/raid1/www/Hosts/bankrupt/TCR_Public/080923.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 23, 2008, Vol. 12, No. 227
Headlines
ARROW SPEED: Case Summary & 20 Largest Unsecured Creditors
ATLANTIS PLASTICS: Wants Court to Set Nov. 15 as Claims Bar Date
ATLANTIS PLASTICS: Court Approves HFC as Financial Advisor
ATLANTIS PLASTICS: Committee Hires Traxi LLC as Financial Advisor
ATLANTIS PLASTICS: Gets Court Nod to Hire Epiq as Claims Agent
BANKUNITED FINANCIAL: Cuts 180 Jobs to Improve Financial Strength
BLUE WATER: Court to Consider Amended Plan of Liquidation Today
BRAY & GILLESPIE: $6.8MM Award to Belfor "Null," Attorney Says
CANADIAN TRUST: Court Denies Noteholders Leave to Appeal Plan
CANADIAN TRUST: Tendering of Old ABCP Notes to Run Until Sept. 30
CIRCUIT CITY: President & CEO Philip Schoonover Leaves
CONSTAR INTERNATIONAL: Has Until Dec. 10 to Meet Nasdaq Criteria
CORD BLOOD: Files SEC Prospectus for Common Stock Resale
COTT CORPORATION: Moody's Chips CFR to B3; Still on Review
DAVID HOFFMAN: Case Summary & Three Largest Unsecured Creditors
DAVE CROFT MOTORS: Files for Chapter 11 Protection
DIAMOND GLASS: Prepares for Disclosure Statement Hearing
DOT VN: Chang Park Raises Going Concern Doubt
DUNE ENERGY: Completes Barnett Shale Asset Sale
EDGEWATER FOODS: Restricts Conversion of Preferred Stock
EDUCATIONAL SERVICES: Completes Sale to Innovative Solutions
ENERLUME ENERGY: Connecticut Court Dismisses Derivative Action
FRONTIER COMMS: Fitch Holds 'BB' IDR on Stable Telecom Performance
GENITOPE CORP: May File for Chapter 11 Bankruptcy Protection
GIN KIN: Voluntary Chapter 11 Case Summary
GRAY TELEVISION: Moody's Confirms 'B2' Corp. Family Rating
GREEN BUILDERS: Receives Non-Compliance Notice from AMEX
HALCYON JETS: Reports $1.2 Million Net Loss for July 2008
HARMONY HOLDINGS: Court Denies Requests to Dump Chapter 11 Case
HERCULES CHEMICAL: Case Summary & Largest Unsecured Creditors
HOME INTERIORS: Sale of Dallas Woodcraft to Myron Bowling Approved
IDEARC INC: Hotchkis and Wiley Discloses De Minimis Stake
IDEARC INC: Sandra Lee Henjum Discloses De Minimis Stake
IDEARC INC: David Bethea Discloses De Minimis Stake
IMAGEWARE SYSTEMS: Board Approves $1.5 Mln Convertible Stock Sale
INPHONIC INC: Parties Object to Confirmation of 2nd Amended Plan
INSIGHT HEALTH: Board Grants Stock Options to Four Executives
JACKSON YUEN: Case Summary & 20 Largest Unsecured Creditors
JEFFERSON COUNTY: Wants Payment Break on General Obligation Bond
JEVIC TRANSPORTATION: Wants Plan Filing Period Moved to Jan. 16
JEVIC TRANSPORTATION: Panel Balks at Bid to Indemnify Officers
JHT HOLDINGS: Amended Plan Confirmation Hearing Set on Oct. 7
JOE GIBSON: Mitsubishi Hauls Away Cars; Suzuki Awaiting Sale
LEGACY ESTATES: Case Summary & 20 Largest Unsecured Creditors
LEHMAN BROS: Mark Shafir to Leave Firm for Citigroup
LEHMAN BROTHERS: Freddie Mac Has $1.2 Billion Unsecured Claims
LEXINGTON PRECISION: Balance Sheet at June 30 Upside-Down by $39MM
LEXINGTON PRECISION: Reports $1.9 Million Net Loss for June 2008
LINCOLN LOGS: Files for Chapter 11 Protection
LINCOLN LOGS: Case Summary & 20 Largest Unsecured Creditors
MCCLATCHY COMPANY: Leroy Barnes, Jr. Discloses 17.9% Equity Stake
MCCLATCHY CO: Gary Pruitt Steps Down From 5 Trusts
MICROMET INC: Notifies NASDAQ on Listing Rule Breach
MIDISTEM LAB: Inks Third Amended License Agreement with ICM
MARTY'S SHOES: Will Close 47 Stores & Liquidate Operations
MLK CARWASH: Case Summary & 13 Largest Unsecured Creditors
MORTGAGES LTD: Fund Investors Seek Court Representation
MOTOR COACH: To Resume Client Programs & Post-Petition Payments
NATIONAL CINEMEDIA: TimesSquare Capital Discloses 10.9% Stake
NEONODE INC: Files Prospectus for Sale of 6.4 Million Shares
NEWARK GROUP: Moody's Junks Sub. Debt Rating on Weak Performance
NITROMED INC: Has Until March 16 to Regain Bid Price Compliance
NOVADEL PHARMA: Issuance of $2.5MM in Secured Notes Approved
OCCULOGIX INC: Nasdaq Grants Temporary Continued Listing
OPEN ENERGY: Quercus Trust Discloses 45.2% Equity Stake
OSAGE EXPLORATION: Ran Furman Quits as CFO to Focus on SEC Suit
PANACEA PARTNERS: De La Costa Restaurant Sold for $1.6MM
PCG SUMMIT-NORTHWOODS: U.S. Trustee Sets 341(a) Meeting for Oct. 2
PCG SUMMIT-NORTHWOODS: Files Schedules of Assets and Liabilities
PEOPLE AGAINST DRUGS: Files for Chapter 11 Bankruptcy Protection
PHILLIP LEE: Case Summary & 11 Largest Unsecured Creditors
PHYTOGEN INT'L: Case Summary & 12 Largest Unsecured Creditors
QUALITY HOME: Creditor Shalom Rubanowitz Files Ch. 11 Plan
RCS-CHANDLER: Wants to Employ Marcus as Broker for Sale
SAINTS MEDICAL: Fitch Affirms 'BB+' Rating on $54MM Revenue Bonds
SEARS HOLDINGS: Fitch Cuts Long-Term Issuer Default Rating to B+
SEMGROUP LP: Gets Final OK to Secure $175 Million DIP Financing
SEMGROUP LP: Gets Final Approval to Access BofA Cash Collateral
SHANDONG ZHOUYUAN: Files Amended 2007 Annual Report
SHUMATE INDUSTRIES: Sells Machine Works Unit to American Int'l
SINOBIOMED INC: Names Lionel Choong as Chief Financial Officer
SMALL PLATES: Case Summary & 20 Largest Unsecured Creditors
SMARTIRE SYSTEMS: Patent Infringement Suit vs. Schrader Settled
SPECTRUM BRANDS: David B. Williams Disclose 10.35% Equity Stake
SPECTRUM BRANDS: David B. Williams Disclose 10.35% Equity Stake
SPORTS COLLECTIBLES: Files for Chapter 11 Bankruptcy in Delaware
SPORTS COLLECTIBLES: Case Summary & 20 Largest Unsecured Creditors
STOCKERYALE INC: Gets Continued Listing of Stocks Until Dec. 23
SYNTAX-BRILLIAN: Files More Proof Olevia Breached Contract
THORNBURG MORTGAGE: Clarifies Georgeson Compensation Issue
TIMKEN COMPANY: Moody's Withdraws 'Ba1' POD and CF Ratings
[Erroneous story redacted Sept. 23, 2008]
UNI-MARTS: Court Approves $17.7MM Sale to Atlantis Petroleum
UST INC: Agrees to Altria Group's $11.7 Billion Acquisition Offer
UTENDAHL INSTITUTIONAL: Moody's Slashes Rating from Aaa to B
V&B ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors
VIREXX MEDICAL: TSX to Delist Common Shares on October 17
VIRGIN MOBILE: SK Telecom Discloses 63.1% Equity Stake
VTA OKLAHOMA: Seeks Authority to Use Lender's Cash Collateral
WASHINGTON MUTUAL: Citigroup, Canadian Bank Might Bid
WELLMAN INC: Amends DIP Credit Agreement with Deutsche Bank
WESTAFF INC: Has Until March 9 to Comply with Nasdaq's Price Rule
WHITEHALL JEWELER: Interim DIP Financing Extended Until Sept. 24
WHITEHALL JEWELERS: Court Okays Global Pact on Consignment Goods
WHITEHALL JEWELERS: Leases in Illinois for Sale, DJM Reveals
WOODSIDE GROUP: List of 20 Largest Unsecured Creditors
WOODSIDE GROUP: Wants to Continue Selling Homes in Ordinary Course
WOODSIDE GROUP: Noteholders Ask Court to Oust Management
WORLD HEART: Regains Compliance with Shares Minimum Price Value
W.R. GRACE: Files Joint Chapter 11 Plan and Disclosure Statement
* Oregon's Housing Market Still Hasn't Reached Bottom
* Large Companies with Insolvent Balance Sheets
*********
ARROW SPEED: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Arrow Speed Warehouse, Inc.
686 South Adams Street
Kansas City, KS 66105-1403
Bankruptcy Case No.: 08-50698
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Streetside Auto, LLC 08-50699
Type of Business: The Debtors sell motor vehicle parts.
See: http://www.arrow-speed.com/
Chapter 11 Petition Date: September 21, 2008
Court: Western District of Missouri (St. Joseph)
Debtor's Counsel: Scott J. Goldstein, Esq.
sgoldstein@spencerfane.com
Spencer Fane Britt & Browne LLP
1000 Walnut Street, Suite 1400
Kansas City, MO 64106
Tel: (816) 292-8218
Fax: (816) 474-3216
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ron Coppaken note payable $2,500,000
686 South Adams
Kansas City, KS 66105
K&N Engineering $917,533
P.O. Box 1329
Riverside, CA 92502
Westin Automotive $671,351
13482 Collections Center Dr.
Chicago, IL 60693
EBC Brakes $541,135
Hypertech $493,363
WARN $430,730
Holley Performance Products $302,389
Mickey Thompson Tire Co., Inc. $297,104
Edelbrock $236,882
Delta Consolidated $226,696
Superchips Inc. $213,733
Energy Suspension $216,842
Aries Automotive $192,263
Competition Cam $190,124
Autotronic Controls $187,810
Auto Ventshade $179,511
Prestolite Wire Corp $176,867
Bushwacker $176,524
Husky Liners $148,556
Monroe Auto Equipment $148,376
Company
ATLANTIS PLASTICS: Wants Court to Set Nov. 15 as Claims Bar Date
----------------------------------------------------------------
Atlantis Plastics Inc. and its debtor-affiliates want the U.S.
Bankruptcy Court for the Northern District of Georgia to set Nov.
15, 2008, at 5:00 p.m., as deadline for creditors to file proofs
of claim arising against the Debtors prior to their Aug. 10, 2008
bankruptcy filing.
The Debtors also want the Court to establish Nov. 15, 2008, at
5:00 p.m. as deadline for any person or entity to file requests
for the allowance of administrative expense claims arising against
the Debtors prior to their bankruptcy filing.
The Debtors also want the Court to set Feb. 15, 2009, 5:00 p.m.,
as the deadline for governmental units to file proofs of claim
arising against the Debtors prior to their bankruptcy filing.
All claim forms must be delivered to:
Atlantis Plastics Inc. Claims Processing Center
c/o Epiq Bankruptcy Solutions LLC
FDR Station, P.O. Box 5115
New York, NY 10150-5115
Atlanta, Georgia-based Atlantis Plastics, Inc. (OTC:ATPL.PK)
manufactures specialty polyethylene films and molded and extruded
plastic components used in a variety of industrial and consumer
applications. It filed a Chapter 11 petition on Aug. 10, 2008
(Bankr. N.D. Ga. Case Nos. 08-75473 through 08-75481) together
with Atlantis Plastics, Inc., Atlantis Plastic Films, Inc.,
Atlantis Films, Inc., Atlantis Molded Plastics, Inc., Atlantis
Plastics Injection Molding, Inc., Extrusion Masters, Inc., Linear
Films, Inc., Pierce Plastics, Inc., and Rigal Plastics, Inc.
David B. Kurzweil, Esq., at Greenberg Traurig, LLP, represents the
Debtors in their restructuring efforts. They listed assets of
between $100 million and $500 million and debts of between
$100 million and $500 million. The Debtors owe The Bank of New
York $75 million in unsecured loan and Equistar $1 million in
unsecured trade debt.
As of September 2007, Atlantis Plastics had $214 million in total
assets, $255 million in total liabilities, and $41 million in
stockholders' deficit.
The Debtors' schedules filed with the Court listed assets of
$143,427,638 and liabilities of $258,455,803.
ATLANTIS PLASTICS: Court Approves HFC as Financial Advisor
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
authorized Atlantis Plastics Inc. and its debtor-affiliates to
employ Hays Financial Consulting LLC as their financial advisor.
HFC is expected to:
(a) assist the Debtors with the drafting and completion of
financial and operational documents, such as schedules and
statements of financial affairs and monthly operating
reports as required by the bankruptcy court;
(b) assist the Debtors with all aspects of addressing vendor
issues and needs;
(c) assist the Debtors with all aspects of its financial
forecasting and reporting, and interact with all interested
parties, especially associated with the Debtor’s budget;
(d) provide advice and assist the Debtors with communication
efforts to its employees, vendors, customers, and other
stakeholders regarding the Debtors' bankruptcy;
(e) provide wind-down services post-sale, as needed and
requested by the Debtors;
(f) provide financial, operational, strategic, and bankruptcy-
related advice as requested by the Debtors;
(g) assist the Debtor and/or its other professionals with all
other matters as requested and directed by the Debtors;
(h) provide expert testimony, as required; and
(i) performing other services incidental and necessary to the
Debtors' performance of their duties in these Chapter 11
cases.
HFC discloses that these professionals have been designated in the
Debtors' case:
Professional Hourly Rate
------------ -----------
Michael McClellan $325
Rob Barnett $325
Chris Tierney $325
Jim Begnaud $250
Kathy Malek $170
Eileen Castle $250
Fred Tulley $150
Should the Debtors need services of other HFC professionals, they
will bill:
Professional Hourly Rate
------------ -----------
Managing Principal/Director $300 - $350
Director $200 - $250
Manager $100 - $250
Senior Associate/Associate $100 - $150
Administrative Staff $50 - $70
Christopher J. Tierney, managing director of HFC says that his
firm does not hold or represent an interest adverse to the
Debtors' estates. To the best of the Debtors' knowledge, HFC is a
"disinterested person" as defined in the U.S. Bankruptcy Code.
Atlanta, Georgia-based Atlantis Plastics, Inc. (OTC:ATPL.PK)
manufactures specialty polyethylene films and molded and extruded
plastic components used in a variety of industrial and consumer
applications. It filed a Chapter 11 petition on Aug. 10, 2008
(Bankr. N.D. Ga. Case Nos. 08-75473 through 08-75481) together
with Atlantis Plastics, Inc., Atlantis Plastic Films, Inc.,
Atlantis Films, Inc., Atlantis Molded Plastics, Inc., Atlantis
Plastics Injection Molding, Inc., Extrusion Masters, Inc., Linear
Films, Inc., Pierce Plastics, Inc., and Rigal Plastics, Inc.
David B. Kurzweil, Esq., at Greenberg Traurig, LLP, represents the
Debtors in their restructuring efforts. They listed assets of
between $100 million and $500 million and debts of between
$100 million and $500 million. The Debtors owe The Bank of New
York $75 million in unsecured loan and Equistar $1 million in
unsecured trade debt.
As of September 2007, Atlantis Plastics had $214 million in total
assets, $255 million in total liabilities, and $41 million in
stockholders' deficit.
The Debtors' schedules filed with the Court listed assets of
$143,427,638 and liabilities of $258,455,803.
ATLANTIS PLASTICS: Committee Hires Traxi LLC as Financial Advisor
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
authorized the Official Committee of Unsecured Creditors appointed
in the bankruptcy cases of Atlantis Plastics Inc. and its debtor-
affiliates to retain Traxi LLC as its financial advisor.
Traxi LLC is expected to:
a) review of all financial information prepared by the Debtors
or their consultants as requested by the Committee
including, but not limited to, a review of the Debtors'
financial statements as of the filing of the petition,
showing in detail all assets and liabilities and priority
and secured creditors;
b) monitoring of the Debtors' activities regarding cash
expenditures, receivable collections, asset sales and
projected cash requirements;
c) attendance at meetings including the Committee, the Debtors,
creditors, their attorneys and consultants, federal and
state authorities, if required;
d) review of Debtors' periodic operating and cash flow
statements;
e) review of Debtors' books and records for related party
transactions, potential preferences, fraudulent conveyances
and other potential pre-petition investigations;
f) any investigation that may be undertaken with respect to the
prepetition acts, conduct, property, liabilities and
financial condition of the Debtors, their management,
creditors including the operation of their businesses, and
as appropriate, avoidance actions;
g) review of any business plans prepared by the Debtors or
their consultants;
h) review and analysis of proposed transactions for which the
Debtors seek Court approval;
i) assistance in a sale process of the Debtors collectively or
in segments, parts or other delineations, if any;
j) assist the Committee in developing, evaluation, structuring
and negotiating the terms and conditions of all potential
plans of liquidation;
k) provide expert testimony on the results of our findings;
l) analysis of potential divestitures of the Debtors’
operations;
m) assist the Committee in developing alternative plans
including contacting potential plan sponsors if appropriate;
and
n) provide the Committee with other and further financial
advisory services with respect to the Company, including
valuation, and advice with respect to financial, business
and economic issues, as may arise during the course of the
structuring as requested by the Committee.
Traxi's professionals bill:
Professional Hourly Rate
------------ -----------
Partners/Managing Directors $475 - $600
Managers/Directors $350 - $475
Associates/Analysts $125 - $350
Chad J. Shandler at Traxi discloses that his firm does not hold or
represent an interest adverse to the Debtors' estates. To the
best of the Debtors' knowledge, Epiq is a "disinterested person"
as defined in the U.S. Bankruptcy Code.
Atlanta, Georgia-based Atlantis Plastics, Inc. (OTC:ATPL.PK)
manufactures specialty polyethylene films and molded and extruded
plastic components used in a variety of industrial and consumer
applications. It filed a Chapter 11 petition on Aug. 10, 2008
(Bankr. N.D. Ga. Case Nos. 08-75473 through 08-75481) together
with Atlantis Plastics, Inc., Atlantis Plastic Films, Inc.,
Atlantis Films, Inc., Atlantis Molded Plastics, Inc., Atlantis
Plastics Injection Molding, Inc., Extrusion Masters, Inc., Linear
Films, Inc., Pierce Plastics, Inc., and Rigal Plastics, Inc.
David B. Kurzweil, Esq., at Greenberg Traurig, LLP, represents the
Debtors in their restructuring efforts. They listed assets of
between $100 million and $500 million and debts of between
$100 million and $500 million. The Debtors owe The Bank of New
York $75 million in unsecured loan and Equistar $1 million in
unsecured trade debt.
As of September 2007, Atlantis Plastics had $214 million in total
assets, $255 million in total liabilities, and $41 million in
stockholders' deficit.
The Debtors' schedules filed with the Court listed assets of
$143,427,638 and liabilities of $258,455,803.
ATLANTIS PLASTICS: Gets Court Nod to Hire Epiq as Claims Agent
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
authorized Atlantis Plastics Inc. and its debtor-affiliates to
employ Epiq Bankruptcy Solutions LLC as their claims and notice
agent.
