moody's expectation that AIG will
take whatever steps possible to protect these operations.
The last rating action on AIG took place on August 7, 2008, when
Moody's affirmed the parent company's ratings and reiterated the
negative outlook. Moody's also affirmed the insurance financial
strength ratings of the DLIRS companies while changing the outlook
to negative from stable.
Moody's has downgraded these ratings and placed them on review for
possible further downgrade:
* American International Group, Inc. -- long-term issuer rating
to A2 from Aa3, senior unsecured debt to A2 from Aa3,
subordinated debt to A3 from A1, senior unsecured debt shelf
to (P)A2 from (P)Aa3, subordinated debt shelf to (P)A3 from
(P)A1, preferred stock shelf to (P)Baa1 from (P)A2;
* AGFC Capital Trust I -- backed preferred stock to Baa2 from
A3;
* AIG Capital Corporation -- long-term issuer rating to Baa1
from A2;
* AIG Capital Trusts I & II -- backed trust preferred stock
shelf to (P)A3 from (P)A1;
* AIG Edison Life Insurance Company -- insurance financial
strength to Aa3 from Aa2;
* AIG Life Holdings (US), Inc. -- backed senior unsecured debt
to A2 from Aa3;
* AIG Program Funding, Inc. -- backed senior unsecured debt
shelf to (P)A2 from (P)Aa3;
* AIG Retirement Services, Inc. -- backed senior unsecured debt
to A2 from Aa3, backed preferred stock to Baa1 from A2;
* AIG UK Limited -- insurance financial strength to A1 from Aa3;
* American General Capital II -- backed trust preferred stock to
A3 from A1;
* American General Finance Corporation -- long-term issuer
rating to A3 from A1, senior unsecured debt to A3 from A1;
* American General Institutional Capital A & B -- backed trust
preferred stock to A3 from A1;
* American Life Insurance Company -- insurance financial
strength to Aa3 from Aa2;
* Capital Markets subsidiaries -- AIG Financial Products Corp.,
AIG Matched Funding Corp., AIG-FP Capital Funding Corp., AIG-
FP Matched Funding Corp., AIG-FP Matched Funding (Ireland)
P.L.C., Banque AIG -- backed senior unsecured debt to A2 from
Aa3;
* Domestic Life Insurance & Retirement Services subsidiaries --
AIG Annuity Insurance Company, AIG Life Insurance Company,
American General Life and Accident Insurance Company, American
General Life Insurance Company, American International Life
Assurance Company of New York, The United States Life
Insurance Company in the City of New York, The Variable
Annuity Life Insurance Company -- insurance financial strength
to Aa3 from Aa2;
* AIG SunAmerica funding agreement-backed note programs -- AIG
SunAmerica Global Financing Trusts, ASIF I & II, ASIF III
(Jersey) Limited, ASIF Global Financing Trusts -- senior
secured debt to Aa3 from Aa2;
* AIG SunAmerica subsidiaries -- AIG SunAmerica Life Assurance
Company, First SunAmerica Life Insurance Company, SunAmerica
Life Insurance Company -- insurance financial strength to Aa3
from Aa2;
* ILFC E-Capital Trusts I & II -- backed preferred stock to Baa2
from A3;
* International Lease Finance Corporation -- senior unsecured
debt to A3 from A1, preferred stock to Baa2 from A3, senior
unsecured debt shelf to (P)A3 from (P)A1;
* Mortgage Guaranty subsidiaries (second-lien and student loans)
-- United Guaranty Commercial Insurance Company of North
Carolina, United Guaranty Residential Insurance Company of
North Carolina -- backed insurance financial strength to A3
from A1.
Moody's has downgraded these ratings and assigned a negative
outlook:
* AIG Capital Corporation -- short-term issuer rating to Prime 2
from Prime 1;
* American General Finance Corporation -- short-term debt to
Prime 2 from Prime-1;
* American General Finance, Inc. -- short-term debt to Prime-2
from Prime-1;
* CommoLoco, Inc. -- backed short-term debt to Prime-2 from
Prime-1;
* International Lease Finance Corporation -- short-term debt to
Prime-2 from Prime-1.
Moody's has placed these ratings on review for possible downgrade:
* American International Group, Inc. -- short-term issuer rating
at Prime-1;
* AIG Financial Products Corp. -- backed short-term debt at
Prime-1;
* AIG Funding, Inc. -- backed short-term debt at Prime-1;
* AIG General Insurance (Taiwan) Co., Ltd. -- insurance
financial strength at A1;
* AIG Liquidity Corp. -- backed short-term debt at Prime-1;
* AIG Matched Funding Corp. -- backed short-term debt at
Prime-1;
* AIG SunAmerica subsidiaries -- AIG SunAmerica Life Assurance
Company, First SunAmerica Life Insurance Company, SunAmerica
Life Insurance Company -- short-term insurance financial
strength at Prime-1;
* American International Assurance Company (Bermuda) Limited --
insurance financial strength at Aa3;
* Commercial Insurance Group subsidiaries -- AIG Casualty
Company; AIU Insurance Company; American Home Assurance
Company; American International Specialty Lines Insurance
Company; Commerce and Industry Insurance Company; National
Union Fire Insurance Company of Pittsburgh, Pennsylvania; New
Hampshire Insurance Company; The Insurance Company of the
State of Pennsylvania -- insurance financial strength at Aa3;
* Mortgage Guaranty subsidiaries (first-lien loans) -- United
Guaranty Mortgage Indemnity Company, United Guaranty
Residential Insurance Company -- backed insurance financial
strength at Aa3.
Moody's has downgraded this rating and assigned a stable outlook:
* Transatlantic Holdings, Inc. -- senior unsecured debt to A3
from A2, senior unsecured debt shelf to (P)A3 from (P)A2,
subordinated debt shelf to (P)Baa1 from (P)A3.
Moody's has affirmed this rating with a stable outlook:
* Transatlantic Reinsurance Company -- insurance financial
strength at Aa3.
AIG, based in New York City, is a leading international insurance
and financial services organization, with operations in more than
130 countries and jurisdictions. The company is engaged through
subsidiaries in General Insurance, Life Insurance & Retirement
Services, Financial Services and Asset Management. AIG reported
total revenues of $19.9 billion and a net loss of $5.4 billion for
the second quarter of 2008. Shareholders' equity was
$78.1 billion as of June 30, 2008.
AMERICAN INTERNATIONAL: Fitch Cuts ID and Outstanding Debt Ratings
------------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating and
outstanding debt ratings of American International Group, Inc. as:
-- Long-term IDR to 'A' from 'AA-';
-- Senior unsecured debt to 'A' from 'AA-'.
-- Short-term IDR to 'F1' from 'F1+';
-- Commercial paper program to 'F1' from 'F1+'.
Fitch has also downgraded AIG's holding company and subsidiary
debt and insurer financial strength ratings. A full list of
rating actions is detailed below. The ratings also remain on
Rating Watch Negative by Fitch.
The rating actions reflect Fitch's view that AIG's financial
flexibility and ability to raise holding company cash is extremely
limited due to recent declines in the company's stock price,
widening credit spreads, and difficult capital market conditions.
The rating actions also reflect benefits derived from a plan
announced by New York's governor that grants certain AIG operating
company subsidiaries the authority to exchange up to $20 billion
of assets with AIG in order to promote the company's liquidity.
Fitch believes that AIG's ability to fund collateral requirements
and replace capital lost due to the company's on-going exposure to
the U.S. residential mortgage market is now largely dependent on
accessing assets provided under the plan outlined by New York's
governor and by asset sales.
AIG's collateral requirements and liquidity needs rise from
several sources, including the company's AIG Financial Products
subsidiary's portfolio of credit default swaps written on
collateralized debt obligations backed by structured finance CDOs.
In the second quarter 2008 AIG posted approximately $8.2 billion
of collateral related to this portfolio, bringing the total
collateral posted at July 31, 2008 to $16.5 billion. Given
current difficult market conditions Fitch believes that AIG is
likely to face additional material collateral calls on this
portfolio.
Further, as of July 31, 2008, AIG estimated that it could be
required to post $10.5 billion of additional collateral if the
company's ratings are downgraded one notch from current levels by
the other major rating agencies and $13.3 billion of collateral if
downgraded by both of the other agencies. AIG's also has
potential liquidity needs derived from 2a-7 put contracts the
company sold that Fitch estimates at $6 billion as of June 30,
2008.
Fitch believes that AIG is likely to pursue other steps to raise
cash and capital and that the company may pursue the sale of
various operating units. Fitch believes that these measures will
take time to develop and thus while they are likely to provide AIG
with long-term benefits they are unlikely to provide benefits in
the short-term. Notwithstanding, Fitch believes the
accommodations being provided by AIG's insurance regulators has
eased the potential liquidity strain being experienced at the
holding company level.
Fitch has downgraded these ratings and kept them on Rating Watch
Negative:
American International Group, Inc.
-- Long-term IDR to 'A' from 'AA-'';
-- Senior debt to 'A' from 'AA-;
-- Junior subordinated debentures to 'A-' from 'A+';
-- Short-term IDR to 'F1' from 'F1+'.
AIG Funding, Inc.
-- Commercial paper to 'F1' from 'F1+'.
AIG International, Inc.
-- Long-term IDR to 'A' from 'AA-'
-- Senior debt to 'A' from 'AA-'.
AIG Life Holdings (US), Inc. (formerly American General Corp.)
-- Long-term IDR to 'A' from 'AA-';
-- Senior debt to 'A' from 'AA-'.
American General Capital II
-- Preferred securities to 'A-' from 'A+'.
American General Institutional Capital A and B
-- Capital securities to 'A-' from 'A+'.
HSB Capital Trust I
-- Preferred securities to 'A' from 'AA-'.
21st Century Insurance Group
-- Long-term IDR to 'A' from 'AA-';
-- Senior debt to 'A' from 'AA-'.
United Guaranty Corporation
-- Long Term Rating to 'A' from 'AA-'.
Ezer Mortgage Insurance Company (ISR)
-- Insurer Financial Strength Rating to 'A' from 'AA'.
Fitch has also downgraded these companies IFS ratings to 'AA-'
from 'AA+' and kept on Rating Watch Negative:
Life Companies
-- AGC Life Insurance Company;
-- AIG Annuity Insurance Company;
-- AIG Life Insurance Company;
-- AIG SunAmerica Life Assurance Company;
-- American General Life and Accident Insurance Company;
-- American General Life Insurance Company;
-- American International Assurance Company (Bermuda) Limited;
-- American International Life Assurance Company of New York;
-- American Life Insurance Company;
-- First SunAmerica Life Insurance Company;
-- SunAmerica Life Insurance Company;
-- The United States Life Insurance Company in the City of
New
York;
-- The Variable Annuity Life Insurance Company.
National Union Inter-company Pool Members:
-- AIG Casualty Company (formerly Birmingham Fire Ins. Co. of
PA);
-- American Home Assurance Company;
-- American International South Insurance Company;
-- Commerce and Industry Insurance Company;
-- Granite State Insurance Company;
-- Illinois National Insurance Co. ;
-- National Union Fire Insurance Company of Pittsburgh, PA;
-- New Hampshire Insurance Company;
-- The Insurance Company of the State of Pennsylvania.
Lexington Inter-company Pool Members:
-- AIG Excess Liability Insurance Company, Ltd. (formerly Starr
Excess Liability Ins. Co., Ltd.);
-- Landmark Insurance Company;
-- Lexington Insurance Company.
AIG Personal Lines Inter-company Pool Members:
-- 21st Century Casualty Company;
-- 21st Century Insurance Company;
-- 21st Century Insurance Company of the Southwest;
-- AIG Advantage Insurance Company (formerly Minnesota Ins.
Co.);
-- AIG Auto Insurance Company of New Jersey;
-- AIG Centennial Insurance Company;
-- AIG Hawaii Insurance Company;
-- AIG Indemnity Insurance Company;
-- AIG National Insurance Company, Inc.;
-- AIG Preferred Insurance Company;
-- AIG Premier Insurance Company;
-- American International Insurance Company;
-- American International Insurance Company of California;
-- American International Insurance Company of New Jersey;
-- American International Pacific Insurance Company;
-- American Pacific Insurance Company;
-- New Hampshire Indemnity Company, Inc.
Non-Pool Companies
-- AIU Insurance Company;
-- American International Specialty Lines Insurance Company;
-- Hartford Steam Boiler Inspection & Insurance Company;
-- United Guaranty Residential Insurance Company.
Foreign Domiciled General Ins. Companies
-- AIG MEMSA Insurance Company Ltd. (UAE);
-- AIG (UK) Ltd. (formerly The Landmark Insurance Co. Ltd. (UK);
-- American International Underwriters Overseas, Ltd. (Bermuda).
ASIF Program
ASIF II Program
ASIF III Program
ASIF Global Financial Program
-- Program ratings downgraded to 'AA-' from 'AA+'.
These companies' ratings remain on Rating Watch Negative:
AIG Capital Corporation
-- Long-term IDR at 'A';
-- Short-term IDR at 'F1'.
International Lease Finance Corp.
-- Long-term IDR at 'A;
-- Senior unsecured debt at 'A';
-- Preferred stock at 'A-';
-- Short-term IDR at 'F1':
-- Commercial paper at 'F1'.
American General Finance, Inc.
-- Long-term IDR at 'A';
-- Short-term IDR at 'F1';
-- Commercial paper at 'F1'.
American General Finance, Corp.
-- Long-term IDR at 'A';
-- Senior debt 'at 'A';
-- Short-term IDR 'at F1';
-- Commercial paper at 'F1'.
AGFC Capital Trust I
-- Preferred stock at 'A-'.
AIG Finance (Hong Kong) Ltd.
-- Long-term local currency IDR at 'A';
-- Senior unsecured at 'A';
-- Short-term local currency IDR at 'F1'.
CommoLoCo Inc.
-- Short term IDR at 'F1';
-- Commercial paper at 'F1'
AMIGOS WATERFORD: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Amigos Waterford Lakes, LLC
dba Amigos
10501 South Orange Avenue, Suite 109
Orlando, FL 32824
Bankruptcy Case No.: 08-08159
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Amigos Winter Park, LLC 08-08161
Type of Business: The Debtors operate restaurants.
Chapter 11 Petition Date: September 12, 2008
Court: Middle District of Florida (Orlando)
Judge: Karen S. Jennemann
Debtor's Counsel: Peter N. Hill, Esq.
phill@whmh.com
Wolff Hill McFarlin & Herron PA
1851 West Colonial Drive
Orlando, FL 32804
Tel: (407) 648-0058
Fax: (407) 648-0681
Estimated Assets: $100,000 to $500,000
Estimated Debts: $1,000,000 to $10,000,000
The Debtor does not have any creditors who are not insiders.
ANWAR ABDULLA: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Anwar Abdulla
Seeni Anwar
231 Western Avenue
Cambridge, MA 02139
Bankruptcy Case No.: 08-16802
Chapter 11 Petition Date: September 11, 2008
Court: District of Massachusetts (Boston)
Judge: Henry Boroff
Debtors' Counsel: John M. McAuliffe, Esq.
McAuliffe & Associates, P.C.
mcauliffeassociates@hotmail.com
430 Lexington Street
Newton, MA 02466
Tel: (617) 558-6889
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
The Debtor did not file a list of its largest unsecured creditors.
ASARCO LLC: Court Okays Alvarez & Marsal as Testifying Experts
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas has
granted permission to ASARCO LLC and its debtor-affiliates to
employ Alvarez & Marsal, LLC, as special purpose testifying
experts to ASARCO's bankruptcy counsel, Baker Botts L.L.P., in
connection with the claim filed by Rinker Materials South Central,
Inc., against ASARCO.
James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas,
tells the Court that his firm has an immediate need for A&M's
expert consulting services in connection with evaluating ASARCO's
liability, if any, for the claim filed by RMSC.
As special purpose testifying experts, A&M will:
(i) assist Baker Botts in interpreting and understanding the
large volume of accounting data that Baker Botts has
received from RMSC, Ready Mix, and other related parties,
including understanding the cost and profit margins
associated with mining at the Tennessee quarries and
mines; and calculating an appropriate damages amount; and
(ii) build a cost to cover damages model and discount Ready
Mix's damages model to present value.
ASARCO will pay A&M according to its customary hourly rates;
provided that the total compensation for the engagement will not
exceed $250,000:
Professional Hourly Rate
------------ -----------
Managing Director $550
Other professionals $200 to $550
A&M will also be reimbursed of its necessary, reasonable out-of-
pocket expenses incurred in providing the services.
Quentin L. Mimms, managing director of Alvarez & Marsal, assured
the Court that his firm neither holds nor represents interests
adverse to the Debtors and their estate with respect to the
matters for which it is to be employed. A&M is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code, as modified by Section 1107(b), Mr. Mimms said.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
The Company filed for Chapter 11 protection on Aug. 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When the Debtor filed for protection from its creditors, it listed
$600 million in total assets and $1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008. The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for $2,600,000,000.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case. AMC would provide up to
$2.7 billion in cash as well as a $440 million guarantee to assure
payment of all allowed creditor claims, including payment of
liabilities relating to asbestos and environmental claims. AMC's
plan is premised on the estimation of the approximate allowed
amount of the claims against ASARCO.
Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at
Milbank, Tweed, Hadley & McCloy LLP, in New York.
(ASARCO Bankruptcy News Issue No. 82; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ASARCO LLC: Settlement Agreement With El Paso Gets Court's Nod
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas has
approved ASARCO LLC and its debtor-affiliates' settlement with El
Paso Natural Gas Company.
The settlement provides that:
* ASARCO agrees that EPNG will keep the net gas imbalance that
was frozen as of November 30, 2005, totaling 22,828 Dth;
* ASARCO agrees that EPNG will keep the current prepetition
deposit of $73,998;
* EPNG agrees to accept the deposit as complete payment and
satisfaction for any prepetition unpaid invoiced dollars
ASARCO owed to EPNG;
* EPNG will withdraw its Claim with prejudice, and will be
allowed to retain any and all amounts determined to be owed
by EPNG to ASARCO attributable to prepetition periods;
* EPNG and ASARCO agree to terminate all current
transportation contracts;
* ASARCO agrees to pay a cash deposit of $214,263 as credit
assurance required by EPNG's Tariff for a new Arizona
Contract; and
* ASARCO agrees to pay EPNG any outstanding postpetition
invoices, including late charges owed under the
current contracts. EPNG agrees to pay ASARCO any
refunds that are due arising from postpetition activity.
ASARCO agrees to pay the monthly invoices for the new
Transport Service Agreement pursuant to the terms of its
FERC Gas Tariff. ASARCO will pay or receive any amounts
owed by it to EPNG or owed to it from EPNG attributable to
the period after the date the Petition was filed.
Jack L. Kinzie, Esq., at Baker Botts, L.L.P., in Dallas, Texas,
told the Court that EPNG provides ASARCO with natural gas pipeline
transmission services to ASARCO'S facilities in El Paso, Texas,
and Hayden, Arizona. ASARCO's contracts with EPNG were in dispute
in a proceeding before the Federal Energy Regulatory Commission
along with numerous other similar EPNG contracts with other
parties. FERC issued an order regarding the dispute on March 20,
2006, and settlement discussions and settlement proposals
continued thereafter.
In 2002, ASARCO and many other El Paso Shippers were part of a
Capacity Allocation Proceeding. The FERC ruling resulted in
ASARCO being allocated more pipeline capacity under its shipping
contracts than it needed. However, the FERC ruling also provided
that the excess capacity was not chargeable to ASARCO for a number
of years, and so ASARCO essentially had a "free ride" on the
excess, unneeded volumes until just recently, Mr. Kinzie recalls.
EPNG had filed Claim No. 10874 against ASARCO and asserted a
secured claim in the amount of $675,716, and an unsecured claim in
the amount of $749,142.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
The Company filed for Chapter 11 protection on Aug. 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When the Debtor filed for protection from its creditors, it listed
$600 million in total assets and $1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008. The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for $2,600,000,000.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case. AMC would provide up to
$2.7 billion in cash as well as a $440 million guarantee to assure
payment of all allowed creditor claims, including payment of
liabilities relating to asbestos and environmental claims. AMC's
plan is premised on the estimation of the approximate allowed
amount of the claims against ASARCO.
Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at
Milbank, Tweed, Hadley & McCloy LLP, in New York.
(ASARCO Bankruptcy News Issue No. 82; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ASARCO LLC: Seeks Court Okay on Settlement With Texas Commission
----------------------------------------------------------------
ASARCO LLC and its debtor-affiliates seek the U.S. Bankruptcy
Court for the Southern District of Texas' approval, pursuant to
Section 363(b)(1) of the Bankruptcy Code and Rule 9019 of the
Federal Rules of Bankruptcy Procedure, of a compromise and
settlement agreement they entered into with the Texas Commission
on Environmental Quality.
The agreement, ASARCO says, is aimed to resolve the TCEQ's Claim
Nos. 10446 and 10449 filed against ASARCO and ASARCO Master,
Inc., with respect to the Debtors' environmental obligations and
liabilities related to the Federated Metals State Superfund Site.
Jack L. Kinzie, Esq., at Baker Botts L.L.P, in Dallas, Texas,
narrates that the Site is owned by ASARCO Master, a wholly owned
subsidiary of ASARCO, and was listed on the Texas State Registry
for sites that may pose an imminent and substantial endangerment
to public health and safety or to the environment.
The TCEQ asserted the Claims against the Debtors for contingent
liabilities to Texas environmental laws and based on the
contingency that ASARCO Master does not perform its obligations
under the June 30, 1993 agreed order, which requires, among
others, ASARCO Master to conduct site assessment and remediation
feasibility studies.
The Debtors and the TCEQ have worked cooperatively at the Site
for many years and have recently participated in several
discussions concerning the resolution of of the TCEQ's Claims,
Mr. Kinzie says. As a result of those discussions, the parties
have agreed that an acceptable third-party liability transfer of
the Site would resolve and satisfy the TCEQ's claims.
ASARCO Master solicited competitive bids from third parties to
enter into an arm's length liability transfer agreement related
to the Site. Of the bids received, the parties determined that
the bid submitted by ELT Houston, LLC, was the best bid.
The TCEQ supports the acquisition of the Site by ELT based on
ELT's and its parent company, Environmental Liability Transfer,
Inc.'s willingness to enter into an agreed remediation order to
fully remediate the site. Also, the TCEQ approves ELT's
selection of EnergySolutions, LLC, as its prime contractor for
the removal and disposal of waste materials and contaminated
soil.
Accordingly, ELT and ASARCO Master entered into a Real Estate and
Environmental Liability Transfer Agreement on August 28, 2008,
under which ELT will take title to the Site and assume all of the
environmental remediation obligations associated in exchange for
$28,900,000. The payment will be placed in a remediation trust
for the benefit of ELT and overseen by Wells Fargo Bank, N.A.,
that will fund continued site assessments and remediation at the
Site.
In light of the TCEQ's support for a liability transfer of the
Site to ELt, and to resolve the TCEQ's claims against ASARCO and
release the Debtors from all obligations related to the Site, the
parties entered into a settlement agreement, which provides,
among others things, that:
* the TCEQ's claims against the Debtors for liabilities at the
Site only will be fully resolved and satisfied upon the
closing of the ELT-AM Agreement, the entry of the Agreed
Remediation Order, and the transactions contemplated;
* the TCEQ agrees that any and all the Debtors' obligations
or liabilities related to past and future response costs at
the Site will be considered fully satisfied;
* the TCEQ releases the Debtors from all damages, costs,
claims, suits, causes of action, and complaints of any kind,
including but not limited to any claims arising out of or in
any way connected with the Site, and all areas affected
by natural migration of releases from the Site;
* the Debtors are entitled to protection from contribution
actions or claims as provided by Section 113(f)(2) of the
Comprehensive Environmental Response, Compensation and
Liability Act, Section 9613 of the Public Health and Welfare
Code, and Section 361.227 of the THSC, for matters addressed
in the Settlement Agreement.
ASARCO believes that the Settlement Agreement meets the standards
and is reasonable, fair, equitable, and promotes the paramount
interest of the creditors. The Settlement Agreement fully
resolves the Debtors' liabilities regarding the Site with respect
to past and future response costs, and thereby fully satisfies
those claims, Mr. Kinzie tells the Court.
Moreover, ASARCO believes that the Settlement represents a fair
and reasonable resolution of the amount of the claims, in light
of the relevant facts relating to the Site. The Settlement
eliminates the risks, uncertainties, and costs that are inherent
in any litigation. As a result, the Settlement saves significant
attorneys' fees and expenses that would otherwise be expended in
prosecuting the estimation of these issues, and will also allow
valuable Court time to be allocated to contested claims under the
case management order for environmental claims.
Contemporaneously, the TCEQ seeks the Court's approval of the
Agreed Remediation Order entered into between TCEQ, ELT,
Environmental Liability Transfer, Inc., and EnergySolutions, to
effectuate the transaction contemplated by ASARCO concerning the
Site pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure.
A full-copy of the Agreed Remediation Order is available for free
at http://bankrupt.com/misc/TCEQ_ELT_agr_remediation_ord.pdf
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
The Company filed for Chapter 11 protection on Aug. 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When the Debtor filed for protection from its creditors, it listed
$600 million in total assets and $1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008. The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for $2,600,000,000.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case. AMC would provide up to
$2.7 billion in cash as well as a $440 million guarantee to assure
payment of all allowed creditor claims, including payment of
liabilities relating to asbestos and environmental claims. AMC's
plan is premised on the estimation of the approximate allowed
amount of the claims against ASARCO.
Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at
Milbank, Tweed, Hadley & McCloy LLP, in New York.
(ASARCO Bankruptcy News Issue No. 82; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ASARCO LLC: Asks Court to Approve Solicitation Procedures
---------------------------------------------------------
ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court
for the Southern District of Texas to approve uniform noticing,
soliciting, balloting, voting, and tabulation procedures in
connection with the confirmation of their Joint Plan of
Reorganization.
The Debtors propose to mail, through AlixPartners, LLP, to
creditors entitled to vote under their Plan, immediately after
approval of the Disclosure Statement explaining their Plan,
solicitation packages containing copies of:
(a) any order approving a disclosure statement of the Debtors
or the Parent;
(b) any disclosure statements approved by the Court;
(c) the Solicitation and Tabulation Procedures;
(d) the appropriate form of Ballot and Master Ballot with the
Voting Instructions;
(e) notice of the Confirmation Hearing and related matters
setting forth the date fixed for submitting acceptances
and rejections to the Debtors' Plan, the date fixed for
filing objections to Confirmation of the Debtors' Plan and
the Parent's Plan, and the date, time and place of the
Confirmation Hearing;
(f) a pre-addressed, postage pre-paid return envelope; and
(g) any other materials as the Court may direct.
With respect to the Bondholder Claimants in Class 4 of the
Debtors' Plan, a Nominee may hold the relevant Claims rather than
the Beneficial Holders themselves. To tabulate votes for those
parties who are Beneficial Holders in Class 4, the Balloting
Agent will deliver Solicitation Packages to Beneficial Holders
and Nominees of record as of the Voting Record Date.
Additionally, the Balloting Agent will distribute Class 4 Master
Ballots to Nominees. The Debtors, through the Balloting Agent,
will instruct Beneficial Holders to mail their Ballots to the
Nominee in sufficient time for Nominees to cast votes to accept
or reject the Debtors' Plan and to make elections on behalf of,
and in accordance with, the Ballots cast by the Beneficial
Holders through the Class 4 Master Ballots. The Balloting Agent
will then tabulate the Class 4 Master Ballots.
For holders of Asbestos Personal Injury Claims in Class 5 of the
Debtors' Plan, if an Asbestos PI Claimant is unrepresented by
counsel, that Claimant will be not be subject to the solicitation
and voting procedures. The Debtors propose to serve a single
Solicitation Package upon each attorney of record on behalf of
all of the Asbestos PI Claimants represented by that attorney.
Solicitation Packages will not be served on individual Asbestos
PI Claimants except to the extent (a) an individual holder of an
Asbestos Personal Injury Claim requests a Solicitation Package or
(b) an attorney advises the Balloting Agent within five business
days after the mailing of the Solicitation Package of the names
and addresses of individual Asbestos Personal Injury Claimants
who should receive their own Solicitation Packages.
Certain creditors, including any creditor whose Claim is the
subject of a pending objection, will not be entitled to vote on
the Debtors' Plan and will not be counted in determining whether
the requirements of Section 1126(e) of the Bankruptcy Code have
been met, unless that Claim has been temporarily Allowed for
voting purposes by Court order entered on or before the Voting
Deadline.
Voting Record Date
The Debtors ask the Court to establish the date the order
approving the Disclosure Statement is entered as the voting
record date for determining (a) the holders of Claims and
Interests that are entitled to receive the Solicitation Package;
and (b) holders of Claims and Interests entitled to vote to
accept or reject the Debtors' Plan.
Ballot Forms
The Debtors propose to prepare and customize Ballots for
creditors and Master Ballots for beneficial holders of claims to
tabulate acceptances of the Plan. The forms of the Ballots are
based on Official Form No. 14 but will be modified to include
additional information that the Debtors deem is relevant and
appropriate for each Class of Claims or Interests entitled to
vote on the Plan.
In accordance with Section 1129(c), each Ballot will allow
holders of Claims and Interests to rank their preference between
the Debtors' Plan and the Parent's Plan.
The Debtors' Plan provides for substantive consolidation of
ASARCO and the Subsidiary Debtors, other than Covington Land
Company, into a single consolidated estate for all purposes
associated with Confirmation and consummation of their Plan.
If the Court does not approve substantive consolidation, the
Debtors' Plan provides for consolidation of the Subsidiary
Debtors, except as to Covington, into ASARCO pursuant to Section
1123(a)(5)(C) as an alternative to substantive consolidation.
The Ballots will list the Debtor that the holder's Claim or
Interest is filed or scheduled against. Holders of Claims and
Interests will be able to vote on a Debtor-by-Debtor basis should
the Debtors elect voluntary consolidation, rather than
substantive consolidation, and the Ballots will allow the Debtors
to tabulate the votes on a consolidated and non-consolidated
basis for the purpose of determining whether the Debtors' Plan
satisfies Sections 1129(a)(8) and (10).
Assuming the Court approves substantive consolidation, when
tabulating voting results, all Ballots and Master Ballots
pertaining to the Debtors, other than Covington, will be counted
as if filed against a single consolidated Estate, and any
obligation of any of the Debtors and all guaranties thereof by or
enforceable against any other Debtor and any joint and several
liability of the Debtors will be treated as a single obligation
in the amount of the obligation of the primary obligor.
Voting Deadline
The Debtors propose that, to be counted as a vote to accept or
reject their Plan, each Ballot or Master Ballot must be properly
executed, completed and delivered to the Balloting Agent by
first-class mail, overnight courier, or personal delivery, so
that it is received by the Balloting Agent no later than 4:00 p.m.
(prevailing Central Time) on Oct. 27, 2008.
The Balloting Agent will file with the Court, on or before
Nov. 12, 2008, a report on the results of the solicitation and
tabulation of votes.
Confirmation Hearing
The Plan Confirmation hearing will commence on Nov. 17, 2008. The
Debtors propose to provide to all holders of Claims and Interests,
simultaneously with the distribution of the Solicitation Packages,
a copy of the Confirmation Hearing Notice setting forth, among
other things, (a) the time, date, and place for the Confirmation
Hearing; (b) the Voting Record Date; (c) the Voting Deadline; (d)
the time fixed for filing objections to Confirmation of either of
the Plans and the manner in which objections will be filed; and
(e) the procedures for temporary allowance of Claims and
Interests.
The Debtors will publish the Confirmation Hearing Notice once in
a national publication, the Wall Street Journal, and once in
several local publications around the United States, especially
in the Texas, Arizona, Kansas, and Utah areas.
The Debtors will also publish another notice tailored to holders
of Asbestos PI Claims to be published once in a weekday edition
of the Wall Street Journal.
Objections to confirmation of the Debtors' Plan must be submitted
on or before Oct. 27, 2008, and must, among other things, be in
writing, identify the nature of the Claims or Interests, and state
the basis for the objection.
The Debtors also propose to provide the Tohono O'odham Nation and
the San Xavier District Allottees with copies of the Plan, the
Disclosure Statement, and a tailored version of the Confirmation
Hearing Notice that also contains a brief description of the
Mission Mine Settlement Agreement.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
The Company filed for Chapter 11 protection on Aug. 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When the Debtor filed for protection from its creditors, it listed
$600 million in total assets and $1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008. The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for $2,600,000,000.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case. AMC would provide up to
$2.7 billion in cash as well as a $440 million guarantee to assure
payment of all allowed creditor claims, including payment of
liabilities relating to asbestos and environmental claims. AMC's
plan is premised on the estimation of the approximate allowed
amount of the claims against ASARCO.
Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at
Milbank, Tweed, Hadley & McCloy LLP, in New York.
(ASARCO Bankruptcy News Issue No. 82; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ASARCO LLC: Pima County Objects to Confirmation of Reorg. Plan
--------------------------------------------------------------
Pima County, a secured creditor holding four claims for real
property taxes totaling $1,011,659, objects to the confirmation
of the Plan of Reorganization filed by ASARCO LLC and its debtor-
affiliates because it proposes to pay only one of the four claims.
That Plan, according to Pima County, violates Section 1129(a)(1)
and (a)(7)(A) of the Bankruptcy Code. Pima County also notes
that Section 13.2 of the Plan provides that "[u]nless a taxing
authority has asserted a claim a Debtor prior to the applicable
Bar Date, no Claim of such taxing authority shall be Allowed."
To the extent this language is intended to require the actual
filing of a claim by the taxing authority, Pima County complains
that it contravenes the provisions of Section 1111(a) and
violates Section 1129(a)(I).
Furthermore, Pima County complains that the Plan does not provide
for payment of post-petition interest on secured claims, thus
violating Sections 506(b) and 511(a). Accordingly, Pima County
asks the Court to deny confirmation of the Joint Plan of
Reorganization for the Debtors unless it is amended to remedy the
defects.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
The Company filed for Chapter 11 protection on Aug. 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When the Debtor filed for protection from its creditors, it listed
$600 million in total assets and $1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008. The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for $2,600,000,000.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case. AMC would provide up to
$2.7 billion in cash as well as a $440 million guarantee to assure
payment of all allowed creditor claims, including payment of
liabilities relating to asbestos and environmental claims. AMC's
plan is premised on the estimation of the approximate allowed
amount of the claims against ASARCO.
Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at
Milbank, Tweed, Hadley & McCloy LLP, in New York.
(ASARCO Bankruptcy News Issue No. 82; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ASHLAND INC: Moody's Rates Proposed $500MM Credit Facility 'Ba1'
----------------------------------------------------------------
Moody's Investors Service assigned Ba1 ratings to Ashland Inc.'s
proposed $500 million revolving credit facility due 2013,
$500 million senior secured term loan A due 2013 and $750 million
senior secured term loan B due 2015, and a Ba3 rating to its
$750 million senior unsecured notes due 2016. The proposed debt
is being issued to finance the $3.3 billion acquisition of
Hercules Incorporated in a transaction expected to be completed in
calendar year 2008.
The ratings incorporate certain assumptions regarding Ashland's
ultimate capital structure and are subject to change if the
Hercules acquisition financing is not completed as currently
contemplated. Upon closing of the acquisition, Moody's will
downgrade the Hercules 6.5% junior subordinated notes due 2029
that Ashland will maintain outstanding to B1 (from Ba2).
Ashland's corporate family rating (Ba1) and existing Ba1 issue
ratings remain under review for a possible downgrade and are
expected to be lowered to Ba2 (CFR) and Ba3 (issue ratings),
respectively, upon the closing of the Hercules acquisition.
These ratings were assigned:
Issuer: Ashland Inc.
-- $500mm sr sec revolving credit facility due 2013 -- Ba1
(LGD2, 25%)
-- $500mm sr sec term loan A due 2013 -- Ba1 (LGD2, 25%)
-- $750mm sr sec term loan B due 2015 -- Ba1 (LGD2, 25%)
-- $750mm sr unsec notes due 2016 -- Ba3 (LGD5, 72%)
These ratings remain under review:
Issuer: Ashland Inc.
-- Corporate Family Rating, Ba1
-- Probability of Default Rating, Ba1
-- Senior Unsecured Medium-Term Note Program, Ba1
-- 6.86% Senior Unsecured Medium Term Notes due 05/01/2009 - Ba1
(LGD4, 60%)
-- 7.72% Senior Unsecured Medium Term Notes due 07/15/2013 - Ba1
(LGD4, 60%)
-- 8.38% Senior Unsecured Medium Term Notes due 04/01/2015 - Ba1
(LGD4, 60%)
-- Senior Unsecured Regular Bond/Debenture
-- 8.8% Senior Unsecured Debentures due 11/15/2012 - Ba1 (LGD4,
60%)
Ratings outlook: Under review for a possible downgrade
The new issue ratings reflect the material amount of new debt
Ashland will take on, but recognizes that Ashland will be
moderately levered for its rating category since it currently has
almost no debt and it will benefit from substantial funding of the
Hercules acquisition with existing cash balances and equity. The
ratings reflects the strategic nature of the Hercules Incorporated
acquisition that will provide Ashland exposure to the water and
paper chemicals businesses, larger scale in overlapping
businesses, a greater international revenue base and greater
stability of earnings.
Ashland is expected to focus on debt reduction in the near-term
and under the credit agreement must annually apply a certain
portion of free cash flow towards debt reduction as long as its
consolidated leverage ratio exceeds 2.50x. The firm will face
typical acquisition integration challenges, but is not expected to
be highly reliant on achieving large synergies to meet its debt
service obligations. The ratings do reflect the additional
Hercules environmental and ongoing asbestos litigation
liabilities.
The ratings could be downgraded if Ashland does not successfully
integrate the Hercules acquisition, realize expected synergies and
reduce debt or if operating metrics deteriorated. Additionally,
an increase in contingent liability payments could be a constraint
on the rating.
It is expected that the company will maintain adequate liquidity
supported by an unused $500 million revolving credit facility
(except for $100-130 million of letters of credit), existing cash
balances, any unused capacity under its proposed accounts
receivable securitization program and positive cash flow from
operations. Working capital use of cash and capital expenditures
are expected to remain moderate. The company has a favorable debt
maturity profile with no debt maturities for the next five years,
but must make debt amortization payments of approximately
$33 million over the next twelve months. The company is expected
to be able to meet its financial covenants.
Hercules Incorporated is a leading global supplier of specialty
chemicals and related services for the paper, paint, consumer
products, construction materials and energy markets. Hercules
operates through two business segments the Paper Technologies and
Ventures segment and the Aqualon Group and owns a minority
interest in FiberVisions, a maker of polyolefin staple fibers,
fibers, and yarn as well as polypropylene fibers for the use in
such products as personal care, diapers, and wipes. The company
had revenues of $2.3 billion for the LTM ended June 30, 2008.
Ashland, headquartered in Covington, Kentucky, is a distributor of
chemicals and plastics, a manufacturer of specialty chemicals with
a focus on performance materials and water technologies and,
through its Valvoline brand, a marketer of premium-branded
automotive and commercial lubricants. Ashland Inc. and Sud-Chemie
AG announced in June 2008 their intention to form a new 50/50
global joint venture to serve foundries that will include
Ashland's Casting Solutions business group, the foundry-related
businesses of Sud-Chemie and Ashland-Sudchemie-Kernfest GmbH.
Ashland had revenues of $8.2 billion for the LTM ended June 30,
2008 ($4.3 billion was from the distribution business).
ASHLAND INC: S&P Keeps Negative Watch on Pending Hercules Deal
--------------------------------------------------------------
Standard & Poor's Ratings Services said that its corporate credit
ratings on Ashland Inc. and Hercules Inc. remain on CreditWatch
with negative implications pending Ashland's acquisition of
Hercules in a transaction valued at about $3.6 billion. In
addition, Ashland's senior unsecured debt and Hercules'
$350 million 6.5% junior subordinated deferrable interest
debenture due June 20, 2029 (balance $216 million) remain on
CreditWatch with negative implications. The ratings were placed
on CreditWatch on July 11, 2008, when the transaction was
announced.
The transaction is subject to regulatory and Hercules shareholder
approval and is expected to close by the end of the 2008 calendar
year. S&P will resolve the CreditWatch upon closing of the
transaction.
"If the transaction is consummated as currently structured, we
expect to lower Ashland's corporate credit rating to 'BB' and
assign a negative outlook," said Standard & Poor's credit analyst
Cynthia Werneth.
S&P would lower the rating on Ashland's existing senior unsecured
debt to 'BB-' and assign a recovery rating of '5'. This would
indicate S&P's expectation of modest (10% to 30%) recovery for
these noteholders in the event of a payment default. S&P would
lower the rating on Hercules' debenture to 'B+', while leaving the
recovery rating unchanged at '6', indicating its expectation for
negligible (0% to 10%) recovery for these creditors in the event
of a payment default.
At the same time, based on preliminary terms and conditions, S&P
assigned a 'BBB-' senior secured bank loan rating and recovery
rating of '1' to Ashland's proposed $500 million five-year
revolving credit facility, $500 million five-year term loan A, and
$750 million seven-year term loan B. These ratings indicate S&P's
expectation of very high (90% to 100%) recovery in the event of a
payment default.
S&P also assigned a senior unsecured debt rating of 'BB-' and a
recovery rating of '5' to the company's proposed offering of
$750 million of senior unsecured notes due in 2016. These ratings
indicate S&P's expectation of modest (10% to 30%) recovery in the
event of a payment default.
Proceeds of the credit facility and notes, along with proceeds
from a planned $200 million accounts receivable program, cash on
hand, and about $450 million of new common equity will be used to
acquire Hercules.
In addition, S&P affirmed its ratings on Hercules' existing senior
secured credit facility and senior subordinated notes. S&P
expects this debt to be refinanced at closing of the transaction,
at which time S&P will withdraw the ratings.
>From a business risk perspective, the Hercules transaction is a
strong positive. It would add substantial specialty chemical
assets with favorable business risk characteristics, creating a
company with more than $10 billion in annual revenues and limited
vulnerability to economic cycles.
Although the transaction will be primarily debt-financed, it will
include about $450 million of stock, depending on Ashland's share
price. In addition, Ashland currently has very little book debt,
and the company plans to use a substantial amount of cash on hand
to finance the Hercules acquisition. As a result, S&P expects
Ashland's total adjusted debt pro forma for the transaction
to be about $3.3 billion. S&P would adjust debt to include about
$360 million of after-tax pension and other postretirement
obligations, $230 million of estimated, tax-effected asbestos
liabilities, and $210 million of capitalized operating leases at
the combined company. Pro forma funds from operations to adjusted
total debt will be in the mid- to upper-teens percentage area.
Following this acquisition, S&P expects Ashland to use the
majority of discretionary cash flow to reduce debt, so that the
FFO to debt ratio strengthens to the 20%-25% range it deems
appropriate at the 'BB' rating.
The prospective negative outlook addresses the fact that S&P would
lower the ratings if credit measures do not show steady
improvement or if the cushion related to maintaining compliance
with financial covenants within the credit agreements
deteriorates. While S&P expects Ashland's operating results to
strengthen, business challenges could include weaker-than-expected
economic conditions, higher raw material cost inflation,
unfavorable trends with respect to asbestos or environmental
outlays, or additional acquisitions or shareholder initiatives.
ATARI INC: Nasdaq to Complete Delisting of Stocks
-------------------------------------------------
The NASDAQ Stock Market stated that it will delist the common
stock of Atari Inc. Atari Inc.'s stock was suspended on May 9,
2008, and has not traded on NASDAQ since that time. NASDAQ will
file a Form 25 with the Securities and Exchange Commission to
complete the delisting.
The delisting becomes effective 10 days after the Form 25 is
filed.
New York City-based Atari Inc. is a publisher of video game
software that is distributed throughout the world and a
distributor of video game software in North America. Most of the
products it publishes and distributes are games developed by or
for Infogrames Entertainment S.A., or IESA, a French corporation
listed on Euronext, which owns approximately 51% of its stock.
Atari has offices in Brazil, the United Kingdom and Japan.
Going Concern Doubt
As reported in the Troubled Company Reporter on July 16, 2008,
J.H. Cohn LLP raised substantial doubt about Atari Inc.'s
ability to continue as a going concern after it audited the
company's financial statements for the year ended March 31,
2008. The auditor pointed to the company's significant
operating losses.
BANK OF AMERICA: Merrill Lynch Deal Cues S&P to Lower Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
counterparty credit rating on Bank of America Corp. to 'AA-' from
'AA'. The long-term ratings of its subsidiaries were also lowered
one notch. The long-term ratings on BofA's holding company and
its bank subsidiaries were placed on CreditWatch with negative
implications.
At the same time, Standard & Poor's placed its ratings on Merrill
Lynch & Co. Inc. -- including the holding company 'A' long-term
and 'A-1' short-term counterparty credit ratings -- as well as the
ratings of all related entities on CreditWatch with developing
implications, meaning ratings could be raised, lowered, or
affirmed.
These actions follow BofA's agreement to acquire Merrill Lynch in
an all-stock transaction valued at about $50 billion. "The
downgrade of BofA and the placement of the ratings on CreditWatch
with negative implications reflect the risks of acquiring Merrill
Lynch in the present turbulent market environment," said Standard
& Poor's credit analyst John Bartko.
This opportunistic acquisition takes place on the heels of BofA's
recent July 1 acquisition of troubled mortgage lender Countrywide
Financial Corp. In S&P's view, the purchase of Merrill will place
further pressure on BofA's capital, already strained by the
Countrywide acquisition.
Merrill will introduce more residential housing risk to BofA,
notably in the form of its sizable holdings of collateralized debt
obligations backed by subprime residential mortgage backed
securities, at a time when the U.S. mortgage market continues to
deteriorate. S&P cannot rule out the possibility of future
writedowns.
While BofA has a history of successfully integrating bold
acquisitions, the purchase of Merrill carries integration risk,
particularly since it comes during a period of severe market
turmoil. BofA has never integrated an investment bank the size of
Merrill. Events of the past year demonstrate the high business
risk of the securities industry. Moreover, management of a
substantially bigger and global franchise could present challenges
unknown to BofA.
On the positive side, Merrill Lynch maintains strong positions in
investment banking, retail brokerage, and wealth management. The
successful combination of these strong business lines with BofA's
second-tier investment banking and asset management positions
would create a top-tier commercial and investment-banking group
with significant growth potential when the financial industry
emerges from its current downturn. The acquisition will enhance
BofA's stable of consumer and commercial banking businesses.
Nonetheless, the near- to intermediate-term risks of capital
strain and residual mortgage risk outweigh the potential long-term
benefits.
S&P will resolve the CreditWatch after holding discussions with
management in order to address capital planning, earnings
projections, and strategic direction. The financial market's
management of the collapse of Lehman Brothers over the next few
weeks will also influence the outcome of the CreditWatch.
As usual, the transaction is subject to shareholder and regulatory
approvals. If it is completed, we will likely raise the ratings
on Merrill Lynch, with the extent of the upgrade dependent on our
assessment of:
The credit profile of the combined group; BofA's business strategy
with respect to Merrill Lynch; and The structure of the
transaction, including any formal support extended by BofA to
Merrill Lynch's debt and other obligations.