Epiq Solutions is expected to:
a. notify all potential creditors and equity security holders
of the filing of the chapter 11 petitions and of the setting
of the first meeting of creditors pursuant to Section 341(a)
of the Bankruptcy Code;
b. maintain an official copy of the Debtors' schedules of
assets and liabilities and statements of financial affairs,
listing the Debtors' known creditors and the amounts owed;
c. maintain a copy service from which parties may obtain copies
of relevant documents in these cases;
d. notify all potential creditors of the existence and amount
of their respective claims as set forth in the Schedules;
e. finish a form for the filing of proofs of claim, after such
notice and form are approved by this Court;
f. file with the Clerk, within ten days of service, a copy of
the notice, a list of persons to whom it was mailed, and the
date the notice was mailed;
g. docket all claims received, maintaining the official claims
registers for each Debtor on behalf of the Clerk, and
provide the Clerk with certified duplicate unofficial Claims
Registers on a monthly basis, unless otherwise directed, or,
in the alternative, make available the claims register
online;
h. specify in the applicable Claims Register these information
for each claim docketed:
(i) the claim number assigned,
(ii) the date received,
(iii) the name and address of the claimant and agent, if
applicable, who filed the claim, and
(iv) the classification of the claim (e.g., secured,
unsecured, priority, etc.);
i. relocate, by messenger, all of the actual proofs of claim
filed with the Court, if necessary to:
Epiq Bankruptcy Solutions, LLC
Attn: Atlantis Plastics, Inc. Claims Processing Center
757 Third Avenue, 3rd Floor
New York, NY 10017
not less than weekly;
j. record all transfers of claims and providing any notices of
such transfers required by Bankruptcy Rule 3001;
k. make changes in the Claims Registers pursuant to Court
Order;
l. upon completion of the docketing process for all claims
received to date by the Clerk's office, turn over to the
Clerk copies of the Claims Registers for the Clerk's review;
m. maintain the official mailing list for each Debtor of all
entities that have filed a proof of claim, which list shall
be available upon request by a party in interest or the
Clerk;
n. assist with, among other things, the solicitation and the
calculation of votes and the distribution as required in
furtherance of confirmation of plan(s) of reorganization;
o. provide other miscellaneous notices to any entities as the
Debtors or the Court may deem necessary or appropriate for
an orderly administration of these chapter 11 cases;
p. provide such other claims processing and related
administrative services as may be requested from time to
time by the Debtors;
q. assist the Debtors with administrative tasks in the
preparation of their Schedules and statements of financial
affairs; and
r. thirty days prior to the close of these cases, submit an
Order dismissing the Agent and terminating the services of
the Agent upon completion of its duties and responsibilities
and upon the closing of these cases.
The Debtors disclose that Epiq's professionals bill:
Professional Hourly Rate
------------ -----------
Clerk $40 - $60
Case Manager (Level 1) $125 - $175
IT Programming Consultant $140 - $190
Case Manager (Level 2) $185 - $220
Senior Case Manager $225 - $275
Senior Consultant $295
The Debtors will pay Epiq for all materials necessary for the
claims agent's performance and any reasonable out-of-pocket
expense.
Daniel C. McElhinney, Senior Vice President of Operations and
Director of Epiq, discloses that his firm does not hold or
represent an interest adverse to the Debtors' estates. To the
best of the Debtors' knowledge, Epiq is a "disinterested person"
as defined in the U.S. Bankruptcy Code.
Atlanta, Georgia-based Atlantis Plastics, Inc. (OTC:ATPL.PK)
manufactures specialty polyethylene films and molded and extruded
plastic components used in a variety of industrial and consumer
applications. It filed a Chapter 11 petition on Aug. 10, 2008
(Bankr. N.D. Ga. Case Nos. 08-75473 through 08-75481) together
with Atlantis Plastics, Inc., Atlantis Plastic Films, Inc.,
Atlantis Films, Inc., Atlantis Molded Plastics, Inc., Atlantis
Plastics Injection Molding, Inc., Extrusion Masters, Inc., Linear
Films, Inc., Pierce Plastics, Inc., and Rigal Plastics, Inc.
David B. Kurzweil, Esq., at Greenberg Traurig, LLP, represents the
Debtors in their restructuring efforts. They listed assets of
between $100 million and $500 million and debts of between
$100 million and $500 million. The Debtors owe The Bank of New
York $75 million in unsecured loan and Equistar $1 million in
unsecured trade debt.
As of September 2007, Atlantis Plastics had $214 million in total
assets, $255 million in total liabilities, and $41 million in
stockholders' deficit.
The Debtors' schedules filed with the Court listed assets of
$143,427,638 and liabilities of $258,455,803.
BANKUNITED FINANCIAL: Cuts 180 Jobs to Improve Financial Strength
-----------------------------------------------------------------
BankUnited Financial Corporation, parent company of BankUnited
FSB, disclosed that as part of its strategic plan, it is reducing
the headcount of the BankUnited FSB by approximately 160 persons,
or 12% of the BankUnited FSB's current workforce.
The reductions will come from the BankUnited FSB's residential
lending support and operations. The company expects this action to
result in estimated annualized cost savings of approximately
$11 million.
"We have done everything to avoid cutting staff and it is painful
to get to this point," Alfred R. Camner, BankUnited's chairman and
chief executive officer, said. "Unfortunately in this
unprecedented economic environment, it has become a necessary
step."
Regulatory Consent Orders
The company and the BankUnited FSB have reached agreement with the
Office of Thrift Supervision on regulatory consent orders that
require the company and the BankUnited FSB to take various actions
and impose certain restrictions designed to improve their
financial strength. The company has disclosed most of the actions
and restrictions set forth in the new Orders which the OTS and the
company and BankUnited FSB agreed. BankUnited and the BankUnited
FSB have therefore, already taken action on, and in certain
situations, completed or made substantial progress towards
completion of a number of the required actions.
The Orders acknowledge that BankUnited has submitted a capital
augmentation plan and an alternative capital strategy to the OTS
to preserve and enhance its capital and the BankUnited FSB's
capital. Upon receipt of the OTS's written non-objection,
BankUnited must adopt and implement the capital plan. The Orders
require the BankUnited FSB, on and after Dec. 31, 2008, to meet
and maintain a minimum Tier One Core Capital Ratio of 7% and a
minimum Total Risk-Based Capital ratio of 14%. The BankUnited
FSB's core and risk-based capital ratios were 7.6% and 13.8% at
June 30, 2008.
The Orders prohibit the BankUnited FSB from paying, and BankUnited
from accepting or requesting from the BankUnited FSB, dividends or
capital distributions without receiving the prior written approval
of the OTS. The Orders also require, among other things, that
BankUnited and the BankUnited FSB notify the OTS prior to adding
directors or senior executive officers; limit certain kinds of
severance and indemnification payments; and obtain OTS approval
before entering into, renewing, extending, or revising any
compensatory or benefits arrangements with any director or
officer.
The Orders also require that the BankUnited FSB enhance its
policies and procedures regarding its allowance for loan losses,
limit its asset growth and develop strategies to strengthen its
liquidity position.
In addition, the Orders preclude the BankUnited FSB from
originating any loans that provide for or may result in negative
amortization, including payment option adjustable rate mortgages.
Additionally, the Orders preclude the BankUnited FSB from
originating any loans under reduced documentation and no
documentation loan programs; require the BankUnited FSB to reduce
the portfolio of negative option ARM loans; and enhance monitoring
and internal reporting on the option ARM loan reduction efforts
and on unpaid mortgage insurance claims. The BankUnited FSB must
report regularly to the OTS on such efforts. As disclosed the
BankUnited FSB has already terminated the option ARM loan program,
eliminated all reduced documentation and no documentation loan
programs and suspended the payment of dividends.
"We have been working closely with our regulators to proactively
position BankUnited to meet the challenges of the sharp decline in
the housing and financial markets," Mr. Camner said. "We have
already enacted many of the elements of the order. "Most
importantly the Orders do not prevent us from offering the
products and services needed to meet our customers' banking needs.
Our employees remain committed to providing our customers with the
high-quality and professional service to which they are
accustomed."
Deferral of Interest Payments on the company's Trust
Preferred
Debentures
The company's board of directors has determined to defer payment
of regularly scheduled quarterly interest payments on the
company's aggregate $237 million of floating rate junior
subordinated interest debentures associated with its ten trust
preferred subsidiaries. Pursuant to the indentures for the
Subordinated Debentures, the company has the right to defer
payments of interest for up to twenty consecutive quarterly
periods, provided that there is no event of default, existing at
the time of deferral. During a period for which interest payments
are deferred the company may not, among other things and subject
to certain exceptions, declare or pay dividends with respect to
the company's capital stock, pay principal or interest on debt
that rank pari passu or junior to the Subordinated Debentures and
make any payments under guarantees of the company which rank pari
passu or junior to the Subordinated Debentures. During a period
when interest payments are being deferred, interest continues to
accrue at an annual rate equal to the interest rate in effect for
such period and compounded quarterly from the date of deferral.
All interest, including the additional compounded quarterly
interest, must be paid at the end of the deferral period. The
total estimated annual interest that would be payable on the
Subordinated Debentures, if not deferred, would be $12.4 million,
based on current variable rates. The deferrals are expected to
take effect commencing with the regularly scheduled payments in
October 2008.
About BankUnited Financial Corp.
BankUnited Financial Corp. -- http://www.bankunited.com/--
(NASDAQ: BKUNA) is the holding company for BankUnited FSB, a
banking institution based in Florida. BankUnited offers consumer
and commercial banking products and services, including online
products. The company serves through its 85 branches in 13
counties, including Miami-Dade, Broward, Palm Beach, Martin, St.
Lucie, Collier, Charlotte, Manatee, Hillsborough, Sarasota, Lee,
Indian River and Pinellas. At June 30, 2008, BankUnited had assets
of $14.2 billion.
BLUE WATER: Court to Consider Amended Plan of Liquidation Today
---------------------------------------------------------------
Judge Marci McIvor of the U.S. Bankruptcy Court for the Eastern
District of Michigan will convene a hearing today, Sept. 23, 2008,
to consider confirmation of Blue Water Automotive Systems Inc. and
its debtor-affiliates' Amended Joint Plan of Liquidation, John A.
Simon, Esq., at Foley & Lardner LLP, in Detroit, Michigan, stated
in a declaration filed with the Court.
Judge McIvor will also consider approval of the plan settlement
agreement entered into among the Debtors, the Official Committee
of Unsecured Creditors, CIT Capital USA Inc., CIT Group/Equipment
Financing Inc., and Ford Motor Company.
Blue Water Automotive Systems Inc. designs and manufactures
engineered thermoplastic components and assemblies for the
automotive industry. The company's product categories include
airflow management, full interior trim/sub-systems, functional
plastic components, and value-added assemblies. They are supported
by full-service design, program management, manufacturing and
tooling capabilities. With more than 1,400 employees, Blue Water
operates eight manufacturing and product development facilities
and has annual revenues of approximately $200 million. The
company's headquarters and technology center is located in
Marysville, Michigan. The company has operations in Mexico.
In 2005, KPS Special Situations Fund II, L.P., and KPS Special
Situations Fund II(A), L.P., acquired Blue Water Automotive
through a stock purchase transaction. In 2006, the company
acquired the automotive assets and operations of Injectronics,
Inc., a manufacturer of thermoplastic injection molded components
and assemblies. KPS then set about reorganizing the company. The
company implemented a program to improve operating performance and
address its liquidity issues. During 2007, the company replaced
senior management, closed two facilities, and reduced overhead
spending by one third.
About Blue Water Automotive
Blue Water Automotive Systems, Inc. designs and manufactures
engineered thermoplastic components and assemblies for the
automotive industry. The company's product categories include
airflow management, full interior trim/sub-systems, functional
plastic components, and value-added assemblies. They are supported
by full-service design, program management, manufacturing and
tooling capabilities. With more than 1,400 employees, Blue Water
operates eight manufacturing and product development facilities
and has annual revenues of approximately US$200 million. The
company's headquarters and technology center is located in
Marysville, Mich. The company has operations in Mexico.
In 2005, KPS Special Situations Fund II, L.P., and KPS Special
Situations Fund II(A), L.P., acquired Blue Water Automotive
through a stock purchase transaction. In 2006, the company
acquired the automotive assets and operations of Injectronics,
Inc., a manufacturer of thermoplastic injection molded components
and assemblies. KPS then set about reorganizing the company. The
company implemented a program to improve operating performance and
address its liquidity issues. During 2007, the company replaced
senior management, closed two facilities, and reduced overhead
spending by one third.
Blue Water Automotive and four affiliates filed for chapter 11
bankruptcy protection Feb. 12, 2008, before the United States
Bankruptcy Court Eastern District of Michigan (Detroit) (Case No.
08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley
& Lardner, LLP, serve as the Debtors' bankruptcy counsel.
Administar Services Group LLC acts as the Debtors' claims,
noticing, and balloting agent. As of June 30, 2008, the Debtors'
unaudited balance sheet showed $93,264,863 in total assets and
$108,300,898 in total liabilities.
The Debtors filed their Liquidation Plan on May 9, 2008. The Plan
contemplates a sale of substantially all of the Debtors' assets
and equity interests, except for a piece of real property located
at Yankee Road, in St. Clair, Michigan.
(Blue Water Automotive Bankruptcy News, Issue No. 29, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
BRAY & GILLESPIE: $6.8MM Award to Belfor "Null," Attorney Says
--------------------------------------------------------------
Jay Stapleton of Daytona Beach News-Journal reports that attorneys
for Bray & Gillespie LLC said a court judgment ordering the Debtor
to pay restoration firm Belfor USA $6.8 million has no effect
after Bray's filing for bankruptcy.
Bray & Gillespie filed for bankruptcy protection in federal court
on Sept. 12. On Sept. 15, Circuit Judge Richard S. Graham ordered
the Debtor to pay the amount to Belfor, which was brought in to do
disaster recovery of eight hotels for the company after the 2004
hurricanes. The ruling stemmed from a non-jury trial held in
April. Bray stands to lose the now-closed Treasure Island Resort
to foreclosure if it doesn't pay.
The judgment is a "nullity," because bankruptcy actions put a stay
on foreclosure claims, according to R. Scott Shuker, Esq. one of
the company's attorneys, the report said. Belfor or any creditor
will have to file a claim in the bankruptcy case.
Marvin P. Pastel, Esq., an Atlanta attorney, represents Belfor in
the lawsuit.
The company's hotels will remain open, reservations will be
honored, and the 571 company employees will keep their jobs,
company officials said, according to the report.
Bray & Gillespie LLC, doing business as Ocean Waters Management --
http://www.brayandgillespie.com-- operates hotels in Dayton
Beach. It is owned by partners Charles A. Bray and Joe Gillespie.
Bray & Gillespie Holdings and 78 affiliates filed for separate
Chapter 11 bankruptcy protection on September 12, 2008 (Bankr.
M.D. Fla., Case No.: 08-05473). R. Scott Shuker, Esq. at Latham
Shuker Eden & Beaudine LLP, represents the Debtors. Bray
disclosed assets of $1 million to $10 million and debts of
$1 million to $10 million in its court filings. According to
Bloomberg News, the company listed assets and debts of between
$100 million and $500 million each.
CANADIAN TRUST: Court Denies Noteholders Leave to Appeal Plan
-------------------------------------------------------------
The Supreme Court of Canada denied on September 19, 2008, a
request for leave filed by 21 noteholders of Canadian asset-
backed commercial paper to appeal the Ontario Court of Appeal's
decision to uphold an order issued by the Superior Court of
Justice (Commercial List) for the Province of Ontario,
sanctioning the Plan of Compromise & Arrangement proposed by the
Investors represented by the Pan-Canadian Investors Committee for
Third Party Structured Asset Backed Commercial Paper, Bloomberg
News reported.
The Supreme Court did not state a reason for its decision, the
report said.
"The alternative would have been incredibly complex," Purdy
Crawford, chairman of the Pan-Canadian Committee, told Bloomberg.
Allan Sternberg, Esq., one of the Appellants' counsel, told
Bloomberg that the Supreme Court Judges may have been "swayed" by
the recent U.S. financial crisis. Among others, Lehman Brothers
Holdings Inc. sought bankruptcy protection on September 15, 2008;
American International Group Inc. narrowly missed a bankruptcy
filing when it accepted an $85 million loan from the U.S.
government on September 16 in exchange for the government
acquiring an 80% equity stake in the government; and Bank of
America committed to acquire Merrill Lynch for $40+ billion. The
Lehman bankruptcy is the largest bankruptcy filing in the U.S.
AIG is one of the world's largest insurer company.
"What's gone on this week could very well have impacted the
[Canadian Supreme Court's] decision," Bloomberg quoted Mr.
Sternberg as saying. "There are allegations of a global
liquidity crisis and the judges probably didn't want to hold up
the plan any longer."
To note, the Appellants, which comprise about 3% of the Affected
ABCP Noteholders, have holdings of the commercial paper
aggregating roughly C$600 million to C$1 billion. The Appellants
have been adamant about their opposition of the ABCP Plan release
provisions because they want to reserve their rights to file
lawsuits against banks and brokerages that sold them the Affected
ABCP. Bloomberg elaborates that dealers of the Affected ABCP may
still be sued for fraud in certain isolated cases, but punitive
damages will not be allowed.
Meanwhile, Canadian Finance Minister Jim Flaherty hailed the
Supreme Court's decision, Reuters disclosed in a separate report.
"I am pleased that the Pan-Canadian Investors Committee plan for
restructuring asset-backed commercial paper cleared its final
legal hurdle this afternoon with the Supreme Court of Canada's
decision. The court's decision means that, after months of
uncertainty, the restructuring can finally proceed as planned."
Notes May Be Untradeable
With the recent turmoil in the financial sector and the global
slide of credit markets, the restructured notes to be issued
under the terms of the Plan may be untradeable, the Financial
Post stated. Because the restructuring of the notes will be
based on credit default swaps tied to "pools" of corporate debt,
the market for ABCP has just disappeared, the Financial Post
related.
"It's going to be a tough market to get liquidity in," Bloomberg
quoted Colin Kilgour, head of a Toronto-based firm that advises
Canadian companies on their commercial holdings, as saying.
"There's no buyers for this stuff out there right now."
In a separate report, the Montreal Gazette noted that Pan-
Canadian Chair Purdy Crawford said the global credit market
crisis could affect the restructuring of the Canadian ABCP. "If
it continues very long, it possibly could, yes. That's all I can
really say," Mr. Crawford told the Gazette.
The Gazette related that Mr. Crawford has not confirmed if the
ABCP Plan investors are in discussions for options to the extent
the current credit market crisis affects the ABCP Plan.
Pan-Canadian Committee's Statement
On September 19, 2008, the Pan-Canadian Investors Committee for
Third-Party Structured ABCP announced it was commencing the final
steps to implement its plan to restructure $32-billion of third-
party asset-backed commercial paper that has been frozen since
August 2007.
The announcement follows the decision earlier by the Supreme Court
of Canada to deny leave to appeal by a small group of corporate
investors who had sought to challenge the Superior Court of
Ontario's sanction of the Committee's plan and the Ontario Court
of Appeal's unanimous ruling affirming that decision.
The plan, which will see existing ABCP exchanged for longer
term notes, was approved in April by the overwhelming majority of
investors under the provisions of the Companies' Creditors
Arrangement Act.
"[The] decision clears the last significant hurdle to
completing our work," said Purdy Crawford, Chairman of the
Investors Committee. Mr. Crawford added that he was hopeful the
issuance of new notes would re-establish stability and liquidity
in the market over time.
The Investors Committee expects to be in a position to commence
the process for implementation of the restructuring by September
30 or shortly thereafter, with a view to completing implementation
during the month of October.
Canaccord Welcomes Supreme Court Decision
On September 19, 2008, Canaccord Capital Inc. welcomes the Supreme
Court of Canada's decision not to grant leave to appeal the
Canadian Asset-Backed Commercial Paper (ABCP) restructuring plan.
This ruling completes the court process, paving the way for the
execution of the restructuring transaction and the Canaccord
Relief Program.
"We commend the Supreme Court's decision," said Paul Reynolds,
President and CEO. "We are eager to complete our relief program
and restore funds to our clients, who have been negatively
impacted by this market disruption. We expect timelines for this
process to be announced in the coming days."
The Canaccord Relief Program combines the resale of restructured
ABCP notes to credible purchasers with a Canaccord-funded top-up
to achieve par value. Eligible clients - those holding an
aggregate of $1 million or less of ABCP - will remain entitled to
receive any unpaid interest pursuant to the Pan-Canadian Investor
Committee Plan and will be reimbursed by Canaccord for their share
of any restructuring costs.
Through its principal subsidiaries, Canaccord Capital Inc. (TSX &
AIM: CCI) is a leading independent, full-service investment dealer
in Canada with capital markets operations in the United Kingdom
and the United States. Canaccord is publicly traded on both the
Toronto Stock Exchange and AIM, a market operated by the London
Stock Exchange. Canaccord has operations in two of the principal
segments of the securities industry: capital markets and private
client services. Together, these operations offer a wide range of
complementary investment products, brokerage services and
investment banking services to Canaccord's private, institutional
and corporate clients. Canaccord has approximately 1,698
employees worldwide in 30 offices, including 23 Private Client
Services offices located across Canada. Canaccord Adams, the
international capital markets division, has operations in Toronto,
London, Boston, Vancouver, New York, Calgary, Montreal, San
Francisco, Houston, and Barbados.
About ABCP
Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust,
Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust,
MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust,
Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate
Trust, Structured Asset Trust, Structured Investment Trust III,
Symphony Trust, Whitehall Trust are entities based in Canada that
issue securities called third-party structured finance asset-
backed commercial paper. As of Sept. 14, 2007, these 21 Canadian
Trusts had approximately C$33 billion of outstanding ABCP.
As reported by the Troubled Company Reporter on March 18, 2008,
Justice Colin Campbell of the Ontario Superior Court of Justice
granted an application filed on March 17 by The Pan-Canadian
Investors Committee for Third-Party Structured ABCP under the
provisions of the Companies' Creditors Arrangement Act.
The Committee asked the Court to call a meeting of ABCP
noteholders to vote on a plan to restructure 20 trusts affecting
C$32 billion of notes. The trusts were covered by the Montreal
Accord, an agreement entered by international banks and
institutional investors on Aug. 16, 2007 to work out a solution
for the ABCP crisis in Canada. Justice Campbell appointed Ernst &
Young, Inc., as the Applicants' monitor, on March 17, 2008.
(Canadian ABCP Trusts Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
CANADIAN TRUST: Tendering of Old ABCP Notes to Run Until Sept. 30
-----------------------------------------------------------------
The Pan-Canadian Investors Committee for Third-Party Structured
ABCP has announced that the process of tendering existing holdings
of ABCP in exchange for new restructured notes has begun. CDS
Clearing and Depositary Services Inc. has established a live on-
line tender system for custodian institutions. Noteholders
holding physical certificates must deposit them with CIBC Mellon
Trust Company, using a letter of transmittal that is available on
the court-appointed Monitor's Web site at:
http://www.ey.com/ca/commercialpaper/
The expiry date for tenders is Tuesday, September 30, 2008. All
Noteholders are encouraged to tender by this date. Noteholders
who tender by September 30 will be sent their new Plan Notes
together with any interest payments to which they are entitled,
within three business days of the restructuring being implemented.
Noteholders are reminded that all ABCP tendered will be returned
in the event the Plan is not implemented for any reason.
The Investors Committee expects to be in a position to commence
the process for implementation of the restructuring by September
30 or shortly thereafter, with a view to completing implementation
during the month of October.
About ABCP
Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust,
Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust,
MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust,
Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate
Trust, Structured Asset Trust, Structured Investment Trust III,
Symphony Trust, Whitehall Trust are entities based in Canada that
issue securities called third-party structured finance asset-
backed commercial paper. As of Sept. 14, 2007, these 21 Canadian
Trusts had approximately C$33 billion of outstanding ABCP.
As reported by the Troubled Company Reporter on March 18, 2008,
Justice Colin Campbell of the Ontario Superior Court of Justice
granted an application filed on March 17 by The Pan-Canadian
Investors Committee for Third-Party Structured ABCP under the
provisions of the Companies' Creditors Arrangement Act.
The Committee asked the Court to call a meeting of ABCP
noteholders to vote on a plan to restructure 20 trusts affecting
C$32 billion of notes. The trusts were covered by the Montreal
Accord, an agreement entered by international banks and
institutional investors on Aug. 16, 2007 to work out a solution
for the ABCP crisis in Canada. Justice Campbell appointed Ernst &
Young, Inc., as the Applicants' monitor, on March 17, 2008.
(Canadian ABCP Trusts Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
CIRCUIT CITY: President & CEO Philip Schoonover Leaves
------------------------------------------------------
Miguel Bustillo and Ann Zimmerman of The Wall Street Journal
report that Circuit City Stores Inc.'s board ousted Philip J.
Schoonover, the company's president, chairperson, and CEO.
Mr. Schoonover joined Circuit City four years ago to turn around
the troubled company, leaving Best Buy Co., where he was executive
vice president of customer segments. He was appointed as Circuit
City's CEO two years ago.
Michael Felberbaum at The Associated Press relates that Mark J.
Wattles, whose investment firm holds a 6.5% stake in Circuit City,
sent a letter to the board in April, describing the turnaround
efforts under Mr. Schoonover "disastrous" and suggesting that Mr.
Schoonover be replaced. Mr. Wattles, Mark Clothier at Bloomberg
News reports, started a "proxy fight" and called for Mr.
Schoonover's ouster earlier this year. According to WSJ, Mr.
Wattles had threatened to oust the entire board earlier this year.
Mr. Wattles agreed to stopped the proxy fight in exchange for
three board seats.
According to the AP, Mr. Schoonover had continuously defended the
turnaround plan despite some acknowledged missteps and had asked
shareholders for more time. Bloomberg relates that Mr. Schoonover
had said, "We need to perform in the second half of this year, and
that's what we're focused on."
Circuit City, the AP says, reported one profitable quarter since
the second quarter of 2007. The AP states that RBC Capital
Markets analyst Scot Ciccarelli wrote in a note to investors
Monday that "Circuit City's business has deteriorated dramatically
over the last two years and although we do not lay the blame
entirely on his shoulders, we do believe that some of Mr.
Schoonover's decisions definitely had a significantly negative
impact." According to WSJ, Mr. Schoonover was also criticized for
decisions that backfired, such as dismissing veteran workers to
cut costs. To try to recoup losses caused by falling TV prices,
Mr. Schoonover replaced 10% of the highest paid, most seasoned
staff in Circuit City's stores, the report says, citing Colin
McGranahan, retail analyst at Sanford C. Bernstein & Co.
WSJ relates that James A. Marcum -- formerly an operating partner
of Tri-Artisan Capital Partners LLC and was a senior executive at
Hollywood Entertainment Corp., a video retailer founded by Mr.
Wattles -- was appointed to serve as acting president and CEO,
replacing Mr. Schoonover. Mr. Marcum joined the board in June
after being nominated by Mr. Wattles. According to Bloomberg, Mr.
Marcum helped turn around bankrupt companies Hollywood
Entertainment and Ultimate Electronics Inc., Mr. Wattles'
electronics retailer.
Circuit City's board elected Allen B. King as its chairperson,
according to WSJ. Mr. King was Universal Corp.'s chairperson.
WSJ relates that Circuit City, under Mr. King, is soliciting bids
for the company. WSJ states that Blockbuster Inc., who made an
unsolicited offer to acquire Circuit City for
$1 billion, had changed its mind. The report says that Circuit
City's board had rejected two earlier offers -- an $8-a-share bid
from Mexican billionaire Carlos Slim in 2003 and a $17-a-share
offer from hedge-fund Highfields Capital Management LP three years
ago.
Bloomberg reports that Circuit City put itself up for sale in May.
Mr. Marcum's appointment means that Circuit City probably won't
find a buyer, Bloomberg states, citing Sanford C. Bernstein & Co.
analyst Colin McGranahan. "The board wouldn't replace the CEO if
they thought there was a chance the company would be sold. Given
the time that has passed and the fact that the board just replaced
the CEO, that tells me that they don't expect a suitor at this
point," Bloomberg quoted Mr. McGranahan as saying.
On September 2, 2008, Circuit City Stores, Inc. and Philip
J. Dunn, senior vice president, treasurer and chief accounting
officer, terminated their employment relationship, effective as of
October 18, 2008. Mr. Dunn joined the Company in 1984 and had
served as its principal accounting officer since 1996.
Michelle O. Mosier, 43, will succeed Mr. Dunn as the Company’s
principal accounting officer. Ms. Mosier joined the Company in
2003 as Director – Financial Reporting and was promoted to Vice
President in 2005. She has served as Vice President and
Controller since 2007 and will remain in those positions.
About Circuit City Stores Inc.
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments: domestic and international.
* * *
As reported by the Troubled Company Reporter on July 3, 2008,
Pallavi Gogoi at BusinessWeek suggested that a chapter 11
bankruptcy filing may be in the offing for Circuit City after
Blockbuster withdrew its offer. "Circuit City is in very serious
trouble, and any scenario is possible today," Mr. Gogoi quoted
Nick McCoy, senior consultant at TNS Retail Forward, a research
firm, as saying.
Mr. Gogoi also noted that Circuit City spokesman Bill Cimino has
said the company has adequate liquidity to survive several
quarters, if not years. Mr. Cimino, according to Mr. Gogoi, said
a Chapter 11 filing is not part of the strategic alternatives that
the company is looking at.
Mr. Gogoi pointed out that Circuit City shares currently trade at
over $2 after Blockbuster made its decision and that the company's
market capitalization is $368,000,000. Mr. Gogoi says the amount
is pocket change for a large private equity firm.
CONSTAR INTERNATIONAL: Has Until Dec. 10 to Meet Nasdaq Criteria
----------------------------------------------------------------
Constar International Inc. received a notice from the Listing
Qualifications Department of the NASDAQ Stock Market indicating
that for 30 consecutive trading days, the company's publicly held
shares had not maintained a minimum market value of $15 million as
required under NASDAQ Marketplace Rule 4450(b)(3).
This calculation excludes shares held by officers, directors, and
holders of 10% or more of the company's outstanding Common Stock.
This notification has no effect on the listing of the company's
Common Stock at this time. However, in accordance with
Marketplace Rule 4450(e)(1), the company is being provided 90
calendar days, or until Dec. 10, 2008, to regain compliance with
the Rule. If at any time prior to such date the market value of
the company's publicly held shares is $15 million or more for ten
consecutive trading days, the NASDAQ staff will provide written
notification that the company has achieved compliance. If
compliance with the Rule cannot be demonstrated by Dec. 10, 2008,
the NASDAQ staff will provide written notification to the company
that its securities will be delisted from the NASDAQ Global
Market. At that time, the company may appeal the Staff's
determination to a Listing Qualifications Panel.
Philadelphia-based Constar International Inc. (Nasdaq: CNST) --
http://www.constar.net/-- is a producer of PET (polyethylene
terephthalate) plastic containers for food, soft drinks and water.
The company provides full-service packaging solutions, from
product design and engineering, to ongoing customer support. Its
customers include many of the world's leading branded consumer
products companies.
At June 30, 2008, the company's balance sheet showed total assets
of $507.0 million and total liabilities of $588.4 million,
resulting in a shareholder's deficit of $81.4 million.
* * *
Constar International Inc. still carries Moody's Caa2 Senior
Subordinate Debt assigned on Sept. 11, 2006.
CORD BLOOD: Files SEC Prospectus for Common Stock Resale
--------------------------------------------------------
Cord Blood America Inc. has filed with the Securities and Exchange
Commission a prospectus to register and sell securities.
The prospectus relates to the resale of 92,021,277 shares of the
company's common stock, par value of $0.0001, by certain
individuals and entities who beneficially own shares of Cord
Blood's common stock. Cord Blood is not selling any shares of its
common stock in the offering and therefore will not receive any
proceeds from the offering.
However, the Company will receive proceeds from the sale of its
common stock under the Securities Purchase Agreement which was
entered into between the Company and Tangiers Investors, LP, the
selling stockholder. Cord Blood agreed to allow Tangiers to
retain 10% of the proceeds raised under the Securities Purchase
Agreement.
The shares of common stock are being offered for sale by the
selling stockholder at prices established on the Over-the-Counter
Bulletin Board during the term of this offering, at prices
different than prevailing market prices or at privately negotiated
prices.
On Aug. 26, 2008, the last reported sale price of the common stock
was $0.0075 per share. The common stock is quoted on the Over-
the-Counter Bulletin Board under the symbol "CBAI.OB." These
prices will fluctuate based on the demand for the shares of the
common stock.
Tangiers, a selling stockholder, intends to sell up to 17,021,277
shares of common stock, which were previously issued as a
commitment fee under the Securities Purchase Agreement and shares
of the company's common stock which will be issued to Tangiers so
that Cord Blood may receive financing pursuant to the Securities
Purchase Agreement. As of Aug. 26, 2008, the shares of common
stock to be issued pursuant to advances under the Securities
Purchase Agreement upon issuance would equal approximately 30% of
the outstanding common stock.
With the exception of Tangiers, who is an "underwriter" within the
meaning of the Securities Act of 1933, no other underwriter or
person has been engaged to facilitate the sale of shares of Cord
Blood's common stock in this offering. This offering will
terminate 24 months after the accompanying registration statement
is declared effective by the Securities and Exchange Commission.
None of the proceeds from the sale of the common stock by the
selling stockholders will be placed in escrow, trust or any
similar account.
A full-text copy of Cord Blood's prospectus is available free of
charge at:
http://ResearchArchives.com/t/s?3263
About Cord Blood
Headquartered in West Hollywood, Calif., Cord Blood America Inc.
(OTC BB: CBAI) -- http://www.cordblood-america.com/-- is an
umbilical cord blood stem cell preservation company with a
particular focus on the acquisition of customers in need of family
based products and services. The company also provides
television, radio and internet advertising services to businesses
that sell family based products and services.
The company operates two core businesses:
-- Cord Partners Inc., CorCell Co. Inc., CorCell Ltd. ("Cord")
operates the umbilical cord blood stem cell preservation
operations, and
-- Career Channel Inc. dba. Rainmakers International ("Rain")
operates the television and radio advertising operations.
Going Concern Doubt
Rose, Snyder & Jacobs, in Encino, Calif., expressed substantial
doubt about Cord Blood America Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditing firm
reported that the company has sustained recurring operating
losses, continues to consume cash in operating activities, and has
insufficient working capital and an accumulated deficit at
Dec. 31, 2007.
Cord Blood America Inc.'s consolidated balance sheet at June 30,
2008, showed $5,859,694 in total assets and $12,054,864 in total
liabilities, resulting in a $6,195,170 stockholders' deficit.
At June 30, 2008, the company's consolidated financial statements
also showed strained liquidity with $204,924 in total current
assets available to pay $12,054,864 in total current liabilities.
The company reported a net loss of $2,499,142 for the second
quarter ended June 30, 2008, compared with a net loss of
$1,758,472 in the same period last year.
COTT CORPORATION: Moody's Chips CFR to B3; Still on Review
----------------------------------------------------------
Moody's Investors Service downgraded the ratings of Cott
Corporation (CFR to B3 from B2 and senior subordinate to Caa1 from
B3). The ratings remain on review for further possible downgrade.
The company's speculative grade liquidity rating remains unchanged
at SGL-3.
The downgrade reflects the likelihood that 2008 performance will
be substantially weaker than Moody's originally expected when it
last lowered the rating on May 20, 2008. The stable outlook had
anticipated stabilization in operating performance.
However, Cott revised its outlook for the full year last month
when it said that declining volumes, heavy promotional activity
from the national brands, high commodity prices and certain
problems in the international concentrate unit will all contribute
to poor 3rd quarter performance.
The third quarter has a disproportionate impact on the full year
performance due to the importance of the summer selling season.
Moody's had previously stated that EBITA margin sustained below 4%
or EBIT/Interest sustained below 1 times could lead to a
downgrade. Moody's currently expects interest coverage to remain
below 1 times for the next several quarters and EBITA margin to be
below 4% for 2008.
Moody's review will focus on the actual reported performance for
the third quarter and the company's outlook for 2009, for which
there is currently very little visibility. It will also focus on
the company's actual and expected liquidity situation in the back
half of this year and early next year.
The SGL-3 recognizes that internally generated cash flow is
expected to be weaker than previously projected and the
availability under the new $250 million facility is likely to be
less than expected. If availability under the asset backed
facility drops below $30 million the company would trigger a fixed
charge coverage covenant, compliance with which could be somewhat
tight.
These ratings were lowered and remain on review for further
downgrade:
Cott Corporation:
-- Corporate Family rating to B3 from B2
-- Probability of Default Rating to B3 from B2
Cott Beverages, Inc.:
-- $275 million 8% senior sub notes due 2011 to Caa1, LGD 5; 71%
from B3, LGD 5; 72%
-- Speculative grade liquidity rating is unchanged at SGL-3
Headquartered in Toronto, Ontario, Cott Corporation is one of the
world's largest retailer-brand soft drink suppliers with a leading
position in take-home carbonate soft drink markets in the US,
Canada, and the UK. Sales for the LTM period ended were
$1.7 billion.
DAVID HOFFMAN: Case Summary & Three Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: David Hoffman Auto Sales, LLC
196 Buffalo Road
Rochester, NY 14611
Bankruptcy Case No.: 08-22440
Type of Business: The Debtor sells new and used automobile.
Chapter 11 Petition Date: September 19, 2008
Court: Western District of New York (Rochester)
Judge: John C. Ninfo II
Debtor's Counsel: Ronald S. Goldman, Esq.
rosgol@yahoo.com
Law Office of Ronald Goldman
532 Times Square Building
45 Exchange Street
Rochester, NY 14614
Tel: (585) 546-7410
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
A list of the Debtor's largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/nywb08-22440.pdf
DAVE CROFT MOTORS: Files for Chapter 11 Protection
--------------------------------------------------
Dave Croft Motors filed for Chapter 11 bankruptcy reorganization
Wednesday in U.S. Bankruptcy Court for the Southern District of
Illinois.
Will Buss of the Belleville News-Democrat in Illinois reports that
Crawford D. Croft, who founded the Chrysler dealership in 1976 and
has operated at 901 Bluff Road since 1979, said the dealership
remains open for business.
"No one is losing their job," Mr. Croft said. "There will be no
cutbacks. We will just go on as normal."
Mr. Croft opted to file for Chapter 11 protection after Croft
Motors' largest creditor, Lisle-Ill.-based Chrysler Financial
Corp., sought more money from the Collinsville dealership, the
Democrat-News reports.
"They wanted me to put more money into the dealership and
personally guarantee a lot of loans," Mr. Croft said. "When they
asked that, I wasn't in the position to do that."
The dealership has a total of $4.2 million in trade debt to 36
creditors, according to documents filed with the Court. Other
creditors listed include Regions Bank at $502,000, Dave "Crawford"
Croft at $347,000 and various media and automotive businesses.
Dave Croft Motors operates a vehicle dealership in Collinsville,
Illinois. The Debtor filed for Chapter 11 relief on Sept. 17,
2008 (Bankr. S.D. Ill. Case No. 08-32084). Thomas Darin Boggs,
Esq., at Boggs Boggs and Bates LLC, represents the Debtor as
counsel. When the Debtor filed for protection from its creditors,
it listed assets of $1 million to $10 million, and debts of
$1 million to $10 million.
DIAMOND GLASS: Prepares for Disclosure Statement Hearing
--------------------------------------------------------
Bill Rochelle of Bloomberg News reports that Diamond Glass, Inc.,
and its debtor-affiliate DT Subsidiary Corp. filed an amended
disclosure statement in advance of a Sept. 19, 2008 hearing to
approve the disclosure statement.
The explanatory disclosure statement, according to the report,
says that $16 million in remaining secured claims will be paid
fully, while unsecured creditors with $60 million in claims may
receive as much as 1.6 percent.
The assets of Diamond Glass were sold, according to the report, in
June to Belron SA from Luxemburg for $53.4 million, plus assumed
debt.
At the auction, Belron competed against an offer from the secured
creditor Guggenheim Corporate Funding LLC, which was willing to
buy the business in exchange for $34 million in secured debt and
specified assumed liabilities, according to the report.
Belron is the world's largest auto-glass replacement business,
according to the report.
The Debtor also owes more than $47 million on 9.25 percent senior
notes, according to the report.
About Diamond Glass
Headquartered in Kingston, Pennsylvania, Diamond Glass Inc. --
http://www.diamongtriumph.com/or
http://www.daimondtriumphglass.com/-- provides automotive
glass replacement and repair services. Founded in 1923, Diamond
Glass had more than 1,600 employees as of March 15.
The company and and its debtor-affiliate DT Subsidiary Corp.,
filed for Chapter 11 bankruptcy petition on April 1, 2008 (Bankr.
D. Del. Lead Case No. 08-10601). Michael P. Richman, Esq., at
Foley & Lardner LLP, and Donald J. Bowman Jr., Esq., at Young
Conaway Stargatt & Taylor LLP, represent the Debtors in their
restructuring efforts. The U.S. Trustee for Region 3 appointed
five creditors to serve on an Official Committee of Unsecured
Creditors. John T. Carrol, III, Esq., and Jeffrey R. Waxman,
Esq., at Cozen O'Connor, represent the Committee in this case.