If, contrary to S&P's expectations, the transaction is not
completed, it could lower the ratings on Merrill Lynch. The
downgrade would reflect the negative market sentiment with respect
to the broker dealers in the wake of the collapse of Lehman
Brothers Holdings Inc., Merrill Lynch's residual exposure to
problem assets, and uncertainty regarding the long-range profit
potential of Merrill's investment banking and trading operations
if it remains independent.
BANK OF AMERICA MORTGAGE: Fitch Cuts Class 30-B-4 to 'B'
--------------------------------------------------------
Fitch takes rating actions on Banc of America Mortgage Securities,
Inc. transaction:
Banc of America Mortgage Securities, Inc., Series 2004-7
Groups 1 and 5
-- Class 1-A-5, 1-A-6, 1-A-12, 1-A-14 through 1-A-19, 1-30-IO,
1-X-PO, 5-A-1 through 5-A-16, 5-X-PO, and 5-30-IO affirmed at
'AAA';
-- Class 30-B-1 affirmed at 'AA';
-- Class 30-B-2 affirmed at 'A';
-- Class 30-B-3 affirmed at 'BBB';
-- Class 30-B-4 downgraded to 'B' from 'BB';
-- Class 30-B-5 downgraded to 'C/DR6' from 'B' and removed from
Rating Watch Negative;
Groups 2 and 4
-- Class 2-A-1 through 2-A-4, 2-X-PO, 2-30-IO, 4-A-1, 4-15-IO,
4-15-PO, and 4-X-PO affirmed at 'AAA';
-- Class X-B-3 downgraded to 'BB' from 'BBB' and placed on
Rating Watch Negative.
Groups 3, 6, and 7
-- Class 3-A-1, 3-15-IO, 3-15-PO, 3-X-PO, 6-A-1, 6-A-2, 6-A-3,
6-15-IO, 6-15-PO, 6-X-PO, 7-A-1, 7-15-IO, 7-15-PO, and 7-X-PO
affirmed at 'AAA'.
The actions are taken as part as Fitch's ongoing surveillance
process of existing transactions.
BARBEQUES GALORE: Closes $15-Mil. Asset Sale to Grand Hall
----------------------------------------------------------
Barbeques Galore, Inc. has closed the sale of substantially all of
the assets to Grand Home Holdings Inc., a newly formed entity
owned by Grand Hall Enterprise Co., Ltd., the largest BBQ grills
manufacturer in Taiwan, one day after receiving bankruptcy court
approval for the sale of its assets pursuant to Section 363 of the
U.S. Bankruptcy Code.
The sale was for an aggregate purchase price equal to $15 million
in cash consideration, including assumption of at least 31 stores
in Texas, California and Arizona and the right to designate
additional stores for assumption within the next three months.
"Grand Hall has more than 30 years of experience in manufacturing
barbeque grills, and we are delighted at the opportunity to
acquire the only retail chain of barbeque grills in the United
States," said William Home, chairman & CEO of Grand Hall.
"We believe this acquisition creates a new chapter for the
Barbeques Galore concept. The acquisition by Grand Hall returns
the business to its original 'roots' as a world-class
manufacturer, retail and distribution company. The strength of the
business plan will allow Barbeques Galore to continue its
leadership in innovative products and will allow the company to
continue to take care of its valued customers and employees for
many years to come," said Jeffery R. Sears, CEO of Barbeques
Galore.
Barbeques Galore aborted a September 10 auction for its assets,
Bill Rochelle of Bloomberg News reported. Hilco Merchant
Resources LLC serves as agent to conduct going-out-of-business
sales, the report says.
On Sept. 8, 2008, the Debtors entered into an asset purchase
agreement with Grand Home. Under the agreement, Grand Home will
pay $12 million, which is equal to 90% of the purchase price less
the deposit, to the Debtor and deposit into an account with the
escrow agent an amount equal to 10% of the purchase price.
According to papers filed with the Court, several creditors
objected to the sale, including Inland Western Fort Worth
Southwest Crossing L.P., Inland Western San Antonio Huebner Oaks,
California Taxing Authorities, NGL Warehouse, LLC, Maister
Enterprises, Inc., Maister Holdings, Inc., Rancho Barbeques, Inc.,
and Tustin Barbeques, Inc.
On Sept. 4, 2008, the Court approved sale procedures and bid
protections -- including break-up fee of $50,000 -- in connection
with the auction that was later aborted.
A full-text copy of the Asset Purchase Agreement date Sept. 8,
2008, among the Debtor and Grand Home is available for free at:
http://ResearchArchives.com/t/s?31ed
About Grand Hall
Grand Hall -- http://www.grandhall.com-- established in 1976, is
principally engaged in manufacturing gas grills, as well as
related appliances and components. The Company's major products
include barbeque gas grills, gas valves, indoor/outdoor heaters
and gas water heaters. The Company distributes its products in
Asia, the United States, Australia, Europe and Africa. Grand
Hall's securities are publicly traded on Taiwan's Over-the-Counter
market (Gretai: 8941).
About Barbeques Galore
Carlsbad, California-based Barbeques Galore Inc. --
http://www.bbqgalore.com/-- owns 65 retail stores selling
barbeque equipment and supplies. It has operations in Australia.
It filed for Chapter 11 on Aug. 15, 2008, (Bank. C.D. Calif. Case
No. 08-16036). Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl
& Jones LLP, represents the Debtor in its restructuring efforts.
The Debtor listed assets of $10 million to $50 million, and debts
of $10 million to $50 million.
BEATRICE BIODIESEL: Wants to Convert Case to Chapter 7 Liquidation
------------------------------------------------------------------
Erik Larson of Bloomberg News reports that Beatrice Biodiesel,
LLC, asks the U.S. Bankruptcy Court for the District of Nebraska
to convert its Chapter 11 bankruptcy case to Chapter 7 liquidation
because it was out of money.
The Debtor struggled to secure a financing amid rising costs of
soybeans, which it planned to convert to fuel at a plant in
Beatrice, Nebraska, says Mr. Larson.
The Debtor failed to win new financing after filing for bankruptcy
petition, reports Mr. Larson.
About Beatrice Biodiesel
Headquartered in Beatrice, Nebraska, Beatrice Biodiesel LLC --
http://www.beatricebiodieselcam.com/-- produces biofuels from
vegetable oil and animal fats as well as ethanol from sugar and
grains.
The company filed for Chapter 11 bankruptcy protection on
Aug. 21, 2008 (Bankr. D. Nebraska Lead Case No. 08-41927). John
L. Horan, Esq., at Cline, Williams, Wright, Johnson represents the
Debtor in its restructuring efforts. The Debtor disclosed
assets of US$50 million to US$100 million and debts of
US$10 million to US$50 million.
BHM TECHNOLOGIES: Wants to Reject C&A Guelph Purchase Order
-----------------------------------------------------------
Pursuant to Section 365(a) of the Bankruptcy Code and Rule 6006
of the Federal Rules of Bankruptcy Procedure, The Brown
Corporation of America seeks authority from the United States
Bankruptcy Court for the Western District of Michigan to reject
Purchase Order No. GP051185, dated June 6, 2005, and any related
releases and other agreements, by and between Brown and Collins &
Aikman-Guelph Products.
Robert S. Hertzberg, Esq., at Pepper Hamilton LLP, in Detroit,
Michigan, relates the Debtors enter into arrangements with
customers to supply product for a particular platform with a
certain tooled capacity. The arrangements have a duration equal
to the life of the platform, generally three to seven years for
automotive vehicles. The Debtors' contracts with their customers
take the form of purchase orders, subject to a standard set of
terms and conditions issued by the customer.
To create a foundation for their business operations and to
ensure the Debtors' viability as a reorganized enterprise, the
Debtors have begun the process of analyzing their customer
contracts, identifying those that are underperforming supply
contracts, negotiating adjustments to the terms of such
contracts, and, if appropriate adjustments are not possible,
seeking to rid themselves of these burdensome supply contracts.
Under the Supply Contract, Brown is to manufacture and sell, and
C & A is to purchase, certain parts for the Chrysler 300 luxury
sedan, including, inter alia, the instrument panel, the "Panel".
As a result of rising steel and other material costs, Brown is
sustaining a loss on each Panel shipped to C & A under the prices
in the Supply Contract.
The Debtors also determined the risk allocations necessary for
the Supply Contract to remain economically viable can be obtained
only through a consensual modification of the pricing terms of
the Supply Contract. The Debtors required an immediate price
increase, effective to April 1, 2008, as well as prospective
price relief indexed to steel prices.
Brown has conducted good-faith negotiations with C & A in an
effort to reach a consensual resolution of the pricing issues.
On June 2, 2008, Brown sent a letter to C & A seeking its
agreement to the amended pricing terms however, C & A rejected
Brown's offer. On June 19, 2008, Brown again sought the
requested relief, but did not receive a response from C & A.
Despite Brown's efforts, the negotiations have not resulted in
any agreement to increase the pricing terms of the Supply
Contract, and the Debtors do not anticipate that further
negotiations with C & A will produce a resolution.
The Debtors' decision to reject the Supply Contract is the result
of:
(a) an analysis of the Supply Contract's historical and
potential future profitability;
(b) an assessment of the status of their negotiations with
C & A regarding the readjustment of the Supply Contract's
terms;
(c) an analysis of the Debtors' relationship with C & A in
general;
(d) consultations with their professional advisors; and
(e) numerous internal meetings and conferences.
The Debtors have determined that the Supply Contract is
unprofitable and the Debtors' continued performance on its
current terms cannot be justified and the Supply Contract is not
necessary to the Debtors' future business plans.
The Debtors realize that C & A's operations rely on an
uninterrupted supply of parts. The Debtors are willing to take
reasonable steps to assist in C & A's transition to a new
supplier and to avoid any supply chain interruptions.
Brown, however, notes that it can only continue supplying C & A
at a price level that is economically viable and cannot continue
to support C & A by providing parts at a loss. Brown is willing
to continue to supply the instrument panels to C & A at a revised
price for a reasonable, agreed-upon time to allow C & A to
transition to a new supplier.
In anticipation of the rejection of the Supply Contract, the
Debtors have offered to continue to supply the Parts to C & A,
only at prices that, while still reasonable, are economically
sustainable to the Debtors.
Headquartered in Ionia, Michigan, BHM Technologies Holdings
Inc. -- http://www.browncorp.com/-- manufactures and sells
automobile parts including air bags and electrical systems. It
has manufacturing facilites in Mexico and operates under Brown
Corp.
BHM Technologies Holdings, Inc. and 14 affiliates filed separate
voluntary petitions under Chapter 11 on May 19, 2008 (Bankr.
W.D. Mich. Lead Case No. 08-04413). Hannah Mufson McCollum,
Esq., Kay Standridge Kress, Esq., Robert S. Hertzberg, Esq., and
Leon R. Barson, Esq. of Pepper Hamilton LLP, represent the
Debtors in their restructuring efforts. The Debtors total
scheduled asset is $0 and its total scheduled liabilities is
$336,506,519.
The Debtors have until Dec. 15, 2008, to exclusively file their
bankruptcy plan. (BHM Technologies Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
BHM TECHNOLOGIES: AlixPartners Ascertains Disinterestedness
-----------------------------------------------------------
Edward J. Stenger, managing director at AlixPartners, LLP, in
Southfield, Michigan, advised the United States Bankruptcy Court
for the Western District of Michigan that his firm has become
aware of a relationship between BHM Technologies Holdings, Inc.,
and Chrysler, LLC, a customer of BHM, that his firm would like to
disclose. AlixPartners was retained by Chrysler to provide
consulting services in numerous areas. The services have included
advice and analysis regarding sourcing issues and alternatives to
Chrysler in connection with Chrysler's dealings with its many and
various suppliers.
Mr. Stenger states that on August 5, AlixPartners was asked to
provide advice and analysis regarding BHM. Although AlixPartners
provides advice and analysis in sourcing issues, all sourcing
decisions are made by Chrysler and not AlixPartners. To insure
confidentiality, AlixPartners maintains separate engagement teams
for BHM and Chrysler and has constructed an information barrier
between these two clients and the two separate engagement teams.
AlixPartners continues to submit that it holds no adverse
interest as to the matters for which it has been employed by the
Debtors and continues to reserve the right to supplement this and
all previous declarations in the event that AlixPartners
discovers any facts bearing on matters regarding AlixPartners'
employment by the Debtors.
Headquartered in Ionia, Michigan, BHM Technologies Holdings
Inc. -- http://www.browncorp.com/-- manufactures and sells
automobile parts including air bags and electrical systems. It
has manufacturing facilites in Mexico and operates under Brown
Corp.
BHM Technologies Holdings, Inc. and 14 affiliates filed separate
voluntary petitions under Chapter 11 on May 19, 2008 (Bankr.
W.D. Mich. Lead Case No. 08-04413). Hannah Mufson McCollum,
Esq., Kay Standridge Kress, Esq., Robert S. Hertzberg, Esq., and
Leon R. Barson, Esq. of Pepper Hamilton LLP, represent the
Debtors in their restructuring efforts. The Debtors total
scheduled asset is $0 and its total scheduled liabilities is
$336,506,519.
The Debtors have until Dec. 15, 2008, to exclusively file their
bankruptcy plan. (BHM Technologies Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
BLUE BELL: Collateral Slide Prompts Fitch to Lower Four Ratings
---------------------------------------------------------------
Fitch downgraded and removed from Rating Watch Negative four
classes of notes issued by Blue Bell Funding, Ltd. These rating
actions are effective immediately:
-- $1,084,500,000 CP Notes affirmed at 'F1+';
-- $55,000,000 class A-1 notes downgraded to 'CCC' from 'BB' and
removed from Rating Watch Negative;
-- $20,000,000 class A-2 notes downgraded to 'CC' from 'B' and
removed from Rating Watch Negative;
-- $37,908,505 class B notes downgraded to 'C' from 'CCC' and
removed from Rating Watch Negative;
-- $11,250,000 class C notes downgraded to 'C' from 'CC' and
removed from Rating Watch Negative.
Fitch's rating actions reflect the collateral deterioration within
the portfolio, specifically subprime residential mortgage-backed
securities, Alternative-A RMBS and structured finance
collateralized debt obligations.
Blue Bell is a SF CDO that closed on Dec. 5, 2003 and is managed
by Capmark Investments, formerly known as GMAC Institutional
Advisors, LLC. Presently, 44.3% of the portfolio is composed of
U.S. subprime RMBS, of which 21.3% was issued in 2005 through
2007. Alt-A RMBS comprises 9.9% of the portfolio, with 7.9%
issued in 2005 through 2007. SF CDOs make up 9.6% of the
portfolio.
Since Nov. 21, 2007, approximately 25.0% of the portfolio has been
downgraded with 17.5% of the portfolio currently on Rating Watch
Negative. Additionally, 15.2% of the portfolio is now rated below
investment grade, with 8.8% of the portfolio rated 'CCC+' or
below.
The collateral deterioration has caused each of the
overcollateralization ratios to fail their respective covenants.
As of the trustee report dated July 29, 2008, the class A and B OC
ratios were 100.4% and 97.2%, respectively, compared to covenants
of 103.0% and 101.5%, respectively. The class C notes have been
paying in kind since March 2008, whereby the principal balances of
the notes are written up by the amount of unpaid interest, due to
the failing class B OC ratio. The class B notes began PIKing in
May 2008 when the class A OC ratio started failing its covenant.
Based on the projected performance of the portfolio, Fitch does
not expect the class B and C notes to receive any interest or
principal distributions going forward.
The CP Notes are issued under Rule 2a-7 as discount commercial
paper with a maturity up to 90 days. The CP notes are remarketed
at maturity. A put option provided by Citibank, N.A. (Citibank,
rated 'AA-/F1+', Rating Outlook Negative) ensures that the issuer
can meet its obligations to pay the maturing CP notes in case of
an unsuccessful remarketing. Specifically, the put option may be
exercised if the CP Notes cannot be placed at a discount rate of
less than one month London Interbank Offered Rate plus 40 basis
points; the failure of Citibank to collateralize its put
obligation following a downgrade of its long-term rating below
'AA-'; or an early termination condition exists. The put premium
is 19 basis points per annum, and the put is renewed annually. To
date, none of the CP Notes have been put to Citibank.
Should Citibank choose not to renew the put agreement, no CP notes
may be issued with maturity after the expiration of the existing
put agreement. Instead, Blue Bell will issue and place with
Citibank, funding notes with the maturity of December 2038 and a
spread of LIBOR plus 50 basis points. Outs to funding under the
put agreement include the bankruptcy or insolvency of Blue Bell,
failure to pay put premiums to Citibank when due, or realized
losses from the sale of defaulted, deferring or PIKing assets in
excess of $107.5 million.
The rating of the CP notes addresses the ultimate repayment of
principal and interest upon each maturity date. Given the
reliance of the put agreements, the rating of the CP notes can be
affected if Citibank is downgraded below 'F1+'. Furthermore, the
rating of the CP notes may be affected in realized losses from the
sale of defaulted, deferring and PIKing securities increase to a
level at or near the put agreement threshold. As of the July 29,
2008 trustee report there had been no realized losses from the
sale of defaulted, deferring or PIKing securities, although
$28.1 million of securities were deemed to be defaulted.
The ratings of the class A-1 and A-2 notes address the likelihood
that investors will receive full and timely payments of interest,
as per the transaction's governing documents, as well as the
stated balance of principal by the legal final maturity date. The
rating of the class B notes addresses the likelihood that
investors will receive ultimate and compensating interest
payments, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date. The rating
of the class C notes addresses the likelihood that investors will
receive their stated balance of principal by the legal final
maturity date. The balance stated above is the remaining rated
balance, net of any interest proceeds received to date. The total
outstanding notional balance of the class C notes, including PIKed
interest, is $19,544,380.
BLUEGRASS ABS: Fitch Cuts Ratings on Eight Classes of Notes
-----------------------------------------------------------
Fitch downgraded eight and removed from Rating Watch Negative four
classes of notes issued by Bluegrass ABS CDO II, Ltd. These
rating actions are effective immediately:
-- $0 class A-1LT notes downgraded to 'B' from 'BBB-';
-- $0 class A-1MM notes downgraded to 'B' from 'F3';
-- $48,117,541 class A-1MTa notes downgraded to 'B' from 'BBB-'
and remain on Rating Watch Negative;
-- $110,991,128 class A-1MTb notes downgraded to 'B' from 'BBB-'
and remain on Rating Watch Negative;
-- $44,497,025 class A-2 notes downgraded to 'CCC' from 'BB-'
and removed from Rating Watch Negative;
-- $52,800,000 class B notes downgraded to 'CC' from 'B-' and
removed from Rating Watch Negative;
-- $12,540,136 class C-1 notes downgraded to 'C' from 'CCC' and
removed from Rating Watch Negative;
-- $6,186,467 class C-2 notes downgraded to 'C' from 'CCC' and
removed from Rating Watch Negative.
Fitch's rating actions reflect the collateral deterioration within
the portfolio, specifically subprime residential mortgage-backed
securities and structured finance collateralized debt obligations.
As Fitch is reviewing its SF CDO approach, the classes that remain
on Rating Watch Negative will have their watch status resolved
upon the completion of the SF CDO criteria.
Bluegrass II is a SF CDO that closed on April 14, 2004 and is
managed by Invesco Institutional N.A. Inc. Presently, 46.9% of
the portfolio is composed of U.S. subprime RMBS, of which 23.6%
was issued between 2005 and 2007. SF CDOs comprise 7.3% of the
portfolio.
Since November 21, 2007, approximately 33.4% of the portfolio has
been downgraded with 2.3% of the portfolio currently on Rating
Watch Negative. Additionally, 40.0% of the portfolio is now rated
below investment grade, with 29.6% of the portfolio rated 'CCC+'
or below.
The collateral deterioration has caused each of the
overcollateralization ratios to fall below 100% and fail their
respective covenants. As of the trustee report dated Aug. 5,
2008, the class A/B and C OC ratios were 75.3% and 70.2%,
respectively, compared to covenants of 107.5% and 102.2%,
respectively. The interest coverage ratios are also below their
respective covenants, with the A/B IC ratio at 111.1% relative to
a 113.3% covenant. On the last payment date in July 2008, the
interest collection account was not sufficient to pay all of the
interest due to the class B notes, and $77,661 of principal
proceeds were used to cover the interest shortfall. The class C-1
and C-2 notes have been deferring their interest payments since
January 2008. Based on the projected performance of the
portfolio, Fitch does not expect the class C notes to receive any
interest or principal proceeds going forward.
The ratings of the class A-1MTa, A-1MTb, A-2 and B notes address
the likelihood that investors will receive full and timely
payments of interest, as per the transaction's governing
documents, as well as the stated balance of principal by the legal
final maturity date. The ratings of the class B and C notes
addresses the likelihood that investors will receive ultimate and
compensating interest payments, as per the governing documents, as
well as the stated balance of principal by the legal final
maturity date.
BOSCOV'S INC: Court Approves Capstone as Financial Advisor
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Boscov's Inc. and its affiliated debtors to employ Capstone
Advisory Group LLC, and its subsidiaries' agents, as their
financial advisor.
As reported in the Troubled Company Reporter on Aug 15, 2008,
Capstone is expected to:
(a) assist the Debtors and the Debtors' counsel in
negotiations with significant creditors or interested
third parties regarding use of cash collateral as well
as debtor-in-possession, exit or other financing;
(b) advise the Debtors concerning, and assist in evaluating,
store lease acceptance or rejection negotiations;
(c) advise the Debtors in evaluating the profitability of
existing store locations;
(d) assist in the preparation of updated projections based on
current performance and latest thinking assumptions;
(e) assist in the preparation of the Debtors' schedules of
assets and liabilities and statement of financial affairs;
(f) assist the Debtors in preparing monthly operating reports;
(g) assist the Debtors in communications with any official
committees appointed in their Chapter 11 cases, as well as
with other constituencies and their professionals,
including financial and operating information required by
the parties or the Bankruptcy Court;
(h) advise and assist management in negotiating and developing
a plan or plans of Reorganization and underlying business
plan;
(i) assist the Debtors with respect to revolving disputes and
otherwise managing the claims process; and
(j) perform other services as may be requested from time to
time.
The Debtors will pay Capstone and its professionals according to
the firm's customary hourly rates. The Debtors anticipate that
these professionals will take the lead in providing financial
advise to the Debtors:
Professional Hourly Rate
------------ -----------
Robert Manzo $725
Christopher J. Kearns $650
Executive Directors $525 to $725
Consulting Staff $265 to $510
Support Staff $75 to $165
Christopher J. Kearns, an executive director at Capstone, assured
the Court that his firm is a "disinterested person," as that term
is defined in Section 101(14) of the Bankruptcy Code, as modified
by Section 1107(b). He adds that his firm does not represent any
interest adverse to the Debtors, their estates, and their
creditors.
About Boscov's Inc.
Headquartered in Reading, Pennsylvania, Boscov's Inc. --
http://www.boscovs.com-- is America's largest family-owned
independent department store, with 49 stores in Pennsylvania, New
York, New Jersey, Maryland, Delaware and Virginia.
Boscov's Inc. and its debtor-affiliates filed for Chapter 11
protection on Aug. 4, 2008 (Bankr. D. Del. Case No.: 08-11637).
Judge Kevin Gross presides over the cases.
David G. Heiman, Esq., and Thomas A. Wilson, Esq., at Jones Day,
serve as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq.,
and L. Katherine Good, Esq. at Richards Layton & Finger P.A.,
serve as the Debtors' local Delaware counsel. The Debtors' claims
agent is Kurtzman Carson Consultants L.L.C.
Boscov's listed assets of $538 million and liabilities of
$479 million in its bankruptcy filing.
BOSCOV'S INC: Court OKs Lehman Brothers as Investment Bankers
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the employment of Lehman Brothers Inc., as investment bankers for
Boscov's Inc. and its affiliated debtors.
As reported in the Troubled Company Reporter on Aug. 21, 2008,
Lehman is expected to:
(a) assist the Debtors in connection with a potential sale;
(b) render a written opinion to the Debtors' Board of
Directors with respect to the fairness of the
consideration involved in the potential sale, where
appropriate, subject to the parties' written agreement;
(c) assist in coordinating potential investors' or purchasers'
due diligence efforts;
(d) assist in evaluating proposals received from potential
investors and purchasers; and
(e) provide testimony regarding a Sale as will be requested by
the Debtors from time to time.
Lehman's engagement will extend through Nov. 1, 2008, unless the
Debtors will have commenced a sale by that date; in which event,
Lehman's engagement will continue after the closing of a Sale, and
the payment of all fees due under the Engagement.
Lehman will be paid according to these terms:
(a) A monthly retainers fee of $25,000, with minimum aggregate
monthly payments of $750,000 after the Petition Date,
provided the the Debtors will not be obligated to pay any
monthly retainer in excess of the minimum monthly payment
if they terminate Lehman's services.
Any monthly retainer fees actually paid to Lehman will be
non-refundable and fully creditable one-time against any
fees that may subsequently become payable.
(b) If, during Lehman's engagement or at any time during the
12 months period following the termination effective date
of Lehman's services, a sale agreement is entered into
with a party introduced to the Debtors by Lehman, or a
sale is consummated with an eligible party, the Debtors
will pay Lehman an advisory fee equal to 1.5% of the
Consideration in the Sale. The Sale Fee will be offset by
all monthly retainer payments and will be payable in cash
upon the closing of the Sale.
(c) If the Debtors request an opinion, Lehman will be paid an
opinion fee that is competitive based upon similar
transactions and practices in the investment banking
industry, payable in case upon the delivery of the Opinion
by Lehman, provided that Opinion Fee will be creditable
against any Sale Fee.
(d) The Debtors will promptly reimburse Lehman, upon request
from time to time, for all reasonable expenses incurred in
connection with services rendered under the Engagement
Letter.
The Court ruled that all fees for services payable to Lehman's
services, including any sale fee, but excluding expense
reimbursements, must not exceed $3,000,000 in the aggregate.
The Court ruled that a "liquidation sale," in one or a series of
separate transactions for substantially all of the Debtors'
assets, will be deemed to constitute a "Sale" if the Debtors,
through the sale process, will have entered into an agreement to
sell substantially all of their assets as a going concern; "but
'liquidation sale' is substantially approved by the Court as the
highest and best offer."
The Court also ruled that the monthly retainer paid to Lehman
will be subject to disgorgement of fees earned pursuant to Court
order, and as may be permitted by applicable law subject to
Sections 328(a) and 330 of the Bankruptcy Code. The Court also
ruled that Lehman will not be subject to the 20% holdback under
the Court-approved Professional Fees Compensation and Expense
Reimbursement Procedures.
Mark J. Shapiro, a managing director at Lehman, assured the Court
that his firm does not represent any interest adverse to the
Debtors, their estates, or their creditors. Mr. Shapiro adds
that Lehman is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
Mr. Shapiro disclosed that the Debtors have paid Lehman a total
monthly retainer of $500,000 which will be applied against the
Sale Fee.
About Boscov's Inc.
Headquartered in Reading, Pennsylvania, Boscov's Inc. --
http://www.boscovs.com-- is America's largest family-owned
independent department store, with 49 stores in Pennsylvania, New
York, New Jersey, Maryland, Delaware and Virginia.
Boscov's Inc. and its debtor-affiliates filed for Chapter 11
protection on Aug. 4, 2008 (Bankr. D. Del. Case No.: 08-11637).
Judge Kevin Gross presides over the cases.
David G. Heiman, Esq., and Thomas A. Wilson, Esq., at Jones Day,
serve as the Debtors' lead counsel. Daniel J. DeFranceschi,
Esq., and L. Katherine Good, Esq. at Richards, Layton & Finger,
P.A., serve as the Debtors' local Delaware counsel. The Debtors'
financial advisor is Capstone Advisory Group. The Debtors' claims
agent is Kurtzman Carson Consultants, L.L.C.
Boscov's listed assets of $538 million and liabilities of
$479 million in its bankruptcy filing.
(Boscov's Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
BOSCOV'S INC: Can Hire Hilco Real as Real Estate Consultant
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the employment of Hilco Real Estate LLC, as real estate
consultants for Boscov's Inc. and its affiliated debtors.
Hilco is expected to:
(a) develop and design a marketing program for the
sale/assignment, or subleasing and termination of certain
leased properties;
(b) perform valuations of the Leased Properties within 30
days of the engagement letter execution;
(c) negotiate, in consultation with the Debtors, the terms of
the agreements for the sale/assignment, sublease or
termination of the Leased Properties, and assist the
Debtors in consummating the related agreements;
(d) negotiate, in consultation with the Debtors, extension of
the time to assume or reject certain of the Leased
Properties and assist the Debtors in consummating the
related agreements;
(e) negotiate, in consultation with the Debtors, the terms and
agreements for more favorable lease terms with landlords
under the Leased Properties; and
(f) report regularly to the Debtors regarding the disposition
or modification of each Leased Property.
A copy of the Consulting and Advisory Services Agreement is
available for free at http://ResearchArchives.com/t/s?3137
The compensation structure under which the Debtors will pay Hilco
provides that:
(a) Hilco will be paid a valuation fee of $40,000, upon
delivery of each valuation report on a Leased Property;
(b) At the Debtors' election, Hilco will negotiate extensions
of the deadline to assume or reject each Leased Property.
Hilco will be paid a $10,000 fee payable at the time of
the Debtors' election. If, on or before October 31, 2008,
the deadline to assume or reject is extended for no less
than 90 days with respect to more than 85% of the Leased
Properties, Hilco will receive an additional $50,000
payable at the time the threshold is met, provided that
those Leased Properties identified as "Family Leases" will
not be considered in computing the 85% requirement.
(c) Hilco will receive disposition and restructuring
commissions depending on these terms:
* Hilco will earn, upon disposition of leases
identified as former Federated location, a fee equal
to 2.5% of the lease sale proceeds. The amounts will
be paid in a lump sum immediately after the later of
(x) execution of an assignment, sublease, termination
or other agreement of the Property, or (y) Court
approval of the appropriate agreement, provided that
any payment derived from a distribution under a plan
or reorganization or liquidation, will be made as and
when the distributions are made.
* Hilco will earn a fee, upon disposition of a Boscov
Lease, equal to 3.25% of the lease sale proceeds.
The fee will be payable immediately following the
later of (x) the execution of agreement relating to
the disposition, or (y) Court approval of the
agreement, provided that any payment derived from a
distribution under the reorganization or liquidation
plan, will be made as and when the distributions are
made.
* If the terms of a Boscov Lease are renegotiated and
modified, Hilco will earn a fee equal to 3% of the
lease savings. The fee will be paid in a lump sum
following the earlier of (x) the consummation of the
agreement on the disposition, (y) the Court's
approval of the agreement, or (z) the confirmation of
a reorganization plan, which includes assumption and
assignment of any of the Leased Properties to a third
party.
Hilco must file no later than 30 days, a monthly statement of fees
and expenses, which it must serve on the Debtors, counsel to the
Debtors, local counsel to the Debtors, the Office of the United
States Trustee, counsel to the senior secured lender, and counsel
to any committee appointed in the Debtors' cases.
Any Hilco affiliate may purchase, for its own or with third
parties, any of the Debtors' assets other than those covered by
the employment application and engagement letter entered into
between the Debtors and Hilco. Should any Hilco affiliate bid or
purchase any property pursuant to the Hilco employment
application and the engagement letter, the U.S. Trustee reserves
its rights to review if the action renders Hilco an interested
party pursuant to Section 101(14) of the Bankruptcy Code.
The Court authorized the Debtors to indemnify and reimburse Hilco
for any claims on services pursuant to the Engagement Letter
except for claims arising from performance of postpetition
services not otherwise approved by the Court.
In a supplemental affidavit dated Sept. 4, 2008, Hilco Real
Estate LLC's president and chief executive officer, Mitchell
Kahn, disclosed that Hilco is a sister company to Hilco Merchant
Resources, LLC, is the joint venture partner of Gordon Brothers
Retail Partners, in liquidating 10 of the Debtors' Closing
Stores.
Mr. Kahn said HMR and Hilco operate independently under the Hilco
Trading family of companies. He added that HMR has no financial
interest in Hilco and Hilco in HMR, nor has Hilco or its
employees received any promises of compensation, or has entered
into any agreement with HMR or any entity to share in any
compensation related to the Debtors' Chapter 11 cases. According
to Mr. Kahn, Hilco is a "disinterested person" within the meaning
of Section 101(14), and holds no interest adverse to the Debtors
or their estates.
The Debtors will also indemnify Hilco, its affiliates, directors,
officers, employees, and consultants, under certain
circumstances, other than for acts involving gross negligence or
willful misconduct. Hilco will be reimbursed for expenses
related to any proceedings that may result from its retention by
the Debtors.
Mr. Kahn, says his firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
About Boscov's Inc.
Headquartered in Reading, Pennsylvania, Boscov's Inc. --
http://www.boscovs.com-- is America's largest family-owned
independent department store, with 49 stores in Pennsylvania, New
York, New Jersey, Maryland, Delaware and Virginia.
Boscov's Inc. and its debtor-affiliates filed for Chapter 11
protection on Aug. 4, 2008 (Bankr. D. Del. Case No.: 08-11637).
Judge Kevin Gross presides over the cases.
David G. Heiman, Esq., and Thomas A. Wilson, Esq., at Jones Day,
serve as the Debtors' lead counsel. Daniel J. DeFranceschi,
Esq., and L. Katherine Good, Esq. at Richards, Layton & Finger,
P.A., serve as the Debtors' local Delaware counsel. The Debtors'
financial advisor is Capstone Advisory Group and their investment
banker is Lehman Brothers Inc. The Debtors' claims agent is
Kurtzman Carson Consultants, L.L.C.
Boscov's listed assets of $538 million and liabilities of
$479 million in its bankruptcy filing.
(Boscov's Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
BOSCOV'S INC: Court OKs $1.45MM Bonus Payments to Top Executives
---------------------------------------------------------------
Judge Kevin Gross of the U.S. Bankruptcy Court for the District of
Delaware approved an incentive plan for six of Boscov's Inc. and
its affiliated debtors' senior executives pursuant to Sections
363(b) and 503(c) of the Bankruptcy Code. Judge Gross, however,
ruled that the Debtors will not make any payments under the
Incentive Program until their obligations under their Prepetition
First Lien Credit Facility and DIP Credit Facility are paid in
full, and all related commitments have been terminated.
As reported in the Troubled Company Reporter on Aug. 29, 2008, the
Debtors stated that an executive vice president could earn a bonus
equal to his annual salary if a Chapter 11 plan is approved by the
end of February or a sale of assets as a going concern is
completed by early January. He would also receive a 50% bonus if
the assets are liquidated by January, the Debtors added.
TCR reported that the other top officers could receive from 20% to
50% of annual salary. For them to qualify, there must be a
plan or a going-concern sale before the same deadlines, the
Debtors noted.
TCR also reported that the payments will compensate the senior
executives for their efforts on the bankruptcy case, a possible
sale and operating the business. The payment will also ensure
that business will be maintained pending these transaction.
Notwithstanding the objection by Roberta A. DeAngelis, the Acting
U.S. Trustee for Region 3, the Court ruled that the facts and
circumstance of the Debtors' Chapter 11 cases warrant approval of
the Incentive Program pursuant to Section 503(c).
The U.S. Trustee has asked the Debtors to prove that the
conditions to their Incentive Plan -- the Chapter 11 Plan
confirmation, or the sale of substantially all of their assets --
are difficult to reach, and that the Incentive Plan is not a
"creatively titled key employee retention plan. The U.S. Trustee
has complained that the six executive participants appear to be
entitled to payments "for simply remaining employed by the
company and completing tasks which they are required to perform".
The U.S. Trustee said that, in the face of the Debtors'
admissions regarding their healthy financial outlook, they must
prove that the incentive payments are more than a vehicle to keep
their executives in their employ until a reorganization plan is
confirmed or their business is sold. The U.S. Trustee complained
that the proposed Incentive Program is performance based in name
only and is factually a creatively titled key employee retention
plan.
The U.S. Trustee pointed out that, under the Incentive Program,
the six executive participants appear to be entitled to the
payments for simply remaining employed by the company and
completing tasks which they are required to perform. The
Incentive Plan Motion contains no insight as to the process which
the Debtors employed in arriving at the Incentive Program and
does not contain sufficient information for the Court to pass on
whether the Program payments are justified, the U.S. Trustee
said.
Section 503(c) provides that . . . no transfer to and incurrence
of obligation for the benefit of an insider for the purpose of
inducing that insider to remain with the debtor's business, will
be allowed or paid, absent a Court finding that the transfer or
incurrence of obligation and the insider's services are essential
to the survival of the business.
Judge Gross, according to LancasterOnline.com, said during the
September 5, 2008 hearing on the Incentive Plan, that the
incentive has "a sound business purpose." The incentives, he
said, are "in the best interests of the Debtors, their creditors,
their estates, and other parties-in-interest," the report quoted
him as saying.
About Boscov's Inc.
Headquartered in Reading, Pennsylvania, Boscov's Inc. --
http://www.boscovs.com-- is America's largest family-owned
independent department store, with 49 stores in Pennsylvania, New
York, New Jersey, Maryland, Delaware and Virginia.
Boscov's Inc. and its debtor-affiliates filed for Chapter 11
protection on Aug. 4, 2008 (Bankr. D. Del. Case No.: 08-11637).
Judge Kevin Gross presides over the cases.
David G. Heiman, Esq., and Thomas A. Wilson, Esq., at Jones Day,
serve as the Debtors' lead counsel. Daniel J. DeFranceschi,
Esq., and L. Katherine Good, Esq. at Richards, Layton & Finger,
P.A., serve as the Debtors' local Delaware counsel. The Debtors'
financial advisor is Capstone Advisory Group and their investment
banker is Lehman Brothers Inc. The Debtors' claims agent is
Kurtzman Carson Consultants, L.L.C.
Boscov's listed assets of $538 million and liabilities of
$479 million in its bankruptcy filing.
(Boscov's Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
BUFFALO MOLDED: Court Converts Chapter 11 Case to Chapter 7
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
has granted Buffalo Molded Plastics, Inc.'s request to convert its
Chapter 11 bankruptcy case to Chapter 7.
The Court held that the case is not an involuntary case originally
commenced under Chapter 11. The Court directed the Debtor and the
Chapter 11 Trustee to:
-- turn over to the Chapter 7 Trustee all records and
property of the estate under its custody and control as
required by Rule 1019(4) of the Federal Rules of
Bankruptcy Procedure;
-- file an accounting of all receipts and distributions made;
-- file a schedule of all unpaid debts incurred after the
commencement of the Chapter 11 case, as required by
Bankruptcy Rule 1019(5), and a list of all post-petition
claimants with their names and addresses. The Clerk will
reject for filing any list of claimants which is not filed
in matrix format; and
-- file a Financial Report (or reports) covering the period
from the last filed financial report through the date of
Conversion.
The Court also directed the Debtor to file statements and
schedules required, if the documents have not already been filed.
Headquartered in Andover, Ohio, Buffalo Molded Plastics, Inc., dba
Andover Industries -- http://www.andoverplastics.com/--
manufactures rocker panels, grilles, pillars and body side molding
components for General Motors Corp. and DaimlerChrysler. The
Company filed for chapter 11 protection on Oct. 21, 2004 (Bankr.
W.D. Pa. Case No. 04-12782). David Bruce Salzman, Esq., at
Campbell & Levine, LLC, represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its
creditors, it estimated assets and debts in the $10 million to
$50 million range. David W. Lampl, Esq., at Leech Tishman
Fuscaldo & Lampl, LLC, represents the Official Committee of
Unsecured Creditors in the Debtor's chapter 11 case.
BUILDING MATERIALS: June 29 Balance Sheet Upside-Down by $81.1MM
----------------------------------------------------------------
Building Materials Corp. of America's consolidated balance sheet
at June 29, 2008, showed total assets of $2.63 billion and total
liabilities of $2.71 billion at June 29, 2008, resulting in an
$81.1 million stockholders' deficit.
The company reported net income of $27.8 million for the second
quarter ended June 29, 2008, as compared to a net loss of
$44.5 million in the corresponding period in 2007. The increase
in net income for the second quarter of 2008 was primarily
attributable to higher income before interest expense and income
taxes and lower interest expense.
Net sales for the second quarter of 2008 were $737.1 million
compared to second quarter of 2007 net sales of $663.3 million.
The increase in second quarter of 2008 net sales was primarily due
to higher net sales of residential roofing products largely due to
higher average selling prices and higher unit volumes.
Results for the second quarter of 2008 included $9.8 million of
after-tax restructuring and other expenses, of which $1.0 million
after-tax was included as a reduction in net sales and
$4.9 million after-tax was included in cost of products sold
related to the integration of Elk operations. The net loss in the
second quarter of 2007 included $46.7 million of after-tax
restructuring and other expenses, of which $7.7 million after-tax
was included in cost of products sold.
Excluding restructuring and other expenses, second quarter of 2008
net income was $37.6 million compared to the second quarter of
2007 net income of $2.2 million.
Net Cash Flow from Operating and Investing Activities
Net cash outflow from operating and investing activities was
$125.2 million during the first six months of 2008, including
$113.1 million of cash used in operations, the reinvestment of
$18.8 million for capital programs, partially offset by
$6.7 million of proceeds from the sale of assets. Due to the
seasonal demands of its business, together with extreme weather
conditions, the company said it generally has negative cash flows
from operations during the first six months of the year.
Total Indebtedness
As of June 29, 2008, the company had total outstanding
consolidated indebtedness of $2.04 billion, which included
$52.8 million of demand loans to the company's parent corporation
and $25.2 million that matures prior to the end of the second
quarter of 2009.
As of June 29, 2008, the company was in compliance with all
covenants under the Senior Secured Credit Facilities and the
indentures governing the company's 2008 Notes and the company's
7 3/4% Senior Notes due 2014. The Senior Secured Credit
Facilities consist of a $975.0 million Term Loan Facility, a
$600.0 million Senior Secured Revolving Credit Facility and a
$325.0 million bridge loan facility, which was subsequently
replaced by a $325.0 million Junior Lien Term Loan, which
collectively financed the purchase of ElkCorp and repaid certain
existing BMCA debt facilities and Elk senior note debt.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 29, 2008, are available for
free at http://researcharchives.com/t/s?31ff
About Building Materials
Based in Wayne, New Jersey, Building Materials Corporation of
America is a manufacturer and marketer of a broad line of asphalt
and polymer-based roofing products and accessories for the
residential and commercial roofing markets. The company also
manufactures specialty building products and accessories for the
professional and do-it-yourself remodeling and residential
construction industries.
The company is a wholly owned subsidiary of BMCA Holdings
Corporation, which is a wholly owned subsidiary of G-I Holdings
Inc. The company's products are marketed in three groups:
residential roofing, commercial roofing and specialty building
products and accessories. On March 26, 2007, the company
completed the acquisition of ElkCorp, a manufacturer of roofing
products and building materials.
* * *
As reported in the Troubled Company Reporter on May 27, 2008,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Building Materials Corp. of America. At the same
time, S&P revised the recovery rating on the company's
$975 million first-lien term loan due 2014 to '3', indicating that
lenders can expect meaningful (50% to 70%) recovery in the event
of a payment default, from '2'. As a result, S&P lowered the
issue-level rating on the term loan to 'B+' from 'BB-', in
accordance with its issue rating framework. S&P also assigned a
'3' recovery rating on BMCA's outstanding $250 million 7.75%
senior notes due 2014.
Standard & Poor's removed all the ratings from CreditWatch, where
they had been placed with negative implications on Jan. 10, 2008.
The outlook is negative.
As reported in the Troubled Company Reporter on April 10, 2008,
Moody's Investors Service lowered the ratings of Building
Materials Corp. of America including the corporate family rating
to B3 from B2, first lien term loan rating to B3 from B2, senior
notes rating to B3 from B2, and junior term loan rating to Caa2
from Caa1. The probability of default rating was lowered to Caa1
from B2. The ratings outlook remains negative.
CARDIAC MANAGEMENT: Auction of Assets Set October 2
---------------------------------------------------
An auction of essentially all of the operating assets of Cardiac
Management Systems, Inc. and its debtor-affiliates is set for Oct.
2, 2008. A Final Sale Hearing is set for Oct. 6, 2008.
Judge Laurel M. Isicoff of the U.S. Bankruptcy Court for the
Southern District of Florida has authorized Bidding and Sales
Procedures to sell essentially all of the operating assets of the
Debtors, either en block as a going concern, by diagnostic sites,
or by specific assets.
Bids are due Sept. 25, 2008. Pre-qualified bidders will be
notified on or before Sept. 20, 2008.
Trenwith Securities, LLC has been retained by the Debtors to act
as investment banker. Interested parties seeking to conduct due
diligence are required to contact:
Jeffrey R. Manning
Managing Director
Trenwith Securities LLC
7101 Wisconsin Ave.
Bethesda, MD 20814-4827
Tel: (301) 634-0233
jrmanning@trenwith.com
About Cardiac Management
Based in Miami, Florida, Cardiac Management Systems, Inc. and its
affiliates provide management services and medical laboratory
facilities. The company and 14 of its affiliates filed for
Chapter 11 protection on June 30, 2008 (Bankr. S.D. Fla. Lead Case
No. 08-19029). Patrick S. Scott & Associates P.A. represents the
Debtors in their restructuring efforts. Alan L. Landsberg, Esq.,
at Bunnell Woulfe Kirschbaum Keller & Gregoire, P.A., and Steven
A. Weinberg, Esq., at Frank Weinberg & Black, P.L. are being
proposed as special counsel. An Official Committee of Unsecured
Creditors has been named in the case. Kluger, Peretz, Kaplan &
Berlin, P.L. is the Committee's counsel.
The Debtors' schedules show total assets of $55,236 and total
debts of $15,405,113.
CASHEL ROCK: Moody's Cuts $25.65MM 'Baa2' Notes Rating to 'Ba1'
---------------------------------------------------------------
Moody's Investors Service has upgraded the notes issued by Cashel
Rock CBO, Ltd.:
Class Description: $20,000,000 Class A-3 Senior Contingent
Performance Notes Due 2014
-- Prior Rating: A2
-- Prior Rating Action Date: 3/6/2007
-- Current Rating: A1
According to Moody's, this rating action is a result of the
ongoing delevering of the transaction.
Additionally, Moody's downgraded these notes:
Class Description: $25,650,000 Class B Senior Subordinated
Floating Rate Notes due 2014
-- Prior Rating: Baa2, on review for possible downgrade
-- Prior Rating Action Date: 3/6/2007
-- Current Rating: Ba1
According to Moody's, this rating action is a result of the
deterioration in the credit quality of the transaction's
underlying collateral pool consisting primarily of bonds.
CD 2005-C1: S&P Junks Ratings on Two Classes of Certificates
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on six
classes of commercial mortgage pass-through certificates from CD
2005-C1 Commercial Mortgage Trust. In addition, S&P affirmed its
ratings on 19 classes from this series.
The downgrades reflect credit concerns with eight of the 15 loans
in the pool that have reported debt service coverage below 1.0x;
one loan ($22.0 million, 0.6%) that will have a DSC of below 1.0x
when its interest-only period ends; and two loans totaling
$10.7 million (0.3%) that were recently transferred into special
servicing. The affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios.