When the Debtors filed for bankruptcy protection, they listed
assets of between $10 million and $50 million and debts of between
$100 million and $500 million.
The Court has extended the exclusive periods by which the Debtors
may file a Chapter 11 plan and to solicit acceptances of such a
plan through November 28, 2008 and January 27, 2009, respectively.
DOT VN: Chang Park Raises Going Concern Doubt
---------------------------------------------
Chang G. Park, CPA, from San Diego, California, expressed on Sept.
10, 2008, substantial doubt about Dot VN Inc.'s ability to
continue as a going concern after auditing the company's condensed
consolidated balance sheet as of July 31, 2008. The auditing firm
reported that the company experienced losses from operations.
The auditor said the the company has had limited revenues due to
the early stage of its efforts to transition into the marketing of
its Internet resources. Consequently, the company has incurred
recurring losses from operations. These factors, as well as the
risks associated with raising capital through the issuance of
equity and debt securities creates uncertainty as to the company's
ability to continue as a going concern, the auditor continued.
The company's consolidated balance sheets showed total assets of
$2,374,074 and total liabilities of $10,001,380 resulting in a
total shareholders' deficit of $7,627,306.
At July 31, 2008, the company's consolidated balance sheets showed
strained liquidity with $44,380 in total current assets available
to pay $10,001,380 in total current liabilities.
The company reported a $2,332,028 net loss on revenues of $376,680
for the quarterly period ended July 31, 2008, compared to a
$3,535,219 net loss on revenues of $290,253 for the same period a
year ago.
Full-text copies of the company's consolidated financial
statements for the quarter ended July 31, 2008, are available for
free at http://ResearchArchives.com/t/s?327a
Dot VN, Inc. (OTC: DTVI.PK) -- http://www.dotvn.com-- offers
Internet services and related online business e-commerce services
in Vietnam and internationally.
DUNE ENERGY: Completes Barnett Shale Asset Sale
-----------------------------------------------
Dune Energy, Inc. disclosed in a Securities and Exchange
Commission filing that it has closed $38.1 million of its sale of
its Barnett Shale assets, located in Denton and Wise Counties,
Texas. The difference between the $38.1 million and the $41.5
million original sale price reflects post closing adjustments.
The funds will be used to eliminate the $28.1 million outstanding
on Dune's $40 million revolver, and for general corporate
purposes.
James A. Watt, the Company's President and Chief Executive
Officer, stated, "This disposition allows Dune to focus its
activity on high rate of return projects in the Gulf Coast, and
develop significant new deeper pool exploratory projects across
our high quality property base".
About Dune Energy
Headquartered in Houston, Texas, Dune Energy Inc. (Amex: DNE)
-- http://www.duneenergy.com/-- is an independent exploration and
development company, with operations focused along the
Louisiana/Texas Gulf Coast and the North Texas Fort Worth Basin
Barnett Shale. Proved reserves as of Jan. 1, 2008, totaled 175
Bcfe.
* * *
Moody's Investor Service placed Dune Energy Inc.'s senior secured
debt, probability of default and long term corporate family
ratings at 'Caa2' in April 2007. The ratings still hold to date
with a stable outlook.
Dune Energy Inc.'s consolidated balance sheet at June 30, 2008,
showed $567.0 million in total assets, $418.9 million in total
liabilities, and $214.2 million in redeemable preferred stock,
resulting in a $66.1 million stockholders' deficit.
EDGEWATER FOODS: Restricts Conversion of Preferred Stock
--------------------------------------------------------
Edgewater Foods International Inc. disclosed in a Securities and
Exchange Commission filing that on Sept. 5, 2008, it amended the
Certificate of Designation of the Relative Rights and Preferences
for its Series A, Series B and Series C Preferred Stock.
As required, at least 75% of each class of the Company's preferred
stock consented to amending the Designation and the amendment was
approved by the Company's directors. Pursuant to the amendment,
the conversion restriction contained the Designation now accounts
for the shares held by the holder and its affiliates; prior to the
amendment, the conversion restriction only accounted for the
shares held by the holder.
The amendment was requested by the preferred stockholders. The
amendment provides that at no time may a holder of shares of
Series A Preferred Stock convert shares of the Series A Preferred
Stock if the number of shares of Common Stock to be issued
pursuant to the conversion would cause the number of shares of
Common Stock owned by the holder and its affiliates at the time to
exceed, when aggregated with all other shares of Common Stock
owned by the holder and its affiliates at that time, the number of
shares of Common Stock which would result in the holder and its
affiliates beneficially owning in excess of 9.9% of the then
issued and outstanding shares of Common Stock outstanding at that
time. However, upon a holder of Series A Preferred Stock
providing the Company with 61 days' notice that the holder would
like to waive this provision of the Certificate of Designation
with regard to any or all shares of Common Stock issuable upon
conversion of Series A Preferred Stock, this provision will be of
no force or effect with regard to those shares of Series A
Preferred Stock referenced in the Waiver Notice.
About Edgewater Foods
Based in Gaithersburg, Maryland, Edgewater Foods International
Inc. (OTC BB: EDWT) -- http://www.edgewaterfoods.com/-- is the
parent company of Island Scallops Ltd., a Vancouver Island
aquaculture company. Established in 1989, ISL operates a scallop
farming and marine hatchery business.
Going Concern Doubt
LBB & Associates Ltd. LLP, in Houston, expressed substantial doubt
about Edgewater Foods International Inc.'s ability to continue as
a going concern after auditing the company's consolidated
financial statements for the year ended Aug. 31, 2007. The
auditing firm pointed to the company's absence of significant
revenues, recurring losses from operations, and its need
for additional financing in order to fund its projected loss in
2008.
EDUCATIONAL SERVICES: Completes Sale to Innovative Solutions
------------------------------------------------------------
The Business Review reports that Educational Services & Products,
LLC, has concluded its sale to Innovative Solutions Group Cos.
LLC.
Innovative Solutions said Tuesday that it will operate under the
Educational Services brand, according to The Business Review.
The report relates that the U.S. Bankruptcy Court for the Northern
District of New York approved the sale in July. Court documents
indicate that Educational Services has not yet emerged from
Chapter 11 bankruptcy protection.
Innovative Solutions has hired Joseph O'Hara, the part-owner of
Educational Services, as managing director and senior consultant,
The Business Review states.
About Educational Services
Albany, New York-based Educational Services & Products, LLC --
http://www.esp-sgs.com/-- is a school district Medicaid billing
agent. It has also developed the Student Tracking And Reporting
System Web-based management information system for school
districts' special edducation programs.
The company has about 40 employees who work with 1,200 U.S. school
districts to claim Medicaid funding for disabled students. It has
offices in 10 other states. Joseph O'Hara, its former owner, co-
founded a consulting firm called Strategic Governmental Solutions,
Inc., which filed for Chapter 7 bankruptcy in April 2008.
Educational Services bought Strategic Governmental's assets in
2007.
The company filed for Chapter 11 protection on April 30, 2008
(Bankr. N.D.N.Y. Case No. 08-11400). Richard L. Weisz, Esq., at
Hodgson Russ, LLP, represents the Debtor in its restructuring
effort. The company listed total assets of $31,571,921 and total
debts of $13,611,681 when it filed for bankruptcy.
ENERLUME ENERGY: Connecticut Court Dismisses Derivative Action
--------------------------------------------------------------
EnerLume Energy Management Corp disclosed in a Securities and
Exchange Commission filing that on Sept. 2, 2008, the Connecticut
Superior Court granted the parties' request to dismiss a
derivative action that had named the Company as a nominal
defendant.
The suit, captioned Bart Hester v. Geoffrey W. Ramsey, et al.,
Docket No. UWY-CV-05-5001448-S, had been filed in 2005 and had
also named as defendants the Company's board, Geoffrey Ramsey and
Roger Lockhart. The court's Sept. 2, 2008 order dismisses the
Hester action against all defendants with prejudice.
On Aug. 8, 2008, a Stipulation of Dismissal of Appeal was filed in
the United States Court of Appeals for the Second Circuit in re
Yorks v. Host America Corp., Docket No. 08-1101-cv. Putative
shareholder Bart C. Hester had appealed from an order of the
United States District Court for the District of Connecticut on
Feb. 5, 2008, which approved the settlement of a shareholders
derivative action over Mr. Hester's objection. By agreement of all
parties, the appeal was dismissed with prejudice.
About EnerLume Energy
Headquartered in Hamden, Conn., EnerLume Energy Management Corp.
(OTC BB: ENLU) -- http://www.enerlume.com/-- through its
subsidiaries, provides energy management conservation products and
services in the United States. Its focus is energy conservation,
which includes a proprietary digital microprocessor for reducing
energy consumption on lighting systems, and the installation and
design of electrical systems, energy management systems,
telecommunication networks, control panels and lighting systems.
EnerLume Energy Management Corp.'s consolidated balance sheet at
March 31, 2008, showed $2,546,707 in total assets and $6,971,150
in total liabilities, resulting in a $4,424,443 total
stockholders' deficit.
Going Concern Doubt
Mahoney Cohen & Company CPA P.C., in New York, expressed
substantial doubt about the ability of Host America Corp., nka
EnerLume Energy Management Corp., to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended June 30, 2007, and 2006. The auditing firm
reported that the company has suffered recurring losses from
continuing operations, has negative cash flows from operations,
and has a stockholders' deficiency at June 30, 2007.
At March 31, 2008 the company had a working capital deficiency and
a stockholders' deficiency of $4,779,556 and $4,424,443
respectively, and a net loss of $4,983,247 for the nine months
ended March 31, 2008.
FRONTIER COMMS: Fitch Holds 'BB' IDR on Stable Telecom Performance
------------------------------------------------------------------
Frontier's 'BB' rating incorporated the relatively stable
performance of its primarily rural telecommunications operations,
its strong operating margins, expected stable credit metrics and
access to ample liquidity. The company has also exceeded the
originally anticipated $30 million in synergies from the March
2007 acquisition of Commonwealth Telephone Enterprises, Inc., with
the revised expectations set at $40 million annually.
Constraining factors in the rating include the continuing pressure
of competition and the slight levering effect of the acquisition
of Commonwealth Telephone Enterprises, Inc. in 2007 and the use of
free cash flow for a $200 million stock repurchase program in
2008.
Fitch anticipates that Frontier's gross debt-to-EBITDA in 2008
will remain relatively unchanged from the 3.8 times recorded in
2007. The company's guidance calls for pre-dividend free cash
flow to be in the range of $470 million to $495 million, and
capital spending to range from $300 million to $310 million.
Competition from cable telephony and wireless operators has
pressured Frontier's revenues. Approximately 60% of its access
lines are exposed to cable-provided voice services and over the
next one to two years the level is expected to reach approximately
65%. To retain and attract customers, Frontier is aggressively
bundling high-speed data and video services. Over recent
quarters, customer-based revenues have been relatively stable,
even in the face of access line losses in the 5% to 6% range, due
to the bundling activities. While customer revenues have been
stable, Frontier has experienced revenue declines from high-margin
regulatory-derived sources such as universal service fund receipts
and switched access services.
Fitch expects Frontier to continue to face continued moderate
declines in its USF receipts due to the company's reduced costs
relative to national average costs per loop and overall access
line declines. Longer-term reforms could also pressure USF and
access-service revenues.
Fitch notes that Frontier is likely to continue to evaluate
acquisitions as a use of capital. However, management has stated
that under a scenario where they would lever up slightly, to
approximately 4x, to make an acquisition, that there is a strong
probability that leverage would be back down as the property was
integrated.
Total debt at June 30, 2008 was $4.75 billion, up approximately
$11 million from year-end 2007. Liquidity is good with an
undrawn, $250 million senior unsecured credit facility in place
until May 2012 and $179 million in cash at June 30, 2008. There
are no material maturities until 2011, when approximately
$1.1 billion in debt matures, and Fitch expects Frontier to take
steps over the coming years to reduce the amount of that debt. In
February 2008, Frontier announced a new $200 million share
repurchase program, with repurchases to take place over a 12-month
period. By June 30, 2008, approximately 56% of the program had
been completed.
The ratings affirmed are:
Frontier Communications Corporation:
-- IDR 'BB';
-- Senior unsecured $250 million credit facility due May 18,
2012 'BB';
-- Senior unsecured $148.5 million senior unsecured term loan
due Dec. 31, 2012;
-- Senior unsecured notes and debentures 'BB';
Citizens Utilities Trust:
-- 5% company obligated mandatorily redeemable convertible
preferred securities due 2036 'BB-'.
Industrial development revenue bonds 'BB' as:
-- Maricopa County Industrial Development Authority IDRB series
1995.
Commonwealth Telephone Enterprises, Inc.
-- IDR 'BB';
-- Convertible Notes 'BB'.
GENITOPE CORP: May File for Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Genitope Corp. expects to file for Chapter 11 bankruptcy
protection or liquidate its assets and dissolve the corporation,
which the company anticipates will result in the stockholders of
the company receiving no consideration or continuing interest in
the MyVax personalized immunotherapy or monoclonal antibody
programs or other assets of the company as stockholders.
Genitope has suspended active development of its MyVax programs.
it estimates that, as of Aug. 31, 2008, net of the approximately
$630,000 of accounts payable, it had cash and cash equivalents of
approximately $1,000,000 and marketable securities with an
estimated fair market value of approximately $476,000.
Genitope has sold its equipment and vacated one of the two
buildings in Fremont, California, that formerly served as its
principal offices. It will vacate the second building in the
near future. Genitope currently has one employee, Dr. Dan Denney,
Jr., its Chief Executive Officer.
As of Aug. 31, 2008, Genitope had:
(i) approximately $1,600,000 million in cash and cash
equivalents; and
(ii) marketable securities with a par value of
approximately $711,000 and an estimated current fair
market value of approximately $476,000.
Genitope believes that it had satisfied all of its liabilities as
of Aug. 31, 2008, other than accounts payable of approximately
$630,000, which the company intends to pay, and obligations under:
(i) two May 2005 lease agreements to lease an aggregate
of approximately 220,000 square feet of space located
in two buildings in Fremont, California;
(ii) a capital lease with General Electric Capital
Corporation; and
(iii) an equipment lease with Cisco Systems Capital
Corporation.
There are currently over 12 years remaining under the Real Estate
Leases, with a total remaining rental obligation of $97,900,000 as
of Aug. 31, 2008. Genitope's unsatisfied obligations to GECC and
Cisco, after giving effect to the sale of available equipment
securing the GECC Lease and the payment of the proceeds therefrom
to GECC, are approximately $2,700,000 in the aggregate. Genitope
is unable to satisfy its obligations under these agreements.
Genitope does not believe that there is remaining equipment
securing the GECC Lease that is available for sale to offset its
remaining obligation to GECC.
Genitope is continuing to evaluate the data from its pivotal Phase
3 clinical trial of MyVax personalized immunotherapy in previously
untreated follicular B-cell non-Hodgkin's lymphoma patients and
related data, with the goal of obtaining value for MyVax
personalized immunotherapy, but the outcome of this evaluation and
Genitope's ability to obtain value remains highly uncertain.
In April 2008, Genitope had retained Piper Jaffray & Co. to act as
its financial advisor to provide financing and strategic advisory
services to the company. In connection with this engagement,
representatives of Piper Jaffray contacted a wide range of third
parties seeking a possible investment in Genitope or with respect
to the company's assets, or a partnership, licensing or
acquisition transaction with the company. To date, no third party
has proposed terms for such a transaction.
About Genitope Corporation
Based in Fremont, Calif., Genitope Corporation --
http://www.genitope.com-- is a biotechnology company focused on
the research and development of novel immunotherapies for the
treatment of cancer. Until Genitope recently suspended its
development, its lead product candidate was MyVax personalized
immunotherapy, a patient-specific active immunotherapy that is
based on the unique genetic makeup of a patient's tumor and is
designed to activate the patient's immune system to identify and
attack cancer cells. Genitope is also developing a monoclonal
antibody panel that it believes will potentially represent a
novel, personalized approach for treating NHL.
GIN KIN: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: Gin Kin, L.L.C.
40 South 600 Eats
Salt Lake City, UT 84102
Bankruptcy Case No.: 08-26300
Chapter 11 Petition Date: September 19, 2008
Court: District of Utah (Salt Lake City)
Judge: Glen E. Clark
Debtor's Counsel: David E. Leta, Esq.
dleta@swlaw.com
Snell & Wilmer
15 West South Temple, Suite 1200
Beneficial Tower
Salt Lake City, UT 84101-1547
Tel: (801) 257-1928
Fax: (801) 257-1800
Estimated Assets: $500,000 to $1,000,000
Estimated Debts: $1,000,000 to $10,000,000
A copy of Gin Kin's list of 20 largest unsecured creditorsis
available for free at:
http://bankrupt.com/misc/UTsl_08-26300
GRAY TELEVISION: Moody's Confirms 'B2' Corp. Family Rating
----------------------------------------------------------
Moody's Investors Service confirmed Gray Television, Inc.'s
Corporate Family Rating at B2 and its Probability of Default
rating at B3. Additionally, Moody's confirmed the B2 rating on
the company's senior secured credit facility ($100 million
revolving credit facility and $925 million term loan facility).
The outlook is negative. In addition, Moody's upgraded the
company's speculative grade liquidity rating to SGL-3 from SGL-4.
This concludes Moody's review initiated on June 18, 2008.
Moody's notes that Gray issued $75 million of preferred stock in
the second quarter of 2008 and used the proceeds to repay its term
loan, which in Moody's view allowed the company to remain in
compliance with its financial maintenance covenants governed by
the senior secured credit facility at the end of the second
quarter of 2008. Gray issued an additional $25 million of
preferred stock in the third quarter of 2008 and again used the
proceeds to repay term debt.
Despite these debt pay downs, Moody's believes that the company
will continue to face a tight covenant compliance margin over the
intermediate term, especially when the covenant step-downs occur
in the fourth quarter of 2008 and 2009, and these concerns are
reflected in the negative outlook and the SGL-3 liquidity rating
for the company.
Moody's has taken these rating actions:
Issuer - Gray Television, Inc.
-- Corporate Family Rating -- Confirmed B2
-- Probability-of-default rating -- Confirmed B3
-- $100 million revolving credit facility -- Confirmed B2
(LGD 3, 35%)
-- $925 million term loan facility -- Confirmed B2 (LGD 3, 35%)
-- Speculative grade liquidity rating -- to SGL-3 from SGL-4
Gray's ratings reflect on-going pressure on the company's
operating performance due to the soft advertising climate, high
financial leverage (including high debt-to-EBITDA leverage of 9.3x
at June 30, 2008 based on the trailing twelve months' EBITDA,
incorporating 75% of Gray's new Series D Perpetual Preferred Stock
as debt and including Moody's standard adjustments), modest scale
and minimal free cash flow relative to debt during the last twelve
months.
Moody's concerns regarding the limited room under the company's
financial leverage maintenance covenant also weigh on the rating.
Ratings further incorporate the increasing business risk
associated with the broadcast television industry as advertising
spending gets diversified over a growing number of media.
Gray's ratings are supported, however, by its diverse geographic
footprint and network affiliations, its dominant news franchise
that helps capture a significant share of in-market revenue, and
its strategy of operating stations in university markets and/or
state capitals. Ratings are further supported by the company's
heavier mix of local advertising revenue.
Gray Television, Inc., headquartered in Atlanta, Georgia, is a
television broadcaster that owns 36 primary television stations
serving 30 mid-sized markets. The company's total revenues were
approximately $307 million for year ended December 31, 2007.
GREEN BUILDERS: Receives Non-Compliance Notice from AMEX
--------------------------------------------------------
Green Builders Inc. received notice from the staff of the American
Stock Exchange that it is not in compliance with the reporting
requirements for continued listing on AMEX set forth in Section
803(B)(2)(c) of the AMEX Company Guide due to Green Builders'
failure to have an audit committee comprised of at least two
independent directors.
On Sept. 3, 2008, Green Builders notified AMEX that as a result of
Barry Williamson and Christopher Ney's resignation as directors of
Green Builders, the Audit Committee would not consist of two
independent directors as required by Section 803(B)(2)(c) of the
AMEX Company Guide. As a result, Green Builders has not been in
compliance with Section 803(B)(2)(c) of the AMEX Company Guide
since Sept. 3, 2008.
In its notice, AMEX advised Green Builders that Green Builders has
until the earlier of next annual shareholders' meeting or Sept. 3,
2009, to regain compliance with the AMEX requirements. AMEX
further advised Green Builders that in setting the deadline for
compliance with the AMEX requirements, AMEX determined not to
apply, at this time, the continued listing evaluation and follow-
up procedures specified in Section 1009 of the Company Guide.
Because Green Builders is not in compliance with the AMEX
continued listing standards, however, the notice constitutes a
warning letter pursuant to Section 1009(a)(i) of the Company Guide
and notice of failure to satisfy a continued listing standard.
In its notice, AMEX also advised Green Builders that if Green
Builders fails to regain compliance with Section 803(B)(2)(c) of
the Company Guide on or before the earlier of next annual
shareholders' meeting or Sept. 3, 2009, or the occurrence of any
subsequent failure to comply with any other continued listing
requirements will result in the Staff assessing Green Builders'
continued listing eligibility including, as appropriate, the
application of the continued listing evaluation and follow-up
procedures specified in Section 1009 of the Company Guide and/or
initiation of delisting proceedings.
Green Builders intends to promptly take all necessary actions to
regain compliance with the AMEX continued listing standards within
the time frame noted above. Green Builders' board of directors is
considering candidates who will qualify to serve on the Audit
Committee, including determining if a current board member meets
the eligibility requirements of AMEX to serve as an independent
member of the audit committee.
About Green Builders Inc.
Headquartered in Austin, Texas, Green Builders Inc. (AMEX:GBH) --
http://www.greenbuildersinc.com/-- fka Wilson Holdings Inc., is a
real estate development and homebuilding company. The company is
focused on the acquisition of undeveloped land. It commenced its
homebuilding operations in June 2007 with the purchase of Green
Builders Inc. The company was engaged in the sale of developed
lots to homebuilders, including national homebuilders.
HALCYON JETS: Reports $1.2 Million Net Loss for July 2008
---------------------------------------------------------
Halcyon Jets Holdings Inc. reported a $1,202,257 net loss on total
revenues of $13,885,817 for the quarterly period ended July 31,
2008, compared to a $1,125,288 net loss on total revenues of
$1,445,277 for the same period a year earlier.
The company's consolidated balance sheets showed total assets of
$5,954,986 and total liabilities of $5,508,581 resulting in a
stockholders' equity of $446,405.
At July 31, 2008, the company's consolidated balance sheets showed
strained liquidity with $5,470,673 in total current assets
available to pay $5,508,581 in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended July 31, 2008, are available for
free at http://ResearchArchives.com/t/s?3279
Going Concern Doubt
Rosenberg Rich Baker Berman & Company, in Bridgewater, N.J.,
expressed substantial doubt about Halcyon Jets Holdings Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements for the period Feb. 1,
2007 (date of inception) through Jan. 31, 2008. The auditing firm
reported that the company began its opinions in March 2007 and has
not as yet attained a level of operations which allows it to meet
its current overhead.
The auditing firm added that the company does not contemplate
attaining profitable operations within its first few operating
cycles and is dependent upon obtaining additional financing
adequate to fund working capital, infrastructure, and significant
marketing/investor related expenditures to gain market recognition
in order to achieve a level of revenue adequate to support its
cost structure.
About Halcyon Jets
Based in New York City, Halcyon Jets Holdings Inc. (OTC BB: HJHO)
-- http://www.halcyonjets.com/-- operating through its wholly
owned subsidiary Halcyon Jets Inc., is a broker of on-demand
aircraft services. Halcyon Jets capitalizes on the
highest-margin segment of the aviation industry: elite business
and luxury travelers who demand the highest levels of service,
professionalism and comfort.
HARMONY HOLDINGS: Court Denies Requests to Dump Chapter 11 Case
---------------------------------------------------------------
Myrtle Beach Sun News reports that the Hon. David R. Duncan of the
U.S. Bankruptcy Court for the District of South Carolina has
denied two motions by lenders Barney Ng and R.E. Loans LLC to
dismiss Harmony Holdings, LLC's Chapter 11 bankruptcy case.
According to Myrtle Beach Sun, the lenders filed the motions,
which also sought to modify the stay. Myrtle Sun relates that the
motions, if granted, would have taken Harmony out of bankruptcy
and put the community into foreclosure.
About Harmony Holdings LLC
Headquartered in Georgetown, South Carolina -- Harmony Holdings
LLC -- http://www.harmonytownship.com-- owns and manages real
estate. The company and one affiliate filed for protection on
Jan. 31, 2008 (Bankr. D.C.S.C. Case No. 08-00599). Barbara George
Barton, Esq. represents the Debtor in its restructuring efforts.
When the company filed for protection against it creditors, it
listed $112,567,540 total assets and $48,088,073 total debts.
Stan McGuffin, Esq., at Haynsworth Sinkler Boyd, P.A., represents
the creditor's committee.
HERCULES CHEMICAL: Case Summary & Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Hercules Chemical Company, Inc.
111 South Street
Passaic, NJ 07055
Bankruptcy Case No.: 08-25553
Chapter 11 Petition Date: August 22, 2008
Court: Western District of Pennsylvania (Pittsburgh)
Debtor's Counsel: Gregory L. Taddonio, Esq.
gtaddonio@reedsmith.com
Reed Smith LLP
435 Sixth Ave.
Pittsburgh, PA 15219
Tel: (412) 288-7102
Fax: (412) 288-3063
Paul M. Singer
psinger@reedsmith.com
Reed Smith LLP
435 Sixth Ave.
Pittsburgh, PA 15219
Tel: (412) 288-3114
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Edna Wander Ghertler Corporate Guarantee $127,707.90
60 Reiverside drive
New York NY 10024
The Dow Chemical Co. Trade Debt $116,159.00
7719 Collection Center Drive
Chicago IL 60694
Keystone Crew Corp. Trade Debt $95,159.00
P.O. Box V
Willow Grove PA 19090
A list of the Debtor's largest unsecured creditors is available
for free at: http://researcharchives.com/t/s?3284
HOME INTERIORS: Sale of Dallas Woodcraft to Myron Bowling Approved
------------------------------------------------------------------
Bill Rochelle of Bloomberg News reports that the U.S. Bankruptcy
Court for the Northern District of Texas authorized Home Interiors
& Gifts, Inc., and its debtor-affiliates to sell the assets of its
Dallas Woodcraft Co. affiliate for $652,000 to Myron Bowling
Auctioneers, Inc.
No buyer was under contract when the Debtors set up the sale
process, according to the report.
The Debtors, according to the report, filed a plan and disclosure
statement along with their Chapter 11 petitions. A hearing for
approval of the disclosure statement, according to the report, was
pushed back most recently until Sept. 18 until it was canceled.
About Home Interiors
Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc.
-- http://www.homeinteriors.com/-- manufactures, imports and
distributes indoor and outdoor home decorative accessories. It
was founded by Mary Crowley in 1957. Through its affiliates,
the company has a significant presence in Mexico, Puerto Rico,
and Canada. Annual revenue in 2007 reached USUS$300 million.
When Mary Crowley, died in 1986, her son, Don Carter continued the
business operation nearly debt-free. In a leveraged transaction
in 1998, private equity firm of Hicks, Muse, Tate, and Furst
acquired 66% of the parent company, which resulted in the
imposition of more than US$500 million in debt on the Debtors. In
the face of decreased sales and increased debt load, bondholders
canceled their debts in February 2006 in exchange for receiving
most of the outstanding equity of the Debtors.
About 40% of the goods the Debtors sell are now acquired from
manufacturers in China. In the last decade, sales volume in the
U.S. has waned, but the Debtors reported that sales in Mexico
and Puerto Rico significantly increased.
The company and six of its affiliates filed for Chapter 11
protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No.08-
31961). Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq.,
Lynnette R. Warman, Esq., and Michael P. Massad, Jr., Esq., at
Hunton & Williams, LLP, represent the Debtors in their
restructuring efforts. The U.S. Trustee for Region 6 has
appointed seven creditors to serve on an Official Committee
of Unsecured Creditors. Richard A. Lindenmuth, at Boulder
International LLC, is designated as CRO. Munsch Hardt Kopf &
Harr PC represents the Committee in these cases. When the
Debtors file for protection against their creditors, they
listed assets of between US$100 million and US$500 million and the
same range of debts.
IDEARC INC: Hotchkis and Wiley Discloses De Minimis Stake
---------------------------------------------------------
Hotchkis and Wiley Capital Management, LLC disclosed in a
Securities and Exchange Commission filing that it may be deemed to
beneficially own 4,235 shares of Idearc Inc.'s common stock.
As of August 7, 2008, there were 147,718,157 shares of the
Company's common stock outstanding.
About Idearc Inc.
Headquartered in Dallas, Texas, Idearc Inc. (NYSE: IAR) --
http://www.idearc.com/-- provides yellow and white page
directories and related advertising products in the United States
and the District of Columbia. Products include print yellow
pages, print white pages, Superpages.com, Switchboard.com and
LocalSearch.com, the company's online local search resources, and
Superpages Mobile, its information directory for wireless
subscribers.
The company is the exclusive official publisher of Verizon print
directories in the markets in which Verizon is currently the
incumbent local exchange carrier. The company uses the Verizon
brand on its print directories in its incumbent markets, as well
as in its expansion markets.
* * *
As reported in the Troubled Company Reporter on June 17, 2008,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Idearc Inc. to 'B+' from 'BB'. S&P removed all ratings
from CreditWatch with negative implications, where they were
placed on March 28, 2008. At the same time, S&P lowered its
issue-level rating on Idearc's senior secured credit facilities to
'BB' from 'BBB-'. The recovery rating on these loans remains
unchanged at '1', indicating that lenders can expect very high
(90%-100%) recovery in the event of a payment default.
The outlook is stable.
S&P also lowered its issue-level rating on Idearc's senior
unsecured notes to 'B-' from 'BB-'. S&P revised the recovery
rating on these securities to '6' from '5'. The '6' recovery
rating indicates that lenders can expect negligible (0%-10%)
recovery in the event of a payment default.
At June 30, 2008, the company's consolidated balance sheet showed
$1.7 billion in total assets and $10.1 billion in total
liabilities, resulting in a $8.4 billion shareholders' deficit.
The company reported net income of $76.0 million for the second
quarter 2008, versus $109.0 million in the same period in 2007.
On an adjusted pro forma basis, which eliminates the impact of
transition and certain non-recurring costs, second quarter net
income was $87.0 million, a decrease of 31.5 percent versus the
same period in 2007.
IDEARC INC: Sandra Lee Henjum Discloses De Minimis Stake
--------------------------------------------------------
Sandra Lee Henjum disclosed in a Securities and Exchange
Commission filing that she may be deemed to beneficially and
directly own 65,368 shares of Idearc Inc.'s common stock.
Ms. Henjum also disclosed that she may be deemed to beneficially
and indirectly own 303 shares of Idearc's common stock through the
401(k) Plan.
As of August 7, 2008, there were 147,718,157 shares of the
Company's common stock outstanding.
About Idearc Inc.
Headquartered in Dallas, Texas, Idearc Inc. (NYSE: IAR) --
http://www.idearc.com/-- provides yellow and white page
directories and related advertising products in the United States
and the District of Columbia. Products include print yellow
pages, print white pages, Superpages.com, Switchboard.com and
LocalSearch.com, the company's online local search resources, and
Superpages Mobile, its information directory for wireless
subscribers.
The company is the exclusive official publisher of Verizon print
directories in the markets in which Verizon is currently the
incumbent local exchange carrier. The company uses the Verizon
brand on its print directories in its incumbent markets, as well
as in its expansion markets.
* * *
As reported in the Troubled Company Reporter on June 17, 2008,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Idearc Inc. to 'B+' from 'BB'. S&P removed all ratings
from CreditWatch with negative implications, where they were
placed on March 28, 2008. At the same time, S&P lowered its
issue-level rating on Idearc's senior secured credit facilities to
'BB' from 'BBB-'. The recovery rating on these loans remains
unchanged at '1', indicating that lenders can expect very high
(90%-100%) recovery in the event of a payment default.
The outlook is stable.
S&P also lowered its issue-level rating on Idearc's senior
unsecured notes to 'B-' from 'BB-'. S&P revised the recovery
rating on these securities to '6' from '5'. The '6' recovery
rating indicates that lenders can expect negligible (0%-10%)
recovery in the event of a payment default.
At June 30, 2008, the company's consolidated balance sheet showed
$1.7 billion in total assets and $10.1 billion in total
liabilities, resulting in a $8.4 billion shareholders' deficit.
The company reported net income of $76.0 million for the second
quarter 2008, versus $109.0 million in the same period in 2007.
On an adjusted pro forma basis, which eliminates the impact of
transition and certain non-recurring costs, second quarter net
income was $87.0 million, a decrease of 31.5 percent versus the
same period in 2007.
IDEARC INC: David Bethea Discloses De Minimis Stake
---------------------------------------------------
David O. Bethea disclosed in a Securities and Exchange Commission
filing that she may be deemed to beneficially and directly own 404
of Idearc Inc.'s common stock.
As of August 7, 2008, there were 147,718,157 shares of the
Company's common stock outstanding.
About Idearc Inc.
Headquartered in Dallas, Texas, Idearc Inc. (NYSE: IAR) --
http://www.idearc.com/-- provides yellow and white page
directories and related advertising products in the United States
and the District of Columbia. Products include print yellow
pages, print white pages, Superpages.com, Switchboard.com and
LocalSearch.com, the company's online local search resources, and
Superpages Mobile, its information directory for wireless
subscribers.
The company is the exclusive official publisher of Verizon print
directories in the markets in which Verizon is currently the
incumbent local exchange carrier. The company uses the Verizon
brand on its print directories in its incumbent markets, as well
as in its expansion markets.
* * *
As reported in the Troubled Company Reporter on June 17, 2008,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Idearc Inc. to 'B+' from 'BB'. S&P removed all ratings
from CreditWatch with negative implications, where they were
placed on March 28, 2008. At the same time, S&P lowered its
issue-level rating on Idearc's senior secured credit facilities to
'BB' from 'BBB-'. The recovery rating on these loans remains
unchanged at '1', indicating that lenders can expect very high
(90%-100%) recovery in the event of a payment default.
The outlook is stable.
S&P also lowered its issue-level rating on Idearc's senior
unsecured notes to 'B-' from 'BB-'. S&P revised the recovery
rating on these securities to '6' from '5'. The '6' recovery
rating indicates that lenders can expect negligible (0%-10%)
recovery in the event of a payment default.
At June 30, 2008, the company's consolidated balance sheet showed
$1.7 billion in total assets and $10.1 billion in total
liabilities, resulting in a $8.4 billion shareholders' deficit.
The company reported net income of $76.0 million for the second
quarter 2008, versus $109.0 million in the same period in 2007.
On an adjusted pro forma basis, which eliminates the impact of
transition and certain non-recurring costs, second quarter net
income was $87.0 million, a decrease of 31.5 percent versus the
same period in 2007.
IMAGEWARE SYSTEMS: Board Approves $1.5 Mln Convertible Stock Sale
-----------------------------------------------------------------
ImageWare Systems disclosed in a Securities and Exchange
Commission filing that on Aug. 29, 2008, its Board of Directors
authorized the sale of 1,500 shares of its Series D 8% Convertible
Preferred Stock at a stated value of $1,000 per share for
aggregate gross proceeds of $1,500,000.
Commencing Aug. 29, 2008 and ending Sept. 5, 2008, the Company
entered into a Securities Purchase Agreement with certain
accredited investors pursuant to which it sold to the Investors an
aggregate of 765 shares of its Series D Preferred Stock for
aggregate gross proceeds of $765,000, and issued to the Investors
warrants to purchase up to an aggregate of 1,530,000 shares of
common stock of the Company with an exercise price of $0.50 per
share.
The Warrants may be exercised at any time from Feb. 28, 2009,
until February 28, 2014. In addition, the Warrants contain a
"cashless exercise" feature. At any time on or before the 15th
day following the Closing, the Company may sell up to the balance
of the authorized shares of Preferred Stock and Warrants not sold
at the Closing to such persons as may be approved by the Company.
About ImageWare Systems
Headquartered in San Diego, ImageWare Systems Inc. (AMEX: IW) --
http://www.iwsinc.com/-- is a developer and provider of identity
management solutions, providing biometric, secure credential, law
enforcement and digital imaging technologies. ImageWare's
identification products are used to manage and issue secure
credentials including national IDs, passports, driver licenses,
smart cards and access control credentials. ImageWare's digital
booking products provide law enforcement with integrated mug shot,
fingerprint Livescan and investigative capabilities. ImageWare
also maintains offices in Washington, D.C. and Canad
Going Concern Disclaimer
Stonefield Josephson Inc., in Los Angeles, expressed substantial
doubt about ImageWare Systems Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditng firm
pointed to the company's substantial net losses since inception
and substantial monetary liabilities as of Dec. 31, 2007.
INPHONIC INC: Parties Object to Confirmation of 2nd Amended Plan
----------------------------------------------------------------
William Rochelle of Bloomberg News reports that the lead plaintiff
in a class-action lawsuit on behalf of shareholders filed an
objection with the U.S. Bankruptcy Court for the District of
Delaware to the Second Amended Joint Plan of Liquidation of SN
Liquidation Inc., formerly known as InPhonic, Inc., and its
debtor-affiliates, and the Official Committee of Unsecured
Creditors in the case.
The plaintiff, according to the report, says the plan is defective
by not allowing the suit to go forward while collecting a judgment
only from proceeds of directors and officers' liability insurance.
The Internal Revenue Service also objected on the grounds that its
priority tax claim isn't paid in cash on confirmation, according
to the report. Instead, the tax claim is paid over time,
presenting the possibility of eventual non-payment, the IRS said
according to the report.
The Court has set an Oct. 14 confirmation hearing on the Chapter
11 plan, according to the report.
SN Liquidation and the Committee filed the Second Amended Plan
August 11, 2008. The Court held a Disclosure Statement hearing on
June 13. The Court later set a status conference regarding the
Disclosure Statement on July 15. It approved the Disclosure
Statement for distribution to interested parties on August 12.
The Plan contemplates the liquidation of the Debtors' assets and
the resolution of the outstanding claims against and interests in
the Debtors. Prior to the November 8, 2007 bankruptcy filing, the
Debtors reached an agreement, subject to higher and better offers,
to sell substantially all of their assets to Adeptio INPC Funding
LLC, the parent corporation of Simplexity, Inc. The Committee
objected to the sale. The Committee, the Debtors, and Adeptio
reached a compromise whereby Adeptio agreed to make certain
payments in connection with the Debtors' bankruptcy cases and
pursuant to a plan of reorganization. After a hearing on
December 13, 2007, the Court entered an order approving the sale.
Mr. Rochelle says the buyer of the Debtors' assets is an affiliate
of secured creditor Versa Capital Management.
The Plan provides for the distribution of the bankruptcy estates'
interest in proceeds from The sale and the creation of a
litigation trust that will administer remaining property of the
Debtors, which includes causes of action. Under the Plan, each
holder of an Allowed General Unsecured Claim -- including rebate
claims -- will receive its pro rata share of all Cash, if any,
available for distribution by the Litigation Trust up to the full
amount of the Allowed General Unsecured Claim, after satisfaction
in full of all expenses, unpaid Allowed Secured Claims, including
the Adeptio Loan, Allowed Administrative Claims, Allowed Priority
Tax Claims, and Allowed Priority Non-Tax Claims. Allowed General
Unsecured Claims are estimated to total $350 million, Mr. Rochelle
notes.
All Cash necessary for the Debtors or the Litigation Trustee to
make payments will be obtained from these sources:
(a) the Debtors' or SN Liquidation's Cash on hand (which is
little or none);
(b) Cash received upon liquidation of the Debtors' assets
excluded from the sale, including proceeds of all the
Debtors' Causes of Action against directors and officers or
otherwise;
(c) Adeptio's funding obligations pursuant to the sale.
The Term Sheet provides that Adeptio will provide a $500,000
secured loan to fund the investigation of Causes of Action and to
commence and prosecute litigation if appropriate through the
Litigation Trust. The value of the Debtors' Causes of Action is
uncertain, and the Litigation Trust needs to further investigate
those claims.
Mr. Rochelle says Versa was to provide as much as $500,000 for
payment of priority claims and $1.1 million for professional fees,
while putting $200,000 into a litigation trust and giving the
trust a $500,000 loan.