There are 15 loans in the pool totaling $165.7 million (4.3%) with
reported DSCs lower than 1.0x. The loans are secured by a variety
of property types with an average balance of $11.0 million and
have experienced an average decline in DSC of 54% since issuance.
The eight loans that are credit concerns are secured by a variety
of property types and have experienced a combination of declining
occupancy and higher operating expenses. The remaining loans are
in various stages of renovation or lease-up; the net cash flow
available for debt service is expected to improve in the future,
and these loans are not credit concerns at this time.
Two assets ($10.7 million, 0.3%) are with the special servicer,
LNR Partners Inc. Details are:
-- The Entrance at Lakeway loan has a total exposure of
$4.2 million (0.1%) and is secured by a 28,627-sq.-ft.
office property in Lakeway, Texas. The loan was
transferred to LNR on Aug. 4, 2008. The loan is 60-plus-
days delinquent due to higher-than-expected vacancies at
the property. Standard & Poor's will monitor the
situation as further information becomes available.
-- The Metrocenter loan has a total exposure of $6.5 million
(0.2%) and is secured by an 89,835-sq.-ft. office property
in Binghamton, New York. The loan was transferred to LNR
on Aug. 4, 2008, because it is 30 days delinquent. A
lockbox was triggered following the borrower's default.
Discussions with the borrower are ongoing, and LNR plans
to review further information as it becomes available.
As of the Aug. 15, 2008, remittance report, the collateral pool
consisted of 224 loans with an aggregate trust balance of
$3.876 billion, compared with 225 loans totaling $3.878 billion at
issuance. The master servicer, Midland Loan Services, reported
financial information for 98.7% of the pool. Eighty-nine percent
of the servicer-provided information was full-year 2007 data.
Standard & Poor's calculated a weighted average DSC of 1.66x for
the pool, up from 1.57x at issuance. There are two delinquent
loans in the pool, both of which are with LNR and were discussed
above. The trust has experienced a loss of $1.7 million to date.
The top 10 loans have an aggregate outstanding balance of
$1.26 billion (33%) and a weighted average DSC of 1.86x, down from
1.92x at issuance. Standard & Poor's reviewed property
inspections provided by the master servicer for nine of the assets
underlying the top 10 exposures. All of the properties were
characterized as "good."
The credit characteristics of One Court Square - Citibank (8.2%),
Yahoo! Center (6.51%), Maine Mall (3.%), 100 East Pratt (2.7%),
Loews Universal Hotel Portfolio (1.4%), Chico Mall (1.0%), Great
Indoors - Sears - Alpha Road (0.4%), MacPhail Crossing (0.2%),
Cook Street Office (0.1%) and 220 East 67th Street (0.1%) loans
are consistent with those of investment-grade obligations.
Details of the four largest of these loans are:
-- The One Court Square - Citibank loan, which is the
largest exposure in the pool, has a trust balance of
$315.0 million. The loan is secured by a 1,401,609-sq.-ft.
office building in Long Island City, New York. Reported
DSC was 2.04x as of year-end 2007, and occupancy was
100.0%, compared with a DSC of 2.25x and 100.0% occupancy
at issuance. Standard & Poor's adjusted value for this
loan is comparable to its level at issuance.
-- The Yahoo! Center loan, which is the second-largest
exposure in the pool, has a trust balance of
$250.0 million. The loan is secured by a 1,076,070-sq.
-ft. office building in Santa Monica, California.
Reported DSC was 1.88x as of year-end 2007 and occupancy
was 84.1%, compared with a DSC of 2.44x and 98.3%
occupancy at issuance. Standard & Poor's adjusted value
for this loan is comparable to its level at issuance.
-- The Maine Mall loan, which is the third-largest exposure
in the pool, has a trust balance of $143.6 million and a
whole-loan balance of $222.2 million. The loan is secured
by a 544,578-sq.-ft. retail building in Portland, Maine.
Reported DSC was 1.74x as of year-end 2007 and occupancy
was 96.1%, compared with a DSC of 1.82x and 92.6%
occupancy at issuance. Standard & Poor's adjusted value
for this loan is comparable to its level at issuance.
-- The 100 East Pratt loan, which is the fourth-largest
exposure in the pool, has a trust balance of
$105.0 million. The loan is secured by a 655,587-sq.-ft.
office building in Baltimore, Maryland. Reported DSC was
2.77x as of year-end 2007 and occupancy was 92.3%,
compared with a DSC of 2.45x and 93.7% occupancy at
issuance. Standard & Poor's adjusted value for this loan
is comparable to its level at issuance.
Midland reported a watchlist of 21 loans ($325.5 million, 8.5%).
The One Financial Plaza loan ($43.0 million, 1.1%) is the largest
loan on the watchlist and the 14th-largest exposure in the pool.
The loan is secured by a 393,902-sq.-ft. office property in
Minneapolis, Minnesota. The loan appears on the watchlist because
a large tenant is vacating the property in December 2008. The
property currently has a DSC of 1.65x, which will decline to 0.96x
if a new tenant does not take over the space.
Standard & Poor's stressed the loans on the watchlist and the
other loans with credit issues as part of its analysis. The
resultant credit enhancement levels support the lowered and
affirmed ratings.
Ratings Lowered
CD 2005-C1 Commercial Mortgage Trust
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
K BB BB+ 2.37%
L BB- BB 2.11%
M B BB- 1.73%
N B- B+ 1.48%
O CCC+ B 1.23%
P CCC B- 0.97%
Ratings Affirmed
CD 2005-C1 Commercial Mortgage Trust
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 30.43%
A-1D AAA 30.43%
A-2FL AAA 30.43%
A-2FX AAA 30.43%
A-3 AAA 30.43%
A-SB AAA 30.43%
A-4 AAA 30.43%
A-1A AAA 30.43%
A-M AAA 20.27%
A-J AAA 12.27%
B AA+ 11.51%
C AA 10.37%
D AA- 9.23%
E A 7.70%
F A- 6.69%
G BBB+ 5.54%
H BBB 4.40%
J BBB- 3.13%
X AAA N/A
N/A -- Not applicable.
CDO REPACK: Moody's Downgrades Baa3 $11.1MM Notes Rating to C
-------------------------------------------------------------
Moody's Investors Service has downgraded the notes issued by CDO
Repack SPC, Ltd.:
Class Description: $11,100,000 Millstone III Class D Combination
Notes Due July 5, 2046
-- Prior Rating: Baa3, on review for possible downgrade
-- Prior Rating Action Date: 4/10/2008
-- Current Rating: C
According to Moody's, the rating action is as a result of the
deterioration in the credit quality of the transaction's
underlying collateral pool consisting primarily of structured
finance securities.
COLLINS & AIKMAN: Claim Against BHM Technologies Challenged
-----------------------------------------------------------
Pursuant to Section 502 of the Bankruptcy Code and Rule 3007 of
the Federal Rules of Bankruptcy Procedure, BHM Technologies
Holdings, Inc., and its debtor-subsidiaries ask the United States
Bankruptcy Court for the Western District of Michigan to disallow
and expunge the proofs of claim filed by Collins & Aikman
Litigation Trust.
Robert S. Hertzberg, Esq., at Pepper Hamilton LLP, in Detroit,
Michigan states that on July 11, 2008, Collins & Aikman filed
proofs of claim each asserting $13,547,436 against:
(a) The Brown Corporation of America (Claim No. 141);
(b) The Brown Company of Moberly, LLC (Claim No. 143)
(c) The Brown Company of Waverly, LLC, (Claim No. 145).
On July 14, 2008, the Claimant filed Claim No. 329 against The
Brown Company of Ionia, LLC, also in the amount of $13,547,436.
Collins & Aikman asserts a right to recover alleged preferential
transfers, pursuant to Section 547(b) of the Bankruptcy Code
and alleged fraudulent transfers, pursuant to Section 548 of the
Bankruptcy Code, made by Collins & Aikman Corp., Collins & Aikman
Products, Co., Collins & Aikman Automotive Exteriors, Inc., and
Collins & Aikman Automotive Interiors, Inc., on or within 90 days
prior to the date that the C&A Entities filed for bankruptcy
protection.
On May 17, 2005, the C&A Entities each filed chapter 11
bankruptcy petitions, and subsequently filed adversary
proceedings against the Brown Debtors. The Preference Action
seeks to avoid and recover $13,547,436, representing transfers
allegedly made by the C & A Transferors to the Debtors during the
applicable period.
In the C & A Entities' bankruptcy proceedings, Brown asserted a
general unsecured claim against C & A Exteriors for $9,643,886,
and C & A Exteriors scheduled a claim in favor of Brown in the
amount of $7,585,781.
Mr. Hertzberg says that the Claims should be disallowed and
expunged because the:
(a) Claims are duplicative;
(b) Claimant cannot establish an entitlement to avoid and
recover the allegedly preferential transfers and, to the
extent the Claimant can establish a prima facie right to
avoid any of the alleged transfers, each of the Debtors
has valid affirmative defenses that preclude the
avoidance and recovery of the alleged transfers; and
(c) the Brown Debtors are entitled to set off the liability
against the outstanding general unsecured claim owed to it
by the C & A Entities.
In the Preference Action, Collins & Aikman asserts that each of
the alleged transfers was made to one of the Debtors as the
initial transferee. The Preference Action does not assert that
any of the Debtors were a mediate transferee of the allegedly
avoidable transfers, and does not assert any bases for finding
joint and several liability against the Debtors that were not the
initial transferee of each individual payment.
The Bankruptcy Code does not provide for joint and several
liability for avoided preferential transfers, Mr. Hertzberg
points out. Rather, Collins & Aikman, to the extent it can avoid
any of the transfers, can only recover the avoided transfers from
the Debtor who actually received the transfer. The Brown Debtors
filed an answer in the Preference Action, denying:
(a) that they received each of the allegedly preferential
transfers;
(b) that the transfers were of a property interest of the C&A
Transferors;
(c) that each transfer was made on account of an antecedent
debt;
(d) that the C&A Entities were insolvent, or were rendered
insolvent, by the transfers;
(e) that the Debtors received more than they otherwise would
have received in a Chapter 7 liquidation; and
(f) that the Debtors failed to provide reasonably equivalent
vale in exchange for the transfers.
The Brown Debtors also asserted various affirmative defenses to
the Preference Action, including contemporaneous exchange;
ordinary course of business; and subsequent new value.
Brown asserted a $9,643,886 claim against C & A Exterior. The
Collins & Aikman Litigation Trust is purportedly the successor to
C&A Exterior, and pursuant to Section 553 of the Bankruptcy Code
and applicable state law, Brown is entitled to offset its
prepetition claim against C & A Exterior against any pre-petition
claim held by C & A Exterior against Brown.
Headquartered in Ionia, Michigan, BHM Technologies Holdings
Inc. -- http://www.browncorp.com/-- manufactures and sells
automobile parts including air bags and electrical systems. It
has manufacturing facilites in Mexico and operates under Brown
Corp.
BHM Technologies Holdings, Inc. and 14 affiliates filed separate
voluntary petitions under Chapter 11 on May 19, 2008 (Bankr.
W.D. Mich. Lead Case No. 08-04413). Hannah Mufson McCollum,
Esq., Kay Standridge Kress, Esq., Robert S. Hertzberg, Esq., and
Leon R. Barson, Esq. of Pepper Hamilton LLP, represent the
Debtors in their restructuring efforts. The Debtors total
scheduled asset is $0 and its total scheduled liabilities is
$336,506,519.
The Debtors have until Dec. 15, 2008, to exclusively file their
bankruptcy plan. (BHM Technologies Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
COLORADO SPRINGS HOUSING: S&P Holds 'B' Rating; Outlook Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Colorado Springs Housing Authority's mortgage revenue refunding
bonds (Centennial Plaza Project) series 1998 to positive from
stable. At the same time, Standard & Poor's affirmed its 'B'
standard long-term rating on the bonds.
The latest audited financial results for the fiscal year ended
Dec. 31, 2007, indicate improvement in the performance of the
property. The outlook revision reflects improvement in debt
service coverage levels to 1.11x based on net operating income for
the fiscal year ended 2007, and reflects the decrease in expenses
leading to an improvement in expense ratio. Full occupancy at the
property, with 368 families on the waiting list, and a debt
service reserve fund funded at maximum annual debt service also
indicate improvements in the property's performance.
As per the project manager report, the occupancy at the project
was 100% as of August 2007. Debt per unit was $21,566 as of
January 2008. Expenses per unit per year have decreased by 7% to
$5,460 in 2007, from $5,845 in 2006. This decrease was mainly due
to a decline in maintenance and repair expenses and utilities
expenses. The increase in revenues accompanied by a decrease in
expenses led to an improved expense ratio of 66.17%.
However, no rental increase since 1995 and contract rent above
fair market rent mitigate Colorado Springs Housing Authority's
strengths. It is imperative for the property to maintain its
current occupancy levels and maintain its expenses to avoid
deterioration in its credit quality.
CREDIT AND REPACKAGED: Moody's Trims $268.75MM Notes Rating to Ba2
------------------------------------------------------------------
Moody's Investors Service has downgraded its rating on the notes
issued by Credit and Repackaged Securities Limited Series 2006-14:
Class Description: $268,750,000 Single Tranche Notes, due Dec. 20,
2016
-- Current Rating: Ba2
-- Prior Rating: A3, on review for downgrade (March 11, 2008)
Originated in November 2006, Credit and Repackaged Securities
Limited Series 2006-14 is a synthetic leveraged super senior CDO
backed by investment grade corporate bonds.
Moody's rating action has applied an updated leverage super senior
monitoring tool, taking into account the new dynamics brought by
the current market crisis. See "A Description of Moody's Tools
for Monitoring Leveraged Super Senior Transactions," Moody's
Structured Finance Special Report, August 29, 2008.
Moody's explained that the rating action has also taken into
account the amendment on May 15, 2008 to reduce the leverage and
increase the spread triggers of the transaction, the underlying
collateral risk, as well as ongoing deterioration in the credit
quality of the transaction's underlying portfolio and the
volatility in the weighted average spread of the portfolio.
According to Moody's, further widening of the weighted average
spread of the portfolio beyond a certain threshold may lead to a
trigger event, which could cause the transaction to unwind and the
underlying collateral to be liquidated.
CREDIT AND REPACKAGED: Moody's Cuts $268.75MM Notes Rating to Ba3
-----------------------------------------------------------------
Moody's Investors Service has downgraded its rating on the notes
issued by Credit and Repackaged Securities Limited Series 2007-11:
Class Description: $268,750,000 Single Tranche Notes, due Dec. 20,
2016
-- Current Rating: Ba3
-- Prior Rating: A3, on review for downgrade (March 11, 2008)
Originated in January 2007, Credit and Repackaged Securities
Limited Series 2007-11 is a synthetic leveraged super senior CDO
backed by investment grade corporate bonds.
Moody's rating action has applied an updated leverage super senior
monitoring tool, taking into account the new dynamics brought by
the current market crisis. See "A Description of Moody's Tools
for Monitoring Leveraged Super Senior Transactions," Moody's
Structured Finance Special Report, August 29, 2008.
Moody's explained that the rating action has also taken into
account the amendment on May 15, 2008 to reduce the leverage and
increase the spread triggers of the transaction, the underlying
collateral risk, as well as ongoing deterioration in the credit
quality of the transaction's underlying portfolio and the
volatility in the weighted average spread of the portfolio.
According to Moody's, further widening of the weighted average
spread of the portfolio beyond a certain threshold may lead to a
trigger event, which could cause the transaction to unwind and the
underlying collateral to be liquidated. MBIA, Inc., guaranteed by
MBIA Insurance Corporation, was the GIC provider for $125,000,000
of the transaction. The GIC was unwound on August 7, 2008.
Moody's will closely monitor the manner in which such proceeds are
to be invested for the remaining term of the notes.
CUPERTINO SQUARE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Cupertino Square, LLC
19330 Stevens Creek Boulevard, Suite 200
Cupertino, CA 95014
Bankruptcy Case No.: 08-54897
Debtor-affiliate filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Vallco International Shopping Center, LLC 08-54901
Type of Business: The Debtors operate a shopping center.
Chapter 11 Petition Date: September 2, 2008
Court: Northern District of California (San Jose)
Judge: Marilyn Morgan
Debtors' Counsel: Richard A. Lapping, Esq.
Thelen, Reid and Priest
rlapping@thelenreid.com
101 2nd Street, Suite 1800
San Francisco, CA 94105-3601
Tel: (415) 371-1200
Cupertino Square's Financial Condition:
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
A copy of the Debtor's petition is available for free at:
http://bankrupt.com/misc/canb08-54897.pdf
CYPHERMINT INC: Trustee Selling Substantially All Assets
--------------------------------------------------------
The Chapter 7 Trustee overseeing the liquidation of Cyphermint,
Inc.'s estate proposes to sell all of the Debtors right, title and
interest in substantially all assets used and useful in the
operation of its business. The assets include software rights,
patents, and related intellectual property. The sale is subject
to Bankruptcy Court approval. A hearing is scheduled for
September 29, 2008, at 8:00 a.m. at U.S. Bankruptcy Court in
Worcester, Mass.
The Trustee has a stalking horse bid in hand at this time offering
(a) $100,000 plus (b) two post-closing payments of 1% of yearly
gross revenues for each of 2009 and 2010 (guaranteed aggregate
minimum of $150,000) plus (c) expenses to cover post-petition
operational shortfall, if any. C.A. Acquisition Corp. is
currently operating Cyphermint under an agreement with the Chapter
7 Trustee.
The stalking horse bid is subject to higher and better offers.
Counteroffers must be filed with the Bankruptcy Court and served
on the Chapter 7 Trustee so as to be received no later than
4:30 p.m. on Sept. 25, 2008. Due diligence materials are
available for inspection by appointment, and a $50,000 deposit is
required at the time any competing bid is presented. Call Kim
DelleChiaie for details at (508) 860-1595.
About Cyphermint
Cyphermint, Inc. -- http://www.cyphermint.com/-- a privately
owned New York corporation, headquartered in Marlborough, Mass.,
says it's a leading provider of secure business-to-business
electronic payment solutions.
Three creditors filed an involuntary chapter 7 petition (D. Mass.
Case No. 08-42682) against Cyphermint, Inc., on August 21, 2008,
together with an emergency motion to appoint an independent
chapter 7 trustee. The Honorable Joel B. Rosenthal granted that
emergency motion and quickly approved the U.S. Trustee's
appointment of Joseph Baldiga, Esq., at Mirick, O'Connell,
DeMallie & Lougee, LLP, as the Chapter 7 Trustee pursuant to 11
U.S.C. Sec. 303(g). The Chapter 7 Trustee is represented by
Christine E. Divine, Esq., and Gina M. Barbieri, Esq., at Mirick,
O'Connell, DeMallie & Lougee, LLP, at 100 Front Street Worcester,
Massachusetts.
DERECKTOR SHIPYARDS: May Reject Deal to Build Catamaran Boat
------------------------------------------------------------
Derecktor Shipyards Connecticut LLC obtained authority from the
U.S. Bankruptcy Court for the District of Connecticut (Bridgeport)
to reject a contract to build what was said to be the world's
largest catamaran sailboat, according to Bloomberg News' William
Rochelle.
About Derecktor Shipyards
Bridgeport, Connecticut-based Derecktor Shipyards Connecticut,
LLC, dba Derecktor Shipyards, -- http://www.derecktor.com/--
builds yachts and commercial vessels. It also has operations in
New York and Florida. It delivered a 350-passenger fast ferry for
Bermuda in 2007. In 2006, the company won deals to build two
large vessels, which are currently under construction.
The Debtor filed its chapter 11 petition on July 18, 2008 (Bankr.
D. Conn. Case No. 08-50643). Judge Alan H.W. Shiff presides over
the case. James Berman, Esq., at Zeisler and Zeisler, represents
the Debtor in its restructuring efforts. The Debtor disclosed
assets of between $10,000,000 and $50,000,000 and debts of between
$10,000,000 and $50,000,000.
DOUBLE JJ: Court Okays October 30 Auction Sale of Resort
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Western District of
Michigan has allowed the auction of Double JJ Resort, which closed
its doors on Sept. 3, 2008, to proceed on Oct. 30, 2008. The sale
will cover all or parts of the 2,000-acre resort, Dave Alexander
of the Muskegon Chronicle reports.
According to Mr. Alexander, court documents show that the resort
owes secured creditors more than $22 million.
As reported in the Troubled Company Reporter on Sept. 10, 2008,
Thomas A. Bruinsma, the court-appointed trustee overseeing Double
JJ Resort Ranch Inc.'s operations, asked the Court to step up the
sale of the resort's asset, saying that postponing the sale will
increase administrative expenses, impacting the possibility of a
distribution to the unsecured creditors of the Debtors' estate.
The resort property, near Muskegon, includes a championship golf
course, hotel and conference center, horses and riding trails, and
Friday night rodeo. A $12 million indoor waterpark opened less
than two years ago.
About Double JJ
Double JJ Resort Ranch operates a resort in Rothbury, Michigan.
The Debtor filed for Chapter 11 bankruptcy on July 18, 2008
(Bankr. W.D. Mich. 08-06296). Steven L. Rayman, Esq., at Rayman &
Stone, and Michael S. McElwee, Esq., at Varnum, Riddering, Schmidt
& Howlett, LLP, represents the Debtor as counsel. When the Debtor
filed for protection from its creditors, it listed $0 to $50,000
in total assets, and $0 to $50,000 in total debts.
DRIGGS FARMS: Court Okays Sale to Land-O-Sun Dairies
----------------------------------------------------
A bankruptcy court approved the sale of Driggs Farms of Indiana
Inc. to Johnson City, Tenn.-based Land-O-Sun Dairies in late
August, Scot Skekloff, Esq. a lawyer at Fort Wayne-based Skekloff,
Adelsperger & Kleven LLP, said, according to Greater Fort Wayne
(Ind.) Business Weekly.
Based in Decatur, Ind., Driggs Farms of Indiana Inc. manufactures
frozen desserts & novelties and dairy products. The company filed
for Chapter 11 protection on June 20, 2008 (N.D. Indiana Case No.
08-11955). Daniel J. Skekloff, Esq., at Skekloff, Adelsperger &
Kleven, LLP, represents the Debtor in its restructuring efforts.
Rothberg Logan & Warsco LLP is the Committee of Unsecured
Creditors' proposed counsel. When the Debtor filed for protection
from its creditors, it listed estimated assets of $10 million to
$50 million and debts of $10 million to $50 million.
EASIX FINANCE: Fitch Trims Two Notes Ratings to 'C/DR6' from 'B'
----------------------------------------------------------------
Fitch Ratings has taken these rating actions on EASIX Finance
Limited Credit-Linked notes, series 2007-1:
-- Class B-7 downgraded to 'B' from 'BB+' and placed on Rating
Watch Negative;
-- Class B-8 downgraded to 'CCC/DR2' from 'BB';
-- Class B-9 downgraded to 'CC/DR3' from 'BB';
-- Class B-10 downgraded to 'CC/DR3' from 'BB-';
-- Class B-11 downgraded to 'C/DR6' from 'B+';
-- Class B-12 downgraded to 'C/DR6' from 'B'.
The rating actions were taken as part of Fitch's ongoing
surveillance process of existing transactions.
EASTERN CONCRETE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Eastern Concrete Foundation, Inc.
7950 Penn Randall Place
Upper Marlboro, MD 20773
Bankruptcy Case No.: 08-21689
Type of Business: The Debtor is a heavy construction company.
Chapter 11 Petition Date: September 11, 2008
Court: District of Maryland (Greenbelt)
Judge: Paul Mannes
Debtor's Counsel: Stephen W. Nichols, Esq.
snichols@deckelbaum.com
Deckelbaum Ogens & Raftery, Chtd.
3 Bethesda Metro Ctr., Suite 200
Bethesda, MD 20814
Tel: (301) 961-9200
http://www.deckelbaum.com/
Estimated Assets: Unknown
Estimated Debts: $1,000,000 to $10,000,000
A copy of Eastern Concrete Foundation, Inc's petition is available
for free at http://bankrupt.com/misc/mdb08-21689.pdf
FORTUNOFF: Completes Liquidation, Court Dismisses Chapter 11 Cases
------------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York has determined that Fortunoff Fine Jewelry and Silverware
LLC and its debtor-affiliates have (i) completed the winding up of
their business affairs, (ii) have either fully liquidated their
assets or abandoned those assets of inconsequential value not
reasonably capable of liquidation, and (iii) no prospect of any
distribution to holders of prepetition priority, general unsecured
claims or equity holders.
Accordingly, Judge James M. Peck dismissed the Debtors' Chapter 11
cases on Sept. 11, 2008, subject to the Debtors' filing of a
notice with the Court confirming their distribution to certain
allowed administrative claim holders.
Judge Peck of the United States Bankruptcy Court for the Southern
District of New York dismissed' Chapter 11 cases on Sept. 11,
2008, subject to the Debtors' filing of a notice with the Court
confirming their distribution to certain allowed administrative
claim holders.
The Court has determined that the Debtors have (i) completed the
winding up of their business affairs, (ii) have either fully
liquidated their assets or abandoned those assets of
inconsequential value not reasonably capable of liquidation, and
(iii) no prospect of any distribution to holders of prepetition
priority, general unsecured claims or equity holders.
A list of Postpetition Administrative Claimants to be paid by the
Debtors is available for free at:
http://bankrupt.com/misc/Fortunoff_PostpetitionAdminClaims.pdf
The Court authorized the Debtors to make distributions provided
for by the Term D Stipulation and the order dated March 6, 2008,
approving the sale of substantially all of their assets.
The payments to be made to the administrative claimants pursuant
to the Stipulation will be in full satisfaction of any
administrative claim filed in the Debtors' cases regardless of
the filed amount of the administrative claim.
Upon the filing of the final Certificate of Distribution:
-- the Debtors' one corporation and two limited liability
companies will be dissolved;
-- the Official Committee of Unsecured Creditors and the
Debtors' board of directors will be disbanded; and
-- the services of Logan and Company, Inc. -- the Debtors'
claims agent -- will be terminated.
Any professional employed by the Debtors or retained by the
Creditors Committee will file with the Court not later than
Oct. 11, 2008, a final application for allowance of
compensation, reimbursement of expenses and payment of any
holdbacks in connection with services rendered by the
Professional during the period from the Petition Date through
September 11.
Fees and expenses awarded pursuant to any Final Fee Application
will be paid from the Wind-Down Reserve or the Debtors' operating
account in accordance with, and subject to, the terms of the
Stipulation.
The Debtors will pay all required fees to the Office of the
United States Trustee, with a final payment being made
promptly upon the filing of the final Certificate of
Distribution.
The Court will convene a hearing to consider the final fee
applications of the professionals on Nov. 6, 2008, at 10:00 a.m.
Any and all of the Debtors' unexpired leases or executory
contracts not previously assumed and assigned to a third party or
rejected will be rejected pursuant to Section 365(a) of the
Bankruptcy Code, the Court stated.
No prepetition rejection damage claims need be filed, and no bar
date for the claims need be set, because there will not be a
distribution to holders of prepetition general unsecured claims,
Judge Peck held.
In addition, the Court denied as moot all pending motions for
payment of administrative claims pursuant to Section 503(b)(9) of
the Bankruptcy Code and motions asserting rights to reclaim goods
sold to the Debtors .
Judge Peck held that:
-- all transactions implemented by the Debtors as authorized
by the Court or the Bankruptcy Code during the pendency of
their bankruptcy proceedings from the Petition Date through
September 11, 2008 are ratified;
-- all orders entered in the Debtors' Chapter 11 cases prior
to September 11 will remain effective after the dismissal;
and
-- the Court will retain exclusive jurisdiction to enforce and
support its orders, including the Dismissal Order.
Notwithstanding the dismissal of the Debtors' Chapter 11 cases,
the Court's Final DIP Financing Order will continue to bind the
parties, and the releases and waivers contained in the Final DIP
Financing Order will survive dismissal of the Debtors' bankruptcy
proceedings.
Judge Peck overruled all objections to the Debtors' Dismissal
Motion.
A full-text copy of the Court's Dismissal Order is available for
free at:
http://bankrupt.com/misc/OrderClosingCases.pdf
The Term D Stipulation
Judge Peck ruled that the Stipulation is a final order of the
Court, effective on Sept. 11, 2008.
Subject to the terms of the Stipulation, the Court modified the
automatic stay to permit Trimaran Fund Management LLC, as
administrative and collateral agent of the Term D Lenders, to
exercise its rights as a secured creditor of the Debtors against
the Term D Collateral including, without limitation, its rights
to pursue, settle, compromise or abandon any outstanding
receivables without further Court approval, except for an
insurance receivable for $91,147.
A full-text copy of the Debtors' Outstanding Receivables is
available for free at:
http://bankrupt.com/misc/Fortunoff_OutstandingReceivables.pdf
Notwithstanding the Debtors' undisputed liens on the Term D
Collateral, in order to complete the wind down of the Chapter 11
Cases in an orderly and efficient manner and in consideration of
the Debtors' time and effort in collecting, liquidating, and
safeguarding the Term D Collateral, the lenders agreed pursuant
to a Court-approved stipulation to permit a gift and charge
against the Term D Cash Collateral to pay up to $850,000 of the
Debtors' winding down expenses.
The Debtors will remit the Term D Cash Collateral to the Term D
Agent on or before Sept. 16, 2008; provided, however, that
the Debtors will retain in their operating account (a) $850,000
of the Term D Collateral for the purpose of making the Permitted
Payments; and (b) a disputed Term D Collateral pending a
resolution.
To recall, the Debtors sought the dismissal of their cases after
entering into negotiations with their secured lenders.
"It is entirely reasonable under the circumstances to approve the
stipulation and to dismiss the case," Reuters quotes Judge Peck,
as saying.
"The benefit [of the dismissal] was keeping 3,000 employees
employed and stores open," Frank Oswald, Esq., at Togut Segal &
Segal LLP, in New York, counsel for the Debtors, told Reuters.
Uneek's Objection
Prior to the Court' Dismissal Order, the Debtors addressed an
objection filed by Uneek Jewelry, Inc. Uneek contended that
dismissal of the Debtors' bankruptcy cases is not in the best
interest of their creditors.
The Debtors disputed Uneek's statement and held that dismissal of
their cases will result in the payment of up to $850,000 in
postpetition wind-down costs that would not be paid if their
Chapter 11 cases were converted to Chapter 7.
The Debtors argued equality of distribution is not a relevant
consideration at this point because they do not seek approval of
a pre-confirmation settlement but, rather, the Debtors' secured
creditor is making a gift or permitting charge against collateral
in which it holds a perfected and undisputed security interest.
The Debtors reminded the Court that while vendors like Uneek hold
administrative claims, there's just no money to pay them as the
proceeds of the sale of substantially all of the Debtors' assets
were not enough to pay any portion of the Debtors' obligations to
their junior secured lenders, which obligations exceed
$19,000,000 and remain secured by a valid and perfected lien.
About Fortunoff Fine Jewelry and Silverware LLC
New York-based Fortunoff Fine Jewelry and Silverware LLC --
http://www.fortunoff.com/-- started out as a family-owned
business founded by Max and Clara Fortunoff in 1922, until it
merged with M. Fortunoff of Westbury, L.L.C. and Source Financing
Corporation in 2004. Fortunoff offers customers fine jewelry and
watches, antique jewelry and silver, everything for the table,
fine gifts, home furnishings including bedroom and bath, fireplace
furnishings, housewares, and seasonal shops including outdoor
furniture shop in summer and enchanting Christmas Store in the
winter. It opened some 20 satellite stores in the New Jersey,
Long Island, Connecticut and Pennsylvania markets featuring
outdoor furniture and grills during the Spring/Summer season and
indoor furniture (and in some locations Christmas trees and decor)
in the Fall/Winter season.
Fortunoff and its two affiliates filed for chapter 11 petition on
Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355)
in order to effectuate a sale to NRDC Equity Partners LLC, --
http://www.nrdcequity.com/-- a private equity firm that bought
Lord & Taylor from Federated Department Stores.
Due to the U.S. Trustee's objection, Fortunoff backed out of
its request to employ Skadden Arps Meagher & Flom LLC, as
bankruptcy counsel. Fortunoff hired Togut Segal & Segal LLP,
as their general bankruptcy counsel instead, but Skadden Arps will
continue to serve the Debtors as special counsel in connection
with the sale the Debtors' assets. Logan & Company, Inc., serves
as the Debtors' claims, noticing, and balloting agent. FTI
Consulting Inc. are the Debtors' proposed crisis manager.
An Official Committee of Unsecured Creditors has been appointed in
this case. Effective March 6, 2008, Morrison & Foerster LLP is
counsel to the Creditors Committee in substitution of Otterbourg
Steidler Houston & Rosen PC. Mahoney Cohen & Company, CPA, P.C.,
serves as financial advisor to the Creditors' Committee.
In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total
assets and $136,626,948 total liabilities; Source Financing Corp.
listed $154,680,100 total assets and $176,961,631 total
liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955
total assets and $119,985,788 total liabilities.
Fortunoff sold substantially all of their assets, including their
"Fortunoff" and "The Source" trademarks, on March 7, 2008, to NRDC
Equity Partners LLC's H Acquisition LLC, now known as Fortunoff
Holdings LLC.
(Fortunoff Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
FREMONT GENERAL: Panel May Employ Solon Group as Financial Advisor
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
granted the Official Committee of Unsecured Creditors in Fremont
General's bankruptcy case authority to retain Solon Group Inc. as
its financial advisor on the proposed CapitalSource transaction.
The proposed CapitalSource Transaction contemplates (1) the sale
of certain assets of Fremont Investment & Loan, its indirect,
wholly owned subsidiary, to CapitalSource Inc. or its designee and
(2) the assumption of FIL's deposits by CSE, which was completed
pursuant to the purchase and assumption agreement entered into on
April 13, 2008.
Deborah Hicks Midanek, president of Solon Group Inc., assured the
Court that the firm and its professionals are disinterested
persons who do not hold or represent an interest adverse to the
Debtor or the Debtor's estates.
Solon Group Inc. will be compensated on the basis of hourly fees,
subject to the Court's approval. Ms. Midanek told the Court she
charges at $650 per hour. The Court disallowed the provision of
the Panel's Engagement Agreement with Solon Group providing for a
minimum fee of $10,000.
About Fremont General
Based in Santa Monica, Calif., Fremont General Corp. (OTC: FMNTQ)
-- http://www.fremontgeneral.com/-- was a financial services
holding company with $8.8 billion in total assets, at Sept. 30,
2007. Fremont General ceased being a financial services holding
company on July 25, 2008, when its wholly owned bank subsidiary,
Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan)
completed the sale of its assets, including all of its 22
branches, and 100% of its $5.2 billion of deposits to
CapitalSource Bank.
Fremont General filed for Chapter 11 protection on June 18, 2008,
(Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq.,
and J. Maxwell Tucker, Esq., at Patton Boggs LLP, are the proposed
counsel for the Debtor. Theodore Stolman, Esq., and Scott H. Yun,
Esq., at Stutman Treister & Glatt, are the proposed co-counsel for
the Debtor. The Debtor selected Kurtzman Carson Consultants LLC
as its claims agent.
Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Jonathan D.
Petrus, Esq. at Klee, Tuchin, Bogdanoff & Stern LLP, represent the
Offical Committee of Unsecured Creditors as counsel.
In its schedules, Fremont General reported $362,227,537 in total
assets and $326,529,372 in total debts. When the Debtor filed for
protection from its creditors, it listed total assets of
$643,197,000 and total debts of $320,630,000.
FREMONT GENERAL: Panel May Employ Klee Tuchin as Counsel
--------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
granted the Official Committee of Unsecured Creditors appointed in
the Chapter 11 case of Fremont General Corp. authority to retain
Klee, Tuchin, Bogdanoff & Stern LLP as its counsel.
As counsel for the Creditors' Committee, Klee Tuchin will advise
and represent the Committee on all matters in the Debtor's Chapter
11 case pursuant to the Sec. 1103(c) of the Bankruptcy Code.
Lee R. Bogdanoff, Esq., a co-managing partner at Klee Tuchin,
assured the Court that the firm and all of the attorneys employed
by it are disinterested persons who do not hold or represent an
interest materially adverse to the Debtor and its estates.
Klee Tuchin professionals' billing rate:
Hourly Rate
-----------
Partners $550-$925
Associates $365-$475
Paralegal $195
Attorneys who are expected to be most active in the Debtor's case
and their billing rates:
Hourly Rate
-----------
Lee R. Bogdanoff, Esq. $815
Jonathan S. Shenson, Esq. $625
Jonathan D. Petrus, Esq. $450
About Fremont General
Based in Santa Monica, Calif., Fremont General Corp. (OTC: FMNTQ)
-- http://www.fremontgeneral.com/-- was a financial services
holding company with $8.8 billion in total assets, at Sept. 30,
2007. Fremont General ceased being a financial services holding
company on July 25, 2008, when its wholly owned bank subsidiary,
Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan)
completed the sale of its assets, including all of its 22
branches, and 100% of its $5.2 billion of deposits to
CapitalSource Bank.
Fremont General filed for Chapter 11 protection on June 18, 2008,
(Bankr. C.D. Calif. Case No. 08-13421). Robert W. Jones, Esq.,
and J. Maxwell Tucker, Esq., at Patton Boggs LLP, are the proposed
counsel for the Debtor. Theodore Stolman, Esq., and Scott H. Yun,
Esq., at Stutman Treister & Glatt, are the proposed co-counsel for
the Debtor. The Debtor selected Kurtzman Carson Consultants LLC
as its claims agent.
In its schedules, Fremont General reported $362,227,537 in total
assets and $326,529,372 in total debts. When the Debtor filed for
protection from its creditors, it listed total assets of
$643,197,000 and total debts of $320,630,000.
GOODY'S CLOTHING: Texas Authorities Object to Plan Confirmation
---------------------------------------------------------------
The Texas Comptroller of Public Accounts and Texas Workforce
Commission asks the U.S. Bankruptcy Court for the District of
Delaware to deny confirmation of the First Amended Plan of
Reorganization proposed by Goody's Family Clothing Inc. and the
Official Committee of Unsecured Creditors. Specifically, the
Texas Authorities cite these defects in the Plan:
a. The Plan provides for reserves to cover various categories of
claims, but refers to a reserve only for "Allowed" priority
tax claims. The Texas Comptroller, which has filed priority
tax claims of more than $1.3 million in the Debtors' cases,
claims that because large amounts of priority tax claims may
be disputed, not reserving for them creates a substantial
risk of non-payment. The Texas Authorities argue that
reserves should be required for all priority tax claims as
filed and deemed allowed under Sec. 502(a) of the Bankruptcy
Code.
b. The definition of "Allowed Claims" in the Plan is unclear in
providing that "Allowed Claims" will not, for purposes of
distribution under Plan, include for Prepetition Claims
interest or any other amounts accruing on, in connection
with, or with respect to, such Allowed Claim from and after
the Petition Date." The Texas Authorities argue that the
definition should be revised because prepetition interest on
priority tax claims is entitled to priority status to the
same extent as tax principal.
c. The Plan attempts to create "exclusive jurisdiction in
this Court for a wide range of post-consummation matters,
including matters that belong in state or federal courts.
d. The Plan excludes default remedy language. Pursuant to
Sec. 1123(a)(5)(G), which requires that a plan provide
adequate means for the plan's implementation, "curing or
waiving any default" language should be added to the plan or
confirmation order.
e. The Plan attempts to create a deadline of 45 days from
the Effective Date for all requests for payment of
Administrative Claims. Post-petition statutory tax claims
should be excepted from the Administrative Claims bar date,
since 28 U.S.C. Sec. 960 requires such claims to be paid when
due.
f. The Plan would prevent tax authorities from asserting any tax
audit claims relating to the pre-Effective Date period.
There is no authority for such a provision as to tax audit
claims, and barring such claims would again violate 28 U.S.C.
Sections 959 and 960.
g. The Plan attempts to enjoin all setoff rights, including
those of tax authorities. Pursuant to Sec. 553, setoff
rights survive bankruptcy and are not affected by other
sections of the Bankruptcy Code, including Sec. 1141.
h. The Plan contains broad exculpation clauses that would
excuse exculpated parties' non-compliance with applicable
statutes, including tax laws.
As reported in the Troubled Company Reporter on Aug. 28, 2008,
the Hon. Christopher S. Sontchi approved on Aug. 24, 2008, an
amended disclosure statement explaining the amended joint Chapter
11 plan of reorganization filed by Goody's Family Clothing Inc.
and the Official Committee of Unsecured Creditors. He held that
the amended disclosure statement contains adequate information
within the meaning of Section 1125 of the Bankruptcy Code.
A hearing was set for Oct. 6, 2008, at 1:00 p.m., to consider
confirmation of the amended plan.
About Goody's Family
Headquartered in Knoxville, Tennessee, Goody's Family Clothing
Inc. -- http://www.shopgoodys.com/-- operates chains of clothing
stores. The company is owned by Goody's Holdings Inc., a non-
debtor entity. As of May 31, 2008, the company operates 355
stores in several states with approximately 9,868 personnel of
which 170 employees are covered under a collective bargaining
agreement. The company and 19 of its affiliates filed for Chapter
11 protection on June 9, 2008 (Bankr. D. Del. Lead Case No.08-
11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq., at
Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings, Esq.,
at Bass, Berry & Sims PLC, represent the Debtors. The Debtors
selected Logan and Company Inc. as their claims agent.
The U.S. Trustee for Region 3 appointed seven creditors to serve
on an Official Committee of Unsecured Creditors. Frederick Brian
Rosner, Esq., at Duane Morris LLP, and Lawrence C. Gottlieb, Esq.,
Cathy Herschopf, Esq., and Jeffrey L. Cohen, Esq., at Cooley
Godward Kronish LLP, represent the Committee in these cases.
When the Debtors filed for protection against their creditors,
they listed assets and debts between $100 million and $500
million. As of May 3, 2008, the Debtors' records reflected total
assets of $313,000,000 -- book value -- and total debts of
$443,000,000.
GREEKTOWN CASINO: Opens 25,000 Square Feet of New Gaming Space
--------------------------------------------------------------
Greektown Holdings, LLC launched 25,000 square feet of new gaming
space, adding about 600 of the latest and hottest slot machines to
the gaming floor, casino officials announced.
The casino now has 100,000 square feet of total gaming space. More
than 2,600 slot machines are now operational, with about 400
additional machines coming online when renovations to the casino's
VIP gaming area are completed in late November.
"With the latest slot machines available and the most convenient
attached parking among the Detroit casinos, we continue
improvements to position Greektown Casino for future revenue
growth and to provide the hottest gaming action to our guests,"
said Greektown Casino CEO Craig Ghelfi.
The expanded gaming floor features spacious aisles, a bank of $1
Wheel of Fortune progressive slot machines, and hundreds of other
penny, nickel and dollar games. New machines include TripleDouble
Diamond Free Games, Double Strike Gold, Super Lucky 2x3x4x5x Pay,
Super Times Pay Free Games, Lil Lady, Wolf Run, Lion Dance, Desert
Spirit, Mayan Riches, Arctic Fox, Lady Of The Lake, and Red Lions
1 For 1.
"We're pleased that work on our permanent Greektown Casino
continues to move forward largely on schedule and on budget, said
Greektown Casino Management Board Chairman Tom Miller, who is also
a member of the Board of Directors of the Sault Ste. Marie Tribe
of Chippewa Indians, the owners of the casino. "The many
improvements we are making increase the casino's revenue-
generating capacity and give our guests more ways to have fun."
Construction crews will now focus on completing two new lounges by
the end of the year, a new buffet restaurant this fall, a 400-room
attached hotel early next year, and renovations to the casino's
VIP slot area later this year. Once work on the permanent casino
is complete, Greektown Casino will offer five lounges, various new
restaurants, spectacular hotel and meeting accommodations, a
multi-purpose theater, and 3,000 slot machines.
In November 2007, Greektown Casino opened its new attached
parking structure, marking the completion of Phase 1 construction
work on the new permanent Greektown Casino. Phase 2 includes
construction of the new hotel and expanded gaming floor. Total
investment in the permanent Greektown Casino project will be
about $550 million.
About Greektown Casino
Based in Detroit, Michigan, Greektown Holdings, LLC and its
affiliates -- http://www.greektowncasino.com/-- operates world-
class casino gaming facilities located in Detroit's historic
Greektown district featuring more than 75,000 square feet of
casino gaming space with more than 2,400 slot machines, over 70
tables games, a 12,500-square foot salon dedicated to high limit
gaming and the largest live poker room in the metropolitan Detroit
gaming market.
Greektown Casino employs approximately 1,971 employees, and
estimates that it attracts over 15,800 patrons each day, many of
whom make regular visits to its casino complex and related
properties. In 2007, Greektown Casino achieved a 25.6% market
share of the metropolitan Detroit gaming market. Greektown Casino
has also been rated as the "Best Casino in Michigan" and "Best
Casino in Detroit" numerous times in annual readers' polls in
Detroit's two largest newspapers.
The company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No.
08-53104). Daniel J. Weiner, Esq., Michael E. Baum, Esq., and
Ryan D. Heilman, Esq., at Schafer and Weiner PLLC, represent the
Debtors in their restructuring efforts. Judy B. Calton, Esq., at
Honigman Miller Schwartz and Cohn LLP, represents the Debtors as
their special counsel. The Debtors chose Conway MacKenzie &
Dunleavy as their financial advisor, and Kurtzman Carson
Consultants LLC as claims, noticing, and balloting agent.
When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to
$500 million. (Greektown Casino Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
HERCULES INC: S&P Retains Negative Watch on Pending Ashland Deal
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its corporate credit
ratings on Ashland Inc. and Hercules Inc. remain on CreditWatch
with negative implications pending Ashland's acquisition of
Hercules in a transaction valued at about $3.6 billion. In
addition, Ashland's senior unsecured debt and Hercules'
$350 million 6.5% junior subordinated deferrable interest
debenture due June 20, 2029 (balance $216 million) remain on
CreditWatch with negative implications. The ratings were placed
on CreditWatch on July 11, 2008, when the transaction was
announced.
The transaction is subject to regulatory and Hercules shareholder
approval and is expected to close by the end of the 2008 calendar
year. S&P will resolve the CreditWatch upon closing of the
transaction.
"If the transaction is consummated as currently structured, we
expect to lower Ashland's corporate credit rating to 'BB' and
assign a negative outlook," said Standard & Poor's credit analyst
Cynthia Werneth.
S&P would lower the rating on Ashland's existing senior unsecured
debt to 'BB-' and assign a recovery rating of '5'. This would
indicate S&P's expectation of modest (10% to 30%) recovery for
these noteholders in the event of a payment default. S&P would
lower the rating on Hercules' debenture to 'B+', while leaving the
recovery rating unchanged at '6', indicating its expectation for
negligible (0% to 10%) recovery for these creditors in the event
of a payment default.