Intercompany Claims and Equity Interests are being extinguished
and will not receive any distribution.
About InPhonic Inc.
Headquartered in Washington, DC, InPhonic Inc. (NASDAQ:INPC)--
http://www.inphonic.com/-- provides internet and wireless
services. The company through its wholly owned subsidiary, CAIS
Acquisition II, market broadband and VOIP services. The company
maintained operations centers in Largo, Maryland; Reston,
Virginia; and Great Falls, Virginia.
As reported in Troubled Company Reporter on Feb. 12, 2008, the
Court authorized the Debtors to change their name and the caption
of the bankruptcy case to SN Liquidation, Inc.
The company and its debtor-affiliates filed for Chapter 11
protection on Nov. 8, 2007 (Bankr. D. Del. Case Nos. 07-11666 to
07-11673). Thomas R. Califano, Esq., and Jeremy R. Johnson, Esq.,
at DLA Piper, LLC in New York, and Neil Glassman, Esq., Eric M.
Sutty, Esq., and Mary E. Augustine, Esq., at Bayard Firm P.A.,
Wilmington, Delaware, represent the Debtors. The Debtors selected
BMC Group Inc. as their claims, noticing and balloting agent. The
United States Trustee for Region 3 appointed five creditors to
serve on an Official Committee of Unsecured Creditors in the
Debtors' cases. Kurt F. Gwynne, Esq., and Robert P. Simons, Esq.,
at Reed Smith LLP, represent the Committee. Anup Sathy, P.C.,
Esq., and David A. Agay, Esq., at Kirkland & Ellis in Chicago,
Illinois, represent Adeptio and Simplexity, the buyer of the
Debtors' assets.
When the Debtors filed from protection from their creditors,
they listed total assets of $120,916,991 and total debts of
$179,402,834.
INSIGHT HEALTH: Board Grants Stock Options to Four Executives
-------------------------------------------------------------
The Board of Directors of InSight Health Services Holdings Corp.
has granted stock options under the Company's 2008 Employee Stock
Option Plan to these executive officers, subject to the execution
of a Non-statutory Stock Option Grant Agreement between the
Company and each of the optionees:
Officer Stock Options
------- -------------
Louis E. Hallman, III 192,000
President and
Chief Executive Officer
Patricia R. Blank 65,000
Executive Vice President
- Revenue Cycle Management
Bernard O'Rourke 85,000
Executive Vice President and
Chief Operating Officer
Donald F. Hankus 55,000
Executive Vice President and
Chief Information Officer
The stock options were issued with an exercise price of $0.36 per
share and were made in accordance with and subject to the terms
and conditions of the Employee Plan and the Stock Option Grant
Agreements. The executive officers executed their Stock Option
Grant Agreements on Sept. 4, 2008, with effect as of Aug. 19,
2008.
The options will vest and become exercisable if, and only if, a
Refinancing Event, as such term is defined in the Stock Option
Grant Agreement, is achieved prior to the expiration of the
options. The options are scheduled to expire on August 19, 2018.
About InSight
Based in Lake Forest, California, InSight Health Services Holdings
Corp. (OTCBB:ISGT) -- http://www.insighthealth.com/-- is a
nationwide provider of diagnostic imaging services. It serves
managed care entities, hospitals and other contractual customers
in over 30 states, including these targeted regional markets:
California, Arizona, New England, the Carolinas, Florida and the
Mid-Atlantic states.
InSight Health's network consisted of 109 fixed-site centers and
108 mobile facilities as of Dec. 31, 2006. The company and its
affiliate, InSight Health Services Corp., filed for Chapter 11
protection on May 29, 2007 (Bankr. D. Del. Case Nos. 07-10700 and
07-10701). Daniel J. DeFranceschi, Esq., Jason M. Madron, Esq.,
and Mark D. Collins, Esq., at Richards, Layton & Finger, represent
the Debtors.
In schedules filed with the court, Insight Health disclosed total
assets of $87,102,870 and total debts of $525,448,053. Its
debtor-affiliates, Insight Health Services, disclosed total assets
of $505,285,296 and total debts of $525,500,934. Insight Health
and its debtor-affiliates' pre-packaged Plan of Reorganization,
which was confirmed by the U.S. Bankruptcy Court for the District
of Delaware on July 10, 2007, became effective on Aug. 1, 2007.
At March 31, 2008, Insight Health's balance sheet showed total
assets of $350.5 million and total liabilities of $353.1 million,
resulting in a total stockholders' deficit of $2.6 million.
JACKSON YUEN: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Jackson Yuen
Sandy Yuen
dba Yuen Computers
19880 Braemar Drive
Saratoga, CA 95070
Bankruptcy Case No.: 08-55303
Chapter 11 Petition Date: September 19, 2008
Court: Northern District of California (San Jose)
Judge: Marilyn Morgan
Debtor's Counsel: Mufthiha Sabaratnam, Esq.
mufti@taxandbklaw.com
Sabaratnam and Associates
1300 Clay St. #600
Oakland, CA 94612
Tel: (510) 205-0986
Fax: (510)225-2417
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
A list of the Debtor's largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/califnb08-55303.pdf
JEFFERSON COUNTY: Wants Payment Break on General Obligation Bond
----------------------------------------------------------------
Martin Z. Braun of Bloomberg News reports that Jefferson County in
Alabama seeks payment breaks from its general obligation
bondholders as it struggles to avoid bankruptcy amid soaring
borrowing costs on more than $3 billion of sewer bonds.
According to the report, the County Commission on Sept. 22 planned
to vote on forbearance agreements with holders of some of its
$270 million of general-obligation bonds, according to a meeting
notice. Last month, Jefferson County's sewer bond creditors,
according to the report, agreed to postpone payments on the debt
until Sept. 30, giving the parties time to negotiate a
restructuring plan. The forbearance for the general-obligation
creditors will also last until Sept. 30, according to the report.
Jefferson County, according to the report, faces a $20 million
payment on $120 million of floating-rate debt backed by the full,
faith and credit of the county, according to an Aug. 1 report by
Standard & Poor's. After investors dumped the floating-rate bonds
amid the sewer debt crisis, JPMorgan Chase & Co. and Bayerische
Landesbank, banks of last resort that agreed to purchase the debt,
had the right to demand accelerated payment from the county,
according to the report.
Jefferson County may become the biggest-ever municipal bankruptcy
after interest rates on its sewer bonds tripled during the credit
crunch, according to the report. Rates on the sewer debt rose as
high as 10 percent when Syncora Guarantee, Inc. and Financial
Guaranty Insurance Co., companies that insured the bonds, lost
their top credit ratings following losses on mortgage-related
securities, according to the report.
Derivatives Backfired
The problem was compounded when derivatives designed to protect
the county against rising borrowing costs backfired, according to
the report.
Interest and principal payments on the bonds have grown to $460
million a year, more than twice the amount the county collects in
revenue, according to former county financial adviser James White,
president of Porter White & Co. in Birmingham, according to the
report.
Syncora and Financial Guaranty sued Jefferson County on Sept. 16,
seeking a receiver to take over the sewer system and raise rates
to meet debt payments, according to the report.
County commissioners will vote on authorizing their attorneys to
respond to the suit on Sept 22, according to the report.
Standard & Poor's assigns a B rating, its fifth-highest junk bond
grade, to the county's general-obligation bonds, according to the
report. The county's sewer bonds are rated C and D, the two
lowest junk grades.
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. Jefferson County has $4.6 billion in overall
debt, including $3.2 billion in sewer bonds.
* * *
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.
JEVIC TRANSPORTATION: Wants Plan Filing Period Moved to Jan. 16
---------------------------------------------------------------
Jevic Holding Corp., Creek Road Properties, LLC, and Jevic
Transportation, Inc., ask the U.S. Bankruptcy Court for the
District of Delaware to extend their exclusive periods within
which to file a chapter 11 plan and to solicit acceptances of that
plan. The Debtors request that their Exclusive Filing Period be
extended for an additional 120 days through and including January
16, 2009, and their Exclusive Solicitation Period be extended
through and including March 17, 2009.
The Debtors explain that they and their professionals have not had
sufficient time to negotiate a plan. The Debtors and their
professionals have been focused on winding down the Debtors'
estates to maximize the value to creditors, including, without
limitation, liquidating substantially all of the Debtors' assets.
The Official Committee of Unsecured Creditors appointed in the
Debtors' cases also has not concluded its investigation as to any
potential challenges to the lenders' liens. The Debtors note that
they have been working closely with the Committee and the lenders
to maximize the value of estate assets.
The Debtors also note that their cases have only been pending for
less than four months, and have been moving at an extremely fast
pace. Given the complexity of the Debtors' cases, nearly all of
the Debtors' attention has been required to successfully wind-down
the Debtors' businesses and liquidated their assets. The Debtors
tell the Court that they have accomplished a great deal during the
short period since the Petition Date and submit that extensions of
the Exclusive Periods are appropriate under the circumstances.
The Court will convene a hearing October 15, at 2:00 p.m. to
consider the Debtors' request. Objections, if any, are due
October 8.
Based in Delanco, New Jersey, Jevic Transportation Inc. --
http://www.jevic.com/-- provides trucking services. The company
has two units: Jevic Holding Corp. and Creek Road Properties.
Neither of the units have assets nor operations. The company and
its affiliates filed for chapter 11 protection on May 20, 2008
(Bankr. D. Del. Case No. 08-11008). Domenic E. Pacitti, Esq., and
Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg &
Ellers, in Wilmington, Delaware, represent Jevic Transportation.
The U.S. Trustee for Region 3 has appointed five creditors to
serve on an Official Committee of Unsecured Creditors. Robert J.
Feinstein, Esq., Bruce Grohsgal, Esq., and Maria A. Bove, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware,
represent the Official Committee of Unsecured Creditors.
Before filing for bankruptcy, the Debtors initiated an orderly
wind-down process. As a part of the wind-down process, the
Debtors have ceased substantially all of their business and
terminated approximately 90% of their employees. The Debtors
continue to manage the wind-down process in attempt to deliver all
of the freight that is in their system and to retrieve their
assets.
When the Debtors filed for protection against their creditors,
they listed assets and debts between $50 million and $100 million.
JEVIC TRANSPORTATION: Panel Balks at Bid to Indemnify Officers
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in the bankruptcy
cases of Jevic Holding Corp., Creek Road Properties, LLC, and
Jevic Transportation, Inc., objects to the Debtors' bid to
indemnify and advance up to $145,000 to cover the defense costs
and expenses of David H. Gorman and Gerald A. Paulson, the
Debtors' officers and directors serving as of the bankruptcy
filing date, in connection with the defense of actions brought by
various former employees and the probe on the Debtors' conduct and
affairs being conducted by the Creditors Committee.
The Debtors contend that they have a duty to indemnify Messrs.
Gorman and Paulson. The Debtors note that the officers relied
upon the advancement and indemnity protections at the time they
joined the Debtors and throughout the performance of their duties.
Certain former employees of the Debtors have commenced lawsuits
against the Debtors, their owner Sun Capital Partners, and other
individuals alleging violations of New Jersey and federal statutes
concerning employee terminations and wage law violations.
The Debtors also note that although Messrs. Gorman and Paulson are
not the target of the Committee's probe, they are likely to incur
expenses relating to discovery.
The Committee, however, thinks that the Debtors are seeking to
elevate the treatment of the prepetition, contingent
indemnification claims of the "Directors and Officers" to
administrative claim status by paying the Directors' and Offcers'
costs and expenses incurred in connection with actions commenced
against the Debtors, the Directors and Officers and others under
the WARN Act. The Debtors' request is in contravention of section
502(e)(1)(b) of the Bankuptcy Code and the priority scheme
established by the Bankruptcy Code, the Committee says.
"The Debtors' request is especially audacious in these cases, in
which the Debtors have already shut down their businesses and
liquidated substantially all of their assets. The Debtors'
request lacks any business justification, and is a transparent
effort by the Directors and Officers, acting through the Debtors,
to benefit themselves and other insiders at the expense of general
creditors," Bruce Grohsgal, Esq., at Pachulski Stang Ziehl & Jones
LLP, in Wilmington, Delaware, says, on the panel's behalf.
Based in Delanco, New Jersey, Jevic Transportation Inc. --
http://www.jevic.com/-- provides trucking services. The company
has two units: Jevic Holding Corp. and Creek Road Properties.
Neither of the units have assets nor operations. The company and
its affiliates filed for chapter 11 protection on May 20, 2008
(Bankr. D. Del. Case No. 08-11008). Domenic E. Pacitti, Esq., and
Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg &
Ellers, in Wilmington, Delaware, represent Jevic Transportation.
The U.S. Trustee for Region 3 has appointed five creditors to
serve on an Official Committee of Unsecured Creditors. Robert J.
Feinstein, Esq., Bruce Grohsgal, Esq., and Maria A. Bove, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware,
represent the Official Committee of Unsecured Creditors.
Before filing for bankruptcy, the Debtors initiated an orderly
wind-down process. As a part of the wind-down process, the
Debtors have ceased substantially all of their business and
terminated approximately 90% of their employees. The Debtors
continue to manage the wind-down process in attempt to deliver all
of the freight that is in their system and to retrieve their
assets.
When the Debtors filed for protection against their creditors,
they listed assets and debts between $50 million and $100 million.
JHT HOLDINGS: Amended Plan Confirmation Hearing Set on Oct. 7
-------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
scheduled the confirmation hearing for the Second Amended Chapter
11 Plan of JHT Holdings, Inc., and its debtor-affiliates, on Oct.
7, 2008, at 10 p.m. (prevailing Eastern time) or as soon
thereafter as counsel may be heard. The hearing will be held
before Judge Brendan Linehan Shannon in the:
U.S. Bankruptcy Court for the District of Delaware
824 Market St., 6th Flr.
Wilmington, Delaware
The Court has also set the deadline for filing and serving
objections to confirmation of the Second Amended Plan for Oct. 1,
2008 at 4 p.m. (prevailing Eastern time).
The Court has also set the voting deadline for parties entitled to
vote on the Second Amended Plan on Oct. 2, 2008 at 4 p.m.
(prevailing Eastern time).
Interested parties may contact the addresses below to obtain
information on the Second Amended Plan, as well as the Second
Amended Disclosure Statement, Disclosure Statement Order, Amended
Disclosure Statement Order and all other materials in the Debtors'
Solicitation Package:
JHT Holdings, Inc.,
Attn: Administar Services, Group, LLC
P.O. Box 66636
Jacksonville, FL 32241-6636
notice@administarllc.com
-- or --
JHT Holdings, Inc.,
Attn: Administar Services, Group, LLC
Western Way, Ste. 10
Jacksonville, FL 32241
Tel: (866) 880-0607
notice@administarllc.com
As reported by the Troubled Company Reporter on Aug. 16, the plan
reflects certain agreements between the Debtors and the
prepetition lenders including General Electric Capital
Corporation; Highland Capital Management L.P.; Spectrum Partners
L.P.; and D.B. Zwim Special Opportunities Fund Ltd., owed in the
aggregate amount of $136,000,000 in secured debt. The plan
further contemplates:
a) the payment in full, in cash, of the allowed prepetition
advance claims, debtor-in-possession facility claims,
administrative claims and priority claims;
b) exchange of the prepetiton lenders' secured claims for,
among other things:
-- the exit second-lien loan in the principal amount of
$60,000,000, and
-- 70% of the new stock of reorganized holdings;
c) reinstatement of intercompany claims and interests; and
d) discharge of all other claims without recovery, and
cancellation of all other equity interests.
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 from their
creditors, they listed assets and debts of between $100 million
and $500 million.
JOE GIBSON: Mitsubishi Hauls Away Cars; Suzuki Awaiting Sale
------------------------------------------------------------
Craig Peters at the Spartanburg Herald-Journal reports that
Mitsubishi Motors Credit of America hauled away cars from Joe
Gibson Automotive, Inc., on Sept. 16.
Spartanburg Herald-Journal relates that Mitsubishi Motors had
filed a motion for relief from automatic stay so it could take the
cars to another location. According to the report, the cars were
transported to Greensboro, N.C. and would likely be sold in
auctions. Three dozen vehicles remained in Joe Gibson, the report
says.
Mitsubishi Motors has been paying for security guards since its
dealership with Joe Gibson closed more than a month ago, according
to Spartan Herald-Journal. Court documents indicate that as of
Sept. 8, 2008, Joe Gibson owed Mitsubishi Motors not less than
$2,673,885 and the collateral is currently valued at no more than
that amount.
Mitsubishi Motors's reclaiming of its cars has "no impact on the
assets of Joe Gibson" because Joe Gibson had no equity in the
vehicles, Spartanburg Herald-Journal states, citing Pat Knie, an
attorney representing some of Joe Gibson's customers.
American Suzuki, says Spartanburg Herald-Journal, is waiting for
Bill McCarthy, Joe Gibson's attorney, to work out a sale of the
franchise to an undisclosed buyer. Spartanburg Herald-Journal
relates that Mr. McCarthy said early this month that negotiations
on a $3.1 million sale of the Suzuki dealership in Spartanburg,
which is part of Joe Gibson Auto World, were in the draft stages.
The report says that Mr. McCarthy said during a Sept. 4 court
hearing that he believes the sale will be for about $3.1 million
and could occur before a Oct. 10 hearing.
Russell Bradley at WSPA reports that car dealer Jay Wakefield has
made an offer for the Suzuki dealership for around $3.1 million.
Joe Gibson's Auto World, Inc., and its subsidiary, Joe Gibson
Automotive, Inc., sell new and used automobiles in retail.
Joe Gibson's Auto World, Inc., and Joe Gibson Automotive, Inc.,
filed separate voluntary petitions under Chapter 11 on July 16,
2008 (Bankr. S.D. N.Y. Lead Case No. 08-04215). G. William
McCarthy, Jr., Esq., represent the Debtors in their
restructuring efforts. When Joe Gibson's Auto World, Inc. filed
for bankruptcy, it listed assets of between $1,000,0000 and
$10,000,000 and estimated debts of between $10,000,0000 and
$50,000,000.
LEGACY ESTATES: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Legacy Estates, L.L.C
16800 24 Mile Rd., Ste. 1
Macomb, MI 48042
Bankruptcy Case No.: 08-62879
Chapter 11 Petition Date: September 19, 2008
Court: Eastern District of Michigan (Detroit)
Judge: Phillip J. Shefferly
Debtor's Counsel: Thomas J. Budzynski, Esq.
lawoffice@tjbudzynskipc.com
Thomas J. Budzynski PC
43777 Groesbeck
Clinton Township, MI 48036
Tel: (586) 463-5253
Total Assets: $4,300,500
Total Debts: $17,386,605
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Fifth Third Bank mortgage; value: $15,486,398
18800 Hall Rd. $3,500,000;
Clinton Township, MI 48038 unsecured:
$11,985,398
Tony Angelo Cement mechanics lien; $650,082
46850 Grand River unsecured: $650,062
Novi, MI 48374
B&V Construction mechanics lien; $346,447
48400 West Road unsecured: $346,447
Wixom, MI 48393
Stock Building Supply mechanics lien; $102,223
unsecured: $102,223
Righi Construction mechanics lien: $78,218
unsecured: $78,218
United Lawnscape Inc. business debt $76,138
Rizzo Companies LLC mechanics lien; $49,600
unsecured: $49,600
Geck Mason mechanics lien; $37,464
unsecured: $37,464
Stadler Plumbing & mechanics lien; $27,657
Heating unsecured: $27,657
Best Block Co. mechanics lien $25,821
unsecured: $25,821
Jeddo Drywall Inc. mechanics lien; $24,620
unsecured: $24,620
European Cabinets mechanics lien; $17,689
unsecured: $17,689
Bedident Construction Inc. mechanics lien; $17,398
unsecured: $17,398
M&K Construction LLC mechanics lien; $17,085
unsecured: $17,085
WG Heating & Cooling Inc. mechanics lien; $16,945
unsecured: $16,945
Utica Trenching Inc. mechanics lien; $14,352
unsecured: $14,352
Tierra Environmental Services mechanics lien; $13,610
unsecured: $13,610
Kitchen Supplies Inc. mechanics lien; $12,344
unsecured: $12,344
LEHMAN BROS: Mark Shafir to Leave Firm for Citigroup
----------------------------------------------------
Citigroup Inc. is hiring Mark G. Shafir, who was Lehman Brothers
Holdings Inc.'s global co-head of Mergers and Acquistion, to take
the same position in the company, David Enrich at The Wall Street
Journal reports, citing people familiar with the matter.