At the same time, based on preliminary terms and conditions, S&P
assigned a 'BBB-' senior secured bank loan rating and recovery
rating of '1' to Ashland's proposed $500 million five-year
revolving credit facility, $500 million five-year term loan A, and
$750 million seven-year term loan B. These ratings indicate S&P's
expectation of very high (90% to 100%) recovery in the event of a
payment default.
S&P also assigned a senior unsecured debt rating of 'BB-' and a
recovery rating of '5' to the company's proposed offering of
$750 million of senior unsecured notes due in 2016. These ratings
indicate S&P's expectation of modest (10% to 30%) recovery in the
event of a payment default.
Proceeds of the credit facility and notes, along with proceeds
from a planned $200 million accounts receivable program, cash on
hand, and about $450 million of new common equity will be used to
acquire Hercules.
In addition, S&P affirmed its ratings on Hercules' existing senior
secured credit facility and senior subordinated notes. S&P
expects this debt to be refinanced at closing of the transaction,
at which time S&P will withdraw the ratings.
>From a business risk perspective, the Hercules transaction is a
strong positive. It would add substantial specialty chemical
assets with favorable business risk characteristics, creating a
company with more than $10 billion in annual revenues and limited
vulnerability to economic cycles.
Although the transaction will be primarily debt-financed, it will
include about $450 million of stock, depending on Ashland's share
price. In addition, Ashland currently has very little book debt,
and the company plans to use a substantial amount of cash on hand
to finance the Hercules acquisition. As a result, S&P expects
Ashland's total adjusted debt pro forma for the transaction
to be about $3.3 billion. S&P would adjust debt to include about
$360 million of after-tax pension and other postretirement
obligations, $230 million of estimated, tax-effected asbestos
liabilities, and $210 million of capitalized operating leases at
the combined company. Pro forma funds from operations to adjusted
total debt will be in the mid- to upper-teens percentage area.
Following this acquisition, S&P expects Ashland to use the
majority of discretionary cash flow to reduce debt, so that the
FFO to debt ratio strengthens to the 20%-25% range it deems
appropriate at the 'BB' rating.
The prospective negative outlook addresses the fact that S&P would
lower the ratings if credit measures do not show steady
improvement or if the cushion related to maintaining compliance
with financial covenants within the credit agreements
deteriorates. While S&P expects Ashland's operating results to
strengthen, business challenges could include weaker-than-expected
economic conditions, higher raw material cost inflation,
unfavorable trends with respect to asbestos or environmental
outlays, or additional acquisitions or shareholder initiatives.
HINES HORTICULTURE: May Employ Kirkland & Ellis as Counsel
----------------------------------------------------------
Hines Horticulture, Inc. and Hines Nurseries, Inc. obtained
permission from the Hon. Kevin J. Carey of the U.S. Bankruptcy
Court for the District of Delaware to employ Kirkland & Ellis, LLP
as their bankruptcy counsel, nunc pro tunc to the bankruptcy
filing.
Kirkland & Ellis will, among other things, advise the Debtors with
respect to their powers and duties as debtors-in-possession in the
continued management and operation of their business and
properties.
The firm will bill at these hourly rates:
Partners $500 - $975
Of Counsel $380 - $870
Associates $275 - $595
Paraprofessionals $120 - $260
On June 3, 2008, the Debtors paid the firm $200,000 as a classic
retainer.
The Debtors related to the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the U.S.
Bankruptcy Code.
Counsel's contact information:
Ray C.Schrock, Esq.
Anup Sathy, P.C.
Ross M. Kwasteniet, Esq.
Kirkland & Ellis, LLP
200 East Randolph Drive
Chicago, IL 60601-6636
Tel: (312) 861-2000
Fax: (312) 861-2200
http://www.kirkland.com
About Hines Horticulture
Headquartered in Irvine, California, Hines Horticulture, Inc. --
http://www.hineshorticulture.com/-- operates nursery facilities
located in Arizona, California, Oregon and Texas. Through its
affiliate, the company produces and distributes horticultural
products. As of August 2008, the Debtors employed about 1,600
workers.
The company and its affiliate, Hines Nurseries, Inc., filed for
Chapter 11 protection on Aug. 20, 2008 (Bankr. D. Del. Case No.08-
11922). Anup Sathy, Esq., and Ross M. Kwasteniet, Esq., at
Kirkland & Ellis, LLP, represent the Debtors in their
restructuring efforts. Robert S. Brady, Esq., and Edmon L.
Morton, Esq., at Young, Conaway, Stargatt & Taylor, serve as the
Debtors' co-counsel. The Debtors selected Epiq Bankruptcy
Solutions LLC as their voting and claims agent, and Financial
Balloting Group LLC as their securities voting agent. When the
Debtors filed for protection against their creditors, they listed
assets and debts of between $100 million and $500 million each.
HINES HORTICULTURE: May Employ Young Conaway as Local Counsel
-------------------------------------------------------------
Hines Horticulture, Inc. and Hines Nurseries, Inc. obtained
permission from Hon. Kevin J. Carey of the U.S. Bankruptcy Court
of the District of Delaware to employ Young Conaway Stargatt &
Taylor, LLP as their local counsel, nunc pro tunc to the
bankruptcy filing.
Young Conaway will assist the Debtors and the Debtors' primary
counsel, Kirkland & Ellis, LLP in this case.
Young Conaway's professionals will bill at these hourly rates:
Robert S. Brady, Esq. $560
Edmon L. Morton, Esq. $430
Kenneth J. Enos, Esq. $290
Margaret B. Whiteman, Esq. $290
Anastasia M. Joseck $115
The Debtors related to the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the U.S.
Bankruptcy Code.
The local counsel's contact information:
Robert S. Brady, Esq.
Edmon L. Morton, Esq.
Young Conaway Stargatt & Taylor, LLP
The Brandywine Building
1000 West Street, 17th Floor
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
http://www.ycst.com
About Hines Horticulture
Headquartered in Irvine, California, Hines Horticulture, Inc. --
http://www.hineshorticulture.com/-- operates nursery facilities
located in Arizona, California, Oregon and Texas. Through its
affiliate, the company produces and distributes horticultural
products. As of August 2008, the Debtors employed about 1,600
workers.
The company and its affiliate, Hines Nurseries, Inc., filed for
Chapter 11 protection on Aug. 20, 2008 (Bankr. D. Del. Case No.08-
11922). Anup Sathy, Esq., and Ross M. Kwasteniet, Esq., at
Kirkland & Ellis, LLP, represent the Debtors in their
restructuring efforts. Robert S. Brady, Esq., and Edmon L.
Morton, Esq., at Young, Conaway, Stargatt & Taylor, serve as the
Debtors' co-counsel. The Debtors selected Epiq Bankruptcy
Solutions LLC as their voting and claims agent, and Financial
Balloting Group LLC as their securities voting agent. When the
Debtors filed for protection against their creditors, they listed
assets and debts of between $100 million and $500 million each.
HINES HORTICULTURE: May Hire Miller Buckfire as Investment Banker
-----------------------------------------------------------------
Hines Horticulture, Inc. and Hines Nurseries, Inc. obtained
permission from the Hon. Kevin J. Carey of the U.S. Bankruptcy
Court for the District of Delaware to employ Miller Buckfire &
Co., LLC as their investment banker and financial advisor, nunc
pro tunc to the bankruptcy filing.
The Debtors related that Miller Buckfire is an independent
investment banker providing strategic and financial advisory
services in large-scale corporate restructuring transactions.
Miller Buckfire is principally owned and controlled by Henry S.
Miller and Kenneth A. Buckfire. Miller Buckfire has about 60
workers.
Miller Buckfire will, among other things, review and analyze the
Debtors' business, operations and financial projections.
The firm's fee structure includes:
a. a monthly financial advisory fee of $150,000;
b. a restructuring transaction fee contingent upon the
consummation of a restructuring and payable at the closing
equal to $500,000;
c. a sale transaction fee contingent upon the consummation of
a sale and payable at the closing equal to $500,000. The
amount of any sale transaction fee paid to the firm will
be credited but only once against any restructuring
transaction fee payable to the firm; and
d. reimbursement of out-of-pocket expenses.
The firm can be reached through:
Stuart Erickson, Managing Member
Miller Buckfire & Co., LLC
153 East 53rd Street, 22nd Floor
New York, NY 10022
http://www.millerbuckfire.com/
About Hines Horticulture
Headquartered in Irvine, California, Hines Horticulture, Inc. --
http://www.hineshorticulture.com/-- operates nursery facilities
located in Arizona, California, Oregon and Texas. Through its
affiliate, the company produces and distributes horticultural
products. As of August 2008, the Debtors employed about 1,600
workers.
The company and its affiliate, Hines Nurseries, Inc., filed for
Chapter 11 protection on Aug. 20, 2008 (Bankr. D. Del. Case No.08-
11922). Anup Sathy, Esq., and Ross M. Kwasteniet, Esq., at
Kirkland & Ellis, LLP, represent the Debtors in their
restructuring efforts. Robert S. Brady, Esq., and Edmon L.
Morton, Esq., at Young, Conaway, Stargatt & Taylor, serve as the
Debtors' co-counsel. The Debtors selected Epiq Bankruptcy
Solutions LLC as their voting and claims agent, and Financial
Balloting Group LLC as their securities voting agent. When the
Debtors filed for protection against their creditors, they listed
assets and debts of between $100 million and $500 million each.
HIOCEAN REALTY: Case Transferred to Long Island Bankruptcy Court
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
(Manhattan) transferred the chapter 11 case of Hiocean Realty LLC
to the U.S. Bankruptcy Court for the Eastern District of New York
(Long Island), William Rochelle of Bloomberg News writes.
Mr. Rochelle comments that New York and Delaware Bankruptcy Courts
seldom grant motions to change venue, especially to nearby courts.
The bankruptcy case involving a company of Christie Brinkley's
former husband, Peter Cook, is an exception. Mr. Cook owns a
mansion in the Hamptons in Long Island, Mr. Rochelle notes.
New York-based Hiocean Realty LLC and Brick Hill One Realty LLC
are controlled by Peter Cook. The Debtors filed their chapter 11
petition on Aug. 7, 2008 (Bankr. S.D.N.Y. Case No. 08-13106 and
08-13107). Judge Robert E. Gerber presides over the case. Arnold
Mitchell Greene, Esq., at Robinson Brog Leinwand Greene Genovese &
Gluck, P.C., represents the Debtors in their restructuring
efforts. The Debtors listed total assets of $11,518,000 and total
debts of $22,295,199.
IL LUGANO: Section 341(a) Meeting Slated for September 29
---------------------------------------------------------
The United States Trustee for the U.S. Bankruptcy Court for the
District of Connecticut will convene a meeting of creditors of IL
Lugano LLC at 2:00 p.m., on Sept. 29, 2008, at The Giaimo Federal
Building, 150 Court Street, Room 309 in New Haven, Connecticut.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Fort Lauderdale, Florida, IL Lugano LLC --
http://www.illugano.com/-- owns a hotel. The company filed for
chapter 11 protection on Aug. 29, 2008 (Bankr. D. Conn. Case No.
08-50811). James Berman, Esq., at Zeisler and Zeisler, represents
the Debtor. When the Debtor filed for protection from its
creditors, it listed assets between $50 million and $100 million
and debts between $1 million and $10 million.
INDYMAC TRUST: Moody's Cuts Ratings on 119 Tranches from 21 Deals
-----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 119
tranches from 21 Option ARM transactions issued by IndyMac. Of
these, 10 tranches remain on review for further possible
downgrade. Additionally, 23 senior tranches were confirmed at
Aaa. The collateral backing these transactions consists primarily
of first-lien, adjustable-rate, Alt-A mortgage loans.
Ratings were downgraded, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels. The
actions are a result of Moody's on-going review process.
Moody's Investors Service also takes action on certain insured
notes identified. The ratings on securities that are guaranteed
or "wrapped" by a financial guarantor is the higher of a) the
rating of the guarantor or b) the published underlying rating.
The underlying ratings reflect the intrinsic credit quality of the
notes in the absence of the guarantee. The current ratings on the
notes are consistent with Moody's practice of rating insured
securities at the higher of the guarantor's insurance financial
strength rating and any underlying rating that is public.
Complete rating actions are:
Issuer: IndyMac IMSC Mortgage Loan Trust 2007-HOA1
-- Cl. A-3, Currently Aaa, On Review for Possible Downgrade
Financial Guarantor: Financial Security Assurance Inc. (Aaa, On
Review for Possible Downgrade)
Underlying Rating: Baa3
-- Cl. AXPP, Confirmed at Aaa
-- Cl. B-1, Downgraded to Ba3 from A2
-- Cl. B-2, Downgraded to B1 from Baa3
-- Cl. B-3, Downgraded to B2 from Ba1; Placed Under Review for
further Possible Downgrade
-- Cl. B-4, Downgraded to B3 from B1; Placed Under Review for
further Possible Downgrade
-- Cl. B-5, Downgraded to Caa1 from B1
-- Cl. B-6, Downgraded to Caa2 from B1
-- Cl. B-7, Downgraded to Ca from B1
-- Cl. B-8, Downgraded to Ca from B2
-- Cl. B-9, Downgraded to Ca from Caa1
Issuer: IndyMac INDX Mortgage Loan Trust 2004-AR1
-- Cl. A-X-2, Confirmed at Aaa
-- Cl. B-2, Downgraded to Ba3 from Ba1
-- Cl. B-3, Downgraded to Ca from Caa2
Issuer: IndyMac INDX Mortgage Loan Trust 2004-AR13
-- Cl. B-1, Downgraded to A2 from Aa3
-- Cl. B-2, Downgraded to Ba2 from A3
-- Cl. B-3, Downgraded to B3 from Baa3
Issuer: IndyMac INDX Mortgage Loan Trust 2004-AR14
-- Cl. A-X-1, Confirmed at Aaa
-- Cl. A-X-2, Confirmed at Aaa
-- Cl. B-1, Downgraded to A2 from Aa3
-- Cl. B-2, Downgraded to Ba2 from Baa2
-- Cl. B-3, Downgraded to Caa2 from B3
Issuer: IndyMac INDX Mortgage Loan Trust 2004-AR2
-- Cl. A-X-1, Confirmed at Aaa
-- Cl. A-X-2, Confirmed at Aaa
-- Cl. B-1, Downgraded to A1 from Aa2
-- Cl. B-2, Downgraded to Baa2 from A2
-- Cl. B-3, Downgraded to Ba3 from Baa3
-- Cl. B-4, Downgraded to Ca from Caa1
Issuer: IndyMac INDX Mortgage Loan Trust 2004-AR5
-- Cl. A-X-2, Confirmed at Aaa
-- Cl. B-1, Downgraded to A1 from Aa2
-- Cl. B-2, Downgraded to Baa2 from A2
-- Cl. B-3, Downgraded to Ba2 from Baa3
-- Cl. B-4, Downgraded to Caa3 from B3
Issuer: IndyMac INDX Mortgage Loan Trust 2004-AR8
-- Cl. A-X-1, Confirmed at Aaa
-- Cl. A-X-2, Confirmed at Aaa
-- Cl. B-1, Downgraded to Baa1 from Aa2
-- Cl. B-2, Downgraded to Ba2 from Baa1
-- Cl. B-3, Downgraded to B3 from Ba2
-- Cl. B-4, Downgraded to Ca from Caa3
Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR10
-- Cl. A-3, Confirmed at Aaa
-- Cl. A-X, Confirmed at Aaa
Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR12
-- Cl. A-PO, Confirmed at Aaa
-- Cl. A-X-1, Confirmed at Aaa
-- Cl. A-X-2, Confirmed at Aaa
-- Cl. 2-A-1C, Downgraded to A2 from Aaa
-- Cl. 2-A-2, Downgraded to A2 from Aaa
-- Cl. B-1, Downgraded to Baa3 from A3
-- Cl. B-2, Downgraded to B2 from Ba3
-- Cl. B-3, Downgraded to Ca from Caa2
Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR14
-- Cl. 1-A-1B1, Confirmed at Aaa
-- Cl. 1-A-1B2, Downgraded to A3 from Aaa
-- Cl. 1-X, Confirmed at Aaa
-- Cl. 2-A-1C, Downgraded to A3 from Aaa
-- Cl. 2-X, Confirmed at Aaa
-- Cl. B-X, Downgraded to Baa3 from Aa2
-- Cl. B-1, Downgraded to Baa3 from A3
-- Cl. B-2, Downgraded to Ba2 from Baa1
-- Cl. B-3, Downgraded to B3 from Ba3
-- Cl. B-4, Downgraded to Caa2 from B3
Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR16IP
-- Cl. A-X, Confirmed at Aaa
-- Cl. B-1, Downgraded to A1 from Aa2
-- Cl. B-2, Downgraded to Ba1 from Baa1
-- Cl. B-3, Downgraded to B3 from Ba1
-- Cl. B-4, Downgraded to Ca from B3
Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR18
-- Cl. 1-A-3A, Downgraded to A2 from Aaa
-- Cl. 1-A-3B, Downgraded to Aa3 from Aaa
Financial Guarantor: Ambac Assurance Corporation (Aa3, negative
outlook)
Underlying Rating: A2
-- Cl. 2-A-3A, Downgraded to A2 from Aaa
-- Cl. 2-A-3B, Downgraded to Aa3 from Aaa
Financial Guarantor: Ambac Assurance Corporation (Aa3, negative
outlook)
Underlying Rating: A2
-- Cl. 1-X, Confirmed at Aaa
-- Cl. 2-X, Confirmed at Aaa
-- Cl. B-1, Downgraded to A3 from Aa1
-- Cl. B-X, Downgraded to A3 from Aa1
-- Cl. B-2, Downgraded to Ba1 from A3
-- Cl. B-3, Downgraded to B3 from Ba1
-- Cl. B-4, Downgraded to Caa2 from B2
-- Cl. B-5, Downgraded to Ca from B2
-- Cl. B-6, Downgraded to Ca from B3
Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR2
-- Cl. A-X-2, Confirmed at Aaa
Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR4
-- Cl. B-1, Downgraded to A3 from Aa3
-- Cl. B-2, Downgraded to Ba2 from Baa2
Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR8
-- Cl. A-PO, Confirmed at Aaa
-- Cl. A-X-2, Confirmed at Aaa
Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR12
-- Cl. A-3, Downgraded to A1 from Aaa
-- Cl. M-1, Downgraded to B2 from Aa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-2, Downgraded to Caa3 from B3
-- Cl. M-3, Downgraded to Ca from Caa1
-- Cl. M-4, Downgraded to C from Ca
Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR14
-- Cl. 1-A1B, Downgraded to Ba1 from Aaa
-- Cl. 1-A3B, Downgraded to Ba1 from Aaa
-- Cl. 1-A3BU, Downgraded to Ba1 from Aaa
-- Cl. 1-AX, Confirmed at Aaa
-- Cl. 2-A, Downgraded to Baa3 from Aaa
-- Cl. 2-AX, Downgraded to Baa3 from Aaa
-- Cl. M-1, Downgraded to B1 from Aa1
-- Cl. M-2, Downgraded to B2 from Baa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to Caa2 from B2
-- Cl. M-5, Downgraded to Ca from B2
-- Cl. M-6, Downgraded to Ca from B3
-- Cl. M-7, Downgraded to Ca from B3
-- Cl. M-8, Downgraded to Ca from Caa1
-- Cl. M-9, Downgraded to C from Ca
-- Cl. M-10, Downgraded to C from Ca
Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR2
-- Cl. 1-A-3A, Downgraded to Ba1 from Aaa
-- Cl. 1-A-3B, Downgraded to Aa3 from Aaa
Financial Guarantor: Ambac Assurance Corporation (Aa3, negative
outlook)
Underlying Rating: Ba1
-- Cl. 2-A-2, Downgraded to Aa3 from Aaa
Financial Guarantor: Ambac Assurance Corporation (Aa3, negative
outlook)
Underlying Rating: Ba1
-- Cl. M-1, Downgraded to B1 from Aa1; Placed Under Review for
further Possible Downgrade
-- Cl. M-2, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to Caa1 from Ba1
-- Cl. M-4, Downgraded to Caa3 from Ba3
-- Cl. M-5, Downgraded to Ca from B3
-- Cl. M-6, Downgraded to Ca from B3
-- Cl. M-7, Downgraded to C from Caa1
-- Cl. M-8, Downgraded to C from Ca
Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR4
-- Cl. A1-C, Downgraded to Ba1 from Aaa
-- Cl. A2-A, Downgraded to Baa3 from Aaa
-- Cl. M-1, Downgraded to B3 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-2, Downgraded to Caa1 from Ba3
-- Cl. M-3, Downgraded to Caa3 from B2
-- Cl. M-4, Downgraded to Ca from B3
-- Cl. M-5, Downgraded to Ca from Caa1
-- Cl. M-6, Downgraded to C from Ca
-- Cl. M-7, Downgraded to C from Ca
Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR6
-- Cl. 1-A-1B, Downgraded to Ba1 from Aaa
Financial Guarantor: Syncora Guarantee Inc. (B2, On Review for
Possible Upgrade)
Underlying Rating: Ba1
-- Cl. 2-A-1C, Downgraded to Ba1 from Aaa
Financial Guarantor: Syncora Guarantee Inc. (B2, On Review for
Possible Upgrade)
Underlying Rating: Ba1
-- Cl. M-1, Downgraded to B1 from A2
-- Cl. M-2, Downgraded to Caa1 from Ba2
-- Cl. M-3, Downgraded to Caa2 from B1
-- Cl. M-4, Downgraded to Ca from B2
-- Cl. M-5, Downgraded to Ca from B3
-- Cl. M-6, Downgraded to Ca from B3
-- Cl. M-7, Downgraded to C from Caa1
-- Cl. M-8, Downgraded to C from Caa3
-- Cl. M-9, Downgraded to C from Ca
Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR8
-- Cl. A3-B, Downgraded to A1 from Aaa
-- Cl. A4-B, Downgraded to A1 from Aaa
-- Cl. M-1, Downgraded to Ba2 from Aa1
-- Cl. M-2, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. M-3, Downgraded to B3 from Baa3; Placed Under Review for
further Possible Downgrade
-- Cl. M-4, Downgraded to Caa1 from Ba3
-- Cl. M-5, Downgraded to Caa2 from B2
-- Cl. M-6, Downgraded to Ca from B2
-- Cl. M-7, Downgraded to Ca from B3
INMAN SQUARE: Fitch Junks Ratings on Three Classes of Notes
-----------------------------------------------------------
Fitch has taken various actions on five classes of notes issued by
Inman Square Funding I, Ltd. and Inman Square Funding, I Inc.
These rating actions are the result of Fitch's review process and
are effective immediately:
-- $17,432,029 Class I rated 'AA' remain on Rating Watch
Negative;
-- $7,000,000 Class II-Fixed downgraded to 'BB' from 'BBB+', and
remain on Rating Watch Negative;
-- $30,000,000 Class II-Floating Notes downgraded to 'BB' from
'BBB+', and remain on Rating Watch Negative;
-- $18,282,150 Class III downgraded to 'CCC' from 'BBB-', and
removed from Rating Watch Negative;
-- $3,417,466 Class IV-Fixed Notes downgraded to 'C' from 'BB+',
and removed from Rating Watch Negative;
-- $12,787,734 Class IV-Floating Notes downgraded to 'C' from
'BB+', and removed from Rating Watch Negative.
Fitch's rating actions reflect the credit deterioration within the
portfolio and underlying exposure to Alternative-A residential
mortgage-backed securities. As Fitch is reviewing its structured
finance collateralized debt obligation approach, the classes that
remain on Rating Watch Negative will have their watch status
resolved upon the completion of the SF CDO criteria.
Inman Square I is a CDO, which closed on Oct. 20, 2004 and is
managed by TCW Asset Management Company. The transaction's
revolving period ended in October 2006. Presently, 17.3% of the
portfolio is comprised of 2005 and 2006 vintage U.S. subprime
RMBS, 2.3% is comprised of 2005 and 2006 vintage U.S. Alt-A RMBS,
and 5.5% consists of pre-2005 vintage U.S. SF CDOs. Additionally,
11.8% of the portfolio is comprised of prime RMBS and a small
percentage of the portfolio consists of commercial asset-backed
securities and non-SF CDOs.
Since the last rating action in November 2007, 63.2% of the
portfolio has been downgraded with an additional 6.3% of
theportfolio currently on Rating Watch Negative. Approximately
86.7% of the portfolio is now rated below investment grade, of
which 46.6% is rated 'CCC+' or below. As per the latest trustee
report dated July 14, 2008, securities deemed to be in default
constituted 43.0%, or $66.3 million, of the portfolio total. The
negative credit migration experienced since the last review has
resulted in the Weighted Average Rating Factor deteriorating to
'BB/B+' as of the last trustee report from 'BB+/BB-'during the
last review, breaching its covenant of 'BB/BB-'.
The collateral deterioration has caused each of the
overcollateralization ratios and all but one the interest coverage
ratios to fall below their respective trigger levels. As of the
latest trustee report, the Class I/II OC ratio, the Class III OC
ratio and the Class IV OC ratio were 131.2%, 97.9% and 79.9%,
respectively, versus triggers of 138.9%, 128.9%, and 119.0%,
respectively. The Class I/II IC ratio, the Class III IC ratio and
the Class IV IC ratio were 172.2%, 111.1% and 83.5%, respectively,
versus triggers of 135.0%, 120.6%, and 115.0%, respectively.
At present, the transaction continues to make scheduled quarterly
interest distributions to the class I and II notes, subsequent to
which all other interest and principal proceeds are used to redeem
class I principal in an attempt to bring coverage test levels into
compliance. The class III and IV notes are currently not
receiving any interest or principal payments, however, Fitch
expects the class III notes to potentially receive some interest
and principal payments in the future. The class IV notes are not
expected to receive any future payments and have little prospect
of any principal recovery.
The ratings on the class I and the class II notes address the
likelihood that investors will receive full and timely payments of
interest, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date. The
ratings on the class III and the class IV notes address the
likelihood that investors will receive ultimate and compensating
interest payments, as per the governing documents, as well as the
stated balance of principal by the legal final maturity date. The
ratings are based upon the capital structure of the transaction,
the quality of the collateral, and the protections incorporated
within the structure.
JEFFERSON COUNTY: Rejects Banks' Plan to Increase Taxes
-------------------------------------------------------
Birmingham News reports that Jefferson County commissioners
rejected a proposal from banks and bond insurers to expand sales
and business taxes to help repay $3.2 billion of sewer debt.
Commission President Bettye Fine Collins said the plan reprises
previous attempts by creditors that failed for lack of political
support and may push the county into bankruptcy, according to the
report.
The report adds that county officials have offered to repay the
debt using only sewer-system revenue, increasing rates as much as
2.85 percent annually. The report continues to say that the plan
would require banks and bond insurers to incur losses, according
to the report.
Jefferson County faces bankruptcy after interest rates on
its adjustable-rate sewer bonds skyrocketed when companies that
insured them lost top credit ratings after incurring subprime
mortgage-related losses.
About Jefferson County
Jefferson County has its seat in Birmingham. It has a population
of 660,000. It ended its 2006 fiscal year with a $42.6 million
general fund balance, according to Standard & Poor's. The
Birmingham firm of Bradley Arant Rose & White, represents
Jefferson County. Porter, White & Co. in Birmingham is the
county's financial adviser. A bankruptcy by Jefferson County
stands to be the largest municipal bankruptcy in U.S. history. It
could beat the record of $1.7 billion, set by Orange County,
California in 1994.
* * *
As reported by the Troubled Company Reporter on June 10, 2008,
Standard & Poor's Ratings Services' ratings on Jefferson County,
Ala.'s series 1997A, series 2001A, series 2003 B-1-A through 2003
B-1-E, and series 2003 C-1 through 2003 C-10 sewer system revenue
bonds ('CCC' underlying rating [SPUR]) remain on CreditWatch with
developing implications.
As reported by the TCR on July 22, 2008, Moody's Investors
Service's continues to review the Caa3 rating on Jefferson
County's (AL) $3.2 billion in outstanding sewer revenue
warrants for possible downgrade.
JHT HOLDINGS: Court Sets October 17 Claims Bar Date
---------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware ordered
that each person or entity including, without limitation, each
individual, partnership, joint venture, corporation, estate, and
trust other than a Government Unit that asserts a claim, as
defined in Section 101(5) of the Bankruptcy Code, against JHT
Holdings, Inc. and its debtor-affiliates, that arose on or prior
to June 24, 2008, must file an original proof of claim by Oct. 17,
2008, at 5:00 p.m. (prevailing Eastern Time).
Each Government Unit that asserts a claim against any of the
Debtors that arose on or prior to June 24, 2008, must file a a
proof of claim by December 22, 2008.
About JHT Holdings
Headquartered in Kenosha, Wisconsin, JHT Holdings Inc. --
http://www.jhtholdings.com/-- and its affiliates provide over-
the-road transportation of various types of motor vehicles,
including commercial trucks and cars.
The Debtors have non-debtor foreign affiliates in Canada and
Mexico. Another Mexican affiliate, Mexicana Logistics, S.A. de
C.V. is owned 50% by JHT Holdings and 50% by Gustavo Vildosola, a
Mexican national with no connection to the Debtors.
JHT Acquisition Corp. owns all of the outstanding stock of JHT
Holdings. JHT Acquisition is a holding company owned by a group
of investors, MTGLQ Investors, L.P., D.B. Zwirn Special
Opportunities Fund, L.P., ZM Private Equity Fund I, Spectrum
Investment Partners, L.P. and Stonehouse Investment Company LLC.
The company and 16 of its affiliates filed for chapter 11
protection on June 24, 2008 (Bankr. D. Del. Lead Case No.
08-11267). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq.,
at Pepper Hamilton, LLP, represent the Debtors in their
restructuring efforts. The U.S. Trustee has appointed members to
the Official Committee of Unsecured Creditors to serve in this
case. Pachulski Stang Ziehl & Jones LLP represents the Creditors'
Committee. When the Debtors filed for protection against their
creditors, they listed assets and debts between $100 million and
$500 million.
JUPITER HIGH-GRADE: Fitch Cuts $13.94MM Class C Notes Rating to C
-----------------------------------------------------------------
Fitch has taken various rating actions on five classes of notes
issued Jupiter High-Grade CDO Ltd. and Jupiter High-Grade CDO Inc.
These rating actions are the result of Fitch's review process and
are effective immediately:
-- $391,564,845 Class A-1A rated 'AAA' placed on Rating Watch
Negative;
-- $91,137,406 Class A-1B rated 'AAA' placed on Rating Watch
Negative;
-- $82,500,000 Class A-2 rated 'AAA' placed on Rating Watch
Negative;
-- $41,250,000 Class B downgraded to 'B' from 'AA', remain on
Rating Watch Negative;
-- $13,943,334 Class C downgraded to 'C' from 'BBB', and removed
from Rating Watch Negative.
Fitch's rating actions reflect the credit deterioration within the
portfolio and underlying exposure to Alternative-A residential
mortgage-backed securities. As Fitch is reviewing its structured
finance collateralized debt obligation approach, the classes that
remain on Rating Watch Negative will have their watch status
resolved upon the completion of the SF CDO criteria.
Jupiter I is a static CDO, which closed on Dec. 2, 2004 and is
managed by Maxim Advisory LLC. Presently, 60.1% of the portfolio
is comprised of pre-2005 and 2005 vintage U.S. subprime RMBS,
11.5% is comprised of 2005 vintage U.S. Alt-A RMBS, and 13.9%
consists of pre-2005 and 2005 vintage U.S. SF CDOs. Additionally,
8.5% of the portfolio is comprised of prime RMBS and a small
percentage of the portfolio consists of non-SF CDOs.
Since the last rating action in July 2007, 23% of the portfolio
has been downgraded with an additional 14.8% of the portfolio
currently on Rating Watch Negative. Approximately 6.8% of the
portfolio is now rated below investment grade, of which 4.1% is
rated 'CCC+' or below. As per the latest trustee report dated
July 31st, 2008, defaulted and deferred interest payment in kind
securities constitute 1.2%, or $7.5 million, of the portfolio
total. The negative credit migration experienced since the last
review has resulted in the Weighted Average Rating Factor
deteriorating to 'A/A-' as of the last trustee report from
'AA+/AA' at the time of the last review, breaching its covenant of
AA/AA-'.
The collateral deterioration has caused each of the
overcollateralization ratios to fall below their respective
trigger levels. As of the latest trustee report, the class B OC
ratio and class C OC ratio were 100.6% and 98.4%, respectively,
versus triggers of 102.1% and 100.4%, respectively. At present,
the transaction continues to make scheduled quarterly interest
distributions to the class A-1, A-2, and B notes, using remaining
proceeds to reduce the principal of class A-1 notes in an attempt
to bring the coverage test levels in compliance. The class C
notes are currently not receiving any interest or principal
payments. Fitch does not expect these classes to receive any
payments in the future.
The ratings of the class A-1A, A-1B, A-2 and B notes address the
likelihood that investors will receive full and timely payments of
interest, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date. The rating
of the class C Notes addresses the likelihood that investors will
receive ultimate interest payments, as per the governing
documents, as well as the stated balance of principal by the legal
final maturity date. The ratings are based upon the capital
structure of the transaction, the quality of the collateral, and
the protections incorporated within the structure.
KEY DEVELOPERS: Bid for Condominium Projects Starts at $17MM
------------------------------------------------------------
Tampa Bay Business Journal reports that the minimum bid to
participate in the auction of Channelside's condominium projects
is $17.25 million. The price is about 24 cents on the dollar of
even the most conservative estimates of The Place's value at
$71.3 million, the report said.
According to the report, some say the value could be as high as
$83.1 million, or $350 a square foot.
As reported by the Troubled Company Reporter on Sept. 4, the U.S.
Bankruptcy Court for the Middle District of Florida authorized
Fisher Auction Co. Inc. to auction Key Developers Group LLC's
assets.
Fisher will auction Key Developers' The Place at Channelside,
which include 171 Condominiums at 911 & 918 Channelside Drive, in
Tampa, Florida.
The Place at Channelside had 245 units, about 171 of which are
unsold. It has two buildings and parking garage, and 12,930 plus
SF retail leasable space.
Property tours will be on Oct. 15, 2008, at 11:00 a.m. For
details, terms, property prospectus, visit
http://fisherauction.com,or call (800) 331-6620.
About Key Developers
Tampa, Florida-based Key Developers Group LLC is a real estate
developer. Its developments include a 469-unit, The Place at
Channelside I and II. The Place at Channelside I, an-8-floor
building, was completed in 2007, while The Place at Channelside
II, a 32-floor building, was never built. Its president is Fida
Sirdar Hussain. Key Developers filed for chapter 11 on March 5,
2008 (Bankr. M.D. Fla. Cas No. 08-02929). Scott A. Stichter,
Esq., at Stichter, Riedel, Blain & Prosser PA, represents the
Debtor in its restructuring efforts.
When it filed for bankruptcy, the Debtor disclosed $100 million to
$500 million in estimated assets, and $50 million to $100 million
in estimated debts.
KLEROS PREFERRED: Fitch Takes Rating Actions on Five Note Classes
-----------------------------------------------------------------
Fitch has taken various rating actions on five classes of notes
issued by Kleros Preferred Funding Ltd. and Kleros Preferred
Funding Inc. These rating actions are the result of Fitch's
review process and are effective immediately:
-- $705,179,763 Class A-1 downgraded to 'BBB' from 'AAA', and
placed on Rating Watch Negative;
-- $60,614,986 Class A-2 downgraded to 'BB' from 'AAA' and
placed on Rating Watch Negative;
-- $45,571,851 Class B downgraded to 'CCC' from 'AA', and
removed from Rating Watch Negative;
-- $11,252,699 Class C downgraded to 'C' from 'A-', and removed
from Rating Watch Negative;
-- $7,378,696 Class D downgraded to 'C' from 'BBB', and removed
from Rating Watch Negative.
Fitch's rating actions reflect the credit deterioration within the
portfolio and underlying exposure to Alternative-A residential
mortgage-backed securities. As Fitch is reviewing its structured
finance collateralized debt obligation approach, the classes that
remain on Rating Watch Negative will have their watch status
resolved upon the completion of the SF CDO criteria.
Kleros I is a static CDO, which closed on June 3, 2005 and is
managed by Strategos Capital Management, LLC. Presently, 34.2% of
the portfolio is comprised of 2005 vintage U.S. subprime RMBS,
11.5% is comprised of 2005 vintage U.S. Alt-A RMBS, and 13.9%
consists of pre-2005 and 2005 vintage U.S. SF CDOs. Additionally,
8.4% of the portfolio is comprised of prime RMBS and a small
percentage of the portfolio consists of non-SF CDOs.
Since the last rating action in January 2007, 23.2% of the
portfolio has been downgraded with an additional 6.9% of the
portfolio currently on Rating Watch Negative. Approximately 10.0%
of the portfolio is now rated below investment grade, of which
5.4% is rated 'CCC+' or below. As per the latest trustee report
dated July 31, 2008, defaulted securities constitute 1.3%, or
$7.5 million, of the portfolio total. The negative credit
migration experienced since the last review has resulted in the
Weighted Average Rating Factor deteriorating to 'A-/BBB+' as of
the last trustee report from 'AA' during the last review,
breaching its covenant of 'AA-/A+'.
The collateral deterioration has caused each of the
overcollateralization ratios to fall below their respective
trigger levels. As of the latest trustee report, the class A/B OC
ratio was 99.6% and the class C/D OC ratio was 97.4% versus
triggers of 101.7% and 100.3%, respectively. At present, the
transaction continues to make scheduled quarterly interest
distributions to the class A-1, A-2, and B notes, using remaining
proceeds to reduce the principal of class A-1 notes in an attempt
to bring the coverage test levels in compliance. The class C and
D notes are currently not receiving any interest or principal
payments. Fitch does not expect these classes to receive any
payments in the future.
The ratings of the class A-1, A-2 and B notes address the
likelihood that investors will receive full and timely payments of
interest, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date. The
ratings for classes C and D address the likelihood that investors
will receive ultimate and compensating interest payments, as per
the governing documents, as well as the stated balance of
principal by the legal final maturity date. The ratings are based
upon the capital structure of the transaction, the quality of the
collateral, and the protections incorporated within the structure.
LEHMAN BROTHERS: Goes Belly-Up In Biggest Bankruptcy Ever
---------------------------------------------------------
Lehman Brothers Holdings Inc. filed a petition under Chapter 11 of
the U.S. Bankruptcy Code with the United States Bankruptcy Court
for the Southern District of New York early morning on September
15.
None of the broker-dealer subsidiaries or other subsidiaries of
LBHI were included in the Chapter 11 filing and all of the broker-
dealers will continue to operate. Customers of Lehman Brothers,
including customers of its wholly owned subsidiary, Neuberger
Berman Holdings, LLC, may continue to trade or take other actions
with respect to their accounts.
The Board of Directors of LBHI authorized the filing of the
Chapter 11 petition in order to protect its assets and maximize
value. In conjunction with the filing, LBHI intends to file a
variety of first day motions that will allow it to continue to
manage operations in the ordinary course. Those motions include
requests to make wage and salary payments and continue other
benefits to its employees.
Ian T. Lowitt, Lehman's chief financial officer, controller, and
executive vice president, said that Lehman was materially affected
by conditions in the global financial markets and worldwide
economic conditions. For most of 2008, Lehman Brothers operated
in an extremely unfavorable global business environment.
"Conditions were characterized by a continued lack of liquidity in
the credit markets, significantly depressed volumes in most equity
markets, a widening in certain fixed income credit spreads
compared to the end of the 2007 fiscal year, and declining asset
values."
"The hardships," Mr. Lowitt continued, were compounded by slowed
growth in major economies as a result of declining business and
consumer confidence. Global inflation rose amid slowing economic
growth. Commodity prices rose significantly during the quarter,
with oil and gold reaching record levels, raising costs of
industrial production. Central banks' concerns about exacerbating
inflationary conditions limited their ability to effect monetary
policies intended to provide liquidity within the markets."
For the quarter ending August 31, 2008, Lehman posted a
preliminary net loss of $3.9 billion, compared to an $887 million
net income for the same quarter in 2007. The $3.9 billion loss,
Bloomberg said, is Lehman's biggest loss in history. For the
quarter ended May 31, 2008, Lehman posted $2.7 billion in losses,
and $489 million in income for the quarter ended Feb. 29, 2008.
The net loss, according to a company statement, was driven
primarily by gross mark-to-market adjustments stemming from
writedowns on commercial and residential mortgage and real
estates.
LBHI is exploring the sale of its broker-dealer operations and is
in advanced discussions with a number of potential purchasers to
sell its Investment Management Division. LBHI intends to pursue
those discussions as well as a number of other strategic
alternatives.
Neuberger Berman, LLC and Lehman Brothers Asset Management will
continue to conduct business as usual and will not be subject to
the bankruptcy case of its parent, and its portfolio management,
research and operating functions remain intact. In addition, fully
paid securities of customers of Neuberger Berman
are segregated from the assets of Lehman Brothers and are not
subject to the claims of Lehman Brothers Holdings' creditors.
Sean Egan of Egan-Jones rating agency, says Lehman's bankruptcy
"wo[n]'t have as big an impact" as the bankruptcy of Fannie Mae
or Freddie Mac, Bear Stearns Cos., or Countrywide Financial Corp.
would have had. "What the market has been telling us is that
Lehman's equity and assets don't cover its liabilities, so the
debt isn't worth 100 cents on the dollar," Mr. Egan said. "That
means credit default swaps on Lehman's debt will be triggered."
Martin Bienenstock, Esq., a prominent corporate restructuring
lawyer at Dewey & LeBeouf, who represents several Lehman
creditors, told Bloomberg that, in the short term, there will
regrettably be losers including creditors, investors and the
capital markets."
The International Swaps and Derivatives Association, according to
WSJ, said a "netting trading session" took place between 2:00
p.m. and 6:00 p.m. Sunday night, to reduce risks associated with
Lehman's bankruptcy.
In its bankruptcy petition, Lehman estimated that funds will be
available for unsecured creditors. Lehman believes that it has
more than 100,000 creditors.
Senior unsecured debt-holders of Lehman may receive 60 cents to
80 cents on the dollar in a bankruptcy filing, research firm
CreditSights said Sept. 14. Early quotations on Lehman senior
debt show the bonds trading in the 32 cents to 35 cents range,
CreditSights said. Secured creditors could receive 100%
recovery, according to analyst David Hendler, who co-authored the
report. Lehman owes $149 billion in bond debt.
Possible Liquidation
Bloomberg said Lehman has access to a lending facility for
brokers that would permit an orderly process for unwinding the
firm. A group of banks, Bloomberg said, citing people familiar
with the matter, is also negotiating a fund to lend to troubled
financial firms and shore up investor confidence.
The WSJ said many Wall Street firms conceded that a liquidation
of Lehman's assets likely would proceed in an orderly fashion. A
liquidation of Lehman's assets would allow other firms to quickly
buy real estate, securities, and other investments, preventing
the assets from flooding the market. Because of this, the WSJ
said some participants in the Fed talks decided that "liquidation
was no worse an option that selling Lehman to a buyer such as
Barclays."
"There will be an orderly wind down," the WSJ quoted one
unidentified banker involved in the matter as saying. "This was
the default option. It happens when you have no buyer." The WSJ
further said that the outside firms decided that instead of
making guarantees for Barclays or some other purchaser of Lehman,
they would prefer to pool their resources and buy the assets
themselves, taking on the risks and carrying costs, along with
the possibility of profiting down the road. Those firms, the WSJ
said, would likely then buy assets such as mortgage-backed
securities, leveraged loans, private-equity positions and
investments in real estate or hedge funds.
Talks Continue with Barclays PLC
Lehman Brothers was negotiating on Monday a last-minute plan to
sell its assets to Barclays PLC, before too many workers and
clients leave the company, which could cause the assets' value to
decline, Jeffrey McCracken, Matthew Karnitschnig, Carrick
Mollenkamp, and Susanne Craig at the Wall Street Journal reports.
A person involved in the talks said that Barclays Americas
chairperson Archibald Cox was leading the talks, and an agreement
is hoped to be reached today, Sept. 16, WSJ reports.
The planned sale, says WSJ, would fold Lehman's core business --
underwriting stocks and bonds, providing merger advice, and
securities trading -- into Barclays. "The assets will be moved as
soon as possible," WSJ quoted a person working on the Lehman
bankruptcy.
Barclays was not expected to take on Lehman's operations in Europe
and Asia, WSJ relates.
According to WSJ, Barclays held discussions about buying Lehman
before the bankruptcy filing. Barclays remains interested in
Lehman's U.S. broker-dealer unit, WSJ states.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
As of May 31, 2008, the Company's consolidated assets totaled
approximately $639 billion, and its consolidated liabilities
totaled $613 billion.
Lehman's bankruptcy petition listed $639 billion in assets and
$613 billion in debts, effectively making the firm's bankruptcy
filing the largest in U.S. history. The September 15 Chapter 11
filing by Lehman Brothers Holdings, Inc., does not include any of
its subsidiaries.
LEHMAN BROTHERS: European Unit Placed Into Administration
---------------------------------------------------------
Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis,
partners at PricewaterhouseCoopers LLP, were appointed as joint
administrators to Lehman Brothers International (Europe) on
September 15, 2008.
Lehman Brothers, the principal UK trading company in the Lehman
group, was placed into administration, together with Lehman
Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are
currently the only UK incorporated companies in administration.
The joint administrators have been appointed to wind down the
business in as orderly a manner as possible.
Tony Lomas, joint administrator and partner of
PricewaterhouseCoopers LLP emphasised, "Because the group managed
its funding on a global basis the
UK trading operation found itself unable to meet its obligations
when the flow of funds dried up last night. Our priority now is to
work with management and trading counterparties to agree the
manner in which the assets and liabilities will be handled.
"I would also like to emphasise that a number of group companies
remain solvent and will continue to trade. These companies include
LBAM (Europe) and a series of special purpose vehicles designed to
manage portfolios of residential and commercial real estate assets
and non performing loans."
About PricewaterhouseCoopers
PricewaterhouseCoopers -- http://www.pwc.com/-- provides
industry-focused assurance, tax and advisory services to build
public trust and enhance value for its clients and their
stakeholders. More than 146,000 people in 150 countries across
our network share their thinking, experience and solutions to
develop fresh perspectives and practical advice.
'PricewaterhouseCoopers' refers to PricewaterhouseCoopers LLP (a
limited liability partnership in the United Kingdom) or, as the
context requires, the PricewaterhouseCoopers global network or
other member firms in the network, each of which is a separate
and independent legal entity.
LEHMAN BROTHERS: Wants Bankruptcy Stay Enforced on Creditors
------------------------------------------------------------
Lehman Brothers Holdings Inc., seeks a ruling by the U.S.
Bankruptcy Court for the Southern District of New York enforcing
the so-called "automatic stay" in its Chapter 11 case.
Harvey Miller, Esq., at Weil, Gotshal & Manges LLP, in New York,
says a court order enforcing the automatic stay pursuant to the
Bankruptcy Code is required given the global nature of Lehman
Brothers' businesses and its extensive dealings with foreign
creditors.
Under Section 362 of the Bankruptcy Code, the filing of a
bankruptcy case triggers an injunction against the continuance of
an action by any creditor against the debtor or its property.
The automatic stay gives the debtor protection from its creditors
subject to the oversight of the bankruptcy judge.