Mr. Shafir joined Lehman Brothers in 2003 from Thomas Weisel
Partners, and is one of the bankrupt company's highest-profile
bankers. He helped arrange Lehman Brothers' rushed sale to
Barclays.
According to WSJ, sources say that Citigroup was trying to lure
Mr. Shafir before Lehman Brothers filed for bankruptcy. Mr.
Shafir will take the place of Frank Yeary in Citigroup, WSJ says.
Mr. Yeary left in June to become a vice chancellor at University
of California, Berkeley. The report states that Mr. Shafir will
report to investment-banking co-heads Raymond McGuire and Alberto
Verme.
WSJ relates that Barclays President Robert E. Diamond Jr. has made
the retention of senior Lehman bankers a top priority. Court
documents indicate that Lehman employees have been broken into
categories like "key" and "critical," and that "approximately 200
employees of the sellers have been designated as key to the
success of the business, and 8 employees have been designated as
critical . . . The retention of a substantial majority of key
employees, and all 8 critical employees, is a condition precedent
to the closing."
WSJ states that a source close to Barclays said the company was
aware of Mr. Shafir's pending departure and that he isn't
considered one of Lehman's eight "critical employees."
About Citigroup Inc.
Headquartered on New York City, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com/citigroup/-- a leading global financial
services company, has some 200 million customer accounts and does
business in more than 100 countries, providing consumers,
corporations, governments and institutions with a broad range of
financial products and services, including consumer banking and
credit, corporate and investment banking, securities brokerage,
and wealth management. The company's major brand names include
Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and
Nikko.
The company has reported three consecutive quarters of net losses
beginning the fourth quarter of 2007. Aggregate net losses for
the last three quarters totaled $17.4 billion.
The company reported a net loss for the 2008 second quarter of
$2.5 billion. Solid results in the core franchise were offset by
write-downs and credit costs. Results include $7.2 billion in
pre-tax write-downs in Securities and Banking. Additionally,
credit costs increased $4.5 billion, mainly driven by Consumer
Banking in North America and Global Cards.
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.
Lehman filed for chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No.: 08-13555). 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.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16
(Case No. 08-13600).
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Luc A. Despins, Esq., and Wilbur F. Foster,
Jr., Esq., at MILBANK, TWEED, HADLEY & McCLOY LLP, in New York,
and Paul Aronzon, Esq., and Gregory A. Bray, Esq., at MILBANK in
Los Angeles, California, represent the official unsecured
creditors committee.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which have filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion ($33 billion) in liabilities in its
petition. Akio Katsuragi, a former Morgan Stanley executive, runs
Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
LEHMAN BROTHERS: Freddie Mac Has $1.2 Billion Unsecured Claims
--------------------------------------------------------------
The Federal Home Loan Mortgage Corporation said Lehman Brothers
Holdings, Inc., owes it $1.2 billion, plus accrued interest,
pursuant to certain unsecured lending transactions.
Freddie Mac disclosed in a filing with the U.S. Securities and
Exchange Commission that Lehman was its counterparty in certain
unsecured lending transactions due to mature Sept. 15, 2008, in
which Lehman was to make principal payments, aggregating
$1.2 billion plus accrued interest, to Freddie Mac. Lehman
sought Chapter 11 protection on Sept. 15.
Lehman services single-family loans for Freddie Mac. The
company's potential exposure to Lehman for servicing-related
obligations due to Freddie Mac, including repurchase obligations,
is currently estimated to be approximately $400 million, the
company's chief executive officer, David M. Moffet, relates.
The company stated it does not know whether and to what extent it
will sustain a loss relating to those transactions. "Actual
losses could materially exceed current estimates," Mr. Moffet
noted.
Freddie Mac said it is in the process of evaluating its exposures
to Lehman and its affiliates arising under other business
relationships. "Until this evaluation is complete, the company
cannot provide assurances as to the potential materiality of such
exposures," Mr. Moffet added.
The automatic stay under the Bankruptcy Code prohibits creditors
from seeking immediate payment of debt from debtors, and requires
them to line up for recovery pursuant to a plan of reorganization
or liquidation that the Court will confirm. Under the absolute
priority rule of the Bankruptcy Code, administrative claims, and
secured claims, to the extent of the value of their collateral,
will have priority over unsecured claims. Unsecured claims,
however, will be paid first before any payments could be made on
account of stock ownerships.
"It's obvious Freddie didn't exercise reasonable safeguards while
using taxpayers' money," said Sean Egan, managing director at
Egan-Jones Ratings Co., an independent credit-rating firm,
according to Dow Jones Newswires.
"Lending such a large amount, there should have been collateral
in place," said Mr. Egan. "It's unfortunate that taxpayers will
have to bear a loss of this magnitude."
Freddie Mac is a stockholder-owned corporation established to
support homeownership and rental housing. To recall, Freddie Mac
staved off collapse after the U.S. Treasury and the Federal
Reserve led actions that placed Freddie Mac and affiliate Fannie
Mae through a conservatorship under the Federal Housing Finance
Agency.
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.
Lehman filed for chapter 11 bankruptcy September 15, 2008 (Bankr.
S.D.N.Y. Case No.: 08-13555). 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.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16
(Case No. 08-13600).
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Luc A. Despins, Esq., and Wilbur F. Foster,
Jr., Esq., at MILBANK, TWEED, HADLEY & McCLOY LLP, in New York,
and Paul Aronzon, Esq., and Gregory A. Bray, Esq., at MILBANK in
Los Angeles, California, represent the official unsecured
creditors committee.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on September 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
The two units of Lehman Brothers Holdings, Inc., which have filed
for bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York, have combined liabilities of
JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion ($33 billion) in liabilities in its
petition. Akio Katsuragi, a former Morgan Stanley executive, runs
Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
(Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
LEXINGTON PRECISION: Balance Sheet at June 30 Upside-Down by $39MM
------------------------------------------------------------------
Lexington Precision Corporation's balance sheet at June 30, 2008,
showed total assets $60,067,000 and total liabilities of
$99,471,000, resulting in a stockholders' deficit of $39,404,000.
Net loss for three months ended June 30, 2008 was $1,940,000
compared to $1,361,000 for the same period in the previous year.
Net loss for six months ended June 30, 2008, was $3,402,000
compared to net loss of $2,278,000 for the same period in the
previous year.
Cash at June 30, 2008, totaled $8,595,000 compared to $212,000 at
Dec. 31, 2007. The cash on hand at June 30, 2008, resulted from
the company's debtor-in-possession financing arrangements, which
consists of:
1) an arrangement with the company's senior, secured lenders to
freeze the loans under the company's revolving line of
credit at the amount outstanding on April 1, 2008, and to
permit the company to utilize the cash collateral of the
senior, secured lenders in the operation of its business
through Feb. 25, 2009; and
2) the DIP Note in the amount of $4,000,000 that matures on
April 1, 2009.
Defaults upon Senior Securities
On Nov. 1, 2006, and February 1, May 1, August 1, and Nov. 1,
2007, and February 1, May 1, and August 1, 2008, the company
failed to pay the quarterly interest payments then due on its
Senior Subordinated Notes. The past due interest payments total
$9,653,000.
Liquidity and Capital Resources
During the first half of 2008, operating activities of the
company's continuing operations provided net cash of $4,415,000.
Accounts receivable decreased by $644,000 during the first half of
2008, because (1) the amount of outstanding billings for sales of
tools and automation equipment decreased by $656,000, (2) the
terms of sale to one of its customers changed, resulting in a
reduction in the dollar amount of receivables outstanding, and (3)
a number of invoices outstanding beyond terms at Dec. 31, 2007,
were paid during the first quarter of 2008. Inventories increased
by $747,000 because of (a) increased metals prices, (b) the
rescheduling of customer orders due to the continued reduction in
the number of vehicles manufactured by the Detroit-based
automobile manufacturers, and (c) the build of components to
satisfy the safety stock requirements of certain of its customers
as a result of its chapter 11 filing. Accrued expenses increased
by $1,693,000, because of the increase in accrued reorganization
expenses during the six-month period ended June 30, 2008. Accrued
interest expense, including accrued interest expense classified as
a liability subject to compromise, increased by $2,841,000 because
of additional accruals of interest on its subordinated debt.
During the first half of 2008, investing activities of the
company's continuing operations used net cash of $1,744,000.
Capital expenditures attributable to the Rubber Group, the Metals
Group, and the Corporate Office totaled $1,509,000, $143,000, and
$11,000, for the purchase of equipment. Capital expenditures for
the Rubber Group, the Metals Group, and the Corporate Office are
currently projected to total $2,985,000, $503,000, and $11,000,
for the year ending Dec. 31, 2008.
During the first half of 2008, the company's financing activities
provided net cash of $5,710,000. In April 2008, it received
$4,000,000 of cash from the issuance of the DIP Note and, during
the first six months of 2008, the company increased borrowings
under its revolving line of credit by $3,587,000. The company
made principal payments on its debt totaling $1,663,000. The
company used $214,000 of cash to fund financing expenses that were
incurred in connection with its efforts to restructure, refinance,
or repay its indebtedness.
About Lexington Precision
Headquartered in New York City, Lexington Precision Corp. --
http://www.lexingtonprecision.com/-- manufactures tight-tolerance
rubber and metal components for use in medical, automotive, and
industrial applications. As of Feb. 29, 2008, the companies
employed about 651 regular and 22 temporary personnel.
The company and its affiliate, Lexington Rubber Group Inc., filed
for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead
Case No.08-11153). Richard P. Krasnow, Esq., at Weil, Gotshal &
Manges, represents the Debtors in their restructuring efforts.
The Debtors selected Epiq Bankruptcy Solutions LLC as claims
agent. The U.S. Trustee for Region 2 appointed seven creditors to
serve on an Official Committee of Unsecured Creditors.
When the Debtors filed for protection from their creditors, they
listed total assets of $52,730,000 and total debts of $88,705,000.
LEXINGTON PRECISION: Reports $1.9 Million Net Loss for June 2008
----------------------------------------------------------------
Lexington Precision Corporation reported $1,940,000 net loss
on net sale of $20,000,000 for the period ended June 30, 2008,
compared to $1,361,000 net loss on net sales of $23,778,000 for
the same period a year ago.
The company's consolidated balance sheets showed total assets of
$60,067,000 and total liabilities of $99,471,000 resulting in a
$39,404,000 stockholders' deficit.
On June 30, 2008, the company's consolidated balance sheets also
showed strained liquidity with $30,657,000 in total current assets
available to pay $47,237,000 in total current liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://ResearchArchives.com/t/s?3277
About Lexington Precision
Based in New York, Lexington Precision Corp. --
http://www.lexingtonprecision.com/-- manufactures tight-tolerance
rubber and metal components for use in medical, automotive, and
industrial applications. As of Feb. 29, 2008, the companies
employed about 651 regular and 22 temporary personnel.
The company and its affiliate, Lexington Rubber Group Inc., filed
for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead
Case No.08-11153). Richard P. Krasnow, Esq., at Weil, Gotshal &
Manges, represents the Debtors in their restructuring efforts.
The Debtors selected Epiq Bankruptcy Solutions LLC as claims
agent. The U.S. Trustee for Region 2 appointed seven creditors to
serve on an Official Committee of Unsecured Creditors.
When the Debtors filed for protection from their creditors, they
listed total assets of $52,730,000 and total debts of $88,705,000.
LINCOLN LOGS: Files for Chapter 11 Protection
---------------------------------------------
North Country Gazette reports that Lincoln Logs Ltd. has filed for
Chapter 11 protection in the U.S. Bankruptcy Court for the
Northern District of New York.
Angela Miller, Esq., the attorney for Lincoln Logs, said that the
company's filing for bankruptcy was mainly due to the housing
market crisis and the resulting decline in consumer demand for
home building packages, North Country Gazette relates. Higher
energy costs and a growing list of delayed orders are also factors
in the company's filing for bankruptcy, the report states.
According to the report, Lincoln Logs incured $3.4 million in
losses from acquisitions dating back to 2003.
James Schlett at The Dailygazette.com relates that Lincoln Logs'
bankruptcy filing does not indicate how deep in debt the company
is. Chief Operating Officer Jeff LaPell said in a statement that
it owes First Pioneer Farm Credit some
$2.6 million, mostly stemming from a 2003 revolving credit and
loan agreement. Dailygazette.com states that Curtis Lumber is
listed as the case's leading unsecured creditor with claims of
$206,000.
Lincoln Logs, says Dailygazette.com, has moved "to shave
$2.1 million off of its overhead by closing unprofitable
businesses," which include True Craft Log Homes and Snake River
Homes.
North Country Gazette relates that Lincoln Logs' officials said
the company will continue operations while developing a plan of
reorganization with its creditors. Ms. Miller said that Snake
River, the company's wholly-owned subsidiary, stopped operating
earlier this year, the report says.
Lincoln Logs' Chief Operating Officer Jeff LaPell said that the
firm will use cash flow from receivables to meet its ongoing
obligations to creditors throughout the reorganization, North
Country Gazette reports. Lincoln Logs, according to North Country
Gazette, has a significant backlog of customer orders, which it
intends to honor. According to Dailygazette.com, Lincoln Logs has
a backlog of sales orders totaling
$26.4 million.
Ms. Miller said that Lincoln Logs believes that it will emerge
from reorganization in a stronger financial position, North
Country Gazette reports.
About Lincoln Logs
Richard Considine founded Lincoln Logs Ltd. --
http://www.lincolnlogs.com/-- in 1977. The company has more than
80 dealers nationwide including six in New York. The company
remained small and family-owned until investors entered the
picture in 1982, about a year before Lincoln Logs went public.
The company has a manufacturing facility and a sawmill in
Chestertown. Its main products are log home building packages and
insulated, panelized-wall home building systems. The company is
headquartered in Chestertown, New York.
LINCOLN LOGS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Lincoln Logs Ltd.
5 Riverside Drive
Chestertown, NY 12817
Bankruptcy Case No.: 08-13079
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Snake River Log Homes, LLC 08-13080
Type of Business: The Debtors specializes in building houses from
log, timber and cedar.
See: http://www.lincolnlogs.com/
Chapter 11 Petition Date: September 19, 2008
Court: Northern District of New York (Albany)
Judge: Robert E. Littlefield Jr.
Debtor's Counsel: Angela Z. Miller, Esq.
amiller@phillipslytle.com
Phillips Lytle LLP
3400 HSBC Center
Buffalo, NY 14203
Tel: (716) 847-7060
Estimated Assets: $1 million to $10 million
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/nynb08-13079.pdf
MCCLATCHY COMPANY: Leroy Barnes, Jr. Discloses 17.9% Equity Stake
-----------------------------------------------------------------
Leroy Barnes, Jr. disclosed in a Securities and Exchange
Commission filing that he is deemed to beneficially own
12,515,950 shares of Common Stock of The McClatchy Company, which
include 18,200 shares of Class A Common Stock (including stock
options) and 12,500,000 shares of Class B Common Stock. The
percentage of Common Stock beneficially owned by Mr. Barnes is
approximately 17.9% of the Company's shares, based on a total of
57,384,516 shares of Class A Common Stock issued and outstanding
as of Aug. 5, 2008.
Of the 12,515,950 shares:
(1) 14,750 are subject to stock options which are currently
exercisable or exercisable within 60 days; and
(2) 12,500,000 shares of Class B Common Stock are held under
four separate trusts, each with 3,125,000 shares and
different income beneficiaries.
Mr. Barnes, William B. McClatchy, William Ellery McClatchy and
William K. Coblentz share joint voting and investment control with
respect to these trusts.
Mr. Barnes is currently a director of The McClatchy Company,
having served in this capacity since 2000. In this role, Mr.
Barnes is actively involved in managing the business and affairs
of The McClatchy Company and may suggest or, from time to time,
approve or authorize, plans or proposals.
About The McClatchy Company
Headquartered in Sacramento, California, The McClatchy Company
(NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest
newspaper company in the United States, with 30 daily newspapers,
approximately 50 non-dailies, and direct marketing and direct mail
operations. McClatchy also operates leading local websites in
each of its markets. McClatchy-owned newspapers include The Miami
Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The
Kansas City Star, the Charlotte Observer, and The (Raleigh) News &
Observer.
McClatchy also owns a portfolio of premium digital assets,
including 14.4% of CareerBuilder, an online job site, and 25.6% of
Classified Ventures, a newspaper industry partnership that offers
the auto website, cars.com, and the rental site, apartments.com.
At June 29, 2008, the company's consolidated balance sheet showed
$3.7 billion in total assets, $3.3 billion in total liabilities,
and $382.1 million in total stockholders' equity.
* * *
As reported by the Troubled Company Reporter on Sept. 19, Moody's
Investors Service downgraded The McClatchy Company's Corporate
Family and Probability of Default ratings to B2 from Ba3, the
ratings on the senior unsecured notes to Caa1 from B1, and the
rating on the guaranteed bank facility to Ba2 from Ba1. The
rating outlook is negative. The downgrade reflects Moody's
expectation that ongoing significant declines in advertising
revenue will continue to pressure EBITDA -- leading to an increase
in leverage and heightened risk of a credit facility covenant
violation. Moody's anticipates McClatchy's free cash flow
generation and the modest bank leverage will allow the company to
obtain an amendment if necessary, but an increase in the interest
rate spread and tighter non-financial covenants are likely to
result, which would reduce financial flexibility.
The TCR also said The McClatchy Co. will be laying off about 1,150
employees or 10% of its work force; and cutting its dividend by
50%.
The TCR, citing a Dow Jones report, said McClatchy previously
fired about 1,400 workers to save $70 million yearly and had cut
about 13% of its workforce between the end of 2006 and April 2007.
On July 16, 2008, the TCR reported that Douglas McIntyre of 24/7
Wall Street said McClatchy could hit debt service problems that
could force the company to sell properties or file for Chapter 11
protection. According to the report, McClatchy is one of the
companies that are at high risk of not making it another year due
to the big debt loads it took in buying newspaper properties and
seeing operating income chopped by falling sales.
MCCLATCHY CO: Gary Pruitt Steps Down From 5 Trusts
--------------------------------------------------
Gary B. Pruitt voluntarily resigned on September 3, 2008, as a co-
trustee of each of separate trusts established for the benefit of
McClatchy family members. A successor co-trustee was named. As a
result, Mr. Pruitt ceased to be a beneficial owner of more than 5%
of McClatchy Common Stock.
Mr. Pruitt became one of four co-trustees of five separate trusts
established for the benefit of McClatchy family members on May 14,
2003. On January 3, 2004, the beneficiary of one of the five
trusts for the benefit of McClatchy family members died and on
March 1, 2004, the shares of Class B Common Stock held by the
trust were distributed in equal shares to the four remaining
trusts. Each of the five trusts contained 2,500,000 shares of
Class B Common Stock. As a result of the distribution from the
fifth trust to the four remaining trusts, each of the four trusts
now contains 3,125,000 shares of Class B Common Stock. Subject to
the terms of the Stockholders' Agreement dated as of September 17,
1987, each holder of Class B Common Stock has the right to convert
Class B Common Stock into Class A Common Stock on a one-for-one
basis.
In a filing with the Securities and Exchange Commission, Mr.
Pruitt said the aggregate number of shares of McClatchy Common
Stock he beneficially owned is 658,934 which include 658,934
shares of Class A Common Stock, including stock options and
restricted stock subject to a right of repurchase. The percentage
of Common Stock beneficially owned by Mr. Pruitt is approximately
1.2%, based on a total of 57,384,516 shares of Class A Common
Stock issued and outstanding as of August 5, 2008. Of the 658,934
shares, 582,500 shares are subject to stock options which are
currently exercisable or exercisable within 60 days and 52,500
shares represent shares of restricted stock which are subject to a
right of repurchase in favor of McClatchy.
About The McClatchy Company
Headquartered in Sacramento, California, The McClatchy Company
(NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest
newspaper company in the United States, with 30 daily newspapers,
approximately 50 non-dailies, and direct marketing and direct mail
operations. McClatchy also operates leading local websites in
each of its markets. McClatchy-owned newspapers include The Miami
Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The
Kansas City Star, the Charlotte Observer, and The (Raleigh) News &
Observer.
McClatchy also owns a portfolio of premium digital assets,
including 14.4% of CareerBuilder, an online job site, and 25.6% of
Classified Ventures, a newspaper industry partnership that offers
the auto website, cars.com, and the rental site, apartments.com.