"Many of the non-U.S. creditors affected by Section 362 of the
Bankruptcy Code are unaware of the significant protection it
provides to [Lehman Brothers]," Mr. Miller says. "A certain
amount of [Lehman Brothers'] assets are located around the globe,
which may further confuse a non-U.S. creditor that is
unaccustomed to the broad reach of the automatic stay."
Lehman Brothers holds regional headquarters in London and Tokyo
and a network of offices in Europe, the Middle East, Latin
America and the Asia Pacific region. It also holds memberships
or associate memberships on several principal international
securities and commodities exchanges.
"The existence of such an order, which Lehman Brothers will be
able to transmit to affected parties, will maximize the
protections afforded by Sections 362 of the Bankruptcy Code,"
Mr. Miller says. He further says that the automatic stay may not
be recognized by foreign creditors or tribunals unless embodied
in an order of the Court.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offers a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
As of May 31, 2008, the Company's consolidated assets totaled
approximately $639 billion, and its consolidated liabilities
totaled $613 billion.
Lehman's bankruptcy petition listed $639 billion in assets and
$613 billion in debts, effectively making the firm's bankruptcy
filing the largest in U.S. history. The September 15 Chapter 11
filing by Lehman Brothers Holdings, Inc., does not include any of
its subsidiaries.
LEHMAN BROTHERS: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Lehman Brothers Holdings Inc.
745 Seventh Avenue
New York, NY 10019
Bankruptcy Case No.: 08-13555
Type of Business: The Debtor is an investment bank. The
company serves the financial needs of
corporations, governments and municipalities,
institutional clients, and high net worth
individuals worldwide. Founded in 1850, Lehman
Brothers is involved in equity and fixed income
sales, trading and research, investment banking,
private investment management, asset management
and private equity. The company operates in three
segments: Capital Markets, Investment Banking, and
Investment Management. It has regional
headquarters in London and Tokyo, and operates in
a network of offices around the world. It has
about 28,000 full-time employees.
See: http://www.lehman.com/
Chapter 11 Petition Date: September 15, 2008
Court: Southern District of New York (Manhattan)
Debtor's Counsel: Harvey R. Miller, Esq.
harvey.miller@weil.com
Richard P. Krasnow, Esq.
Lori R. Fife, Esq.
Shai Y. Waisman, Esq.
Jacqueline Marcus, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
http://www.weil.com/
The Debtor's financial condition as of May 31, 2008:
Total Assets: $639 billion
Total Debts: $613 billion
Debtor's 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Citibank, N.A., as indenture bond debt $138,000,000,000
trustee, and The Bank of New
York Mellon Corporation (with
respect to the Euro Medium
Term Notes only, as indenture
trustee, under the Lehman
Brothers Holdings. Senior
Notes.
Citibank, N.A.
399 Park Avenue
New York, NY 10043
Attn: Wafaa Orfy
Tel: (800) 422-2066
Fax: (212) 816-5773
The Bank of New York
One Canada Square
Canary Wharf, London E14 5AL
Attn: Raymond Morison
Tel: 44-207-964-8800
The Bank of New York bond debt $15,000,000,000
Mellon Corporation, as
indenture trustee under the
Lehman Brothers Holdings
Inc. subordinated debt.
The Bank of New York
Mellon Corporation
101 Barclay Street
New York, NY 10286
Attn: Chris O'Mahoney
Tel: (212) 815-4107
Fax: (212) 815-4000
AOZORA bank loan $463,000,000
1-3-1 Kudan-Minami
Chiyoda-ku, Tokyo 102-8660
Tel: 81-3-5212-9631
Fax: 81-3-3265-9810
Mizuho Corporate Bank Ltd. bank loan $289,000,000
Global Syndicated Financi
Division
1-3-3, Marunochi, Chiyoda-ku
Tokyo, Japan 100-8210
Timothy White
Managing Director - Head of
Originations Corporate and
Investment Bank Department
1251 Avenue of the Americas
32nd floor
New York, NY 10020-1104
Tel: (212) 282-3360
Fax: (212) 282-4487
Citibank N.A. Hong Kong bank loan $275,000,000
Branch
Financial Institutions Group
Asia Pacific
44f Citibank Tower
3 Garden Rd.
Central Hong Kong
Michael Mauerstein
MD - FIG
388 Greenwich Street
New York, NY 10013
Tel: (212) 816-3431
BNP Paribas bank loan $250,000,000
787 7th Avenue
New York, NY 10019
Tel: (212) 841-2084
Shinesi Bank Ltd. bank loan $231,000,000
1-8, Uchisaiwaicho 2-
Chome
Chiyoda-ku, Tokyo 100-8501
Tel: 81-3-5511-5377
Fax: 81-3-4560-2834
UFJ bank Limited bank loan $185,000,000
2-7-1, Marunouchi
Chiyoda-ku, TKY 100-8388
Stephen Small
vice president
head of financial
institutions
Bank of Tokyo-Mitsubishi
UFJ Trust Company
1251 Avenue of the Americas
New York, New York
10020-1104
Tel: (212) 782-4352
Fax: (212) 782-6445
Sumitomo Mitsubishi bank loan $177,000,000
Bank Corp.
13-6 Nihobashi-
Kodenma-Cho, Chuo-ku,
Tokyo, 103-0001
Yas Imai
Senior Vice President
Head of Financial
Institution Group
Sumitomo Mistui Banking
Corporation
277 Park Avenue
New York, NY 10172
Tel: (212) 224-4031
Fax: (212) 224-4384
Svenska Handelsbanken letter of credit $140,610,543
153 E. 53rd St., 37th floor
New York, NY 10022
Tel: (212) 258,9487
KBC Bank letter of credit
$100,000,000
125 W. 55th St.
New York, NY 10019
Tel: (212) 258-9487
Mizuho Corporate Bank Ltd. bank loan $93,000,000
1-3-3, Marunouchi
Chiyoda-ku, TKY 100-8219
Timothy White
Managing Director - Head of
Originations Corporate and
Investment Bank Department
1251 Avenue of the Americas
32nd floor
New York, NY 10020-1104
Tel: (212) 282-3360
Shinkin Central Bank bank loan $93,000,000
8-1, Kyobashi 3-Chome
Chuo-ku, Tokyo 104-0031
Shuji Yamada
Deputy General Manager
Financial Institution Dept.
Shinkin Central Bank
3-7, Yaesu 1-chome, Chuo-ku
Tokyo 104-0028
Tel: 81-3-5202-7679
Fax: 81-3-3278-7051
The Bank of Nova Scotia bank loan $93,000,000
Singapore Branch
1 Raffles Quay #201-01
One Raffles Quay North
Tower
Singapore 0485583
George Neofitidis
Director Financial
Institutions Group
One Liberty Plaza
New York, NY 10006
Tel: (212) 225-5379
Fax: (212) 225-5254
Chuo Mitsui Trust & Banking bank loan $93,000,000
3-33-1 Shiba, Minato-ku,
Tokyo, 105-0014
Tel: 81-3-5232-8953
Fax: 81-3-5232-8981
Lloyds Bank letter of credit $75,381,654
1251 Avenue of the Americas
39th Floor
P.O. Box 4873
New York, NY 10163
Tel: (212) 930-8967
Fax: (212) 930-5098
Hua Nan Commercial Bank bank loan $59,000,000
Ltd.
38 Chung-King South
Road Section 1
Taipei, Taiwan
Bank of China bank loan $50,000,000
New York Branch
410 Madison Avenue
New York, NY 10017
Tel: (212) 936-3101
Fax: (212) 758-3824
Nippon Life Insurance Co. bank loan $46,000,000
1-6-6, Marunouchi,
Chiyoda-ku, Tokyo 100-8288
Takayuki Murai
Deputy General Manager
Corporate Finance Dept. #1
Nippon Life Insurance Co.
Tel: 81-3-5533-9814
Fax: 81-3-5533-5208
ANZ Banking Group bank loan $44,000,000
Limited
18th Floor Kyobo Building
1 Chongro 1 Ku,
Chongro Ka,
Seoul, Korea
Michael Halevi
Director, Financial
Institutions
ANZ Banking Group
1177 Avenue of Americas
New York, NY 10036
Tel: (212) 810-9871
Fax: (212) 801-9715
Standard Chartered Bank bank loan $41,000,000
One Madison Avenue
New York, NY 10010-3603
Bill Hughes
SVP-FIG
Standard Chartered bank
One Madison Avenue
New York, NY 10010-3603
Tel: (212) 667-0355
Fax: (212) 667-0273
Standard Chartered Bank letter of credit $36,114,000
One Madison Avenue
New York, NY 10010-3603
Bill Hughes
SVP-FIG
Standard Chartered bank
One Madison Avenue
New York, NY 10010-3603
Tel: (212) 667-0355
Fax: (212) 667-0273
First Commercial Bank bank loan $25,000,000
Co. Ltd.
New York Agency
750 3rd Avenue, 34th Floor
New York, NY 10017
Jason C. Lee
Deputy General Manager
First Commercial Bank Co.
Ltd.
New York Agency
750 3rd Avenue, 34th Floor
New York, NY 10017
Tel: (212) 599-6868
Fax: (212) 599-6133
Bank of Taiwan bank loan $25,000,000
New York Agency
100 Wall Street, 11th Floor
New York, NY 1005
Eunice S.J. Yeh
Senior Vice President &
General Manager
100 Wall Street, 11th floor
New York, NY 10005
Tel: (212) 968-0580
Fax: (212) 968-8370
DnB NOR Bank ASA bank loan $25,000,000
NO-0021, Olso, Norway
Stranden 21, Aker Brygge
Tel: 47 22 9487 46
Fax: 47 22 48 29 84
Australia and New Zealand bank loan $25,000,000
Banking Group Limited
Melbourne Office
Level 6, 100 Queen
Street Victoria
Melbourne, VIC 3000
Australia
Michael Halevi
Director, Financial
Institutions
ANZ Banking Group
1177 Avenue of Americas
New York, NY 10036
Tel: (212) 810-9871
Fax: (212) 801-9715
Australia National Bank letter of credit $12,588,235
1177 Avenue of the
Americas, 6th Floor
New York, NY 10036
Michael Halevi
Director, Financial
Institutions
ANZ Banking Group
1177 Avenue of Americas
New York, NY 10036
Tel: (212) 810-9871
Fax: (212) 801-9715
National Australia Bank letter of credit $10,294,163
245 Park Avenue, 28th Fl.
New York, NY 10167
Michael Halevi
Director, Financial
Institutions
ANZ Banking Group
1177 Avenue of Americas
New York, NY 10036
Tel: (212) 810-9871
Fax: (212) 801-9715
Taipei Fubon Bank, New bank loan $10,000,000
York Agency
100 Wall Street, 14th floor
NY NY 10005
Tel: (212) 968-9888
Fax: (212) 968-9800
LEHMAN BROTHERS: Fitch Puts Ratings at 'D' After Bankruptcy Filing
------------------------------------------------------------------
Fitch Ratings has downgraded the long- and short-term Issuer
Default Ratings and outstanding debt ratings of Lehman Brothers
Holdings Inc, parent of Lehman Brothers Inc. and other
subsidiaries as:
-- Long-term IDR to 'D' from 'A+';
-- Short-term IDR to 'D' from 'F1';
-- Senior debt to 'CCC' from 'A+';
-- Subordinated debt to 'C' from 'A';
-- Preferred stock to 'C' from 'A'.
Fitch has also removed LBHI's long- and short-term ratings from
Rating Watch Negative, where they were originally placed on
Sept. 9. The rating action follows LBHI's declaration of
bankruptcy. The ratings of the subsidiaries will remain on Rating
Watch Negative and will likely be downgraded as additional
information becomes available.
LBHI's declaration of bankruptcy results from an inability to
raise additional capital or effect a merger in the very near term.
Liquidity has become constrained extremely limiting flexibility,
particularly for its UK broker-dealer, Lehman Brothers Holdings,
plc. LBHI is expected to explore the sale of several divisions
and or subsidiaries including the investment management division
which owns Neuberger Berman, the former Lincoln Capital and equity
interests in GLG, Spinnaker and DE Shaw. Execution of the
proposed structural sales and changes as discussed on LBHI's
third-quarter 2008 earnings call are not likely to be executed.
LBHI posted a net operating loss nine months year-to-date of
$6.2 billion or ($10.81) per share. Offsetting these cumulative
losses have been share raises of $4 billion of common equity and
$4 billion of preferred debt which serve to cushion senior debt
holders from any future losses. The mark to market nature of
securities firms' assets result in regularly updated valuations.
Fitch expects the liquidation and lack of financing by
counterparties to reduce the most recent valuation of these
assets, particularly the $17 billion of residential related
securities and whole loans, and the $37 billion of commercial real
estate exposures. However, an orderly liquidation should provide
substantive cash for recovery at the senior level. At this time,
Fitch expects limited to no recovery at the subordinated and
preferred debt levels at LBHI.
Fitch will evaluate ratings of various subsidiaries over the next
few days with an expectation of downgrades of long-term IDRs of
'CCC' for Lehman Brothers Inc., Lehman Brothers Holdings, plc and
Lehman Brothers International (Europe). By law, broker dealer
subsidiaries are not subject to bankruptcy but in turn face
liquidation. Fitch believes Lehman Brothers Inc, its US broker
dealer, will continue to operate for some time. Eventual default
remains a real possibility.
LBHI's bank subsidiaries, Lehman Brothers Bank, FSB, Lehman
Brothers Commercial Bank and Lehman Brothers Bankhaus AG will also
be downgraded; however debt is expected to remain more highly
rated than the broker-dealer subsidiaries. US based regulated
entities will be protected from cash outflows to the parent. The
vast majority of deposits are brokered retail deposits and all
below $100,000. Uninsured deposits, while minimal, are expected
to be protected by the well-capitalized status of the
institutions.
Borrowings at Lehman Brothers Bank, FSB are largely from the
Federal Home Loan Bank System, and secured by mortgage collateral.
Both bank entities have an ability to put weakened assets back to
LBHI which will protect their capital base, but increase loss
potential for unsecured creditors of LBHI.
Fitch has downgraded these ratings:
Lehman Brothers Holdings Inc.
-- Long-term IDR to 'D' from 'A+';
-- Long-term senior to 'CCC' from 'A+';
-- Senior unsecured debt to 'CCC' from 'A+';
-- Subordinated debt to 'C' from 'A';
-- Preferred stock to 'C' from 'A';
-- Short-term IDR to 'D' from 'F1';
-- Short term debt to 'D' from 'F1';
-- Individual to 'F' from 'B/C'.
All support ratings of subsidiaries are downgraded from '1' to
'5'.
Lehman Brothers Holdings Capital Trust III - VII
-- Preferred stock to 'C' from 'A'.
Lehman Brothers UK Capital Trust LP, II and III
-- Preferred stock to 'C' from 'A'.
Lehman Brothers E-Capital Trust I
-- Preferred stock to 'C' from 'A'.
Fitch has also affirmed these ratings:
Lehman Brothers Holdings Inc.
-- Support at '5';
-- Support Floor at 'NF'.
LEHMAN BROTHERS: Parent's Bankruptcy Cues Fitch to Review Units
---------------------------------------------------------------
Following its rating downgrade of Lehman Brothers Holdings Inc.'s
long- and short-term Issuer Default Ratings to 'D' on its
declaration of bankruptcy, Fitch Ratings is reviewing LBHI and
subsidiaries' counterparty exposure in global structured finance
transactions. Credit default swap counterparty, eligible security
and reference entity exposure will be discussed in a separate
commentary to be issued shortly by Fitch.
In addition to those actions, Fitch is evaluating ratings of
various LBHI subsidiaries, the long term IDRs of which were also
downgraded by Fitch. The subsidiaries include:
-- Lehman Brothers Inc.;
-- Lehman Brothers Holdings, plc;
-- Lehman Brothers International (Europe);
-- Lehman Brothers Bank, FSB;
-- Lehman Brothers Commercial Bank.
Counterparty risk in SF transactions is subject to Fitch's
criteria for hedge counterparties. For SF transactions rated
'BBB+' or higher with counterparties that are downgraded to below
'BBB+/F2', Fitch expects that the actions of choice by the issuer
should be to replace the counterparty or arrange for the hedge
obligations to be guaranteed by a rated entity that is consistent
with Fitch's criteria. During the time a replacement or guarantor
is sought, Fitch expects collateral to be posted as a measure of
protection.
Fitch's hedge counterparty criteria provides for a 30-day cure
period before a security is placed on Rating Watch Negative
following a counterparty downgrade. However given the severity of
the downgrades to LBHI and its subsidiaries, Fitch will move more
quickly to indicate which structured finance transactions are at
risk of downgrade, should no replacement counterparty or guarantor
assume Lehman's hedge obligations. Fitch will provide lists of
transactions in the U.S., EMEA and Asia with exposure to the
various Lehman entities over the next few days.
The resolution of the Rating Watch Negative status will reflect
the rating of the specific counterparty, terms of the hedge
contract, the likelihood of cure, and when a cure is not expected,
analysis of transactions cash flows without benefit of existing
hedges.
LEHMAN BROTHERS: Fitch Cuts Ratings of Units, Keeps Neg. Watch
--------------------------------------------------------------
Fitch Ratings downgraded all subsidiary ratings of various
entities owned by Lehman Brothers Holdings Inc. LBHI filed a
voluntary bankruptcy on Sept. 14, 2008 which excluded all
subsidiaries. At this time, rating actions vary considerably by
subsidiary as regulatory actions are expected to occur to preserve
capital for specific constituencies. Recovery ratings will be
assigned over the next few days. Rating actions are listed
throughout this comment.
Lehman Brothers Inc.
-- Long-term Issuer Default Rating from 'A+' to 'B';
-- Long-term senior from 'A+' to 'B';
-- Senior unsecured debt from 'A+' to 'B';
-- Subordinated debt from 'A' to 'B-';
-- Short-term IDR 'F1' to 'B';
-- Short term debt 'F1' to 'B';
-- Individual from 'B/C' to D/E';
-- Ratings Remain on Rating Watch Negative
-- Recovery Ratings to be assigned.
Lehman Brothers Inc, a U.S. broker/dealer, continues to operate
and meet ongoing maturities. However, liquidity is expected to
deteriorate quickly if a sale is not announced over the next few
days. LBI remains eligible for financing of select assets by the
Federal Reserve under the existing primary dealer facilities and
term securities funding vehicles. LBI could face liquidation
under Chapter 7 or the Securities Investor Protection Act by U.S.
law. Ratings remain on Rating Watch Negative.
Lehman Brothers Holdings plc
-- Long-term IDR from 'A+' to 'D';
-- Long-term senior from 'A+' to 'CCC';
-- Senior unsecured debt from 'A+' to 'CCC';
-- Subordinated debt from 'A' to 'C';
-- Short-term IDR 'F1' to 'D';
-- Short term debt 'F1' to 'C'
-- Individual from 'B/C' to 'F';
-- Ratings removed from Rating Watch Negative;
-- Recovery ratings to be assigned.
Lehman Brothers Holdings plc is an interim holding company that
owns equity in several European subsidiaries. It is the issuer
and subordinated guarantor of several junior preferred securities
that are also fully guaranteed by the parent, LBHI and have been
previously downgraded. There is minimal to no recovery expected
for preferred and subordinated debt.
Lehman Brothers International (Europe)
-- Long-term IDR from 'A+' to 'D';
-- Short-term IDR 'F1' to 'D';
-- Ratings removed from Rating Watch Negative.
Lehman Brothers International (Europe) has been placed into
administration following LBHI's failure to attest to its solvency.
The administrator has broad powers to validate contracts and make
payments as it wishes. There is no long -term debt outstanding.
Ratings reflect short-term payables and debt outstanding although
a majority of the debt is received from affiliates including
parent, LBHI.
Lehman Brothers Bank, FSB
-- Long-term IDR from 'A+' to 'BB';
-- Long-term deposits from 'AA-' to 'BBB-';
-- Short-term IDR 'F1' to 'F3';
-- Short-term deposits from 'F1+' to 'F3;
-- Subordinated debt from A to 'BB-'
-- Individual from B/C to 'D';
-- Ratings remain on Rating Watch Negative.
Lehman Brothers FSB retains a significant portion of Lehman's
residential mortgage exposures and obtain funding via brokered
certificates of deposit and the Federal Home Loan Bank. At
June 30, 2008, the thrift remained well-capitalized under
regulatory standards with a majority of funding from retail
deposits. Subordinated debt is intercompany and provides
additional regulatory capital. Fitch believes regulators will
step in and prevent any cash flows to the parent until all
deposits and funding is repaid. The strong capitalization provides
material protection of funding.
Lehman Brothers Commercial Bank
-- Long-term IDR from 'A+' to 'BB';
-- Short-term IDR 'F1' to 'F3';
-- Long-term deposits from 'AA-' to 'BBB-';
-- Short-term deposits from 'F1+' to 'F3';
-- Individual from 'B/C' to 'D';
-- Ratings remain on Rating Watch Negative.
Lehman Brothers Commercial Bank is an industrial loan company with
very limited borrowings. Two-thirds of its assets are supported
by retail brokered deposits. Assets are highly liquid securities
and high grade commercial loans. While ratings are tied directly
to the Lehman franchise, the bank remains well capitalized under
regulatory standards and is expected to liquidate in an orderly
fashion and return excess capital to the parent, LBHI.
LBHI posted a net operating loss 9MYTD of $6.2 billion or ($10.81)
per share. Offsetting these cumulative losses has been share
raises of $4 billion of common equity and $4 billion of preferred
debt which serve to cushion senior debt holders from any future
losses. The mark to market nature of securities firms' assets
result in regularly updated valuations. Fitch expects the
potential for forced liquidation as a result of the lack of
available financing by counterparties will reduce the most recent
valuation of these assets, particularly the $17 billion of
residential related securities and whole loans, and the
$37 billion of commercial real estate exposures.
However, an orderly liquidation should provide material cash for
recovery at the senior level. At this time, Fitch expects limited
to no recovery at the subordinated and preferred debt levels at
LBHI.
LEHMAN BROTHERS: Moody's Junks Debt Ratings; To Undertake Review
----------------------------------------------------------------
Moody's Investors Service downgraded the senior ratings of Lehman
Brothers Holdings Inc., and those of certain guaranteed
subsidiaries, to B3 from A2. The firm's subordinated debt was
downgraded to Caa2 from A3, and its preferred stock to Ca from
Baa1. The senior long-term rating of Lehman Brothers Inc. was
lowered to B1 from A1 and subordinated debt to B3 from A2. The
short-term ratings for all rated Lehman entities were lowered to
Not-Prime from Prime-1.
All long-term ratings were placed on review for possible further
downgrade. The rating action follows the collapse in market
confidence in the firm, and Lehman's announcement that it was
filing for Chapter 11 bankruptcy protection after its failure to
reach a merger agreement with a stronger strategic partner.
According to Lehman, none of the firm's broker-dealer subsidiaries
or other subsidiaries of LBHI will be included in the Chapter 11
filing.
On September 10, 2008, Moody's placed Lehman on review with
direction uncertain, reflecting the deterioration of Lehman's
situation, as well as the assessment of the possibility of a
strategic transaction that would add support to the ratings.
Moody's noted in the September 10 rating action that should a
strategic arrangement fail to materialize in the near term,
Lehman's ratings would be downgraded, likely into the Baa
category, with the ratings continuing on review for possible
downgrade. However, the credit deterioration at Lehman has been
far sharper than anticipated, with LBHI's pending bankruptcy
filing driving the extent of the rating downgrade.
Moody's said that the B3 rating on LBHI senior obligations
reflects Moody's expectations that the financial regulators will
look to achieve an orderly wind-down of the firm that should help
support existing asset value coverage for senior creditors. The
higher B1 rating on Lehman Brothers Inc. reflects the regulated
entity's primary broker-dealer status and higher quality balance
sheet relative to unregulated entities. Nevertheless, the
extended time expected to affect such a wind-down brings
uncertainty as to ultimate asset value realizations. Within the
review period Moody's will assess the potential for recovery for
various securities across Lehman's capital structure.
The ratings of the following Lehman subsidiaries are based upon
the quality of the guarantee from LBHI and do not reflect the
intrinsic quality of the balance sheets of these rated entities.
-- Lehman Brothers International (Europe),
-- Lehman Brothers OTC Derivatives Inc.,
-- Lehman Brothers Special Financing Inc.,
-- Lehman Brothers Bank, FSB,
-- Lehman Brothers Commercial Bank,
-- Lehman Brothers Bankhaus AG,
-- Lehman Brothers Treasury Co,B.V.
Moody's also said that the Caa2 rating on junior subordinated
obligations and the Ca rating on preferred stock reflect higher
loss expectations for these securities as Lehman's operations are
wound down and asset liquidations occur.
Lehman Brothers Holdings Inc. is a global investment bank and
financial services firm headquartered in New York, NY with total
stockholders equity of approximately $28.4 billion and
$143 billion of long-term capital at August 31, 2008.
The long-term and short-term ratings of Lehman Brothers Holdings
Inc. and its subsidiaries were downgraded. The following is a
list of Lehman's major operating subsidiaries:
* Lehman Brothers Holdings Inc. -- long-term issuer rating to B3
from A2; subordinate rating to Caa2 from A3; preferred rating
to Ca from Baa1; commercial paper rating to Non-Prime from
P-1; long-term ratings placed on review for possible
downgrade.
* Lehman Brothers, Inc. -- long-term issuer rating to B1 from
A1; subordinate rating to B3 from A2; commercial paper rating
to Non-Prime from P-1; long-term ratings placed on review for
possible downgrade.
* Lehman Brothers Bank, FSB -- long-term deposit rating to B3
from A2; short-term deposit rating to Non-Prime from P-1;
long-term ratings placed on review for possible downgrade.
LEHMAN BROTHERS: S&P Downgrades Credit Rating to 'SD' from 'A'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
counterparty credit rating on Lehman Brothers Holdings Inc. to
'SD' (selective default, meaning payments may not be made on some
financial obligations), from 'A'. S&P also removed the rating
from CreditWatch, where it had been placed with developing
implications on Sept. 12, 2008.
The downgrade followed S&P's lowering of Lehman's preferred stock
issues to 'D' from 'BBB+'. At the same time, S&P lowered Lehman's
senior unsecured debt issues to 'CCC-' from 'A', and its
subordinated debt issues to 'C' from 'A-'. The issue ratings
remain on CreditWatch where they were placed on Sept. 12, 2008,
but S&P have changed the implications to negative from developing.
Meanwhile, S&P lowered the long-term counterparty credit and issue
ratings on most of Lehman's other subsidiaries to 'BB-'. These
ratings remain on CreditWatch with developing implications, which
means that S&P could raise, affirm, or lower the ratings.
In addition, S&P lowered the long-term counterparty ratings on
Lehman Brothers International (Europe) and Lehman Brothers
Holdings PLC to 'R', signifying that regulators have taken over
these entities, from 'A'. S&P removed the ratings from
CreditWatch, where they had been placed with developing
implications on Sept. 12, 2008.
"These rating actions follow Lehman Brothers Holdings Inc., the
parent/holding company of the Lehman Brothers group, filing for
Chapter 11 bankruptcy protection," said Standard & Poor's credit
analyst Scott Sprinzen. "No other Lehman subsidiary has been
included in the filing. At this time, it is not clear whether
Lehman will default on its holding company senior and subordinated
debt obligations. But we assume Lehman is highly likely to
discontinue payments on its hybrid capital issues."
It is also uncertain whether the Chapter 11 proceedings will
ultimately include some of Lehman's affiliates in the U.S. and in
other countries or whether regulators will take over those
entities. Ten securities firms and banks reportedly have access
to a $70 billion "club" borrowing facility, which should help to
stabilize the financial markets, while the Federal Reserve has
broadened the collateral eligible to be used under the Primary
Dealer Credit Facility.
"Standard & Poor's will continue to monitor the situation closely
and make additional rating changes as further information about
Lehman's reorganization becomes available," said Mr. Sprinzen.
Lehman's Chapter 11 filing followed a precipitous decline in
confidence on the part of creditors, counterparties, and clients,
with severe ramifications for its ability to fund its operations.
This faltering confidence is attributable, in part, to the
company's large holdings of commercial real estate, and
residential mortgages and mortgage-backed securities--and
uncertainty regarding their value--which therefore served as a
magnet for negative market sentiment in the current difficult
environment.
MAGNA ENTERTAINMENT: $40MM Loan Maturity Date Extended to Oct. 15
----------------------------------------------------------------
Magna Entertainment Corp. amended certain of its financing
agreements including:
* extending the maturity date of its $40 million senior secured
revolving credit facility with a Canadian chartered bank from
Sept. 15, 2008 to Oct. 15, 2008;
* extending the maturity date of its bridge loan facility with
a subsidiary of MI Developments Inc., MEC's controlling
shareholder, from Sept. 30, 2008 to Oct. 31, 2008; and
* extending the due date of its $100 million repayment
requirement under the Gulfstream Park project financing with
the MID Lender from Sept. 30, 2008 to Oct. 31, 2008 (during
which time any repayments will not be subject to a make-whole
payment).
MEC incurred a fee of $400,000 in connection with the extension of
the Senior Bank Facility and a fee of $500,000 in connection with
the extension of the Bridge Loan.
Consideration of the amendments to the financing arrangements with
the MID Lender was supervised by the Special Committee of MEC's
board of directors consisting of Jerry D. Campbell (Chairman),
Anthony J. Campbell and William J. Menear. The approval of MEC's
board followed a favorable recommendation of the Special
Committee.
MEC will file a material change report as soon as practicable
after issuing this press release. The material change report will
be filed less than 21 days prior to the closing of the loan
amendments. The timing of the material change report is, in MEC's
view, both necessary and reasonable because the terms of the
amendments were settled and approved by MEC's board of directors
and MEC requires immediate funding to address its short-term
liquidity needs.
About Magna Entertainment
Headquartered in Aurora, Ontario, Magna Entertainment Corp.
(Nasdaq: MECA)(TSX: MEC.A) -- http://www.magnaentertainment.com/
-- acquires, develops, owns and operates horse racetracks and
related pari-mutuel wagering operations, including off-track
betting facilities. The company also develops, owns and operates
casinos in conjunction with its racetracks where permitted by law.
Going Concern Doubt
As reported in the Troubled Company Reporter on March 20, 2008,
Ernst & Young LLP in Toronto, Canada, expressed substantial doubt
about Magna Entertainment Corp.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the years Dec. 31, 2007, and 2006. The auditing
firm pointed to the company's recurring operating losses and
working capital deficiency.
The company has incurred net losses of $67.7 million for the six
months ended June 30, 2008, and at June 30, 2008, had an
accumulated deficit of $577.8 million and a working capital
deficiency of $151.1 million. At June 30, 2008, the company had
$229.8 million of debt that matures in the 12-month period ending
June 30, 2009, including amounts owing under its $40.0 million
senior secured revolving credit facility with a Canadian financial
institution, which is scheduled to mature on Aug. 15, 2008,
amounts owing under the amended Bridge Loan, which is scheduled to
mature on Aug. 31, 2008, and its obligation to repay
$100.0 million of indebtedness under the Gulfstream Park project
financings with a subsidiary of MID by Aug. 31, 2008.
MAGNA STORAGE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Magna Storage Properties, LLC
1490 North 2200 W., Ste. 140
Salt Lake City, UT 84116
Bankruptcy Case No.: 08-26087
Chapter 11 Petition Date: September 11, 2008
Court: District of Utah (Salt Lake City)
Debtor's Counsel: Andres' Diaz, Esq.
courtmail@adexpresslaw.com
1 On 1 Legal Services
307 W. 200 S., Ste. 3004
Salt Lake City, UT 84101
Tel: (801) 596-1661
Fax: (801) 359-6803
http://www.adexpresslaw.com/
Estimated Assets: $1,000,000 to $10,000,000
Estimated Debts: $100,000 to $500,000
The Debtor did not file a list of its largest unsecured creditors.
MAGNOLIA CAR WASH: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Magnolia Car Wash LLC
PO Box 1506
Colton, CA 92324
Bankruptcy Case No.: 08-21886
Related Information: Terry L. Whaley, member, filed the petition
on the Debtor's behalf.
Chapter 11 Petition Date: September 5, 2008
Court: Central District Of California (Riverside)
Judge: Meredith A. Jury
Debtor's Counsel: Michael G. York, Esq.
1301 Dove Street Suite 1000
Newport Beach, CA 92660
Tel: (949) 833-8848
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
The Debtor did not file a list of its largest unsecured creditors.
MARTY'S SHOES: Hurt by Retail Downturn, Files for Bankruptcy
------------------------------------------------------------
Crain's New York Business reports that Secaucus, N.J.-based
discount retailer Marty Shoes Inc. filed for bankruptcy protection
Monday with the U.S. Bankruptcy Court for the District of Delaware
after defaulting on its loan agreements.
The Debtor is now selling shoes at up to 60% discount. It is not
clear how its collapse will affect other discount footwear
retailers in the area, but if it would continue to offer deeper
discounts, that might hurt competitors, said Michael Appel,
managing director of Quest Turnaround Advisors.
The footwear industry isn't exempted in the current downturn in
the retail climate. The American Apparel & Footwear Association
recently reported a decline in U.S. shoe purchases in 2007 over
the prior year, according to the report.
Marty Shoes -- http://www.martyshoes.com-- mainly sells athletic
footwear, including brands Adidas and Reebok. It has been
operating 60 stores in 4 states for more than 30 years.
MARTY'S SHOES: Case Summary & 21 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Marty's Shoes, Inc.
60 Enterprise Avenue N.
Secaucus, NJ 07096
Bankruptcy Case No.: 08-12131
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
E Shoe Sales, Inc. 08-12130
Marty Shoes Holdings, Inc. 08-12129
Type of Business: The Debtors sell shoes.
See: http://www.martyshoes.com/
Chapter 11 Petition Date: September 12, 2008
Court: District of Delaware
Debtor's Counsel: Kevin Scott Mann, Esq.
kmann@crosslaw.com
Cross & Simon, LLC
913 N. Market Street, 11th Floor
P.O. Box 1380
Wilmington, DE 19899-1380
Tel: (302) 777-4200
Fax: (302) 777-4224
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
Debtor's 21 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Marty Samowitz note $2,000,000
3030 Gleenbay Boulevard
Loang Boat Key, Florida 32448
New Balance Athletic Shoes Inc. $257,965
PO Box 31978
Harthford, CT 06150-1978
The Rockport Co. Inc. $234,712
PO Box 405178
Atlanta, GA 303884-5178
Dorelle, Inc. $190,245
Kenneth Cole Productions Inc. $188,859
New York Transit $188,558
P&N Logistics $186,067
Connors Footwear $177,230
Asics America Corp. $175,108
Skechers USA $172,934
Wolff Shoe Co. $149,773
Chainson Footwear Inc. $143,948
Prophet USA Inc. $138,450
Grendha Shoes Corp. $116,940
Eastman Footwear Group Inc. $116,068
Total Logistics $112,257
Footwear International Corp. $109,335
Global Brand Marketing Inc. $99,450
Footwear Unlimited Inc. $97,940
Duck Head Footwear $94,266
United Parcel Service $84,752
MERRILL LYNCH: Fitch Changes Watch to Evolving After BofA Deal
--------------------------------------------------------------
Following the announcement that Merrill Lynch & Co. Inc. has
agreed to be acquired by Bank of America Corporation; Fitch has
revised the Rating Watch to Evolving from Negative on these
entities.
Merrill Lynch & Co., Inc.
-- Long-term Issuer Default Rating 'A+';
-- Long-term senior debt: 'A+';
-- Subordinated debt 'A';
-- Preferred stock 'A';
-- Short-term IDR 'F1';
-- Commercial paper 'F1';
-- Short-term debt 'F1';
-- Individual 'B/C';
Merrill Lynch Bank USA
-- Long-term IDR 'A+';
-- Long-term deposits 'AA-';
-- Short-term IDR 'F1';
-- Individual 'B/C';
Merrill Lynch Bank & Trust Co., FSB
-- Long-term IDR 'A+';
-- Long-term deposits 'AA-';
-- Short-term IDR 'F1';
-- Individual 'B/C'.
Merrill Lynch Canada Finance
-- Long-term IDR 'A+';
-- Long-term senior 'A+';
-- Short-term IDR 'F1'.
-- Individual 'B/C';
Merrill Lynch International Bank Ltd.
-- Long-term IDR 'A+';
-- Short-term IDR 'F1'.
-- Individual 'B/C';
Merrill Lynch S.A.
-- Long-term IDR 'A+';
-- Long-term senior 'A+'.
Merrill Lynch Finance (Australia) Pty LTD
-- Short-term IDR 'F1';
-- Commercial paper 'F1'.
Merrill Lynch Preferred Capital Trust III, IV, and V
-- Trust preferred 'A'.
Merrill Lynch Capital Trust I, II and III
-- Trust preferred 'A';
First Republic Bank
-- Subordinated debt 'A'.
First Republic Preferred Capital Corp.
-- Preferred stock 'A'.
First Republic Preferred Capital Corp. II
-- Preferred stock 'A'.
Fitch has also affirmed the following ratings:
Merrill Lynch & Co., Inc.
-- Support '5';
-- Support Floor 'NF'.
Merrill Lynch Bank USA
-- Short-term deposits 'F1+';
-- Support '1'.
Merrill Lynch Bank & Trust Co., FSB
-- Short-term deposits 'F1+';
-- Support '1';
-- Suppprt Floor 'NF'.
Merrill Lynch S.A.
-- Support '1'.
Merrill Lynch Canada Finance
-- Support '1'.
Merrill Lynch International Bank Ltd.
-- Support '1'.
Merrill Lynch & Co., Canada Ltd.
-- Short-term 'F1'.
DSP Merrill Lynch Ltd.
-- Long-term 'AAA(ind)';
-- Short-term 'F1+(ind)'.
Merrill Lynch Mexico, Casa de Bolsa
-- Long-term senior debt 'AAA(mex)';
-- Short-term 'F1+(mex)'.
MERRILL LYNCH: Moody's Might Raise Rating After BofA Deal
---------------------------------------------------------
Moody's Investors Service placed on review for possible upgrade
all long-term ratings of Merrill Lynch (senior at A2) and its
subsidiaries. The Prime-1 short-term ratings of Merrill Lynch and
its guaranteed subsidiaries were affirmed.
The rating action follows the announcement that Merrill Lynch will
be acquired by Bank of America Corporation, rated Aa2 for senior
debt (on review for downgrade) in an all-stock transaction valued
at approximately $50 billion. The transaction is expected to
close early in the first quarter of 2009. The review will focus
on the ultimate legal and regulatory structure for Bank of America
Corporation and the nature of support for each rated Merrill Lynch
entity.
The long-term ratings of Merrill Lynch & Co., Inc. and its
subsidiaries were placed on review for possible upgrade; the
short-term ratings of Merrill and its subsidiaries were affirmed
at P-1. The following is a list of Merrill's major operating
subsidiaries:
* Merrill Lynch Bank USA; C+ Bank Financial Strength and A2
long-term deposit ratings placed on review for possible
upgrade.
* Merrill Lynch Bank & Trust Company; C+ Bank Financial Strength
and A2 long-term deposit ratings placed on review for possible
upgrade
* Merrill Lynch & Co., Inc is a global investment bank and
wealth management firm headquartered in New York that reported
a loss of $4.7 billion in the second quarter of 2008.
MICHAEL SEBASTIAN: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Michael Joseph Sebastian
Barbara Ann Sebastian
10171 Sycamore
Villa Park, CA 92861
Bankruptcy Case No.: 08-15613
Chapter 11 Petition Date: September 11, 2008
Court: Central District Of California (Santa Ana)
Judge: Erithe A. Smith
Debtor's Counsel: Rocky Ortega, Esq.
405 El Camino Real No. 302
Menlo Park, CA 94025
Tel: (650) 384-0019
Fax: 650-384-0951
Estimated Assets: $1 million to $10 million
Estimated Debts: $10 million to $50 million
Debtor's list of its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Maurice McAlister Trade Debt $115,000
44027 Pratt. Rd.
Bullhead City, AZ 86459
Union Bank of California Line of Credit $97,500
1055 N. Main St. No. 200
Santa Ana, CA 92702
Citibank Credit Card $64,112
P.O. Box 6417
Las Vegas, NV 88901
ADP Commercial Contract $55,000
McCarthy Burges & Wolff Contract $30,895
C.I.T. Service $25,971
Ellis Family Trust Sale Proceeds $20,000
American Express Credit Card $16,217
Channel Blade Advertising $15,460
Union 76 Gasoline $15,450
Verngroff Williams &
Associates Advertising $11,169
Beam and Associates Legal Services $10,556
De Lage Landen Financial Services $8,243
ADP Dealer Service Advertising $7,545
MAP Services $6,400
Capitol One Credit Card $6,179
Professional Car Care Services $6,000
Don Ray Driveway Services $5,509
GE Mobile Water Services $4,451
RH Power & Associates Advertising $1,989
MIDWEST AIR: ALPA Allocates $2MM to Support Pilots Cause
--------------------------------------------------------
The Air Line Pilots Association Int'l., the bargaining
representative for the 400 pilots at Midwest Airlines, has
allocated $2 million to support the Midwest Airlines pilots' fight
to protect their jobs as they begin contract negotiations with
management.
In its September 10th resolution, ALPA's executive board
authorized the amount from the Association's Major Contingency
Fund for "strategic planning and communications programs in
support of the [Midwest pilots'] contract enforcement and
negotiating activities." ALPA's MCF, the union's "war chest,"
provides pilot groups the necessary resources to respond to
threats to their jobs and to the piloting profession.
"The airline's plan to outsource Midwest pilots' jobs is the
latest example of management's systematic efforts to dismantle our
airline," capt. Jay Schnedorf, chairman of the Midwest pilots'
Master Executive Council, said. "Midwest pilots will not shrink
from this fight. With ALPA's financial support and the backing of
all 53,000 ALPA pilots, we stand ready to fully engage in the
fight to protect our jobs, and hold management accountable for its
contractual obligations to this pilot group."
The Midwest pilots' contract became amendable on Aug. 31, 2008.
They negotiated their first contract in February 2000, and three
years later, provided millions in concessions to help save their
airline from bankruptcy. Over the past four months, as the pilots
prepared to address their contractual concerns through the
negotiations process under the Railway Labor Act called "Section
6," management again demanded outrageous concessions from the
pilots. Most recently, Midwest announced that, in addition to its
parking of all the MD-80 aircraft, it would now replace all but
nine B-717s with smaller EMB 170s and outsource that flying to
pilots from another airline as part of a deal with Republic
Airways Holdings.
About Midwest Air
Headquartered in Oak Creek, Wisconsin, Midwest Air Group Inc. --
http://www.midwestairlines.com/-- is a holding company of Midwest
Airlines, Inc. Midwest Airlines operates a passenger jet airline
that serves destinations throughout the United States from
Milwaukee, Wisconsin and Kansas City, Missouri. Skyway Airlines,
Inc., dba Midwest Connect, is a wholly owned subsidiary of Midwest
Airlines and serves as the regional airline for the company.
Midwest Airlines and Midwest Connect constitute the company's
segments. It has three principal product offerings: Midwest
Airlines Signature Service, Midwest Airlines Saver Service and
Midwest Connect regional service. As of Dec. 31, 2006, Midwest
Airlines Signature Service operated in 20 cities in the United
States, and Midwest Airlines Saver Service operated in 10 cities.
Midwest Connect builds feeder traffic and provides regional
scheduled passenger service to cities primarily in the Midwest.
Its subsidiaries provide aircraft charter services, transport air
freight and mail. The company has a total of more than 3,000
workers.
As of Sept. 30, 2007, Midwest Air Group listed total assets of
$395,615,000, total liabilities of $331,810,000, and total
stockholders' equity of $63,805,000.
MILLENNIUM TRANSIT: Section 341(a) Meeting Slated for September 25
------------------------------------------------------------------
The United States Trustee for Region 20 will convene a meeting of
creditors of Millennium Transit Services LLC at 11:00 a.m., on
Sept. 25, 2008, at 500 Gold Ave SW, Room 12411 in Albuquerque, New
Mexico.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Roswel, New Mexico-based Millennium Transit Services LLC is a bus
manufacturer. The company filed for chapter 11 protection on Aug.
29, 2008 (Bankr. D. N.M. Case No. 08-12848). Judge Mark B.
McFeeley presides over the case. David T. Thuma, Esq., at
Jacobitz, Thuma & Walker, P.C., represents the Debtor. When the
Debtor filed for protection from its creditors, it listed both its
assets and debts to be between $10 million and $50 million.
MONROE CENTER: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Monroe Center, LLC
720 Monroe Street, Unit C308
Hoboken, NJ 07030
Bankruptcy Case No.: 08-27203
Chapter 11 Petition Date: September 10, 2008
Court: District of New Jersey (Newark)
Debtor's Counsel: Joseph Markowitz, Esq.
jmarkowitz@mgs-law.com
Markowitz, Gravelle & Schwimmer
3131 Princeton Pike
Lawrenceville, NJ 08648
Tel: (609) 896-2660
Estimated Assets: Unknown
Estimated Debts: $10 million to $50 million
Debtor's list of its 19 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Principal Commercial Funding II LLC $18,762,608
801 Grand Avenue
Des Moines, IA 50309
H & H Green Construction $1,098,000
720 Monroe Street, Suite C511
Hoboken, NJ 07087
Tern Landing Development LLC $890,000
720 Monroe Street, Suite #C211A
Hoboken, NJ 07030
Lasser Hochman, LLC $450,000
75 Esenhower parkway, Suite No. 120
Roseland, NJ 07068
Natural Products $348,000
Lake Industrial $309,806
100 Manhattan Avenue
Union City, NJ 07087
Mid-State Construction $294,514
74 Porete Avenue
North Arlington, NJ 07031
Nacirema Insustries, Inc. $272,415
P.O Box 183
Bayonne, NJ 07002
North Hudson Electrical $140,734
Skyview Architecture $114,104
Standard Elevator Corp. $102,170
Mumta AJ Rangrej $100,000
MWW $75,000
Cananwill $63,205
Paulus, Sokolowski & Sartor, Inc. $34,000
Liberty Paper & Janitorial Supply Co. $31,369
Till Design LLC $28,350
North Hudson Sewerage Authority $25,467
Barberi Construction, LLC $18,601
MORGAN STANLEY: S&P Lowers Class O Certs. Rating to CCC+ from B-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of commercial mortgage pass-through certificates from
Morgan Stanley Capital I Trust 2005-IQ9. Concurrently, S&P
affirmed its ratings on the remaining 21 classes from this
transaction.
The downgrades reflect credit concerns with seven loans
($26.5 million) that have reported debt service coverage below
1.0x. The downgrades also reflect anticipated credit support
erosion upon the eventual resolution of one ($4 million) of the
three specially serviced assets.
The affirmed ratings reflect credit enhancement levels that
provide adequate support through various stress scenarios.
There are 16 loans ($61.8 million, 4%) in the pool that have
reported DSCs of less than 1.0x. The loans are secured primarily
by multifamily properties, have an average balance of
$3.9 million, and have experienced an average decline in DSC of
67% since issuance. The seven loans that are credit concerns have
experienced an average decline in DSC of 51% since issuance and
are secured by five multifamily and two retail properties. The
properties have experienced a combination of declining occupancy
and higher operating expenses. The remaining loans are not
considered credit concerns at this time due to improving property
occupancy, in-place reserves, or relatively low leverage.
Three loans ($6.9 million) are with the special servicer, Midland
Loan Services; details of these loans are:
-- The Mariemont Promenade loan ($4.0 million) is secured by
a 48,688-sq.-ft. unanchored retail property built in 1990
in the Cincinnati suburb of Mariemont, Ohio. The loan was
transferred to the special servicer due to an imminent
default and is less than 30-days delinquent. After heavy
rains this past spring, the hillside behind the property
eroded and collapsed. As a result, a city inspector
required several tenants to vacate their spaces and some
gas utilities were shut off. The year-end 2007 DSC was
1.56x; however, occupancy was 45% as of Aug. 15, 2008. At
this time, Standard & Poor's expects a significant loss
upon the eventual resolution of the asset.
-- The 1199 Ocean Avenue Tenants Corp. loan ($1.6 million) is
secured by a residential cooperative apartment property in
Brooklyn, New York. The loan was transferred to the
special servicer due to a poor property condition report
and is now current. The borrower recently began making
repairs to the property to address the deferred
maintenance. At this time, Standard & Poor's does not
expect a loss upon the resolution of the asset.
-- Autumn Park loan ($1.3 million) is secured by a 98-unit
multifamily property built in 1972 in Orange, Texas. The
loan was transferred to the special servicer due to
monetary default after a fire damaged four units at the
property. After the Aug. 15, 2008, remittance report, the
borrower brought the loan current and the damaged units
are being repaired. Two units have been repaired and are
back in service, and repairs on the remaining two units
are near completion. S&P expects the loan to be
transferred back to the master servicer in the near
future.
As of the Aug. 15, 2008, remittance report, the collateral pool
consisted of 239 loans with an aggregate balance of $1.47 billion,
compared with 241 loans with a balance of $1.53 billion at
issuance. Wells Fargo Bank N.A. is the master servicer for 172
loans ($1.31 billion, 89%) secured by a variety of commercial real
estate property types, and National Consumer Cooperative Bank is
the master servicer for 67 loans ($162.4 million, 11%) secured by
residential cooperative apartments. The servicers reported
financial information for 99.6% of the pool, 92% of which was
interim or full-year 2007 data. Standard & Poor's calculated a
weighted average DSC of 1.64x for the pool, down from 2.05x at
issuance. There are no delinquent loans in the pool, and the
trust has experienced no losses to date.
The top 10 loans have an aggregate outstanding balance of
$684.2 million (46%) and weighted average DSC of 1.58x, down from
1.69x at issuance. The second-largest loan in the pool, the
Central Mall Portfolio loan, was recently added to Wells Fargo's
watchlist. Wells Fargo provided property inspections for all of
the top 10 loan exposures, and one was characterized as
"excellent," while the remaining properties were characterized as
"good."
The credit characteristics of the 540 Madison Avenue loan are
consistent with those of an investment-grade obligation. The loan
is the fourth-largest exposure in the pool and has a balance of
$75 million. The loan is secured by the leasehold interest in a
38-story, class A office building totaling 280,830 sq. ft. in
Midtown Manhattan at the southwest corner of Madison Avenue and
55th Street. The property was constructed in 1970 and last
renovated in 1997. Reported DSC was 1.94x as of year-end 2007,
and occupancy was 98%. Standard & Poor's adjusted value for this
loan is 9% higher than at issuance.
Wells Fargo reported a watchlist of 50 loans ($323 million, 20%),
while NCB reported a watchlist of nine loans ($22.9 million, 2%).
The largest loan on Wells Fargo's watchlist is the Central Mall
Portfolio loan ($134.5 million, 9%), which is the second-largest
loan in the pool. The loan is secured by three regional malls in
Texas and Oklahoma with 1.75 million sq. ft. The properties were
built between 1979 and 1982. The loan was placed on the watchlist
because of hail storm damage at the Texarkana mall in March 2008.
The storm caused $1 million in damage to the roof and the
skylights. Insurance covers the damage.
Standard & Poor's stressed the loans on the watchlists, along with
other loans with credit issues, as part of its pool analysis. The
resultant credit enhancement levels support the lowered and
affirmed ratings.
Ratings Lowered
Morgan Stanley Capital I Trust 2005-IQ9
Commercial mortgage pass-through certificates
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
M B B+ 1.43%
N B- B 1.17%
O CCC+ B- 0.78%
Ratings Affirmed
Morgan Stanley Capital I Trust 2005-IQ9
Commercial mortgage pass-through certificates
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 20.81
A-2 AAA 20.81
A-3 AAA 20.81
A-4 AAA 20.81
A-AB AAA 20.81
A-5 AAA 20.81
A-1A AAA 20.81
A-J AAA 11.96
B AA 9.75
C AA- 8.97
D A 7.15
E A- 6.11
F BBB+ 5.07
G BBB 4.29
H BBB- 3.12
J BB+ 2.73
K BB 2.21
L BB- 1.82
X-1 AAA N/A
X-2 AAA N/A
X-Y AAA N/A
N/A -- Not applicable.
MOTOR COACH: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Steven Church and Dawn McCarty of Bloomberg News report that Motor
Coach Industries International, Inc., and its affiliates filed for
Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court
for the District of Delaware on September 15, 2008, blaming
falling demand, the rising cost of steel and the weak U.S. dollar.
The Debtors negotiated a reorganization plan with one of its main
creditors, Franklin Mutual Advisors, LLC, designed, to cut
$300 million in debt, the report says. The agreement would give
Franklin Mutual and other creditors an equity stake in the
Debtors, currently majority owned by JLL Partners, Inc., the
report continues.
As part of the Franklin Mutual agreement, the Debtors are required
to file a reorganization plan with the court within 45 days and
receive confirmation from the Court within 135 days, according to
the report.
Plan to Borrow $315MM from GE Capital
The Debtors said it plans to borrow as much as $315 million from a
group of lenders led by GE Capital Markets Inc. to help fund
operations as they restructure, the report says. Operations
shouldn't be interrupted, the report quotes the company as saying.
The rising value of the Canadian dollar costs Motor Coach
$30 million in 2007 because most of the company's workforce and
factories are in Winnipeg, Manitoba, while its sales are mainly in
the U.S., according to the report. Every time the Canadian dollar
rose in value against the U.S. dollar by 1 cent, the company lost
$2 million in cash, court records show.
Private-sector customers made up 64 percent of new coach unit's
sales in 2007, says the report.
The company's Canadian subsidiaries aren't in bankruptcy, the
report says. About 750 of Motor Coach's 1,975 employees work in
the U.S., while the rest work in Canada, according to the report.
Wilmington, Delaware-based Motor Coach Industries International,
Inc.-- http://www.mcicoach.com/-- and its subsidiaries
manufacture intercity coaches for the tour, charter, line-haul,
scheduled service, and commuter transit sectors in the U.S. and
Canada. They also operate seven sales centers and nine service
centers in the U.S. and Canada and is the industry's supplier of
aftermarket parts for most makes and models.
Jason M. Madron, Esq., and Lee E. Kaufman, Esq., at Richards
Layton & Finger, P.A., represent the Debtors in their
restructuring efforts. They listed assets of as much as
$1 billion and debts of as much as $765 million.
MOTOR COACH: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Motor Coach Industries International, Inc.
Corporate Trust Center
1209 Orange Street
Wilmington, DE 19801
Bankruptcy Case No.: 08-12136
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
MCII Holdings, Inc. 08-12137
MCI Financial Services, Inc. 08-12138
MCI Sales and Service, Inc. 08-12139
MCI Service Parts, Inc. 08-12140
MCII Financial Services II, Inc. 08-12141
Motor Coach Industries, Inc. 08-12142
Type of Business: The Debtors manufacture intercity coaches for
the tour, charter, line-haul, scheduled
service,
and commuter transit sectors in the U.S. and
Canada. The Debtors also operate seven sales
centers and nine service centers in the U.S.
and Canada and is the industry's supplier of
aftermarket parts for most makes and models.
http://www.mcicoach.com/
Chapter 11 Petition Date: September 15, 2008
Court: District of Delaware (Delaware)
Judge: Brendan Linehan Shannon
Debtors' Counsel: Simpson Thacher & Bartlett LLP
Local Counsel: Jason M. Madron, Esq.
madron@rlf.com
Lee E. Kaufman, Esq.
collins@RLF.com
Richards, Layton & Finger, P.A.
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
Tel: (302) 651-7595
Fax: (302) 651-7701
Restructuring Managers: AP Services LLC
Investment Bankers: Rothschild Inc.
Notice and Claims Agent: Kurtzman Carson Consultants LLC
Debtors' debtor-in-possession lenders:
General Electric Capital Corporation and GE Canada Finance
Holding Company as senior debtor-in-possession lenders.
Goldman Sachs Credit Partners LP as junior debtor-in-possession
lenders
Estimated Assets: $500 million to $1 billion
Estimated Debts: $100 million to $500 million
Debtor's 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
JLL Fund III L.P. 11.25% Sr. Sub. $209,725,295
450 Lexington notes
Avenue, Suite 3350
Tel: (212) 286-8600
Fax: (212) 286-8626
The Bank of New York Trust Indentured Trustee $59,151,065
Company, N.A. 11.25% Sr. Sub.
Corporate Trust notes
Administration
2 N. LaSalle
Street, Suite 1020
Chicago, IL 60602
Tel: (312) 827-8500
Fax: (312) 827-8542
Manitoba Development term loan $6,151,065
Corporation
555-1555 Carlton St.
Winnipeg, MB, R3C 3H8
Tel: (204) 945-0141
Fax: (204) 945-1193
Allison Transmission trade $6,412,366
Division
4700 West 10th St.
Indianapolis, IN 4606-0894
Tel: (317) 242-4345
Fax: (317) 242-5139
Arvin Motor trade $1,630,369
444 Hebron Rd.
Heath, OH 43056-1440
Tel: (248) 435-1057
Fax: (740) 344-9726
Cummins Engine Co. Inc. trade $959,653
500 Jackson Street
Columbus, IN 47201
Tel: (812) 377-9859
Fax: (812) 377-1311
Gilberto Cantu Garcia litigation $700,000
et al.
The Ammons Law Firm LLP
520 E. Levee Street
Brownsville, TX 78520
Tel: (965) 541-4981
Fax: (965) 504-3674
Caterpillar Corp. Inc. trade $614,535
100 N.E. Adams St.
Peoria, IL 61629
Tel: (309) 578-3589
Fax: (309) 578-2045
Carrier Transicold trade $579,878
Box 4895
Carrier Parkway
Syracuse, NY 13221
Tel: (315) 432-6519
Fax: (315) 432-7218
Webb Wheels Products Inc. trade $482,311
Transit Business Unit
714 Industrial Drive SW
Cullman, AL 35055
Tel: (256) 735-2276
Fax: (866) 514-3301
Arow Global Inc. trade $459,783
404 Egesz St.
Wennipeg, MB, R2R 1X5
Tel: (204) 633-4808
Fax: (204) 693-7108
Detroit Diesel trade $444,591
Corporation
13400 Outer Drive West
Detroit, MI 48239-4001
Tel: (313) 529-5060
Fax: (313) 529-7288
Vansco Electronics LP trade $380,501
1205 Clarence Avenue
Winnipeg, MB, R3T 1T4
Tel: (204) 453-3339 ext. 396
Fax: (701) 845-6331
Hamilton Sundstrand trade $372,130
8201 109th St., Suite 500
Pleasant Prairie, WI 53158
Tel: (262) 947-2220
Fax: (262) 947-2221
Hypower Systems trade $323,096
39Terracon Pl.
Winnipeg, MB, R2J4B3
Tel: (204) 231-2328
Fax: (204) 231-1393
Toromont Cat trade $311,240
140 Inksbrook Dr.
Winnipeg, MB, R2R2W3
Tel: (204) 453-4343
Fax: (204) 475-7694
Caprock Mfg. Inc. trade $280,770
2303 120th St.
Lubbock, TX 79423
Tel: (806) 745-6454
Fax: (806) 745-9441
Johnson & Towers Inc. trade $276,9082
500 Wilson Point Rd.
Baltimore, MD 21220
Tel: (856) 234-6690
Fax: (410) 687-5137
Modine Mfg. Company trade $273,662
615 Bierly Rd.
Pemberville, OH 43450
Tel: (262) 636-1200
Fax: (262) 636-1424
Romeo-Rim Inc. trade $227,434
Design Intent Engineering trade $201,094
Inc.
Baldwin Filters trade $200,958
Linnig Corporation trade $190,497
Ricon Corporation trade $157,469
March Electronics Inc. trade $157,075
ZF Sales & Service N. trade $155,683
America LLC
Bjornson Oil trade $143,457
Company
Guardian-Flat Glass trade $141,699
Thermo King Corporation trade $137,890
NATIONAL CITY: Hires LeKachman to Liquidate $20BB in Assets
-----------------------------------------------------------
Linda Shen of Bloomberg reports that National City Corp. hired Jim
LeKachman to oversee the disposal of $20 billion in assets from
businesses that the company is exiting.
Mr. LeKachman, formerly at General Electric Co. unit GE Money,
will join the Company in October and help sell or manage its non-
prime mortgages and some home equity, construction and car loans,
Ms. Shen quotes National City.
The Company said in May 2008 that the $7 billion it raised in
April would let the bank wind down non-prime mortgage and home-
equity operations, reports Ms. Shen. It had a $1.76 billion
second-quarter loss after being forced to set aside more money to
cover homeowners and builders defaulting on loans and taking a
charge on past acquisitions, according to Ms. Shen.
National City stock lost more than 70 percent of its value this
year, Ms. Shen adds.
About National City Corporation
Headqurtered in Cleveland, Ohio, National City Corporation (NCC)
-- http://www.nationalcity.com/-- is financial holding company
that operates through an extensive distribution network in Ohio,
Florida, Illinois, Indiana, Kentucky, Michigan, Missouri,
Pennsylvania, and Wisconsin, and also conducts selected lending
and other financial services businesses on a nationwide basis. The
primary source of National City's revenue is net interest income
from loans and deposits, revenue from loan sales and servicing,
and fees from financial services provided to customers. Its
operations are primarily conducted through more than 1,400 branch
banking offices located within National City's nine-state
footprint. In addition, National City operates over 410 retail
mortgage offices throughout the United States.
As reported by the TCR on June 9, 2008, National City Corp.'s
banking unit has entered into a confidential agreement with the
Office of the Comptroller of the Currency that effectively put
the bank on probation. The TCR, citing The Wall Street Journal,
reported that the terms of the agreement with National City aren't
disclosed, however, regulators usually urge banks to maintain
adequate capital and improve lending standards. According to WSJ,
National City has been severely contracting its mortgage and home-
equity lending, laying off hundreds of employees in the process.
NETBANK INC: Court Okays Second Amended Liquidation Plan
--------------------------------------------------------
According to Bankruptcy Data, the U.S. Bankruptcy Court for the
Middle District of Florida approved NetBank Inc.'s Second Amended
Liquidating Plan of Reorganization.
Bankruptcy Data relates that the Court overruled the U.S.
Trustee's objection to the Plan.
As reported in the Troubled Company Reporter on Sept. 5, 2008,
Donald F. Walton, the U.S. Trustee for Region 21, objected to the
plan of liquidation for NetBank, saying that a provision in
NetBank's liquidation plan would exculpate non-debtors.
July 31 Plan Modifications
On July 31, 2008, pursuant to Section 1127 of the Bankruptcy Code,
NetBank submitted modifications to its Amended Liquidating Plan of
Reorganization. The Amended Plan provides that the holders of
equity interests in the Debtor in Class VIII are deemed to have
rejected the Plan and will not receive a ballot because the
likelihood of a distribution to this class is remote.
The Debtor told the Court the amendment has no effect on any
creditor or interest holder other than the Interest Holders in
Class VIII. According to the Debtor, the amendment does not alter
the treatment of the Interest Holders in Class VIII, only their
voting rights.
The Debtor explained that at the time of the filing of the Amended
Plan, it only had knowledge of that there were approximately 350
holders of record of the Debtor's common stock. Subsequently, the
Debtor has learned that there are more than 11,000 Interests
Holders. Because the likelihood of a distribution to Interest
Holders is remote, the expense with regard to solicitation of
acceptances of the Amended Plan from Interest Holders -- which
acceptance is irrelevant to confirmation under Section 1129 -- is
cost prohibitive. The Debtor has received an estimate that the
cost to the estate to provide solicitation packages to all
Interest Holders would be in excess of $250,000.
About NetBank
Headquartered in Jacksonville, Florida, NetBank, Inc. --
http://www.netbank.com/-- is a financial holding company of
Netbank, the United States' oldest Internet bank serving retail
and business customers in all 50 states. NetBank, Inc. does
retail banking, mortgage banking, business finance, and provides
ATM and merchant processing services.
The company filed for chapter 11 protection on Sept. 28, 2007
(Bankr. M.D. Fla. Case No. 07-04295). Alan M. Weiss, Esq., at
Holland & Knight LLP, represents the Debtor. The U.S. Trustee for
Region 21 appointed six creditors to serve on an Official
Committee of Unsecured Creditors of the Debtor's case. Rogers
Towers, Esq. at Kilpatrick Stockton LLP, represents the Committee
in this case. Rogers Towers P.A. serves as co-counsel to the
Committee. As of Sept. 25, 2007, the Debtor listed total
assets of $87,213,942 and total debts of $42,245,857.
ORKNEY RE: Moody's Junks Ratings on Two Classes of 30-Year Notes
----------------------------------------------------------------
Moody's Investors Service has downgraded the notes issued by
Orkney Re II plc. The rating action concludes a review for
downgrade that was initiated on March 14, 2008, based on Moody's
assessment of significant projected investment losses for the
underlying mortgage-related securities.
Orkney Re II:
* $42.5 million of 30-year Class A-2 Fixed Rate Notes
-- Current Rating: Caa2, stable outlook
-- Prior Rating: Ba1, on review for downgrade
* $30 million of 30-year Class B-1 Subordinated Floating Rate
Notes
-- Current Rating: C, stable outlook
-- Prior Rating: Ba3, on review for downgrade
Orkney Re II is a special purpose reinsurer sponsored by Scottish
Annuity & Life Insurance Company Ltd. (B3 insurance financial
strength, on review with direction uncertain) for the purpose of
financing the "excess" reserve requirement associated with
specified blocks of business ceded by Scottish Re (U.S.), Inc.
(Ba3 IFS rating, on review with direction uncertain), a subsidiary
of Scottish Re Group Limited (Scottish Re; Pink Sheets: SKRRF;
Caa3 preferred stock, on review with direction uncertain). The
reinsurance agreement between Scottish Re (U.S.) and Orkney Re II
covers defined blocks of level premium term life policies subject
to the statutory reserve requirements of Regulation XXX. Moody's
rating analysis views the actuarial assumptions in Regulation XXX
as producing economically redundant statutory reserves for level
premium term products.
According to Moody's, the downgrade is based on Moody's loss
projections for Orkney Re II's investment portfolio, which is
heavily invested in subprime and Alt-A residential mortgage-backed
securities, as well as the possible impact of further unrealized
investment losses on the default probability of the rated notes.
The losses on the RMBS securities include both realized credit
impairments as well as unrealized mark-to-market losses, although
none of the securities in the Orkney Re II portfolio have
experienced a payment default to date. The performance of the
underlying level premium term business is consistent with Moody's
original expectations, and is not directly affected by movements
in the investment portfolio.
The rating agency said that based on current expectations for
ultimate losses on the investments supporting the repayment of the
notes, there is a high probability that the class A-2 notes will
suffer a payment default at some point in the near- to
intermediate-term. The class B-1 notes are currently not paying
interest, and are not expected to receive any significant future
payments of interest or principal.
According to Shachar Gonen, Analyst, "The quarterly requirement
for Orkney Re II to true up the market value of the assets held in
the reserve credit trust to the level of the statutory reserves,
combined with the expected investment losses on the RMBS
securities, have significantly eroded unencumbered surplus in the
vehicle." Moody's emphasized that whereas there is a high
probability of an interruption of interest payments, primarily
driven by a decline in the market value of the investments, the
ultimate loss on the notes will be driven both by the performance
of the underlying term life business and the performance of the
invested assets.
Most of the notes issued by Orkney Re II to fund the collateral
requirements for the statutory reserves are insured by a financial
guarantor, while some of the notes were issued without financial
guaranty insurance. The ratings of the uninsured notes consider
the results of stochastic modeling of insurance and investment
cash flows from the level premium term business supporting the
transaction, including the modeled expected losses to the note
holders.
These rated notes are not affected by the rating action:
Orkney Re II:
* $382.5 million of Series A-1 Floating Rate Notes, insured by
Assured Guaranty (UK) Ltd. (Aaa for insurance financial
strength, on review for downgrade)
-- Current Rating: Aaa
The rating on Assured Guaranty (UK) Ltd. is on review for
downgrade.
Orkney Re II plc is a public limited company established in
Ireland as a special purpose vehicle. Scottish Re is a Cayman
Islands company with principal executive offices located in
Bermuda. On Dec. 31, 2007, Scottish Re reported total assets of
$12.8 billion and shareholder's equity of $347 million.
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to repay punctually senior
policyholder claims and obligations.
PORTOLA PACKAGING: Plan Confirmation Hearing Slated for October 6
-----------------------------------------------------------------
A hearing to confirm the reorganization plan of Portola Packaging
Inc. and its debtor-affiliates is set for Oct. 6, 2008. Objection
deadline is Sept. 29, 2008, and the reply date (if any) is Oct. 3,
2008.
The Troubled Company Reporter said on Sept. 1, 2008, that in
connection with the Debtors' bankruptcy filing, the Debtors
confirmed that all of its secured lenders and holders of
approximately 90% in aggregate principal amount of its 8-1/4%
Senior Notes due 2012 agreed to a voluntary and consensual
restructuring of the company pursuant to the restructuring support
agreement dated July 24, 2008. Pursuant to the proposed plan of
reorganization, holders of the Senior Notes will receive 100% of
the common stock of reorganized Portola in exchange for their
claims.
The company reached agreement with its existing secured lenders
to provide the Company with debtor-in-possession financing of
US$79 million to pay off the outstanding indebtedness under the
company's existing secured facilities and to finance its ongoing
operations.
About Portola Packaging
Portola Packaging Inc. -- http://www.portpack.com/-- designs,
manufactures, and markets a full line of tamper-evident plastic
closures, bottles, and equipment for the beverage and food
industries, as well as plastic closures and containers for the
cosmetics industry.
The company and 6 of its debtor-affiliates filed for Chapter 11
reorganization on Aug. 27, 2008 (Bankr. D. Del. Lead Case No.
08-12001). Edmon L. Morton, Esq., Robert S. Brady, Esq., and Sean
T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent
the Debtors as counsel. When the Debtors filed for protection
from their creditors, they listed assets of between US$50 million
and US$100 million, and debts of between US$100 million and
US$500 million. The company has locations in China, Mexico and
Belgium.
QUEBECOR WORLD: Court OKs Five Engagement Letters with KPMG LLP
---------------------------------------------------------------
Judge James Peck of the U.S. Bankruptcy Court for the Southern
District of New York (Manhattan) authorized Quebecor World Inc.
and its debtor-affiliates to enter into the five additional
engagement letters they entered into with KPMG LLP (US), under
which KPMG will perform tax compliance and consulting services for
the Debtors.
Parties Enter Into Transfer Pricing Services Pact
The Debtors also ask the Court to approve an additional
engagement letter they entered into with KPMG, which contemplates
for KPMG to provide to the Debtors transfer pricing services with
respect to certain transactions conducted during fiscal year
ended 2007.
KPMG, according to Michael J. Canning, Esq., at Arnold & Porter
LLP, in New York, is expected to provide a 2007 transfer pricing
documentation update study to satisfy compliance with Section 482
of the Internal Revenue Code with respect to determining whether
the transfer prices of the transactions between the Debtors, a
third-party insurer, and Quebecor World, Inc. meet the arm's-
length standard.
The Transfer Pricing Services will consist of three broadly
defined phases:
(a) US will engage in an information gathering process
consisting of reviewing relevant documents and conducting
interviews to supplement KPMG US's understanding of the
facts;
(b) KPMG US will undertake functional, economic and actuarial
analysis of the information; and
(c) KPMG US will prepare a transfer pricing documentation
study that will include detailed descriptions of the
businesses, functional descriptions of the intercompany
transaction and economic analysis of the relevant
intercompany transactions during the taxable
year 2007. KPMG US will, at the end of the drafting
stage, incorporate the Debtors' comments and issue a final
report.
The Transfer Pricing Services may necessitate the assistance of a
member firm of KPMG International, in particular certain tax
professionals from KPMG LLP (Canada), which professionals either
previously have worked for the Debtors, Mr. Canning tells the
Court. KPMG US intends to use KPMG LLP (Canada) in connection
with the services to be provided in the Engagement Letter.
KPMG US will not make a profit from the use of the professionals
and KPMG US will pay KPMG Canada for the use of its tax
professionals through a KPMG inter-member firm agreement. The
fee of KPMG US and any KPMG member will be the lesser of actual
time incurred to complete the Transfer Pricing Services at 80% of
local office standard hourly rates or $95,000.
The Debtors will pay KPMG according to these discounted hourly
rates for the Transfer Pricing Services:
(a) KPMG US Discounted Hourly Rates
Professional Discounted Rate
------------ ---------------
Tax Managing Director $660
Senior Manager $600
Manager $480
Senior Associate $320
Associate $240
(b) KPMG Canada Discounted Hourly Rates
Professional Discounted Rate
------------ ---------------
Practice Leader C$512
Senior Manager C$420-C$440
Manager C$276
Senior Associate C$180-C$192
In addition, KPMG US will bill the Debtors and any KPMG member
firm's for their out-of-pocket expenses and third party database
fees. KPMG US and any KPMG member firm will not charge for
overhead or administrative fees.
Robert Clair, a managing director with KPMG LLP, in New York,
will have overall responsibility for the Engagement. Julia
Keppler, a senior manager in the New York office will be
responsible for the day-to-day conduct of the project.
Robert Clair disclosed that KPMG US continues to be engaged by
Quebecor Word, Inc., and anticipates entering into additional
engagement letters with QWI or through one or more inter-member
firm agreements with KPMG Canada. According to Mr. Clair, KPMG
US does not anticipate that the Debtors will be party to any
engagement letters. Further, KPMG US does not anticipate
receiving payments in respect of the Engagement nor have any
arrangements been made to receive payments directly from the
Debtors.
Mr. Clair maintains that KPMG US does not represent any interest
adverse to the Debtors or their estates and remains a
"disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.
KPMG US delivered to the Court an addendum to the March 20, 2008
engagement letter entered into with the Debtors to provide for
KPMG US to prepare federal and state income tax returns for the
year 2007 for three additional affiliates of QWUSA, which
services are to be provided at the same rates and upon the same
terms approved by the Court in connection with KPMG US's initial
employment order.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of $3,412,100,000, total
liabilities of $4,326,500,000, preferred shares of $62,000,000,
and total shareholders' deficit of $976,400,000.
The Debtors' CCAA stay has been extended to Sept. 30, 2008.
(Quebecor World Inc. News, Issue No. 25; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
QUEBECOR WORLD: Wants Plan Filing Period Extended Until January 31
------------------------------------------------------------------
Quebecor World Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York (Manhattan)
to further extend the period by which they have exclusive rights
to file a plan of reorganization until Jan. 31, 2009, and the
period to solicit acceptances of that plan until March 31, 2009.
The Debtors' current Plan Filing Deadline expires on Sept. 30,
2008, and their Solicitation Period expires on Nov. 28, 2008.
The complexity of the Debtors' businesses and corporate structure
support the requested extension of the Exclusive Periods, Michael
J. Canning, Esq., at Arnold & Porter LLP, in New York, tells the
Court.
Mr. Canning relates that subsequent to the Debtors' filing of
their first request to extend the exclusive periods in April
2008, in light of the size of their cases, the need to address
the operational issues associated with their businesses, and the
challenges arising from the cross-border nature of their
financial affairs, they have determined that they will require a
period of time longer than the four-month extension of time
granted in their first extension request to formulate and confirm
a plan of reorganization.
Mr. Canning assures the Court that the Debtors are not seeking an
extension of the Exclusive Periods to pressure creditors into
accepting their reorganization demands. He points out that the
Debtors' Chapter 11 cases have not been pending long enough to
result in material prejudice to any creditors, and there is no
indication that the Debtors are using the Chapter 11 process to
extract particular demands from any creditor group.
"To the contrary, the purpose of the Debtors' present request for
an extension of the Exclusive Periods is to ensure that the
Debtors have an opportunity to respond to and address the
concerns of all creditor groups in formulating restructuring
proposals and, ultimately, a plan of reorganization," Mr. Canning
tells the Court.
Section 1121(b) of the Bankruptcy Code provides a debtor with an
exclusive right to file a plan of reorganization during the
first 120 days after the Petition Date. If a debtor files a plan
during the exclusive filing period, Section 1121(c)(3) grants an
additional 60 days during which the debtor may solicit
acceptances of that plan and no other party-in-interest may file
a plan. Section 1121(d) provides that on request of a party-in-
interest made within the exclusive periods after notice and a
hearing, the court may for cause reduce or increase the 120-day
period or the 180-day period. However, the 120-day period may
not be extended beyond a date that is 18 months after the
petition date and the 180-day period may not be extended beyond a
date that is 20 months after the petition date.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of $3,412,100,000, total
liabilities of $4,326,500,000, preferred shares of $62,000,000,
and total shareholders' deficit of $976,400,000.
The Debtors' CCAA stay has been extended to Sept. 30, 2008.
(Quebecor World Inc. News, Issue No. 25; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
QUEBECOR WORLD: Wants KPMG Canada to Give Tax Consulting Services
-----------------------------------------------------------------
Quebecor World Inc. and its debtor-affiliates and KPMG LLP
(Canada) filed an additional engagement letter with the the U.S.
Bankruptcy Court for the Southern District of New York
(Manhattan), which contemplates for KPMG Canada to provide tax
consulting services with respect to various US tax projects and
restructuring initiatives.
KPMG Canada's services are to be provided at the same rates and
upon the same terms and conditions approved by the Court in
connection with its employment.
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of $3,412,100,000, total
liabilities of $4,326,500,000, preferred shares of $62,000,000,
and total shareholders' deficit of $976,400,000.
The Debtors' CCAA stay has been extended to Sept. 30, 2008.
(Quebecor World Inc. News, Issue No. 25; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
RANCHO MANANA: Discloses $46,200,000 in Liabilities
---------------------------------------------------
Rancho Manana Ventures, LLC, filed its schedules of assets and
liabilities with the U.S. Bankruptcy Court for the District of
Arizona on September 11, 2008, indicating $9,040,000 in assets and
$46,200,000 in debts, more than five times the value of its homes
and undeveloped land, the Turkish Daily News reports, citing
Bloomberg News.
Phoenix, Arizona is one of the cities hit hardest by the collapse
of the U.S. housing market, Turkish Daily News cites the report.
Bloomberg quotes New York-based real estate research company Radar
Logic's Sept. 2 report stating that the city's home prices fell
26.9 percent per square foot in June from a year earlier.
Reportedly, Rancho Manana's debt includes National City Bank's
secured claim of $7.08 million.
Cave Creek, Arizona-based Rancho Manana Ventures, LLC, is a time-
share condominium project. The Debtor filed for Chapter 11
bankruptcy protection with the United States Bankruptcy Court for
the District of Arizona on August 13, 2008 (Case No. 08-10441).
Thomas E. Littler, Esq., at Warnick & Litter, PLC, represents the
Debtor in its restructuring efforts.
RITCHIE RISK: Court Approves Chapter 11 Liquidation Plan
--------------------------------------------------------
The U.S. District Court for the Southern District of New York
(Manhattan) approved a chapter 11 liquidating plan proposed by
Ritchie Risk-Linked Strategies Trading (Ireland) Ltd. and Ritchie
Risk-Linked Strategies Trading (Ireland) II Ltd., William Rochelle
of Bloomberg News says.
As reported by the Troubled Company Reporter on Aug. 4, 2008,
under the plan, Ritchie I creditor ABN AMRO Bank NV will initially
get an undisclosed amount of cash after the plan's effectivity,
plus some of the proceeds from an ongoing policy rights lawsuit
between the Debtors and co-investor, Coventry First LLC. Ritchie
II's unsecured creditors will be paid from the Coventry suit
proceeds on a pro rated basis.
The Hon. Burton Lifland on July 30, 2008, approved a disclosure
statement explaining the Debtors' modified liquidation plan.
About Ritchie Risk-Linked
Based in Dublin, Ireland, Ritchie Risk-Linked Strategies Trading
(Ireland) Ltd. and Ritchie Risk-Linked Strategies Trading
(Ireland) II Ltd. -- http://www.ritchiecapital.com/-- are Dublin-
based funds of hedge fund group Ritchie Capital Management. The
Debtors were formed as special purpose vehicles to invest in life
insurance policies in the life settlement market.
The Debtors filed for chapter 11 protection on June 20, 2007
(Bankr. S.D.N.Y. Case Nos. 07-11906 and 07-11907). Allison H.
Weiss, Esq., David D. Cleary, Esq., and Lewis S. Rosenbloom, Esq.,
at LeBoeuf, Lamb, Greene & MacRae, LLP represent the Debtors in
their restructuring efforts. No Official Committee of Unsecured
Creditors has been appointed to date. When the Debtors filed for
bankruptcy, they listed estimated assets and debts of more than
$100 million.
About Ritchie Capital
Headquartered in Lisle, Illinois, Ritchie Capital Management
Ltd. -- http://www.ritchiecapital.com/-- is a private asset
management firm founded in 1997 by former college football
linebacker Thane Ritchie. The company has offices in New York
and Menlo Park, California.
S & A RESTAURANT: Trustee Can Retain NRC Realty as Sales Agent
--------------------------------------------------------------
Michelle H. Chow, the Chapter 7 bankruptcy trustee for S & A
Restaurant Corp. and its debtor-affiliates, obtained authority
from the The U.S. Bankruptcy Court for the Eastern District of
Texas, to retain NRC Realty Advisors LLC as sales agent.
As reported in the Troubled Company Reporter on Sept. 3, 2008, NRC
is expected to:
* provide in-depth financial advisory services;
* file reviews;
* prepare collateral sales materials and due diligence
packages;
* develop an all-inclusive campaign;
* arrange on-site access to the stores for potential buyers
and brokers;
* create detailed reports about the progress of the sale, the
negotiations and closing of the sales; and
* assist the Trustee in determining a minimum sales price for
the GE Assets.
The Trustee will pay to NRC 4% of the gross sales proceeds for
each restaurant. If NRC is working with another broker, the
Trustee will add 1%, thus paying 5% to NRC. The Trustee has not
paid any retainer fees to NRC.
The Trustee confirms that the retention of NRC is necessary for
the orderly liquidation and realization of the GE Assets for the
benefit of the Debtors' estates and creditors.
Dennis L. Ruben, managing director of NRC, assured the Court that
NRC is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
About S & A Restaurant
Headquartered in Plano, Texas, S & A Restaurant Corp. --
http://www.metrogroup.com,http://www.steakandale.com,
http://www.steakandalerestaurants.com,http://www.bennigans.com/
-- and other affiliated entities operate the Bennigan's Grill &
Tavern, and the Steak & Ale restaurant chains under the Metromedia
Restaurant Group. Bennigan's Grill & Tavern is a chain of more
than 310 pub-themed restaurants offering sandwiches and burgers,
as well as ribs, steaks, and seafood. The Steak & Ale chain
offers a broader menu set in the atmosphere of an 18th century
English country inn. The Metromedia Restaurant Group, a unit of
closely held conglomerate Metromedia Company, is one of the
world's leading multi-concept table-service restaurant groups,
with more than 800 Bennigan's(R), Bennigan's SPORT(TM), Steak and
Ale(R), Ponderosa Steakhouse(R) and Bonanza(TM) Steakhouse
restaurants in the United States and abroad. MRG's annual U.S.
sales are estimated at $1,000,000,000.
S & A Restaurant and 38 of its affiliates filed Chapter 7 petition
under the U.S. Bankruptcy Code on July 29, 2008 (Bankr. E.D. Tex.
Case No. 08-41898). J. Michael Sutherland, Esq. at Carrington
Coleman Sloman & Blumenthal, is the Debtors counsel. The Debtors
disclosed total scheduled assets of $2,302,057 and total scheduled
liabilities of $159,432,691.
Michelle H. Chow is the Debtors' Chapter 7 bankruptcy trustee.
The lead counsel for the trustee is Kane Russell Coleman & Logan
PC. Mark Ian Agee, Esq., of the law firm Mark Ian Agee, Attorney
at Law, is co-counsel. (Bennigan's and Steak & Ale Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
S & A RESTAURANT: Trustee Endorses Lain Faulkner as Accountant
-------------------------------------------------------------
Michelle H. Chow, the Chapter 7 bankruptcy trustee for S & A
Restaurant Corp. and its debtor-affiliates, seeks authority from
the The U.S. Bankruptcy Court for the Eastern District of Texas to
retain Lain Faulkner & Co. P.C., as accountant.
As the Trustee's accountant, Lain Faulkner will:
* assist the Trustee in analyzing the Debtors' records for any
avoidance actions;
* assist the Trustee in performing claims analysis;
* provide electronic data management services including the
collection and preservation of e-mails and other electronic
data;
* prepare and file the income tax return for the Debtors; and
* other accounting services which the Trustee may require.
Lain Faulkner's professionals will be billed according to their
hourly rates:
Title Rate per hour
----- -------------
Shareholder $300 to $375
Manager $275
Staff Accountant $195 to $140
Clerical and Bookkeepers $70 to $140
Lain Faulkner will will apply for compensation in accordance to
Sections 330 and 331 of the Bankruptcy Code.
The Trustee has not paid any retainer fees to Lain Faulkner.
Jason Rae, a shareholder at Lain Faulkner, tells the Court that
his firm has performed services in certain bankruptcy cases that
have involved certain of the creditors and attorneys present in
the Debtors' Chapter 7 cases. Mr. Rae, however, stresses that
Lain Faulkner does not represent any interest materially adverse
to the Debtors' estates with respect to matters upon which it is
employed by the Trustee. Mr. Rae assures the Court that should
Lain Faulkner discover any material adverse associates, the firm
will file the appropriate disclosure by a supplemental affidavit.
Mr. Rae avers that Lain Faulkner is a "disinterested person" as
the term is defined under Section 101(14).
About S & A Restaurant
Headquartered in Plano, Texas, S & A Restaurant Corp. --
http://www.metrogroup.com,http://www.steakandale.com,
http://www.steakandalerestaurants.com,http://www.bennigans.com/
-- and other affiliated entities operate the Bennigan's Grill &
Tavern, and the Steak & Ale restaurant chains under the Metromedia
Restaurant Group. Bennigan's Grill & Tavern is a chain of more
than 310 pub-themed restaurants offering sandwiches and burgers,
as well as ribs, steaks, and seafood. The Steak & Ale chain
offers a broader menu set in the atmosphere of an 18th century
English country inn. The Metromedia Restaurant Group, a unit of
closely held conglomerate Metromedia Company, is one of the
world's leading multi-concept table-service restaurant groups,
with more than 800 Bennigan's(R), Bennigan's SPORT(TM), Steak and
Ale(R), Ponderosa Steakhouse(R) and Bonanza(TM) Steakhouse
restaurants in the United States and abroad. MRG's annual U.S.
sales are estimated at $1,000,000,000.
S & A Restaurant and 38 of its affiliates filed Chapter 7 petition
under the U.S. Bankruptcy Code on July 29, 2008 (Bankr. E.D. Tex.
Case No. 08-41898). J. Michael Sutherland, Esq. at Carrington
Coleman Sloman & Blumenthal, is the Debtors counsel. The Debtors
disclosed total scheduled assets of $2,302,057 and total scheduled
liabilities of $159,432,691.
Michelle H. Chow is the Debtors' Chapter 7 bankruptcy trustee.
The lead counsel for the trustee is Kane Russell Coleman & Logan
PC. Mark Ian Agee, Esq., of the law firm Mark Ian Agee, Attorney
at Law, is co-counsel. (Bennigan's and Steak & Ale Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SEMGROUP LP: Final Hearing on $250 Million DIP Financing Tomorrow
-----------------------------------------------------------------
The Hon. Brendan L. Shannon of the United States Bankruptcy Court
for the District of Delaware postponed issuing a final ruling on
the SemGroup L.P. and its debtor-affiliates' request to obtain
$250,000,000 of DIP financing loans until September 17, 2008,
Bloomberg News said.
Judge Shannon previously granted interim authority for the
Debtors to obtain up to $150,000,000 of the DIP Loans from Bank
of America, N.A., as agent for a syndicate of lenders. In a
press release dated September 10, 2008, the Debtors said they
have posted approximately $70,000,000 of DIP letters of credit
to, among other things, ensure continuing supplies from vendors.
The Debtors also said that they currently have $400,000,000 in
cash, a majority of which will be used to purchase energy
products for subsequent sale. "We plan to use these funds to
operate our business units as profitably as possible so that we
maximize their value in a sale or as ongoing operations," said
Terry Ronan, SemGroup L.P. acting president and chief executive
officer.
About SemGroup
SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt. Services include purchasing, selling, processing,
transporting, terminaling and storing energy. SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525). These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent. The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
Nov. 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
(SemGoup Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
SEMGROUP LP: U.S. Trustee Appoints Chapter 11 Examiner
------------------------------------------------------
The Hon. Brendan L. Shannon of the United States Bankruptcy Court
for the District of Delaware directed Roberta A. DeAngelis, Acting
U.S. Trustee for Region 3, to appoint a Chapter 11 examiner to
investigate the trading practices and the prepetition transactions
of SemGroup LP and its debtor affiliates, pursuant to Section
104(c) of the Bankruptcy Code.
The Examiner will investigate the circumstances surrounding
the Debtors' trading strategy, as well as certain insider
transactions, the transfer of the $1,960,000,000 trading account
with the New York Mercantile Exchange to Barclays, Plc, and the
formation of the SemGroup Energy Partners, L.P., and its
subsequent acquisitions.
The Examiner will also probe the potential improper use of
borrowed funds from the Debtors' operations and the liquidation
of its assets, in order to satisfy margin calls in connection
with the trading strategy.
"The appointment of an examiner in a case like this is to be
expected," Lance Ignon, spokesman for SemGroup, told The Tulsa
World.
The U.S. Trustee, in support of its request, has argued that
appointment of an examiner to investigate the Debtors' Chapter 11
cases will "shed light on the issues and produce a report that
informs the Court and the public whether culpable conduct
occurred." Bank of America, N.A., agent for the DIP Lenders, and
other parties, support the appointment request. The Bank,
however, sought a limited scope of the investigation, a 30-day
timeline, and a $100,000 budget.
Judge Shannon directed the Debtors, the Committee, and the
prepetition secured parties to fully cooperate with the Examiner
in its investigation.
About SemGroup
SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt. Services include purchasing, selling, processing,
transporting, terminaling and storing energy. SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525). These represent the Debtors' restructuring efforts: John
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil
Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the
Debtors' claims agent. The Debtors' financial advisors are The
Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
Nov. 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
(SemGoup Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
SEMGROUP LP: Taps PA Consulting as Industry Consulants
------------------------------------------------------
SemGroup L.P. and its debtor-affiliates seek authority from the
United States Bankruptcy Court for the District of Delaware to
employ PA Consulting Group, Inc., as energy industry consultants.
As consultants, PA Consulting will:
(a) develop a trading protocol;
(b) if needed, assist with trading book and forward contract
claims and related issues;
(c) assist the investigation team;
(d) develop an allocation methodology for invoices relating to
commodities purchased pre- and postpetition; and
(e) provide other services as requested by the Debtors from
time to time.
The Debtors will pay PA Consulting according to its customary
hourly rates:
Professional Hourly Rate
------------ -----------
Members of Management $650 to $780
Managing Consultants $490 to $525
Principal Consultants $405
Consultants/Consultant Analysts $315
Analysts $265
Technical Associates $160
Administrators $85
In addition, the Debtors will pay all of the firm's reasonable,
documented out-of-pocket expenses, including costs of
reproduction and reasonable travel expenses for its
professionals.
Under an engagement letter, the Debtors agree to indemnify the
firm against any third party claim brought against the firm in
respect of any injury, damage or loss associated by the Debtors
or a third party's use or operation of the results of PA
Consulting's services without the firm's approval.
Todd Filsinger, member of PA Consulting Group, Inc., assures the
Court that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code. He also
assures the Court that his firm does not represent any interest
adverse to the Debtors, their estates, and their creditors.
Mr. Filsinger discloses that PA Consulting currently performs
services to Deutsche Zentrum f. Energy Future Holdings, Entergy
Services, Inc., GE Trading and Licensing, IBC Euroforum, ING
Investment Management, Lloyd's Register, EMEA, Montana-Dakota
Utilities Co., Northern Indiana Public, Riverstone Holdings, LLC,
and UGI Energy Services, Inc., on matters wholly unrelated to the
Debtors' Chapter 11 cases.
PA Consulting has provided energy industry consulting services in
connection with the restructuring of PGE National Energy Group,
NRG Energy, Dynegy, Allegheny Energy, Edison Mission Energy,
Exelon Boston Generating, and Mirant.
About SemGroup
SemGroup L.P. -- http://www.semgrouplp.com/-- is a
midstream service company providing the energy industry means to
move products from the wellhead to the wholesale marketplace.
SemGroup provides diversified services for end users and consumers
of crude oil, natural gas, natural gas liquids, refined products
and asphalt. Services include purchasing, selling, processing,
transporting, terminaling and storing energy. SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.
SemGroup L.P. and its debtor-affiliates filed for Chapter 11
protection on July 22, 2008 (Bankr. D. Del. Lead Case No.
08-11525). These represent the Debtors' restructuring efforts:
John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins,
Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael
P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal &
Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq.
at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C.
is the Debtors' claims agent. The Debtors' financial advisors are
The Blackstone Group L.P. and A.P. Services LLC.
Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye
Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter
Anderson & Corroon LLP, represent the Debtors' prepetition
lenders.
SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc.,
is the appointed monitor of SemCanada Crude Company and its
affiliates' reorganization proceedings before the Canadian
Companies' Creditors Arrangement Act. The CCAA stay expires on
Nov. 21, 2008.
SemGroup L.P.'s consolidated, unaudited financial conditions as of
June 30, 2007, showed $5,429,038,000 in total assets and
$5,033,214,000 in total debts. In their petition, they showed
more than $1,000,000,000 in estimated total assets and more than
$1,000,000,000 in total debts.
(SemGoup Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
SHARPER IMAGE: Wants Chapter 7 Conversion Motion Denied
-------------------------------------------------------
Sharper Image Corp. asks the U.S. Bankruptcy Court for the
District of Delaware to deny Frederic Prohov's request to convert
its Chapter 11 case to a case under Chapter 7 of the Bankruptcy
Code for lack of cause.
"[Mr.] Prohov has not established he is a creditor of TSIC, other
than the claim that his father purportedly purchased a Sharper
Image gift card in the amount of $50 and gave it to him," the
Debtor argues.
John H. Strock, Esq., at Womble Carlyle Sandridge & Rice, PLLC,
in Wilmington, Delaware, tells the Court that the Debtor and its
professionals have worked diligently, expeditiously, and
efficiently to convert its remaining assets and interests to
cash, including, without limitation, its interests in real
property and unexpired nonresidential leases. As a result of its
efforts, the Debtor has realized approximately $56,200,000 in
recoveries and is presently pursuing additional recoveries.
The Debtor's management, employees, and its professionals have
worked overtime to minimize the impact of the disappointing
recoveries and to maximize the value of remaining assets for the
benefit of the estate, Mr. Strock says. If conversion is
granted, it will negatively affect the ongoing efforts to realize
value for the estate and its economic stakeholders, the Debtor
argues.
"Mr. Prohov has initiated the conversion motion to obtain
leverage for the granting of his motion to certify a putative
class of TSIC gift card claimants, the objective being to
eliminate potential review and objections to claims that may be
asserted by the gift card claimants," Mr. Strock asserts.
The Debtor informs the Court that, together with its
professionals, it has worked diligently to collect and dispose of
the estate's remaining assets, as well as resolve any outstanding
liabilities, including, among other things:
(a) termination of its unexpired nonresidential lease interest
in its Rockefeller Center and Marlton Center leases,
resulting in recovery of $1,360,000 in cash;
(b) conclusion of the second wave of store closing liquidation
sales;
(c) management of an auction for the assumption and assignment
of the Debtor's remaining unexpired nonresidential lease
property interest and, after resolving contested
assignments with respective lessors, recovery of over
$2,500,000 in cash for the estate;
(d) negotiations with the joint venture of Hilco/Gordon
Brothers to reconcile merchandise value sold in the second
wave store liquidation sales, resulting in receipt of
$700,000 in cash;
(e) settlement with Wells Fargo Retail Finance LLC in an
amount of $150,000 to terminate the prepetition indemnity
account, which had been maintained in favor of Wells on
account of the prepetition credit facility;
(f) termination of the Debtor's interest in certain corporate
owned life insurance policies, estimated recovery of
$100,000 in cash;
(g) analysis and pursuit of potentially valuable claims;
(h) collection of amounts outstanding in closed store bank
accounts, valued at over $2,000,000 in cash;
(i) management of the cash flows and maintenance of the estate
within the projected wind-down budget; and
(j) closure of the corporate headquarters and preservation of
corporate records.
In a separate filing, the Official Committee of Unsecured
Creditors disputes Mr. Prohov's contention that the Committee is
"working to deprive priority creditors of their rights."
The Committee argues that Mr. Prohov's statements regarding the
settlements of its objection to the Debtor's sale of assets to
Hilco/Gordon Brothers are wrong, unsupported by the records, and
do not constitute evidence supporting his burden of proof with
respect to the Conversion Motion.
Mr. Prohov's characterization of the settlement and obligations
was squarely addressed and refuted in the Court's Memorandum
Opinion on August 18, 2008, pursuant to which the Court approved
the settlement and held, among other things, that (i) the
Committee owes its responsibility and duty to the class it
represents, the general unsecured creditors of the Debtor; and
(ii) the money to be paid to the Committee on behalf of general,
unsecured creditors, is non-estate property, the Committee points
out.
Pursuant to the Memorandum Opinion, the Joint Venture's funds are
not proceeds from a secured creditor's lien, do not belong to the
estate, and will not become part of the estate even if the Court
does not approve the settlement, the Committee contends. In
addition, the Committee avers that Mr. Prohov's unfounded
characterization of its role in the proceeding is a thinly veiled
attempt to rewrite the record of the Debtor's case and gain
leverage for his gift card class-certification and conversion
motion.
About Sharper Image Corp.
Headquartered in San Francisco, California, Sharper Image Corp. --
http://www.sharperimage.com/-- is a multi-channel specialty
retailer. It operates in three principal selling channels: the
Sharper Image specialty stores throughout the U.S., the Sharper
Image catalog and the Internet. The company has operations in
Australia, Brazil and Mexico. In addition, through its Brand
Licensing Division, it is also licensing the Sharper Image brand
to select third parties to allow them to sell Sharper Image
branded products in other channels of distribution.
The company filed for Chapter 11 protection on Feb. 19, 2008
(Bankr. D.D., Case No. 08-10322). Judge Kevin Gross presides
over the case. Harvey R. Miller, Esq., Lori R. Fife, Esq., and
Christopher J. Marcus, Esq., at Weil, Gotshal & Manges, LLP,
serve as the Debtor's lead counsel. Steven K. Kortanek, Esq.,
and John H. Strock, Esq., at Womble, Carlyle, Sandridge & Rice,
P.L.L.C., serve as the Debtor's local Delaware counsel.
An Official Committee of Unsecured Creditors has been appointed in
the case. Cooley Godward Kronish LLP is the Committee's lead
bankruptcy counsel. Whiteford Taylor Preston LLC is the
Committee's Delaware counsel.
When the Debtor filed for bankruptcy, it listed total assets of
$251,500,000 and total debts of $199,000,000. As of June 30,
2008, the Debtor listed $52,962,174 in total assets and
$39,302,455 in total debts.
The Court extended the exclusive period during which the Debtor
may file a Plan through and including Sept. 16, 2008. Sharper
Image sought and obtained the Court's approval to change its name
to "TSIC, Inc." in relation to an an Asset Purchase Agreement by
the Debtor with Gordon Brothers Retail Partners, LLC, GB Brands,
LLC, Hilco Merchant Resources, LLC, and Hilco Consumer Capital,
LLC.
(Sharper Image Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
SILVER STATE: Nasdaq Delists Common Stock, Files Form 25 with SEC
----------------------------------------------------------------
The NASDAQ Stock Market disclosed that it will delist the common
stock of Silver State Bancorp. Silver State Bancorp's stock was
suspended on Sept. 10, 2008, and has not traded on NASDAQ since
that time. NASDAQ will file a Form 25 with the Securities and
Exchange Commission to complete the delisting.
The delisting becomes effective ten days after the Form 25 is
filed.
Headquartered in Henderson, Nevada, Silver State Bancorp (NASDAQ:
SSBX) -- http://www.silverstatebank.com/-- through its wholly-
owned subsidiary, Silver State Bank, currently operates thirteen
full service branches in southern Nevada and four full service
branches in the Phoenix/Scottsdale market area. Silver State Bank
also operates loan production offices located in Nevada,
California, Washington, Oregon, Utah, Colorado and Florida.
QUEBECOR WORLD: Amends Sr. Secured Superpriority DIP Credit Deal
----------------------------------------------------------------
Quebecor World Inc., disclosed with the U.S. Securities and
Exchange Commission, amendments to its senior secured
superpriority DIP credit agreement, which state that the
Borrowers have agreed to pay to Credit Suisse Securities (USA)
LLC, as the Administrative Agent, an amendment fee equal to 0.25%
of the sum of the aggregate unused Commitments and of the
aggregate outstanding Advances and Letter of Credit Obligations
of each the Lender under the Existing Credit Agreement as of
Aug. 5, 2008.
The amendment will become effective only when each of these
conditions have been fulfilled:
(a) All accrued costs and expenses and fees of the
Administrative Agent in connection with the administration
of the DIP Credit Agreement and the other instruments and
documents to be delivered and under the Loan Documents
will have been paid by the Borrowers;
(b) The Administrative Agent will have received counterparts
of the Amendment executed by the Borrower and the Required
Lenders, or, as to any of the Lenders, advice satisfactory
to the Administrative Agent that the Lender has executed
the Amendment;
(c) The Administrative Agent will have received counterparts
of the consent executed by each Guarantor;
(d) The Administrative Agent will have received a certificate
signed by a duly authorized officer of the Borrowers
stating that (i) the representations and warranties
contained in the Loan Documents are correct on and as of
the date of the certificate as though made on and as of
the date other than any representations or warranties that
refer to a date other than the date of the certificate;
and (ii) no event has occurred and is continuing that
constitutes a Default; and
(e) The amendment fee will have been paid by the Borrowers.
A copy of the Senior Secured Superpriority DIP Credit Amendment
is available for free at http://ResearchArchives.com/t/s?31eb
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of $3,412,100,000, total
liabilities of $4,326,500,000, preferred shares of $62,000,000,
and total shareholders' deficit of $976,400,000.
The Debtors' CCAA stay has been extended to Sept. 30, 2008.
(Quebecor World Inc. News, Issue No. 25; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
STRUCTURED ASSET: S&P Corrects Class A-4 Loan Rating from BB to A
-----------------------------------------------------------------
Standard & Poor's Ratings Services corrected its rating on class
A4 from Structured Asset Investment Loan Trust 2006-4 after taking
erroneous rating action on this class on Sept. 2, 2008.
S&P are revising its rating on class A4 to 'A' after having
lowered it in error to 'BB' from 'AA/Watch Neg' on Sept. 2.
Standard & Poor's originally downgraded this class to 'BB' from
'AA' based on its expectation that principal payments for the
senior certificates would be distributed pro rata when the credit
support provided by the subordinate classes had been exhausted.
Upon further review of the payment waterfall for the senior
certificates, Standard & Poor's has determined through the
trustee, Wells Fargo, that the priority of payments for the senior
certificates isn't likely to change when the subordination is
eroded. As a result of the sequential-payment structure, the
class A4 certificates will be exposed to a lower amount of losses
than previously projected. As a result, S&P have revised its
rating on this class to 'A'.
The Sept. 2, 2008, rating action was part of a larger review of
U.S. subprime residential mortgage-backed securities transactions
issued in 2006.
This transaction is backed by conventional, fully amortizing,
adjustable- and fixed-rate mortgage loans secured by first or
second liens on one- to four-family residential properties.
Rating Revised
Structured Asset Investment Loan Trust 2006-4
Rating
------
Class Current Sept. 2 Pre-Sept. 2
----- ------- ------- -----------
A-4 A BB AA/Watch Neg
SYNTAX-BRILLIAN: Nasdaq Delists Securities, Files Form 25 with SEC
------------------------------------------------------------------
The NASDAQ Stock Market will delist the common stock of Syntax-
Brillian Corporation. Syntax-Brillian Corporation's stock was
suspended on July 22, 2008, and has not traded on NASDAQ since
that time. NASDAQ will file a Form 25 with the Securities and
Exchange Commission to complete the delisting. The delisting
becomes effective ten days after the Form 25 is filed.
Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:BRLC)
-- www.syntaxbrillian.com -- manufactures and markets LCD HDTVs,
digital cameras, and consumer electronics products include
Olevia(TM) brand high-definition widescreen LCD televisions and
Vivitar brand digital still and video cameras. Syntax-Brillian is
the sole shareholder of California-based Vivitar Corporation.
The company and two of its affiliates -- Syntax-Brillian SPE,
Inc., and Syntax Groups Corp. -- filed for Chapter 11 protection
on July 8, 2008 (Bankr. D. Delaware Lead Case No.08-11409 through
08-11409. Dennis A. Meloro, Esq., and Victoria Watson Counihan,
Esq., at Greenberg Traurig LLP, represent the Debtors in their
restructuring efforts. Five members compose the Official
Committee of Unsecured Creditors. Epiq Bankruptcy Solutions, LLC
is the Debtors' balloting, notice, and claims agent.
When the Debtors filed for protection against their creditors,
they listed total assets of $175,714,000 and total debts of
$259,389,000.
TAYFAL REAL: Case Summary & 6 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Tayfal Real Estate, LLC
8710 West Hillsborough Avenue, Suite 204
Tampa, FL 33615
Bankruptcy Case No.: 08-13907
Chapter 11 Petition Date: September 11, 2008
Court: Middle District of Florida (Tampa)
Judge: K. Rodney May
Debtor's Counsel: Sheila D Norman, Esq.
sheila@normanandbullington.com
Norman and Bullington, P.A.
1905 West Kennedy Blvd
Tampa, FL 33606
Tel: (813) 251-6666
Fax: (813) 254-0800
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
A copy of Tayfal Real Estate, LLC's petition is available for free
at http://bankrupt.com/misc/flmb08-13907.pdf
TIGRIS CDO: Collateral Deterioration Cues Fitch to Cut Ratings
--------------------------------------------------------------
Fitch Ratings has downgraded and removed from Rating Watch
Negative seven classes of notes issued by Tigris CDO 2007-1, Ltd
and Tigris CDO 2007-1, LLC. These rating actions are effective
immediately:
-- $191,390,597 Class A-1A to 'CC' from 'B-';
-- $168,727,846 Class A-1B to 'CC' from 'B-';
-- $8,325,000 Class S to 'C' from 'B-';
-- $40,573,773 Class A-2 to 'C' from 'CCC';
-- $88,360,661 Class B to 'C' from 'CC';
-- $51,415,719 Class C to 'C' from 'CC';
-- $93,065,375 Class D to 'C' from 'CC'.
Fitch's rating actions reflect the significant collateral
deterioration within the portfolio, specifically structured
finance collateralized debt obligations with underlying exposure
to subprime residential mortgage backed securities.
Tigris 2007-1 is a cash flow SF CDO squared that closed on
March 15, 2007 and is managed by Harding Advisory LLC. Presently,
the entire portfolio consists of 2006 and 2007 vintage U.S. SF
CDOs, of which all but one asset are deemed to be defaulted per
the most recent trustee report dated Aug. 18, 2008.
Since the last review in November 2007, approximately $520 million
or 70.1% of the underlying portfolio has defaulted. As of the
August 2008 trustee report, the balance of defaulted securities is
more than $725 million or 97.6% of the portfolio. The significant
amount of defaulted assets caused Tigris 2007-1 to experience an
event of default in January 2008 and the majority of the
controlling class voted to accelerate the maturity of the
transaction in March 2008 as a remedy to the event of default.
This acceleration has diverted all interest and principal proceeds
to pay interest to the class A-1A and A-1B notes and any remaining
proceeds are used to pay principal to the class A-1A notes.
Payment of interest is not being made to the class S, A-2, B, C
and D notes. Fitch expects that defaulted and deferred interest
will not be paid to these classes and expects zero principal
recovery for these classes as well as for the class A-1B notes.
Class A-1A is expected to receive only a small portion of
principal repayment.
Fitch is reviewing its SF CDO approach and will comment separately
on any changes and potential rating impact at a later date. Fitch
will continue to monitor and review this transaction for future
rating adjustments.
The ratings on the class A-1A and A-1B notes and the class S, A-2,
and B notes address the timely receipt of scheduled interest
payments and the ultimate receipt of principal as per the
transaction's governing documents. The ratings on the class C and
D notes address the ultimate receipt of interest payments and the
ultimate receipt of principal as per the transaction's governing
documents. The ratings are based upon the capital structure of
the transaction, the quality of the collateral, and the
protections incorporated within the structure.
TRIAD FIN'L: Run-Off Mode Cue Moody's to Confirm Caa2 Rating
------------------------------------------------------------
Moody's Investors Service confirmed the Caa2 senior unsecured
rating of Triad Financial Corp. The corporate family rating was
lowered one notch to Caa2. The rating outlook is stable.
The rating action reflects Moody's view that, with the company now
effectively in run-off mode, unsecured bondholders are likely to
receive a substantial -- quite possibly full -- recovery as the
company services its existing portfolio, repays related term ABS
debt, and channels excess cash into the unrestricted cash account.
On the other hand, the ratings also reflect: 1) the high degree of
risk associated with sub-prime auto finance, a business whose
asset quality, profitability and liquidity are highly vulnerable
to adverse economic developments; 2) some risk of servicing
platform degradation as the portfolio runs off; and 3) some degree
of uncertainty regarding governance and control issues,
particularly as it relates to the potential that Triad could use
funds for purposes other than debt repayment, within the terms and
conditions of the company's unsecured bond indenture.
Moody's has equalized Triad's CFR with its senior unsecured
rating. This reflects the fact that Triad's recourse indebtedness
is of a single class -- senior unsecured debt. Based in
Huntington Beach, California, Triad is an auto finance company
that operates primarily in the sub-prime segment of the market.
TROPICAL BREEZE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Tropical Breeze Resort of Siesta Key, LLC
Post Office Box 2383
Sarasota, FL 34230-2383
Bankruptcy Case No.: 08-14026
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Siesta Key Florida Rentals, Inc. 08-14029
Tropical Breeze Resort, LLC 08-14028
Type of Business: The Debtors operate hotels and resorts.
See: http://www.tropicalbreezeinn.com/
Chapter 11 Petition Date: September 12, 2008
Court: Middle District of Florida (Tampa)
Debtor's Counsel: R. John Cole, II, Esq.
rjc@rjcolelaw.com
R. John Cole, II, PA
46 N Washington Blvd, Suite 24
Sarasota, FL 34236
Tel: (941) 365-4055
Fax: (941) 365-4219
http://rjcolelaw.com/
Estimated Assets: Less than $50,000
Estimated Debts: $10 million to $50 million
A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/flmb08-14026.pdf
TUPPERWARE BRANDS: Moody's Lifts Ratings on Sustained Performance
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Tupperware
Brands Corporation, including the company's corporate family
rating to Ba1 from Ba2. The upgrade reflects Tupperware's
sustained operating performance, meaningfully improved credit
metrics as well as Moody's expectation that the company's
financial policies will remain balanced. Moody's also assigned a
Speculative Grade Liquidity rating of SGL-2. The ratings outlook
is stable.
These ratings of Tupperware were upgraded/LGD assessments revised:
-- Corporate family rating to Ba1 from Ba2
-- Probability of default rating to Ba2 from Ba3
-- $200 million senior secured revolving credit facility due
2012 to Baa3 (LGD 2, 21%) from Ba1 (LGD 2, 22%)
-- $563 million senior secured term loan A due 2012 to Baa3
(LGD 2, 21%) from Ba1 (LGD 2, 22%)
These ratings were assigned:
-- Speculative Grade Liquidity rating of SGL-2
-- Outlook is stable
"Tupperware's Ba1 rating is driven by its modest leverage,
favorable positions in attractive direct selling markets, a
portfolio of recognized brand names, excellent geographic
diversification, and a base of independent sales consultants that
provides a significant platform for growth," says Moody's Vice
President Janice Hofferber. Notwithstanding these positive credit
qualities, the rating reflects the company's moderate scale,
relatively narrow product diversification and weaker market share
position in the broader cosmetics and personal care sector. The
rating also considers ongoing growth challenges of the direct
selling model in mature markets (Europe and the U.S.), its
exposure to raw materials and currency price volatility,
sensitivity to discretionary spending trends, competition from
traditional and direct selling, and the potential for future
acquisitions.
Tupperware's liquidity profile is good and is supported by its
strong cash flow from operations, modest cash balances, and full
access (approx. $16 million outstanding) to its $200 million
revolving credit facility which expires in September 2012.
Tupperware's liquidity is constrained by the seasonal nature of
its business as approximately 50% of their cash flow is generated
in the fourth quarter and that all of the company's cash is held
offshore. In addition, future acquisitions or additional share
repurchases could impact the company's liquidity depending upon
the timing and financing of any related transactions.
The last rating action regarding Tupperware was on September 17,
2007 when Moody's assigned ratings to the company's new bank
credit facilities and revised the outlook to positive from stable.
Headquartered in Orlando, Florida, Tupperware Brands Corporation
(NYSE: TUP) is a direct seller of premium food storage,
preparation, serving items and cosmetics and personal care
products with sales in over 100 countries worldwide. Tupperware's
distribution system includes 1,800 distributors, 50,900 managers
and 1.1 million dealers worldwide. The company's beauty sales
force totaled 1.1 million. For the last twelve months ended
June 30, 2008, Tupperware's sales were approximately $2.1 billion.
TYSON FOODS: Fitch Lifts Three Ratings from 'BB+' to 'BBB-'
-----------------------------------------------------------
Fitch Ratings has upgraded the ratings of Tyson Foods, Inc. and
its subsidiary Tyson Fresh Meats, Inc.:
Tyson Foods, Inc.
-- Secured bank facility to 'BBB-' from 'BB+'.
Tyson Fresh Meats, Inc.
-- 7.95% Senior Notes due 2010 to 'BBB-' from 'BB+';
-- 7.125% Senior Notes due 2026 to 'BBB-' from 'BB+'.
At June 28, 2008, Tyson had approximately $3.1 billion in total
debt. The Rating Outlook is Negative.
The rating actions follow the Sept. 10 amendment to Tyson's
$1 billion credit agreement which expires Sept. 28, 2010.
Excluding letters of credit, $715 million was available at
June 28, 2008.
The amendment provides additional guarantees, primarily from the
poultry and prepared food business, and pledges inventory and
trademarks owned by Tyson and its U.S. subsidiaries. Furthermore,
assets pledged by TFM and its subsidiaries will also secure
obligations under TFM's notes due 2010 and 2026.
In addition to providing collateral and further guarantees, the
amendment gives Tyson extra cushion under its maximum leverage
covenant, which was scheduled to step down to 3.25 times during
fiscal 2009. The amendment increased this ratio to 3.9x for the
period prior to Dec. 31, 2009 and 3.75x thereafter.
TYSON FOODS: S&P Holds 'BB' Corp. Credit and Removes Neg. Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'BB' corporate
credit rating on Tyson Foods Inc. and its wholly owned subsidiary,
Tyson Fresh Meats Inc. and removed the rating from CreditWatch
with negative implications, where S&P had originally placed it on
June 19, 2008. Standard & Poor's had lowered the corporate credit
rating from 'BBB-' on Sept. 4, based on the company's volatile
operating performance that had contributed to credit protection
measures more consistent with the current rating. The rating
affirmation is based on the company completing its planned
$450 million senior convertible note offering and 20 million
shares of common equity. The outlook is negative. As of June 28,
2008, Tyson had about $3.1 billion of debt.
At the same time, Standard & Poor's revised the CreditWatch
listing on all of the company's issue ratings to positive from
negative. This is based on the company completing an amendment in
which it will provide collateral and additional guarantees from
its operating subsidiaries to secure its $1 billion revolving
credit facility. The security will consist of a priority lien on
inventory from seven new guarantors and from TFM, which is the
current guarantor. In addition, each domestic subsidiary that
owns trademarks will provide the trademarks as collateral.
Assets pledged by TFM and its subsidiaries under the credit
agreement will also be pledged to secure TFM and the company's
obligations under TFM's outstanding 7.125% notes due 2026 and
TFM's 7.95% notes due 2010, in accordance with the requirements
under the indenture governing such notes. The issue ratings
remain on CreditWatch, pending its assessment of the effect of the
collateral pledge on the remaining unsecured debt issues. This
includes a determination of the appropriateness of the cap on
recovery and issue-level ratings currently in place.
The outlook on Tyson is negative. Tyson continues to face
significant near-term challenges from increased commodity costs
and the weak economic environment.
"If these trends continue to pressure its operations and result in
lease-adjusted debt leverage exceeding 4x, or if debt leverage
approaches levels where the company risks violating its amended
bank covenants, we could lower the ratings," said Standard &
Poor's credit analyst Patrick Jeffrey.
"Tyson will need to stabilize its operations and maintain leverage
in the low to mid-3x area before we can consider a stable
outlook," he continued.
UNO RESTAURANT: End Discussions With Bondholders, Pays Interest
---------------------------------------------------------------
Uno Restaurant Holdings Corporation said it has decided to end
discussions with its bondholders regarding a proposed
recapitalization of its balance sheet and has paid the interest
payment on its bonds ahead of the September 15, 2008 due date. Uno
also anticipates that future interest payments can and will be
made in a timely fashion.
The interest payment was initially deferred by Uno's in accordance
with a contractual 30-day grace period available under the bond
indenture while Uno's and a group of its bondholders discussed a
potential recapitalization of Uno's balance sheet. However, given
that terms acceptable to Uno's could not be agreed upon, Uno
decided to end the negotiations and make the interest payment.
According to Uno's Chief Financial Officer, Mr. Louie Psallidas
"Given the Company's current level of profitability and liquidity
position, we did not feel compelled to agree to terms that were
not in the best interests of the Company. As such, we have decided
to end our current discussions and make the interest payment ahead
of the September 15, 2008 due date."
The Company said it remains in compliance with all provisions of
its bond indenture as well as its bank debt agreements and has
sufficient liquidity post the interest payment to fund several of
the strategic initiatives already underway. Such initiatives
include domestic and international franchise development; the
continued rollout of the Uno Express concept; investments in the
consumer products division; investing in facilities similar to the
newly-opened or refurbished restaurants located in Swampscott and
Burlington Massachusetts and Winter Garden Florida and the rollout
of Uno's newest concept, Uno Due Go, which is scheduled to debut
in two locations in the Dallas Fort Worth airport later this fall.
Mr. Frank Guidara, Chairman and Chief Executive Officer of Uno's
stated "While we are disappointed that a mutually acceptable
agreement that would enable Uno's to accelerate growth could not
be worked out with our bondholders at this time, our operating
results combined with our existing liquidity will enable us to
meet our financial obligations and continue to invest in strategic
initiatives. We will continue our focus on delivering a Best in
Class experience to our restaurant guests, franchisees and
customers of our consumer products division."
Based in Boston, Uno Restaurant Holdings Corporation --
http://www.unos.com-- has 206 company-owned and franchised full
service units located in 29 states, the District of Columbia,
Puerto Rico, and select international cities. Uno offers a diverse
selection of high quality, fresh and flavorful menu items prepared
daily in its restaurants and served in a friendly atmosphere.
Uno's menu includes its signature Chicago-style, deep dish pizza,
as well as ribs, steak, seafood, chicken, pasta and salads. The
Company also operates a consumer foods division, which supplies
airlines, movie theaters, airports, travel plazas, hotels and
supermarkets with both frozen and refrigerated Uno branded
products.
VICORP RESTAURANTS: Eau Claire, Wisconsin Outlet Closes
-------------------------------------------------------
Leader-Telegram (Wis.) reports that the Eau Claire location of the
Bakers Square restaurant chain at 4750 Golf Road has closed.
Based in Denver, Colorado, VICORP Restaurants Inc. --
http://www.vicorpinc.com/-- operates two restaurant concepts
under proven and well-recognized brands, Village Inn and Bakers
Square. Founded in 1958, VICORP has 343 restaurants in 25 states,
consisting of 250 company-operated restaurants and 93 franchised
restaurants. Known for its strong breakfast heritage, Village Inn
has been serving its signature breakfast items like one-of-a-kind
skillet dishes and made-from-scratch pancakes for 50 years. In
addition, Village Inn offers traditional American fare for lunch
and dinner.
The company and its affiliates filed for Chapter 11 protection on
April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Kimberly
Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A.
Robinson, Esq., at Reed Smith LLP, and Donna L. Culver, Esq., at
Morris Nichols Arsht & Tunnell, represent the Debtors in their
restructuring efforts. The Debtors selected The Garden City
Group, Inc. as their claims agent. Abhilash M. Raval, Esq.,
Dennis Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed
Hadley & McCloy LLP, represent the Committee in these case.
When the Debtors filed for protection from their creditors, they
listed assets of $100 million to $500 million and debts
of $100 million to $500 million.
VITERRA INC: Moody's Assigns 'Ba1' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service assigned a Ba1 Corporate Family Rating
to Viterra, Inc. Moody's also assigned a Ba1 rating to the
company's C$300 million in public notes currently outstanding.
Moody's also assigned a speculative grade liquidity rating of
SGL-2 indicating a good liquidity profile over the next 12 months.
These are first time ratings for Viterra. The outlook is stable.
Assignments:
Issuer: Viterra Inc.
-- Corporate Family Rating, Assigned Ba1
-- Probability of Default Rating, Assigned Ba1
-- Speculative Grade Liquidity Rating, Assigned SGL-2
-- Senior Notes, Assigned Ba1 LGD-4 50%
Viterra's Ba1 CFR reflects the company's strong market shares,
focus and scale relative to other rated, global companies in the
merchandizing and distribution of agricultural commodities, the
size and conservative structure of its Canadian trading and
distribution operations for its core agricultural products, and
current low leverage and strong credit metrics when incorporating
its expected use of the revolving credit facility. Moody's
believes these positives are offset to a limited degree by the
potential for acquisition related growth initiatives whose size
are as yet unknown and the lack of a long lived trading and
hedging history as a transformed company after its May 2007
acquisition of Agricore United.
Moody's expects Viterra's future growth to be funded in a prudent
manner and its trading operations to be managed conservatively,
similar to past performance. Moody's notes that Viterra's public
audited financial statements provide little numerical detail as to
the contribution to profit of its trading and hedging operations.
Financial metrics are currently stronger than for most other Ba1
CFR companies and are expected to remain strong over the next 24
months (fiscal 2009/2010) due to the substantial increase in many
commodity prices and the benefit of substantial equity issuance to
fund Agricore as well as to pre-fund future growth. Viterra
currently has some C$500 million in cash on its balance sheet to
help fund its future growth plans.
The stable outlook reflects the anticipated strength in Viterra's
financial profile through the 2009 fiscal year (October 31, 2009)
due to the strength of the agricultural markets as a result of
favorable global supply-demand dynamics along with the strong cash
balances currently available for growth initiatives. The outlook
also incorporates that the Agricore integration will continue to
progress smoothly and that management may entertain prudently
funded acquisitions.
The notes are rated Ba1, the same as the CFR, due primarily to the
presence of covenants requiring that they be secured on a parri
passu basis with Viterra's existing secured term debt. This term
debt currently has a first lien on fixed assets and a second lien
on current assets. If this secured term debt is no longer in
place these notes would also become unsecured. The notes
indentures do, however, permit the presence of a secured revolver
without providing similar security to the notes.
Viterra Inc., formerly known as Saskatchewan Wheat Pool Inc., is
headquartered in Regina, Saskatchewan, and is the largest grain
handler in Canada. The Viterra entity was formed on May 29, 2007
after the acquisition of Agricore United by Saskatchewan Wheat
Pool. Viterra operates through five business segments; Grain
Handling and Marketing, Agri-Products, Agri-Food Processing,
Livestock Feed and Services, and Financial Products, but derives
the majority of their income through the Grain Handling and
Marketing and Agri-Products business segment. Revenues were
$5.06 billion for the 9-month period ending July 31, 2008.
VTA OKLAHOMA: Case Summary & 15 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: VTA Oklahoma City, LLC
dba Shepherd Mall
2401 NW 23rd Street
Oklahoma City, OK 73107
Bankruptcy Case No.: 08-13982
Type of Business: The Debtor owns and operates a retail mall.
Chapter 11 Petition Date: September 10, 2008
Court: Western District of Oklahoma (Oklahoma City)
Judge: T.M. Weaver
Debtor's Counsel: Joseph A. Friedman, Esq.
ecf@krcl.com
Kane Russell Coleman & Logan PC
1601 Elm Street, Suite 3700
Dallas, TX 75201
Tel: (214)777-4200
Estimated Assets: $50 million to $100 million
Estimated Debts: $10 million to $50 million
Debtor's list of its 15 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Affordable Asphalt and Concrete Inc $53,000
8424 NW 76th Street
Oklahoma city, OK 73132
Oklahoma Gas & Electric $44,580
321 North Harvey
Oklahoma City, OK 73102
The Wackenhut Corporation $7,272
P.O. Box 277469
Atlanta, GA 30384
Smith Staffing, Inc. OKC $2,506
Standard Management Company $1,057
Kelly Moore paint Company Inc. $513
Komputer Tek $461
Hasco Industries Corporation $369
Simplex Grinell $277
leetcore Technologies $224
Lowes Business Account $178
Staples Inc. $76
Hiigh Tech Tronics, Inc. $72
Grainger $56
Eureka Water Company $7
WACHOVIA BANK: S&P Affirms Low-B Ratings on 18 Certificates
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on three
classes of commercial mortgage pass-through certificates from
Wachovia Bank Commercial Mortgage Trust's series 2005-C16.
Concurrently, S&P affirmed its ratings on the remaining 18 classes
from this series. S&P also affirmed its ratings on the "175WJ"
and "180ML" raked commercial mortgage pass-through certificates
from the Wachovia Bank Commercial Mortgage Trust's series 2004-C15
transaction.
The three upgrades are due to increased credit enhancement levels
resulting from a 10% reduction in the mortgage pool balance, as
well as the defeasance of the collateral securing 25%
($467.5 million) of the pool. The affirmations of the ratings on
the certificates from series 2005-C16 reflect credit enhancement
levels that provide adequate support through various stress
scenarios.
The affirmations of the ratings on the raked certificates from
series 2004-C15 reflect S&P's analysis of the 175 West Jackson and
180 Maiden Lane loans. The cash flows for the class "175WJ" and
"180ML" raked certificates are solely dependent on the operating
performance of the office properties securing the 175 West Jackson
and 180 Maiden Lane loans, respectively. A portion of these two
loans' whole-loan balances serves as collateral for the 2005-C16
transaction, and these loans are discussed in further details
below.
As of the Aug. 15, 2008, remittance report, the trust collateral
consisted of 180 loans with an aggregate pooled principal balance
of $1.85 billion, compared with 183 loans totaling $2.06 billion
at issuance. The master servicer, Wachovia Bank N.A., reported
financial information for 96% of the loans in the pool. Excluding
the defeased loans, 92% of the servicer-reported information was
full-year 2007 or partial-year June 2008 data. Based on this
information, Standard & Poor's calculated a weighted average debt
service coverage of 1.73x, up from 1.62x at issuance. The current
weighted average DSC includes amortization for loans totaling 35%
of the pool balance that originally had partial interest-only
periods from five to 60 months. All of the loans in the pool are
current, and no loans are with the special servicer. To date, the
trust has not experienced any losses.
The top 10 exposures secured by real estate have an aggregate
pooled principal balance of $610.5 million (33%) and a weighted
average DSC of 1.95x, up from 1.85x at issuance. The calculation
includes additional debt service for five of the top 10 exposures
that have initial IO periods but did not begin to fully amortize
in 2007. One of the top 10 exposures is on the master servicer's
watchlist and is discussed below. Standard & Poor's reviewed the
property inspection reports provided by Wachovia for the assets
underlying the top 10 exposures. One of the properties was
characterized as "fair," while the remaining properties were
reported as "good."
Three of the top 10 exposures exhibited credit characteristics
consistent with those of investment-grade obligations at issuance
and continue to do so. Details of these loans are:
-- The largest exposure in the pool, the 175 West Jackson
loan, has a whole-loan balance of $277.0 million. The
loan is secured by a 22-story, 1.4 million-sq.-ft. class A
office building in Chicago, Illinois. The property is
encumbered by a $222.6 million A note that is split into
two pari passu pieces, of which $111.3 million (6%) serves
as trust collateral. In addition, there is a
$54.4 million subordinate B note that is raked to the
class 175WJ-A, 175WJ-B, 175WJ-C, 175WJ-D, and 175WJ-E
certificates. Additionally, the borrower's equity
interests in the property secure mezzanine financing up
to $54.0 million, of which $40.0 million has been funded
to date. Standard & Poor's calculated a DSC of 1.60x for
the 12 months ended Nov. 30, 2007, compared with 1.72x at
issuance. This calculation includes additional debt
service for the loan that had an initial IO period for the
first 36 months. Occupancy was 97% as of June 2008,
compared with 90% at issuance. Standard & Poor's adjusted
net cash flow is comparable to its level at issuance.
-- The second-largest exposure in the pool, the 180 Maiden
Lane loan, has a whole-loan balance of $292.0 million.
This loan, secured by a 41-story, 1.1 million-sq.-ft.
office building in lower Manhattan, consists of a
$186.0 million IO A note that is split into two pari passu
pieces, of which $93.0 million (5%) is the trust balance.
In addition, the property is encumbered by a $69.5 million
subordinate B note that supports the class 180ML-A, 180ML-
B, 180ML-C, 180ML-D, 180ML-E, 180ML-F, and 180ML-G raked
certificates and a $36.5 million C note that is held
outside the trust. Additionally, the borrower's equity
interests in the property secure a mezzanine loan totaling
$43.8 million. Reported DSC was 2.60x and occupancy was
100% for the six months ended June 30, 2008, compared with
a DSC of 2.61x and 100% occupancy at issuance. Standard &
Poor's adjusted NCF is comparable to its level at
issuance.
-- The eighth-largest exposure in the pool, Cameron Village,
has a trust and whole-loan balance of $47.3 million
(3%).
This loan is secured by a 630,100-sq.-ft. grocery-anchored
retail center in Raleigh, North Carolina. The master
servicer reported a DSC of 2.63x for the six months ended
June 30, 2008, and 88% occupancy as of May 2008, compared
with a 2.42x DSC and 85% occupancy at issuance. Standard
& Poor's adjusted NCF has increased 15% since issuance.
Wachovia reported a watchlist of 10 loans totaling $91.6 million
(5%). The watchlist includes two loans ($14.1 million, 1%) with
DSCs below 1.0x, which are secured by a 76,200-sq.-ft. grocery-
anchored retail center in Villa Rica, Georgia, and a 34,800-sq.-
ft. medical office building in Stockbridge, Georgia No other loans
reported DSCs below 1.0x. The ADG Crossed Portfolio loan, the
ninth-largest exposure in the pool, comprises of six cross-
collateralized and cross-defaulted loans, one of which is on the
master servicer's watchlist. The six crossed loans total
$42.3 million (2%) and are secured by 19 mobile home parks
totaling 2,457 pads located in Wisconsin and Minnesota and a
90-unit multifamily apartment complex in North Canton, Ohio. The
properties are also encumbered by a $2.6 million subordinate B
note. The $26.0 million loan, which is the largest loan on the
watchlist, secured by 11 MHPs totaling 1,614 pads in Wisconsin, is
on the watchlist because of outstanding delinquent servicing
advances. Wachovia had indicated that the borrower has remitted
payment this week to cure the delinquency. The combined DSC for
the portfolio was 1.37x for the 12 months ended Dec. 31, 2007, and
occupancy was 88% as of July 2008, compared with a combined DSC of
1.28x and 91% occupancy at issuance.
The remaining loans are on the watchlist due to low occupancies,
declines in DSC since issuance, and/or upcoming lease expirations.
Standard & Poor's stressed the loans on the watchlist and other
loans with credit issues as part of its analysis. The resultant
credit enhancement levels adequately support the raised and
affirmed ratings.
Ratings Raised
Wachovia Bank Commercial Mortgage Trust
Commercial mortgage pass-through certificates series 2005-C16
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
B AA+ AA 12.12%
C AA AA- 10.73%
D A+ A 8.91%
Ratings Affirmed
Wachovia Bank Commercial Mortgage Trust
Commercial mortgage pass-through certificates series 2005-C16
Class Rating Credit enhancement
----- ------ ------------------
A-1A AAA 22.29%
A-2 AAA 22.29%
A-3 AAA 22.29%
A-PB AAA 22.29%
A-4 AAA 22.29%
A-J AAA 15.18%
E A- 7.80%
F BBB+ 6.41%
G BBB 5.29%
H BBB- 3.76%
J BB+ 3.62%
K BB 3.20%
L BB- 2.65%
M B+ 2.37%
N B 2.09%
O B- 1.81%
X-C AAA N/A
X-P AAA N/A
Wachovia Bank Commercial Mortgage Trust
Commercial mortgage pass-through certificates series 2004-C15
Class Rating Credit enhancement
----- ------ ------------------
175WJ-A BB N/A
175WJ-B BB- N/A
175WJ-C B+ N/A
175WJ-D B N/A
175WJ-E B- N/A
180ML-A BB+ N/A
180ML-B BB+ N/A
180ML-C BB N/A
180ML-D B+ N/A
180ML-E B N/A
180ML-F B- N/A
180ML-G B- N/A
N/A -- Not applicable.
WASHINGTON MUTUAL: Fitch Cuts Ratings on Continued Asset Pressures
------------------------------------------------------------------
Fitch Ratings has downgraded the long- and short-term Issuer
Default Ratings of Washington Mutual, Inc. as:
-- Long-term IDR to 'BBB-' from 'BBB';
-- Short-term IDR to 'F3' from 'F2'
Fitch has also taken these rating actions on Washington Mutual
Bank:
-- Long-term IDR affirmed at 'BBB''
-- Short-term IDR downgraded to 'F3' from 'F2'.
The Rating Outlook is Negative.
The actions reflect Fitch's expectation for continuing asset
quality challenges amidst market conditions that are considered
the most difficult in several decades for U.S. retail banks,
particularly those with a concentration in residential mortgage
assets.
WaMu has posted significant quarterly losses for the past three
quarters, primarily as a result of a sharp rise in credit loss
provisioning during the past year. Earlier in 2008, WaMu began
provisioning with a view toward estimated cumulative losses over
the life of its loan portfolio in an attempt to build reserves in
advance of charge-offs. To date, provisions have been
substantially higher than net charge-offs, although that trend is
anticipated to reverse in the future as the reserve building
plateaus and is then used to absorb credit losses. WaMu announced
that it expects the provision for third-quarter 2008 to start
showing evidence of that anticipated trend with a substantially
lower provision (estimated at approximately $4.5 billion) in 3Q'08
versus the 2Q'08 provision of $5.9 billion.
WaMu also indicated that net charge-offs are continuing to climb,
as expected, albeit at a slower pace than in prior quarters. The
provision, while less than the 2Q'08 provision, is still
sufficiently elevated that it will translate into a significant
loss for the quarter; this is very much in line with Fitch's prior
expectations which do not anticipate WaMu returning to
profitability until some time in 2009.
Market conditions, including receptivity of the capital markets
and the cost of funding for all financial institutions, have
remained volatile and have deteriorated in some cases. This is
the primary driver behind today's downgrades of the holding
company ratings and the short-term debt and IDR of WMB. WaMu's
series of capital raising actions during the past year have
resulted in the build-up of a notable, but necessary, capital
flexibility. This provides a meaningful buffer to absorb losses
as WaMu works through its considerable level of problem assets.
However, Fitch believes that the flexibility to add to capital is
now significantly constrained in light of market conditions. In
particular, while the holding company has several years worth of
liquidity, should it become necessary for the holding company to
inject additional capital into WMB from its storehouse of
liquidity, the holding company's ability to rebuild its own
liquidity, given current market conditions, is assumed to be quite
low.
That being said, prior to summer 2007, WaMu expanded and
diversified its funding sources at both the bank and the holding
company, reducing its reliance on historical sources such as
certificates of deposit and FHLB advances. Since that time,
however, WaMu has shifted back toward a greater reliance on these
domestic funding sources. Its retail deposit base has remained
fairly steady through the turbulence of the summer of 2008, with a
reduction in uninsured deposits largely offset by growth in FDIC
insured transaction accounts and CDs. WaMu has no reliance on
short-term wholesale funding sources and has only minimal debt
maturities over the intermediate term. WaMu's outstanding debt is
not subject to rating triggers or other terms that would cause
acceleration.
Thus, WaMu's most significant operating constraint in the
intermediate term is maintenance of capital levels at sufficiently
high levels to be considered well-capitalized by its regulators.
ased on the current capital cushion, but assuming WaMu continues
to post quarterly net losses in 2009, albeit at levels in line
with the expectation that 2Q08 represents the peak level of
necessary provisions, Fitch believes WaMu's ability to keep
capital ratios at acceptable levels will largely hinge on how well
it executes on previously announced expense saves and modest
balance sheet reduction initiatives.
WaMu named a new CEO, Alan Fishman, earlier this week. As with any
organization under new management, other potentially significant
changes are possible over the intermediate term. However, at this
juncture, the only obvious path is to continue to aggressively
work to contain the high, and still rising, level of problem
loans. In the current environment, this is expected to take a
considerable amount of time. Should asset quality deterioration
accelerate or WaMu be faced with other problems preventing it from
maintaining solid capital levels, it would put additional pressure
on WaMu and could result in further rating downgrades.
Fitch has taken these rating actions on WaMu and subsidiaries:
Washington Mutual Inc.
-- Long-term IDR downgraded to 'BBB-' from 'BBB';
-- Senior debt downgraded to 'BBB-' from 'BBB';
-- Short-term IDR downgraded to 'F3' from 'F2';
-- Short-term debt downgraded to 'F3' from 'F2';
-- Subordinated debt downgraded to 'BB+' from 'BBB-';
-- Preferred stock downgraded to 'BB-' from 'BB+';
-- Individual downgraded to 'C/D' from 'B/C';
-- Support affirmed at '5';
-- Support Floor affirmed at 'NF'.
Washington Mutual Bank
-- Long-term IDR affirmed at 'BBB';
-- Long-term deposits affirmed at 'BBB+';
-- Senior debt affirmed at 'BBB';
-- Short-term IDR downgraded to 'F3' from 'F2';
-- Short-term deposits affirmed at 'F2'.
-- Individual downgraded to 'C' from B/C;
-- Support affirmed at '3';
-- Support Floor affirmed at 'BB-';
-- Subordinated debt affirmed at 'BBB-'.
Bank United FSB
-- Subordinated debt affirmed at 'BBB-'.
Bank United Corp.
-- Subordinated debt downgraded to 'BB+' from 'BBB-'.
Providian Financial Corp
-- Senior debt downgraded to 'BBB-' from 'BBB+'.
Providian National Bank
-- Long Term Deposits affirmed at 'BBB+'.
Washington Mutual Preferred Funding (Cayman) I Ltd.
Washington Mutual Preferred Funding Trust I (Delaware)
Washington Mutual Preferred Funding Trust II
Washington Mutual Preferred Funding Trust III
Washington Mutual Preferred Funding Trust IV
-- REIT Preferred downgraded to 'BB-' from 'BB+'.
Washington Mutual Capital I
Providian Capital I
-- Trust Preferred downgraded to 'BB-' from 'BB+'.
This rating action has no effect on WM Covered Bonds Program
outstanding debt, which is rated 'AA' by Fitch.
WASHINGTON MUTUAL: S&P Cuts Counterparty Credit Rating to 'BB-/B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
rating on Washington Mutual Inc. to 'BB-/B' from 'BBB-/A-3'. S&P
also lowered its rating on Washington Mutual Bank to 'BBB-/A-3'
from 'BBB/A-2'. The outlook is negative.
"Increasing market turmoil and the related impact from managing
its concentrated mortgage franchise in this troubled housing and
credit cycle led to the downgrade of WAMU. The company's weak
equity pricing in the markets is also a concern, and it
increasingly appears that market conditions could overtake credit
fundamentals and leave the company with greatly diminished
financial flexibility," said Standard & Poor's credit analyst
Victoria Wagner.
On a more positive note, S&P recognize that WAMU's holding company
liquidity position is currently solidly positioned to meet all of
its fixed obligations through 2010, and the bank is operating with
adequate capital positions from a regulatory perspective and has
demonstrated funding resilience as the deposit franchise has
remained stable.
WAMU has preannounced that its third-quarter credit provision will
be $4.5 billion, $1.4 billion lower than the second quarter's, but
still quite high. Provisions will again represent almost double
the level of expected net loan charge-offs, and the reserve will
increase to $10 billion at the end of the third quarter in
anticipation of record-high $19 billion mortgage losses during
this cycle. WAMU indicated that the growth rate of net charge-
offs is easing from the second quarter's level, and the provision
demands on mortgage-related assets are declining. This is partly
being replaced by higher provisions on credit-card receivables,
because WAMU is holding more of these assets on its balance sheet
as credit card securitizations mature.
WAMU's overall liquidity profile at the bank and the holding
company is positioned to withstand this weak credit cycle through
the end of 2010. During the past year, WAMU has conservatively
and prudently managed its holding company liquidity position. It
faces minimal debt maturities through the end of 2009. WAMU
reaffirmed that its outstanding debt is not subject to rating
triggers or other terms that would cause acceleration.
The capital cushion over regulatory well-capitalized measures
remains in the $9 billion - $12 billion range for the various
measures. Clearly, capital pressures remain high given the
expectation for a loss in 2008 and possibly in 2009. WAMU's
balance-sheet growth remains constrained in the midst of earnings
pressure, and financial flexibility is clearly restricted given
the low pricing of its equity securities.
S&P's current ratings and negative outlook assume an improvement
in earnings for the second half of 2008, but a loss for the full
year. WAMU posted an after-tax loss of $4.8 billion in the first
half of 2008. S&P will continue to monitor company and market
developments, particularly on the funding and liquidity fronts.
Should earnings, capital levels, or liquidity weaken
precipitously, S&P could lower the ratings further. S&P could
revise the outlook to stable when market stability, asset quality,
and earnings exhibit improving trends over time.
WCI COMMUNITIES: Committee Taps Pachulski Stangs as Co-Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of WCI Communities
Inc. and its debtor-affiliates seeks the authority of the United
States Bankruptcy Court for the District of Delaware to retain
Pachulski Stang Ziehl & Jones LLP, as its co-counsel.
The Committee believes that Pachulski has extensive experience
and knowledge in the field of debtors' and creditors' rights and
business reorganizations under Chapter 11 of the Bankruptcy Code.
As co-counsel to the Committee, Pachulski will:
a. provide legal advice and assistance to the Committee in its
consultation with the Debtors relative to the Debtors'
administration of their reorganization;
b. review and analyze all applications, motions, orders,
statements of operations and schedules filed with the Court
by the Debtors or third parties, advise the Committee as to
their propriety, and, after consultation with the
Committee, take appropriate action;
c. prepare necessary applications, motions, answers, orders,
reports, and other legal papers on behalf of the Committee;
d. represent the Committee at hearings held before the Court
and communicate with the Committee regarding the issues
raised as well as the decisions of the Court;
e. perform all other legal services for the Committee which
may be necessary and proper in this proceeding;
f. represent the Committee in connection with any litigation,
disputes, or other matters that may arise in the Debtors'
bankruptcy cases; and
g. represent the Committee in connection with any other
matters for which Akin Gump has a conflict of interest.
Pachulski will seek fees for its services at its regular hourly
rates for attorneys and paraprofessionals, and reimbursement of
expenses incurred on the Committee's behalf, subject to Court
approval.
The principal attorneys and paralegals presently designated to
represent the Committee and their current standard hourly rates
are:
Professional Hourly Rate
------------ -----------
Laura Davis Jones $775
Michael R. Seidl $475
Timothy P. Cairns $375
Lynzy Oberholzer (paralegal) $190
Laura Davis Jones, Esq., a partner at Pachulski, assures the
Court that her firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code. She, however,
notes that her firm and certain of its partners may have in the
past represented and in the future may represent creditors of the
Debtors in connection with matters unrelated to the Debtors and
their Chapter 11 cases.
Ms. Jones informs the Court that Pachulski previously represented
the Debtors as local counsel working with Carlton Fields LLP in
connection with the Debtors' claim filed in Owen Cornings' case
in 2006. Pachulski last received payment from the Debtors on
February 22, 2007, and Pachulski has closed that file. She adds
that the representation was unrelated to the Debtors' Chapter 11
cases.
Ms. Jones tells the Court that Pachulski intends to work closely
with Akin Gump and any other professionals retained by the
Committee to ensure that there is no unnecessary duplication of
services performed or charged to the Debtors' estates.
About WCI Communities
Headquartered in Bonita Springs, Florida, WCI Communities, Inc. --
http://www.wcicommunities.com/-- is a fully integrated
homebuilding and real estate services company. It has operations
in Florida, New York, New Jersey, Connecticut, Massachusetts,
Virginia and Maryland. The company directly employs roughly 1,800
people, as well as roughly 1,800 sales representatives as
independent contract employees.
The company and 126 of its affiliates filed for Chapter 11
protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No.08-11643
through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq.,
Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida.
Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard,
P.A, are the Debtors' local bankruptcy counsel. Lazard Freres &
Co. represents the Debtors as financial advisors. The Debtors
selected Epiq Bankruptcy Solutions LLC as their claims & notice
agent. The U.S. Trustee for Region 3 appointed five creditors to
serve on an Official Committee of Unsecured Creditors. Daniel H.
Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, and Laura Davis Jones,
Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, represent the Committee in
these cases. When the Debtors filed for protection against their
creditors, they listed total assets of $2,178,179,000 and total
debts of $1,915,034,000.
(WCI Communities Bankruptcy News, Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).
WCI COMMUNITIES: Committee Taps Akin Gum as Co-Counsel
------------------------------------------------------
The Official Committee of Unsecured Creditors of WCI Communities
Inc. and its debtor-affiliates asks authority from the United
States Bankruptcy Court for the District of Delaware to retain
Akin Gump Strauss Hauer & Feld LLP, as its co-counsel.
The Committee asserts that it is necessary for it to retain Akin
Gump to:
(a) advise it with respect to its rights, duties, and powers
in the Chapter 11 cases;
(b) assist and advise it in its consultations with the Debtors
relative to the administration of the Debtors' Chapter 11
cases;
(c) assist it in analyzing the claims of the Debtors'
creditors and the Debtors' capital structure and in
negotiating with holders of claims and equity interests;
(d) assist it in its investigation of the acts, conduct,
assets, liabilities, and financial condition of the
Debtors and of the operation of the Debtors' businesses;
(e) assist it in its analysis of, and negotiations with, the
Debtors or any third party concerning matters related to,
among other things, the assumption or rejection of certain
leases of non-residential real property and executory
contracts, asset dispositions, financing, or other
transactions and the terms of one or more plans of
reorganization for the Debtors and accompanying disclosure
statements and related plan documents;
(f) assist and advise it as to its communications to the
general creditor body regarding significant matters in
these Chapter 11 cases;
(g) represent it at all hearings and other proceedings;
(h) review and analyze applications, orders, statements of
operations, and schedules filed with the Court; and advise
it as to its propriety and to the extent it deem
appropriate, support, join, or object to it;
(i) advise and assist it with respect to any legislative,
regulatory, or governmental activities;
(j) assist it in preparing pleadings and applications as may
be necessary in furtherance of its interests and
objectives;
(k) assist it in its review and analysis of the Debtors'
various commercial agreements;
(1) prepare, on its behalf, any pleadings, including motions,
memoranda, complaints, adversary complaints, objections,
or comments in connection with any matter related to the
Debtors or these Chapter 11 cases;
(m) investigate and analyze claims against third parties and
the Debtors' non-debtor affiliates, including, without
limitation, any avoidance actions; and
(n) perform other legal services as may be required or are
otherwise deemed to be in the interests of the Committee
in accordance with the Committee's powers and duties as
set forth in the Bankruptcy Code, Bankruptcy Rules, or
other applicable law.
The Committee also asks the Court to rule that all of Akin Gump's
fees and expenses be afforded administrative expense status
pursuant to Sections 328, 330(a), 331, 503(b), and 507(a)(1) of
the Bankruptcy Code. Subject to the Court's approval, Akin Gump
will charge for its legal services on an hourly basis in
accordance with its ordinary hourly rates in effect on the date
services are rendered. The current hourly rates charged by Akin
Gump for professionals and paraprofessionals employed in its
offices are:
Partners $460 - $1,050
Special Counsel and Counsel $250 - $810
Associates $175 - $580
Paraprofessionals $75 - $250
The Akin Gump attorneys expected to have primary responsibility
of providing services to the Committee are:
Name Position Hourly Rate
---- -------- -----------
Daniel H. Golden Partner - Financial $950
Restructuring Dept.
Lisa G. Beckerman Partner - Financial $875
Restructuring
Stephen B. Kuhn Partner - Corporate $745
Dept.
Philip C. Dublin Partner - Financial $675
Restructuring Dept.
Abid Qureshi Partner - Financial $625
Restructuring Dept.
Philip M. Abelson Counsel - Financial $580
Restructuring Dept.
Lisa G. Beckerman, Esq., a partner at Akin Gump, assures the
Court that neither she nor her firm hold any claim, debt, or
equity security of the Debtors. She adds that no member of Akin
Gump has been, within two years from the Petition Date, a
director, officer, or employee of the Debtors as specified under
Section 101(14)(B) of the Bankruptcy Code.
Ms. Beckerman maintains that Akin Gump does not have an interest
materially adverse to the interests of the Debtors' estates or of
any class of creditors or equity security holders of the Debtors,
by reason of any direct or indirect relationship. She says Akin
Gump neither holds nor represents any interest adverse to the
Committee, the Debtors, their creditors, or other parties in
interest or their attorneys in the Chapter 11 cases and thus, is
a "disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code, as modified by Section 1103(b) of the
Bankruptcy Code.
Ms. Beckerman, however, notes that Akin Gump is a large firm with
a national and international practice, and may represent or may
have represented certain of the Debtors' creditors, equity
holder, or other parties in interest in matters unrelated to the
Chapter 11 cases.
Ms. Beckerman avers that Akin Gump has represented official
creditors' committees in many significant Chapter 11
reorganizations, including:
-- Allegiance Telecom, Inc.,
-- American Commercial Lines LLC,
-- ATA Holdings Corp.,
-- Calpine Corp.,
-- Delta Airlines, Inc.,
-- Quebecor World (USA) Inc.,
-- Solutia Inc.,
-- TOUSA, Inc., and
-- Tower Automotive, Inc.
About WCI Communities
Headquartered in Bonita Springs, Florida, WCI Communities, Inc. --
http://www.wcicommunities.com/-- is a fully integrated
homebuilding and real estate services company. It has operations
in Florida, New York, New Jersey, Connecticut, Massachusetts,
Virginia and Maryland. The company directly employs roughly 1,800
people, as well as roughly 1,800 sales representatives as
independent contract employees.
The company and 126 of its affiliates filed for Chapter 11
protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No.08-11643
through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq.,
Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida.
Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard,
P.A, are the Debtors' local bankruptcy counsel. Lazard Freres &
Co. represents the Debtors as financial advisors. The Debtors
selected Epiq Bankruptcy Solutions LLC as their claims & notice
agent. The U.S. Trustee for Region 3 appointed five creditors to
serve on an Official Committee of Unsecured Creditors. Daniel H.
Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, and Laura Davis Jones,
Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, represent the Committee in
these cases. When the Debtors filed for protection against their
creditors, they listed total assets of $2,178,179,000 and total
debts of $1,915,034,000.
(WCI Communities Bankruptcy News, Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).
WCI COMMUNITIES: FTI Consulting Approved as Bankruptcy Advisor
--------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
authorized WCI Communities Inc. and its debtor-affiliates to
employ FTI Consulting as their bankruptcy and restructuring
advisors.
FTI is a global business advisory firm with more than 3,000
professionals located in major business centers around the world.
FTI provides services in areas ranging from corporate finance and
interim management to economic consulting, forensic and
litigation consulting, strategic communications and technology.
The Debtors told the Court that the services of FTI are necessary
to enable them to maximize the value of their estates and to
reorganize successfully. The Debtors believe FTI has a wealth of
experience in providing restructuring and financial advisory
services in restructurings and reorganizations, and has an
excellent reputation for services rendered in large and complex
Chapter 11 cases on behalf of debtors and creditors throughout
the United States.
FTI, the Debtors noted, has advised management, senior lenders and
unsecured creditors in several restructurings, including
Northwest Airlines Corporation, American Home Mortgage Corp.,
Calpine Corporation, Tower Automotive, Inc., Winn-Dixie Stores,
Inc., Refco, Inc., Delphi Corporation, Dana Corporation, and
LandSource Communities Development LLC.
Specifically, the Debtors need FTI to:
* evaluate current liquidity position and expected future cash
flows;
* assist in the management and control of all cash
disbursements;
* advise management on cash conservation measures and assist
with implementation of cash forecasting and reporting tools
as requested;
* assist in the development of financial projections;
* assess current situation and determining a solution for
highest and best recovery and recommending appropriate
strategic alternatives;
* assist management and the board of directors in managing the
various aspects of the execution of a Chapter 11 filing;
* advise the Debtors' personnel with the communications and
negotiations with lenders, creditors, and other parties-in-
interest including the preparation of financial information
for distribution to the parties-in-interest;
* advise and assist them in the preparation, analysis and
monitoring of historical, current and projected financial
affairs, including schedules of assets and liabilities,
statement of financial affairs, periodic operating reports,
analyses of cash receipts and disbursements, forecasts, and
various asset and liability accounts between themselves and
any other entities;
* assist them in the valuation of businesses and in the
preparation of a liquidation valuation for a reorganization
plan;
* advise and assist in identifying preference payments,
fraudulent conveyances and other causes of action; and
* assist with any other accounting and financial advisory
services as requested by the Debtors consistent with the
role of a bankruptcy and restructuring advisor.
The Debtors noted that they have filed employment applications of
other professionals and FTI will work closely with the Debtors'
other professionals to ensure that there is no duplication in the
performance of tasks.
The customary hourly rates charged by FTI professionals
anticipated to be assigned to the Debtors' cases are:
Senior Managing Director $650 to $715
Directors/Managing Directors $475 to $620
Associates/Consultants $235 to $440
Administration/Paraprofessionals $100 to $190
In addition, FTI will be entitled to receive a performance fee as
determined to be reasonable by the Debtors' board of directors.
The performance fee will be $500,000 upon confirmation of a plan
of reorganization plus one percent of the total exit financing
raised by the Debtors and will be capped at $1,500,000.
The Debtors will indemnify FTI for any claim arising from the
services the firm will provide, but not for any claim in
connection with the firm's postpetition performance of any other
services unless the postpetition services and indemnification are
approved by the Court.
The Debtors will have no obligation to indemnify FTI for any
claim or expense that is judicially determined to have arisen
from the firm's bad faith, gross negligence, or willful
misconduct and for a contractual dispute in which the Debtors
allege a breach of the firm's contractual obligations.
FTI will file an application if it believes it is entitled to
payments on account of the Debtors' indemnification before the
entry of an order confirming a Chapter 11 plan.
Michael C. Beunzow, a senior managing director with FTI, assured
the Court that his firm does not hold any interest adverse to the
Debtors' estates and is a "disinterested person" as defined
within Section 101(14) of the Bankruptcy Code.
About WCI Communities
Headquartered in Bonita Springs, Florida, WCI Communities, Inc. --
http://www.wcicommunities.com/-- is a fully integrated
homebuilding and real estate services company. It has operations
in Florida, New York, New Jersey, Connecticut, Massachusetts,
Virginia and Maryland. The company directly employs roughly 1,800
people, as well as roughly 1,800 sales representatives as
independent contract employees.
The company and 126 of its affiliates filed for Chapter 11
protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No.08-11643
through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq.,
Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida.
Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard,
P.A, are the Debtors' local bankruptcy counsel. Lazard Freres &
Co. represents the Debtors as financial advisors. The Debtors
selected Epiq Bankruptcy Solutions LLC as their claims & notice
agent. The U.S. Trustee for Region 3 appointed five creditors to
serve on an Official Committee of Unsecured Creditors. Daniel H.
Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, and Laura Davis Jones,
Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, represent the Committee in
these cases. When the Debtors filed for protection against their
creditors, they listed total assets of $2,178,179,000 and total
debts of $1,915,034,000.
(WCI Communities Bankruptcy News, Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).
WCI COMMUNITIES: Wants to File Schedules Until November 2
---------------------------------------------------------
WCI Communities Inc. and its debtor-affiliates previously sought
and obtained permission from the United States Bankruptcy Court
for the District of Delaware to extend the time by which they must
file their Schedules and Statements through and including October
3, 2008.
By this motion, the Debtors seek an additional extension of the
period within which to complete and file their Schedules and
Statements. Specifically, the Debtors seek that they be given
until November 2, 2008, for the filing of their Schedules and
Statements.
Jeffrey M. Schlerf, Esq., at Bayard P.A., in Wilmington,
Delaware, asserts that the necessity of the requested extension
is largely due to the size and complexity of the Debtors'
businesses and the limited staffing available to gather process
and complete the Schedules and Statements.
Mr. Schlerf assures the Court that since the Petition Date and
during the course of preparing the Schedules and Statements, the
Debtors have been performing many critical tasks to position
themselves to maximize value for their creditors. He contends
that the time required to perform those tasks has necessarily
limited the amount of time the Debtors have been able to commit
to preparing the Schedules and Statements.
About WCI Communities
Headquartered in Bonita Springs, Florida, WCI Communities, Inc. --
http://www.wcicommunities.com/-- is a fully integrated
homebuilding and real estate services company. It has operations
in Florida, New York, New Jersey, Connecticut, Massachusetts,
Virginia and Maryland. The company directly employs roughly 1,800
people, as well as roughly 1,800 sales representatives as
independent contract employees.
The company and 126 of its affiliates filed for Chapter 11
protection on Aug. 4, 2008 (Bankr. D. Del. Lead Case No.08-11643
through 08-11770). Thomas E. Lauria, Esq., Frank L. Eaton, Esq.,
Linda M. Leali, Esq., at White & Case LLP, in Miami, Florida.
Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Bayard,
P.A, are the Debtors' local bankruptcy counsel. Lazard Freres &
Co. represents the Debtors as financial advisors. The Debtors
selected Epiq Bankruptcy Solutions LLC as their claims & notice
agent. The U.S. Trustee for Region 3 appointed five creditors to
serve on an Official Committee of Unsecured Creditors. Daniel H.
Golden, Esq., Lisa Beckerman, Esq., and Philip C. Dublin, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, and Laura Davis Jones,
Esq., Michael R. Seidl, Esq., and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, represent the Committee in
these cases. When the Debtors filed for protection against their
creditors, they listed total assets of $2,178,179,000 and total
debts of $1,915,034,000.
(WCI Communities Bankruptcy News, Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).
W.R. GRACE: Wants Court to Disallow $100 Mil. Interest Payments
---------------------------------------------------------------
W.R. Grace Co. and its debtor-affiliates, and the Bank Debt
Holders -- Anchorage Advisors, LLC; Avenue Capital Group; Bass
Companies; Caspian Capital Advisors, LLC; Catalyst Investment
Management Co., LLC; and Citigroup Special -- filed briefs in
support of their opposing views on the Lenders' request for
approximately $100,000,000 in interest payments.
No Postpetition Interest is Due, Debtors Insist
The Debtors maintain that the important facts in their bankruptcy
cases are unchanged -- their solvency is still disputed and their
proposed plan of reorganization will preserve value for equity if
it is confirmed, and they are still prepared to pay postpetition
interest at the rate agreed upon in 2005 and 2006. The Debtors,
however, note that only two things have changed:
(1) new Lenders have come into the picture with a higher cost
basis; and
(2) the new Lenders have sought to wash their hands of history
and insist that they get the maximum default rate that
could be argued from the applicable Credit Agreements.
The overreach, according to David M. Bernick, Esq., at Kirkland &
Ellis LLP, in Chicago, Illinois, is of major financial
consequence, as reflected in these disputed figures:
Postpetition Interest
(as of 12/31/08)
---------------------
Base Contract Rate $287,000,000
Agreed Rate $323,000,000
Default Rate $414,000,000
The Debtors maintain that they and the plan proponents are still
prepared to pay postpetition rates of interest contained in the
long-standing agreements negotiated by the Official Committee of
Unsecured Creditors on behalf of all unsecured creditors,
notwithstanding the Committee's decision to litigate the matter
with the Lenders.
Indeed, Mr. Bernick tells the United States Bankruptcy Court for
the District of Delaware that the Lenders' insistence on more than
the agreed-upon rates has shown them to be entitled to far less.
He argues that the Committee's argument that the Debtors' stock
price proved solvency had no basis in the law, which defines
"solvency" as the excess of assets over liabilities.
The Lenders have paraded like "so many paper tigers a series of
contentions that have utterly no foundation in fact or law," Mr.
Bernick asserts. He says, if their arguments fail, the Lenders
will now undoubtedly go to a "Plan B" and press the Court to
engage in a second round of estimation.
"This blunt proposal to set the Chapter 11 cases back two years
at the behest of those who just decided to come on the scene and
rewrite history still cannot get the Lenders more than what the
anticipated plan will provide," Mr. Bernick says.
In addition, Mr. Bernick contends that Plan B indicates that the
Lenders do not believe in their own position and, while they hope
the Court will give them more, they want to insist that the Court
cannot give them less.
The Debtors therefore submit that the default interest rate issue
can be decided now and with finality. They note that the record
supports no postpetition interest and establishes that even if
the Debtors were solvent and the Lenders could clear the other
legal hurdles to default interest, the discretionary analysis of
what is fair and equitable advocates only a result equal to or
less than what the Creditors' Committee and the Lenders agreed
to.
Accordingly, the Debtors ask the Court to decide their pending
objection to the Lenders' claims.
Creditors Must Be Paid First Before
Shareholders, Lenders Assert
The Bank Lenders, joined by the Creditors' Committee and JP
Morgan, maintain that a reorganization plan must pay a class of
dissenting creditors their contract default interest before
shareholders get anything.
Under the Debtors' Plan, shareholders will get equity worth
$2,000,000,000, the Lenders point out. At the same time, the
Debtors refuses to pay $91,000,000 of contract default interest
accrued at 2% over almost eight years on the Lenders' more than
$500,000,000 of claims.
Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, LLP, in New York, argues that outside a consensual
plan, Section 1129(b) of the Bankruptcy Code's absolute priority
rule tolerates shareholders retaining property in only one
circumstance -- payment of the impaired unsecured creditor class
in full -- in short, in the circumstance of solvency. Any other
outcome would produce the polar opposite of equity, he notes.
Because the Debtors' Plan provides for the shareholders to retain
stock worth $2,000,000,000, the Debtors' solvency must be
presumed, Mr. Shimshak asserts. If a solvency trial is
necessary, then the Committee and the Bank Lenders have a due
process right to that trial, he further asserts.
With solvency established, the Bank Lenders must receive default
interest unless there are compelling equitable considerations
that overcome the strong presumption in favor of paying the Bank
Lenders postpetition interest at the contract default rate, Mr.
Shimshak argues. The rule, he says, is that courts apply the
contract interest default rate, and no other rate, when a contest
over value boils down to a fight between creditors and
shareholders.
Mr. Shimshak asserts that the Lenders have done nothing to impede
the Debtors' Chapter 11 cases. He notes that the Lenders have
involuntarily funded the Debtors for more than seven years
through short term, prepetition facilities that featured low
interest rates typical for an investment grade credit, not a
Chapter 11 debtor.
In attacking the Lenders' rights to contract default interest,
Mr. Shimshak says that the Debtors has started down a procedural
path that can only delay, not expedite, the Chapter 11 cases. He
further argues that though the Debtors characterize its attacks
as "objections," "best interest test" and "fair and equitable"
standards that the Debtors invoke have nothing to do with claim
disallowance under Section 502(b).
Accordingly, the Lenders ask the Court to overrule the Debtors'
objections. The Bank Lenders also seek leave to exceed the page
limit requirement for their Pre-Trial Memorandum.
Parties Serve Discovery Requests
The Debtors notified the Court that they have served first set of
requests for production of documents to JPMorgan, Wachovia Bank &
Trust Co., N.A.; the Creditors' Committee and its counsel,
Stroock & Stroock & Lavan, LLP; and Lehman Commercial Paper, Inc.
The Creditors' Committee and the Bank Lender Group also said they
have served the first set of interrogatories to the Debtors and
the Official Committee of Equity Security Holders. The Equity
Committee, the Creditors' Committee, Lehman Commercial, JP
Morgan, said they have served responses to the interrogatories.
Mr. Bernick told the Court during the September 2, 2008, omnibus
hearing that the parties have engaged in one deposition and
exchanged documents. The discovery is almost complete, he said,
and the parties are on track to have the matter briefed on
September 29, 2008.
The Debtors, the Bank Lenders, the Creditors' Committee, and
JPMorgan, after recognizing that discovery in the Debtors'
Chapter 11 cases may require the production, and use of
documents, information and other materials that contain
information deemed confidential, entered into a confidentiality
stipulation, which will govern the dissemination of confidential
information in relation to the interest payment dispute.
About W.R. Grace
Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee
of Equity Security Holders.
The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement. The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005. The
Debtors' exclusive period to file a chapter 11 plan expired on
July 23, 2007.
Estimation of W.R. Grace's asbestos personal injury liabilities
commenced on January 14, 2008.
At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of $3,620,400,000 and total debts of $4,189,100,000.
As of November 30, 2007, W.R. Grace's balance sheet showed total
assets of $3,335,000,000, and total debts of $3,712,000,000.
(W.R. Grace Bankruptcy News, Issue No. 164; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Court Approves 2008-2010 Incentive Plan
---------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
approved the terms of W.R. Grace Co. and its debtor-affiliates'
2008-2010 Long-Term Incentive Program for officers, including all
executive officers, and certain other key employees.
The LTIP will cover approximately 200 employees worldwide.
Awards under the 2008 LTIP are payable in cash and options to
purchase Grace Common Stock. The stock option portion is to be
issued on the terms and conditions of the Grace 2000 Stock
Incentive Plan, as amended. The cash portion is to be payable
based on the extent to which Grace achieves core earnings before
interest and taxes targets over the three-year performance
period.
Employees who become entitled to cash award payments under the
2008 LTIP will generally be paid in two installments: one in the
first quarter of 2010, and the other in the first quarter of
2011.
The pool available to fund the cash portion of the 2008 LTIP is
$5.9 million. The remaining value of the awards, which is $9.9
million, will comprise the stock option portion.
The aggregate value available for the cash and stock option
portions of the 2008 LTIP represents an increase of $4 million
over the pool available to fund the 2007-2009 Long-Term Incentive
Program which is a cash-only program.
The 2008 and 2007 LTIP amounts exclude awards to the Chief
Executive Officer that are governed by his employment agreement.
The Grace Board of Directors has discretion to interpret, amend,
implement and terminate the 2008 LTIP.
About W.R. Grace
Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee
of Equity Security Holders.
The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement. The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005. The
Debtors' exclusive period to file a chapter 11 plan expired on
July 23, 2007.
Estimation of W.R. Grace's asbestos personal injury liabilities
commenced on January 14, 2008.
At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of $3,620,400,000 and total debts of $4,189,100,000.
As of November 30, 2007, W.R. Grace's balance sheet showed total
assets of $3,335,000,000, and total debts of $3,712,000,000.
(W.R. Grace Bankruptcy News, Issue No. 164; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Wants to Acquire Interest in NewCo for $2 Million
-------------------------------------------------------------
W.R. Grace Co. and its debtor-affiliates ask the United States
Bankruptcy Court for the District of Delaware for authority to
acquire, from a limited liability company expected to be named GR
2008 LLC, a limited liability interest for an aggregate purchase
price of up to $2,000,000, pursuant to an organization agreement
and ancillary agreements attached to the organization agreement as
exhibits.
The New Company will be formed by the Debtors and a small start-
up technology company to exploit the Technology Company's
technology and develop and market products for the concrete
industry, David M. Bernick, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois says. The Debtors have withheld the name of
the Technology Partner to protect confidentiality of the proposed
transaction, Mr. Bernick tells the Court. The Technology
Company's name and related information will be provided to the
official committees and the future claims representative under
the appropriate confidentiality protections and to the Court in
camera upon request, he adds.
Mr. Bernick says the new technology can be used to develop
equipment and software applications of significant value for the
concrete industry. The equipment and software applications will
facilitate automated monitoring and control of the concrete mix
in concrete mixing devices. The Debtors believe that the
developed equipment and associated software applications will
generate significant revenues for the New Company and will also
expand the market for admixture chemicals thereby generating
significant new revenues and margin for the Debtors.
Under the organization agreement, admixture revenues and profits
will be solely the Debtors' and are specifically excluded from
the field of operation contemplated by the New Company, Mr.
Bernick notes. The Debtors also believe that the equipment and
software will enable concrete producers to make more efficient
use of raw materials in producing more consistent, high value,
differentiated, admixture intensive concrete mix designs.
According to Mr. Bernick, the Technology Company has filed for a
number of patents on certain portions of its technology.
However, the New Company will not disclose the complete details
of its technology to the Debtors until the Debtors make their
initial investment in the New Company.
The Technology Company needs additional capital to develop its
technology and the resulting products. The Technology Company
seeks a strategic partner that can help it develop a second
generation of the technology and products by providing knowledge
about concrete and the effects of chemical admixtures on the
quality of concrete. This expertise, Mr. Bernick says, will help
drive the technology into the target market, thereby growing
sales faster than the Technology Company can do alone.
The Debtors and the Technology Company will form the New Company
as a Delaware limited liability company and will enter into a
limited liability company agreement for Newco, under which they
will become the "members" or owners of Newco with equal voting
rights. The Technology Company will provide the basic
technology, and the Debtors will provide the funds for
development of the technology and various products. As major
suppliers of admixtures to the concrete industry, Mr. Bernick
says, the Debtors can leverage its channels of distribution, its
worldwide customer relationships, its brand, and its technical
service and research and development capabilities to generate
accelerated market penetrations and sales growth for Newco's
products.
The Debtors will make a capital contribution of $2,000,000 and a
non-exclusive license to Newco for the use of the Debtors'
related technology. The Debtors will make a $1,000,000
contribution at a first closing expected to occur shortly after
the Court's authorization of the transaction and an additional
$1,000,000 at a second closing one year later.
The Technology Company's contribution will be made at the first
closing and will consist of the sole license of its technology to
Newco, plus $10,000.
Newco will pay the Technology Company for the development
services that it provides. Payment for the Debtors' services
will be deferred until the earlier of the second anniversary of
the first closing date or the accrual of $2,400,000 of deferred
payment for the Debtors' services. Thereafter the accrued
service payments will be paid to the Debtors with interest over
three years. Newco's obligations to the Debtors for the payments
will be evidenced by a promissory note that will be secured by
the Assets of Newco.
Day-to-day management of Newco will be vested in two managers,
one of which will be appointed by each of the two owners. All
management decisions will require the consent of both managers.
Certain other matters will require the approval of a four-member
board of directors, two of which are appointed by each of the
owners. The quorum for a directors' meeting is at least one
designee of each owner, and all actions require a unanimous vote.
The technology developed by Newco and by its owners will be the
property of Newco.
About W.R. Grace
Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee
of Equity Security Holders.
The Debtors' filed their Chapter 11 Plan and Disclosure Statement
on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan
and Disclosure Statement. The hearing to consider the adequacy of
the Debtors' Disclosure Statement began on Jan. 21, 2005. The
Debtors' exclusive period to file a chapter 11 plan expired on
July 23, 2007.
Estimation of W.R. Grace's asbestos personal injury liabilities
commenced on January 14, 2008.
At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of $3,620,400,000 and total debts of $4,189,100,000.
As of November 30, 2007, W.R. Grace's balance sheet showed total
assets of $3,335,000,000, and total debts of $3,712,000,000.
(W.R. Grace Bankruptcy News, Issue No. 164; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
XELR8 HOLDINGS: Has Until October 6 to Submit Amex Compliance Plan
------------------------------------------------------------------
XELR8 Holdings Inc. received a notice from The American Stock
Exchange, stating that the company is not in compliance with
certain continued listing standards of the AMEX company Guide.
Specifically, the company is not in compliance with Section
1003(a)(i) of the company Guide because the company's
stockholders' equity was less than $2,000,000 and it had losses
from continuing operations and net losses in two of the last three
most recent fiscal years.
The notice is based on a review by the AMEX of XELR8's Form 10-Q
for the quarter ended June 30, 2008, which publicly disclosed the
financial status of the company at that time.
XELR8 must submit a plan by Oct. 6, 2008, advising AMEX of the
actions it has taken, or will take, that would bring XELR8 into
compliance with Sections 1003(a)(i) of the company Guide by May 5,
2010. The company is taking steps to prepare and submit such a
plan to AMEX on or before Oct. 6, 2008. Failure to submit a plan,
or if the plan is not accepted, the company could be subject to
delisting procedures.
"We highly value our listing on the AMEX and shareholders can
expect that we'll properly prepare a Compliance Plan to address
the issues outlined by the AMEX in order to regain full compliance
in a timely fashion," Mr. John Pougnet, chief executive officer of
XELR8, stated. "In the event we are unable to regain full
compliance, we will continue to provide a market for our company's
common stock by listing our shares on the OTC Bulletin Board,"
Mr. Pougnet, continued.
The Listings Qualifications Department of AMEX will evaluate the
company's plan and determine whether it reasonably demonstrates
its ability to regain compliance with the continued listing
standards within 18 months. If AMEX accepts its plan, it may be
able to continue its listing during the plan period provided that
the company makes progress consistent with its plan and comply
with other applicable AMEX listing qualifications. If the company
fails to submit a satisfactory plan or fail to make progress
consistent with the plan accepted by the AMEX, AMEX may initiate
delisting procedures. During the plan period, it will be subject
to periodic review to determine whether the company is making
progress consistent with the plan. In the event the AMEX doesn't
accept its plan or the company does not satisfy the listing
requirements, the company's common stock will continue to be
traded on the OTC Bulletin Board, therefore providing the
company's shareholders with continued liquidity for their common
stock.
About XELR8 Holdings
XELR8 Holdings Inc. (AMEX: BZI) -- http://www.xelr8.com/ --
develops, sells, markets and distributes nutritional supplement
products primarily through a direct sales or network marketing
system in which independent distributors sell the company's
products, as well as purchase them for their own personal use.
The company also sells products directly to professional and
Olympic athletes and to professional sports teams.
* Fitch Says U.S. CREL CDO Delinquencies Rise Modestly in August
----------------------------------------------------------------
Three new delinquent and two recently repurchased loans led to an
increase in the U.S. commercial real estate loan (CREL) CDO
delinquency rate to 1.79% for August 2008, according to the latest
CREL CDO Delinquency Index (CREL DI) from Fitch Ratings. Although
on average, CREL CDOs remain adequately cushioned to absorb some
credit deterioration, Fitch anticipates that a few more CREL CDOs
will be placed on Rating Watch Negative as more problem loans come
to the surface. A good indicator of future delinquencies is the
percentage of loans that are 30 day or less delinquent, which
currently totals 0.87% (by dollar balance) of all CDO collateral.
While the CREL DI is continuing a gradual upward ascent - up from
last month's rate of 1.46% - it is being tempered by the asset
managers' flexibility to change the terms of the underlying assets
through continued extensions and to repurchase credit impaired
loans. While the volume of extensions has grown, repurchases as a
percent of total delinquencies have declined in recent months. As
such, the 57 basis point (bp) increase of new additions to the
CREL DI is partially offset by the extension of one matured
balloon loan (nine bps) which showed as delinquent last month and
the exclusion of the three repurchased assets (15 bps) which were
included in last month's index.
The increase in the CREL DI could also be tempered by the imminent
extension of one of the newly added loans to the Index. Without
this loan included, the CREL DI would fall to 1.47%, which is only
one basis point higher than last month's rate. This loan is
classified as a matured balloon whole loan (32 bps). Per the asset
manager, the borrower requested a one year extension for this
still stabilizing office property. The extension is permitted in
the loan documents, and is currently being processed.
The number of loans extended this month totals 34 loans (0.3% by
number of loans in the CREL CDO universe); roughly two-thirds were
extensions that were contemplated in the original loan documents.
Extensions are being exercised on matured balloon loans secured by
transitional assets as business plans are either taking longer to
actualize or are stalled. Further, favorable refinance
opportunities remain scarce for all borrowers under current market
conditions. While extensions have allowed delinquencies to remain
relatively low, they are potentially deferring possible losses on
overleveraged assets.
Two loans (15 bps) were repurchased this month. The first loan is
secured by a multifamily property. The asset manager repurchased
this asset as it believed a default was imminent. The loan's
interest-only period was scheduled to expire and property cash
flow was not sufficient to cover the soon to be higher payment.
The other repurchased loan is a condominium conversion.
Foreclosure proceedings have been initiated. Comparable units were
selling at prices well below the required release prices for the
subject property; the lender and borrower were not able to
negotiate an acceptable lower amount.
The CREL DI includes loans that are 60 days or longer delinquent,
matured balloon loans, and the current month's repurchased assets.
* Federal Reserve Takes Steps to Stabilize Market
-------------------------------------------------
Though the U.S. Federal Reserve avoided a bail-out of Lehman
Brothers, The Wall Street Journal said the federal agency is
expected to take steps, including the expansion of its lending
facilities, to stabilize the broader financial system. The
Journal said the Fed would take a broader array of collateral from
firms for the facility, including equities. Another facility, in
which firms can swap risky securities for safe Treasury bonds, was
also expanded, the report said.
The Federal Reserve, on September 14, 2008, announced several
initiatives to provide additional support to financial markets,
including enhancements to its existing liquidity facilities. The
collateral eligible to be pledged at the Primary Dealer Credit
Facility has been broadened to closely match the types of
collateral that can be pledged in the tri-party repo systems of
the two major clearing banks. Previously, PDCF collateral had
been limited to investment-grade debt securities.
The collateral for the Term Securities Lending Facility also has
been expanded; eligible collateral for auctions will now include
all investment-grade debt securities. Previously, only Treasury
securities, agency securities, and AAA-rated mortgage-backed and
asset-backed securities could be pledged. The amounts offered
under the auctions will be increased to a total of $150 billion,
from a total of $125 billion.
* Ms. Vrato Joins Garden City's Business Reorganization Division
----------------------------------------------------------------
The Garden City Group, Inc. said Elizabeth Vrato, Esq. has joined
the business development team of its business reorganization
division. Ms. Vrato has a wide range of experience in business
development and strategic marketing, and has practiced law in both
the private and public sectors.
Before joining GCG, Ms. Vrato handled a wide range of bankruptcy,
litigation, and policy matters with BMC Group, Kirkland & Ellis,
Wolf, Block, Schorr & Solis-Cohen, and the National Judicial
Education Program. She has also written and lectured extensively
on a wide variety of workplace topics, including diversity and
mentoring.
Ms. Vrato received her J.D. from New York University School of
Law, where she was an Editor of the NYU Moot Court Board, and she
received her B.A., magna cum laude, from LaSalle University. She
has been admitted to practice in New York and Illinois. As a
member of the International Women's Insolvency and Restructuring
Confederation (IWIRC), Ms. Vrato currently serves as the
Communications Director for the Chicago IWIRC Network. She is also
a member of the American Bankruptcy Institute (ABI), where she has
served on the Advisory Committee for the ABI Central States
Conference and the ABI committee for sponsors and vendors.
"I'm excited to bring my experience to the GCG team and look
forward to contributing to the Restructuring community and our
clients," said Vrato.
"We are most pleased to welcome Liz to our team," said GCG
Executive Vice President and General Counsel, Karen Shaer. "With
her arrival, we are in an even stronger position to serve our
clients' needs," Ms. Shaer added.
The Garden City Group, Inc. -- http://www.gardencitygroup.com-- a
subsidiary of Crawford & Company, administers class action
settlements, designs legal notice programs, manages Chapter 11
administrations, and provides expert consultation services.
Based in Atlanta, Georgia, Crawford & Company --
http://www.crawfordandcompany.com-- is the world's largest
independent provider of claims management and related solutions to
the risk management and insurance industry as well as self-insured
entities, with a global network of more than 700 locations in 63
countries. Major service lines include property and casualty
claims management; warranty inspections; integrated claims and
medical management for workers' compensation; legal settlement
administration, including class action and bankruptcy claims
administration; and risk management information services. The
Company's shares are traded on the NYSE under the symbols CRDA and
CRDB.
* LeClairRyan Names Richard Bowerman as Connecticut Office Leader
-----------------------------------------------------------------
LeClairRyan has established an office in New Haven, Connecticut,
in continuing to extend its reach into the Northeast.
Recognizing an opportunity, the firm will initially add a
significant number of former Tyler Cooper attorneys, well as legal
and administrative staff to support the new office, including
Richard W. "Deke" Bowerman, who will serve as office leader.
LeClairRyan expects its New Haven office to expand through year
end.
"This represents an excellent opportunity for LeClairRyan to
continue its commitment to providing its clients with much greater
depth, breadth and reach of representation," Gary D. LeClair,
LeClairRyan chairman, stated. "The addition of an office in
Connecticut, with the exceptionally talented new LeClairRyan
attorneys, will build upon our corporate law and nationally
established litigation practice teams and provide our clients with
access to a greater depth of legal and business counsel services."
The lawyers joining LeClairRyan bring litigation experience in
general civil, commercial, bankruptcy and employment-related
matters.
"We are excited about this opportunity to join a national law firm
with offices from New York to Los Angeles," Mr. Bowerman stated.
"This will enable us to provide a greater depth of talent for our
clients while, at the same time, provide us opportunities for
professional growth in a firm that has the same culture and core
values that we have appreciated at Tyler Cooper."
About LeClairRyan
LeClairRyan -- http://www.leclairryan.com/-- specializes in
developing legal solutions to its clients' business challenges.
Founded in 1988, LeClairRyan provides business counsel and client
representation in corporate law and high-stakes litigation. With
offices in California, Connecticut, Massachusetts, Michigan, New
Jersey, New York, Pennsylvania, Virginia and Washington, D.C., the
firm has more than 300 attorneys representing a wide variety of
clients throughout the nation.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Share-
Total holders Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ -------- -------
-------
ABSOLUTE SOFTWRE ABT CN 103 (3) 31
AFC ENTERPRISES AFCE US 145 (45) (10)
APP PHARMACEUTIC APPX US 1,105 (42) 260
ARIAD PHARM ARIA US 82 (39) 40
BARE ESCENTUALS BARE US 263 (49) 113
BLOUNT INTL BLT US 482 (33) 148
CABLEVISION SYS CVC US 9,483 (5,001) (633)
CENTENNIAL COMM CYCL US 1,375 (1,040) 57
CHENIERE ENERGY CQP US 1,855 (289) 185
CHOICE HOTELS CHH US 349 (115) (16)
CLOROX CO CLX US 4,708 (370) (412)
COLUMBIA LABORAT CBRX US 48 (6) 11
CONEXANT SYS CNXT US 625 (133) 206
COREL CORP CREL US 255 (12) (20)
COREL CORP CRE CN 255 (12) (20)
CROWN MEDIA HL-A CRWN US 682 (661) (35)
CV THERAPEUTICS CVTX US 351 (207) 267
CYBERONICS CYBX US 144 (7) 119
CYTORI THERAPEUT CYTX US 17 (12) 1
DELTEK INC PROJ US 181 (72) 39
DEXCOM DXCM US 57 (15) 34
DISH NETWORK-A DISH US 7,681 (2,092) (466)
DOMINO'S PIZZA DPZ US 466 (1,438) 78
DUN & BRADSTREET DNB US 1,658 (512) (192)
DYAX CORP DYAX US 85 (14) 21
EINSTEIN NOAH RE BAGL US 160 (22) (48)
ENDEVCO INC EDVC US 24 (9) (18)
EXTENDICARE REAL EXE-U CN 1,569 (20) 128
FORD MOTOR CO F BB 270,450 (3,229) 19,646
FORD MOTOR CO F US 270,450 (3,229) 19,646
GARTNER INC IT US 1,121 (42) (266)
GENCORP INC GY US 994 (24) 67
GENERAL MOTO-CED GM AR 136,046 (55,594) (18,825)
GENERAL MOTORS GM US 136,046 (55,594) (18,825)
GENERAL MOTORS C GMB BB 136,046 (55,594) (18,825)
GLG PARTNERS INC GLG US 581 (350) 80
GLG PARTNERS-UTS GLG/U US 581 (350) 80
HEALTHSOUTH CORP HLS US 1,965 (872) (161)
HUMAN GENOME SCI HGSI US 847 (120) (36)
IMAX CORP IMAX US 216 (89) (4)
IMAX CORP IMX CN 216 (89) (4)
IMS HEALTH INC RX US 2,360 (10) 324
INCYTE CORP INCY US 205 (237) 152
INTERMUNE INC ITMN US 210 (81) 143
IPCS INC IPCS US 553 (38) 60
JAZZ PHARMACEUTI JAZZ US 187 (36) 0
KNOLOGY INC KNOL US 650 (43) 2
LIFE SCIENCES RE LSR US 202 (14) 10
LINEAR TECH CORP LLTC US 1,584 (434) 1,070
MEDIACOM COMM-A MCCC US 3,659 (283) (295)
MOLECULAR INSIGH MIPI US 146 (10) 114
MOODY'S CORP MCO US 1,664 (822) (248)
NATIONAL CINEMED NCMI US 540 (475) 58
NAVISTAR INTL NAV US 11,557 (228) 1,501
NPS PHARM INC NPSP US 188 (197) 95
OCH-ZIFF CAPIT-A OZM US 2,129 (208) N.A.
OSIRIS THERAPEUT OSIR US 32 (15) (23)
PROTECTION ONE PONE US 654 (52) 4
RADNET INC RDNT US 510 (77) 10
RASER TECHNOLOGI RZ US 73 (11) (12)
REGAL ENTERTAI-A RGC US 2,688 (214) (124)
RESVERLOGIX CORP RVX CN 21 (6) 16
ROK ENTERTAINMEN ROKE US 21 (26) (15)
ROTHMANS INC ROC CN 545 (213) 102
RURAL CELLULAR-A RCCC US 1,405 (558) 169
SALLY BEAUTY HOL SBH US 1,496 (695) 413
SEALY CORP ZZ US 1,044 (105) 41
SEMGROUP ENERGY SGLP US 262 (55) (10)
SHERWOOD COOPER SWC CN 291 (22) 55
SONIC CORP SONC US 798 (87) (41)
ST JOHN KNITS IN SJKI US 213 (52) 80
SUN COMMUNITIES SUI US 1,221 (11) N.A.
SYNTA PHARMACEUT SNTA US 87 (10) 60
TAUBMAN CENTERS TCO US 3,198 (1) N.A.
TEAL EXPLORATION TEL SJ 47 (19) (42)
TEAL EXPLORATION TL CN 47 (19) (42)
THERAVANCE THRX US 281 (112) 202
UAL CORP UAUA US 21,336 (570) (2,522)
UST INC UST US 1,417 (394) 165
WARNER MUSIC GRO WMG US 4,519 (99) (750)
WEIGHT WATCHERS WTW US 1,107 (893) (210)
WESTMORELAND COA WLB US 796 (192) 3
WR GRACE & CO GRA US 3,859 (273) 934
XM SATELLITE -A XMSR US 1,724 (1,144) (683)
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Sheryl Joy P. Olano, Ronald C. Sy, Joel Anthony G. Lopez,
Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr.,
Loyda I. Nartatez, Tara Marie A. Martin, Joseph Medel C. Martirez,
Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A.
Chapman, Editors.
Copyright 2008. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
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$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***