At June 29, 2008, the company's consolidated balance sheet showed
$3.7 billion in total assets, $3.3 billion in total liabilities,
and $382.1 million in total stockholders' equity.
* * *
As reported by the Troubled Company Reporter on Sept. 19, Moody's
Investors Service downgraded The McClatchy Company's Corporate
Family and Probability of Default ratings to B2 from Ba3, the
ratings on the senior unsecured notes to Caa1 from B1, and the
rating on the guaranteed bank facility to Ba2 from Ba1. The
rating outlook is negative. The downgrade reflects Moody's
expectation that ongoing significant declines in advertising
revenue will continue to pressure EBITDA -- leading to an increase
in leverage and heightened risk of a credit facility covenant
violation. Moody's anticipates McClatchy's free cash flow
generation and the modest bank leverage will allow the company to
obtain an amendment if necessary, but an increase in the interest
rate spread and tighter non-financial covenants are likely to
result, which would reduce financial flexibility.
The TCR also said The McClatchy Co. will be laying off about 1,150
employees or 10% of its work force; and cutting its dividend by
50%.
The TCR, citing a Dow Jones report, said McClatchy previously
fired about 1,400 workers to save $70 million yearly and had cut
about 13% of its workforce between the end of 2006 and April 2007.
On July 16, 2008, the TCR reported that Douglas McIntyre of 24/7
Wall Street said McClatchy could hit debt service problems that
could force the company to sell properties or file for Chapter 11
protection. According to the report, McClatchy is one of the
companies that are at high risk of not making it another year due
to the big debt loads it took in buying newspaper properties and
seeing operating income chopped by falling sales.
MICROMET INC: Notifies NASDAQ on Listing Rule Breach
----------------------------------------------------
RTT News reports that Micromet Inc. has appointed board member
Peter Johann as a member of the company's audit committee to
succeed Barclay Phillips, who resigned to assume the post of Chief
Financial Officer of the company.
Following Johann's appointment, Micromet regained compliance with
the NASDAQ Stock Market, according to the report.
On Sept. 5, Micromet disclosed in a Securities and Exchange
Commission filing that it notified The NASDAQ Stock Market on
Sept. 4, 2008, that, as a result of the resignation of Mr.
Phillips as a member of the Company's Board of Directors and its
audit committee effective as of Aug. 29, 2008, the Company's Audit
Committee had only two independent directors and therefore was no
longer in compliance with NASDAQ Marketplace Rule 4350(d)(2)(A).
The Company subsequently informed NASDAQ that the Board instructed
the nominating & corporate governance committee to review the
composition of all board committees and to propose to the board
whether to fill the vacancy on the audit committee with a current
board member or whether to initiate a search process to identify a
qualified candidate to fill the vacancy left by the resignation of
Mr. Phillips.
The Company further notified NASDAQ that it intended to rely on
the cure provisions of NASDAQ Rule 4350(d)(4)(B) and expected to
complete the process of filling the vacancy on the audit
committee, and provide evidence of its compliance with Marketplace
Rule 4350 to NASDAQ, by the earlier of the Company's next annual
shareholders' meeting or Aug. 29, 2009, as required under said
rule.
About Micromet Inc.
Micromet Inc. (Nasdaq: MITI) -- http://www.micromet-inc.com/-- is
a biopharmaceutical company developing novel, proprietary
antibodies for the treatment of cancer, inflammation and
autoimmune diseases. Four of its antibodies are currently in
clinical trials, while the remainder of the product pipeline is in
preclinical development.
Going Concern Doubt
The company disclosed in its Form 10-Q for the second quarter of
2008, that as of June 30, 2008, it had an accumulated deficit of
$179.4 million, and that it expects to continue to incur
substantial, and possibly increasing, operating losses for the
next several years. These conditions create substantial doubt
about our ability to continue as a going concern.
The company is continuing its efforts in research and development,
preclinical studies and clinical trials of its product candidates.
These efforts, and obtaining requisite regulatory approval prior
to commercialization, will require substantial expenditures. Once
requisite regulatory approval has been obtained, substantial
additional financing will be required to manufacture, market and
distribute its products in order to achieve a level of revenues
adequate to support its cost structure.
Management believes it has sufficient resources to fund its
required expenditures into the second quarter of 2009, without
considering any potential milestone payments that it may receive
under current or future collaborations, or any future capital
raising transactions or drawdowns from the committed equity
financing facility (CEFF) with Kingsbridge Capital Limited.
At June 30, 2008, the company's consolidated balance sheet showed
$48.3 million in total assets, $36.3 million in total liabilities,
and $12.0 million in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?30f0
MIDISTEM LAB: Inks Third Amended License Agreement with ICM
-----------------------------------------------------------
Medistem Laboratories, Inc. disclosed in a Securities and Exchange
Commission filing that it entered into a Third Amended and
Restated License Agreement with the Institute for Cellular
Medicine.
The Third Amendment amends the previous license agreement with ICM
and has the effect of:
(i) expanding the territory covered by the license agreement to
include Mexico and all of Central America, South America,
and the Caribbean; and
(ii) revising the royalty rate from 20% of ICM's gross revenues
during the term of the agreement to a fully paid royalty in
the amount of $1,000,000 plus 560,000 shares of the
Company's common stock, with such shares being transferred
by entities controlled by Dr. Neil H. Riordan, the
Company's Chairman of the Board and majority stockholder.
ICM paid $600,000 of the cash portion of the royalty payment upon
signing of the Third Amendment and will pay the remaining $400,000
in eight monthly installments of $50,000 each. This amendment
also satisfies all outstanding loans and other amounts due from
ICM. Medistem estimates that the value of the consideration
received exceeds the value of existing amounts due from ICM by
over $900,000.
>From its inception in 2005 to June 30, 2008, Medistem earned
approximately $507,000 in royalties from the license agreement
with ICM. The Company's Board of Directors approved the Third
Amendment to reduce its dependence on revenue streams beyond its
control and to provide immediate liquidity to enable the Company
to accelerate its research and development activities. Because of
his controlling ownership interest in ICM, Dr. Riordan abstained
from voting on the Board of Directors' decision to approve the
Third Amendment.
About Medistem Laboratories
Headquartered in Tempe, Ariz., Medistem Laboratories Inc. (OTC BB:
MDSM) -- http://www.medisteminc.com/-- is a biotechnology company
founded to develop and commercialize technologies related to adult
stem cell extraction, manipulation, and use for treating
inflammatory and degenerative diseases. The company's lead
product, the endometrial regenerative cell, is a "universal
donor" stem cell derived from the menstrual blood that possesses
the ability to differentiate into nine tissue types, produce large
quantities of growth factors, and a large proliferative capacity.
Going Concern Doubt
Malone & Bailey P.C., in Houston, expressed substantial doubt
about Medistem Laboratories Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditing firm
reported that the company has had limited operations and has not
commenced planned principal operations. The future of the company
is dependent upon future profitable operations and the development
of new business opportunities.
MARTY'S SHOES: Will Close 47 Stores & Liquidate Operations
----------------------------------------------------------
Marty's Shoes Inc. will close all of its 47 stores in New Jersey,
New York, and Connecticut and liquidate operations, Joan Verdon at
Northjersey.com reports, citing documents the company filed in
U.S. Bankruptcy Court for the District of Delaware.
Northjersey.com relates liquidation sales started last month.
Most of Marty's Shoes's 10 stores in North Jersey are expected to
close by October, the report says. David P. Willis at APP.com
reports that the going-out-of-business sales for all of the stores
are expected to finish by Nov. 15.
Court documents indicate that Marty's President and Chief
Executive Officer John Adams attributed the firm's failure to
tough economic conditions, excess inventory and a poorly executed
management change in 2006, Northjersey.com says. Mr. Adams helped
Martin Samowitz found Marty's Shoes in 1974 and was the company's
president until management was changed in 2006. The new
management tried to increase sales through new store openings and
by remodeling existing stores until an economic slump hit shoe
retailers last year. The new management was removed and Mr. Adams
returned as CEO and president.
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.
The company filed for Chapter 11 protection on Sept. 12, 2008
(Bankr. D.Del. Case No. 08-12131). Kevin Scott Mann, Esq., at
Cross & Simon, LLC, represents the Debtor in its restructuring
effort. The company listed assets of between $10 million and
$50 million and debts of between $10 million and $50 million when
it filed for bankruptcy.
MLK CARWASH: Case Summary & 13 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: MLK Carwash & Detail, Inc.
dba Red Carpet Carwash
1620 W. Martin Luther King Jr. Blvd.
Los Angeles, CA 90062
Bankruptcy Case No.: 08-25516
Type of Business: The Debtor provides car washing services.
Chapter 11 Petition Date: September 21, 2008
Court: Central District Of California (Los Angeles)
Judge: Ernest M. Robles
Debtor's Counsel: Daniel J. Weintraub, Esq.
dan@wsrlaw.net
Weintraub & Selth APC
12424 Wilshire Blvd., Suite 1120
Los Angeles, CA 90025
Tel: (310) 207-1494
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
A list of the Debtor's largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/califcb08-25516.pdf
MORTGAGES LTD: Fund Investors Seek Court Representation
-------------------------------------------------------
Andrew Johnson at The Arizona Republic reports that 50 investors
of a Value-to-Loan fund that Mortgages Ltd. managed are asking for
court representation in the company's bankruptcy case.
According to The Arizona Republic, the Hon. Randolph Haines of the
U.S. Bankruptcy Court for the District of Arizona granted a motion
at a hearing on Wednesday clarifying that an existing investor
committee does not represent the Value-to-Loan investors, who
pumped almost $8 million into the fund.
Maricopa County property records indicate that Mortgages had as
many as 3,000 investors at one time who provided almost
$1 billion for loans made to real-estate developers, The Arizona
Republic says. According to the report, some investors put money
directly into specific loans, receiving an interest in the loans
and a deed of trust on the properties. Others invested in
separate funds collectively called "opportunity funds," which held
interests in multiple loans, the report states.
The Arizona Republic states that Valley bankruptcy attorney Dale
Schian said that some of those investors have asked him to get a
committee formed to represent them.
Jonathan Hess, an attorney for the U.S. Trustee in Phoenix, said
that the office will still decide on whether it would appoint a
separate committee to represent those investors, The Arizona
Republic relates.
According to The Arizona Republic, Mortgages will likely oppose
the formation of a second investors committee because the company
would have to pay for the group's legal fees, which is standard
bankruptcy procedure. Morgages already has to pay attorneys fees
for the existing investors committee and an unsecured creditors
committee, the report says.
The Arizona Republic reports that the court has set an Oct. 7
deadline for the filing of a claim that outlines how much money
they believe Mortgages owes them. The Value-to-Loan investors
must know who will represent them before Oct. 7 so they can
determine whether they should file claims, the Arizona Republic
states, citing Schian and Cathy Reece, the counsel for the
existing investor committee.
Mortgages will submit its reorganization plan by Oct. 22, The
Arizona Republic states.
About Mortgages Ltd.
Phoenix, Arizona-based Mortgages Ltd. -- http://www.mtgltd.com/
-- originates, invests in, sells and services its own short-term
real-estate secured loans on properties within the state of
Arizona in the US. It underwrites loans for commercial,
industrial and residential properties for acquisition,
entitlement, development, construction and investment.
Mortgages Ltd. was the subject of an involuntary chapter 7
petition dated June 20, 2008, filed by KGM Builders Inc. -- a
contractor for Grace Communities, a borrower of the company --
in the U.S. Bankruptcy Court for the District of Arizona.
Central & Monroe LLC and Osborn III Partners LLC, divisions of
Grace Communities, sought the appointment of an interim trustee
for Mortgages Ltd. in the chapter 7 proceeding.
Mortgages Ltd. is also facing lawsuits filed by Grace Communities
and Rightpath Limited Development Group for its alleged failure to
fully fund loans. Mortgages Ltd. denied the charges. It has
filed a motion to dismiss the Rightpath suit.
The Debtor's case was converted to a chapter 11 proceeding on
June 24, 2008 (Bankr. D. Ariz. Case No. 08-07465). Judge Sarah
Sharer Curley presides over the case. Carolyn Johnsen, Esq., and
Bradley Stevens, Esq., at Jennings, Strouss & Salmon P.L.C.,
replaced Todd A. Burgess, Esq., at Greenberg Traurig LLP, as
counsel to the Debtor. As of Dec. 31, 2007, the Debtor had total
assets of $358,416,681 and total debts of $350,169,423.
MOTOR COACH: To Resume Client Programs & Post-Petition Payments
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted
Motor Coach Industries International, Inc., permission to continue
all customer programs without interruption and pay post-petition
expenses without seeking court approval.
The Court also allowed MCI to continue to honor its current
standard limited warranties on coaches. The Court approval also
included MCI's request to borrow as much as $278 million to pay
debt and keep operating, which was reported by the Troubled
Company Reporter on Sept. 17, 2008.
"MCI intends to work closely with all of its stakeholders to
implement our pre-negotiated restructuring plan and emerge by
February 2009," said Tom Sorrells, MCI's President and CEO.
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.
The Company and its debtor-affiliates filed for separate Chapter
bankrupty protection with the United States Bankruptcy Court for
the District of Delaware on September 15, 2008 (Lead Case No. 08-
12136). Jason M. Madron, Esq., and Lee E. Kaufman, Esq., at
Richards Layton & Finger, P.A., represent the Debtors in their
restructuring efforts. At the time of filing, the Debtors listed
assets of between $500,000,000 and $1,000,000,000 and liabilities
of between $100,000,000 and $500,000,000.
NATIONAL CINEMEDIA: TimesSquare Capital Discloses 10.9% Stake
-------------------------------------------------------------
TimesSquare Capital Management, LLC disclosed in a Securities and
Exchange Commission filing that it may be deemed to beneficially
own 4,582,900 shares of National Cinemedia, Inc.'s common stock,
representing 10.9% of the 42,067,798 shares issued and
outstanding.
Headquartered in Centennial, Colorado, National CineMedia Inc.
(NASDAQ: NCMI) -- http://www.ncm.com/-- is the managing member
and owner of 43.6% of National CineMedia LLC. NCM LLC operates
the largest digital in-theatre network in North America through
long-term agreements with its founding members, AMC Entertainment
Inc., Cinemark USA Inc. (NYSE: CNK) and Regal Entertainment Group
(NYSE: RGC), the three largest theatre operators in the U.S., and
through multi-year agreements with several other theatre
operators.
National CineMedia Inc.'s consolidated balance sheet at June 26,
2008, showed $540.1 million in total assets and $1.0 billion in
total liabilities, resulting in a $474.8 million stockholders'
deficit.
The Company generated $4.3 million in net income for the quarter
ended June 26, 2008, compared to a net loss of $400,000 for the
first quarter ended March 27, 2008.
NEONODE INC: Files Prospectus for Sale of 6.4 Million Shares
------------------------------------------------------------
Neonode Inc. filed on Sept. 5, 2008, with the Securities and
Exchange Commission a prospectus that relates to the resale of:
(i) 1,640,467 shares of common stock, $0.001 par value per
share; and
(ii) 4,746,013 shares of Common Stock issuable upon the
exercise of warrants.
The Company noted that selling stockholders may sell the shares of
common stock subject to the prospectus from time to time and may
also decide not to sell all the shares they are allowed to sell
under the prospectus. Selling stockholders will act independently
of the Company in making decisions with respect to the timing,
manner and size of each sale.
Neonode's prospectus is available free of charge at:
http://researcharchives.com/t/s?3245
About Neonode Inc.
Neonode Inc. (Nasdaq: NEON) -- http://www.neonode.com/-- is a
Swedish mobile communication company that specializes in optical
finger based touch screen technology. The company designs and
develops mobile phones under its own brand and licenses its
patented touch screen technologies, zForce(TM) and neno(TM) to
third parties. Neonode USA, which is based in San Ramon, Calif.,
markets Neonode's products within North America, Latin America and
China and is the exclusive licensor of the Neonode Intellectual
Property.
As reported in the Troubled company Reporter on May 29, 2008,
Neonode Inc.'s consolidated balance sheet at March 31, 2008,
showed total assets of $13.9 million and total liabilities of
$23.4 million, resulting in a roughly $9.4 million of total
stockholders' deficit.
Going Concern Doubt
BDO Feinstein International AB, in Stockholm, Sweden, expressed
substantial doubt about Neonode Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. the auditing firm
pointed to the company's recurring losses, negative cash flows
from operations, and working capital deficiency.
NEWARK GROUP: Moody's Junks Sub. Debt Rating on Weak Performance
----------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
of The Newark Group to B3 from B2, downgraded the senior
subordinated notes rating to Caa1 from B3, and changed the rating
outlook to negative. Concurrently, the Speculative Grade
Liquidity rating was lowered to SGL-4 from SGL-3.
These rating actions were driven by weak operating performance and
deteriorating credit metrics as a result of high recycled fiber
and energy costs, weaker demand for end products, and overcapacity
plaguing the industry, albeit moderating. The contribution from
the company's international segment has only partially offset the
significant shortfalls realized in North American paperboard and
converting operations. The negative outlook reflects the
volatility of key input costs, the general macroeconomic outlook
for both the US and Europe, and industry-wide trends within the US
housing industry that impact demand for certain of TNG's products.
The downgrade in the liquidity rating reflects Moody's expectation
that TNG's liquidity profile will be weak over the next twelve
months. Operating cash flow may not fully cover working capital
needs, capital expenditures, and debt amortization requirements.
As a result, Moody's anticipates TNG will further increase its
reliance on the $85 million asset-based revolving credit facility
(unrated by Moody's), leaving minimal availability for unplanned
operating shortfalls. After consideration of the borrowing base
calculation, the outstanding balance, letters of credit, and the
swap obligation, approximately $23 million was technically
available under the revolver at July 31, 2008.
However, because the fixed charge covenant ratio is measured if
availability falls below $10 million and TNG would not be in
compliance with this covenant should it be measured, effective
availability under the revolver was limited to about $13 million
at July 31, 2008. The maximum senior leverage covenant in the
credit-linked facility was amended on August 12, 2008 to increase
the threshold through January 31, 2009. While financial
flexibility has improved as a result of the amendment, the related
increase in the facility's pricing and term loan amortization
further pressures cash flow.
The B3 CFR reflects Moody's expectation that leverage, interest
coverage, and cash flow generation will continue to be weak over
the intermediate term despite some benefit from recent price
increases, retractions in input costs and cost reduction
initiatives implemented by management. Moody's views recent
uncoated recycled board capacity reductions as positive, including
mill closures made by TNG, but remains cautious on the company's
pricing power with customers in light of potential declines in
demand and the volatility of input costs. Any further
deterioration in liquidity or shortfall in revenue, margins or
cash flow as compared to expectations could lead to a downgrade.
The last rating action occurred on February 2, 2007 when Moody's
affirmed the B2 CFR and assigned a Ba3 to TNG's proposed
$90 million senior secured credit-linked facility.
Moody's downgraded these ratings (assessments):
-- Corporate Family Rating, to B3 from B2
-- Probability of Default Rating, to B3 from B2
-- Speculative Grade Liquidity Rating, to SGL-4 from SGL-3
-- $175 million senior subordinated notes due 2014, to Caa1
(LGD5,75%) from B3 (LGD5,75%)
Moody's affirmed this rating (assessment):
-- $90 million senior secured credit-linked facility due 2012,
Ba3 (LGD2, 22% from LGD2, 23%)
The Newark Group Inc., headquartered in Cranford, New Jersey, is
an integrated producer of 100% recycled paperboard and paperboard
products in North America and Europe. For the twelve months ended
July 31, 2008, the company generated revenues of just over
$1 billion.
NITROMED INC: Has Until March 16 to Regain Bid Price Compliance
---------------------------------------------------------------
NitroMed Inc. received a letter from The NASDAQ Stock Market's
Listing Qualifications Department providing notification that, for
the last 30 consecutive business days, the bid price of NitroMed's
common stock has closed below the minimum $1.00 per share
requirement for continued inclusion on The NASDAQ Global Market
under NASDAQ Marketplace Rule 4450(a)(5), referred to as the
minimum bid price rule.
NASDAQ stated in such notification that, in accordance with NASDAQ
Marketplace Rule 4450(e)(2), NitroMed has 180 calendar days, or
until March 16, 2009, to regain compliance with the minimum bid
price rule.
The NASDAQ notification also states that if at any time before
March 16, 2009, the bid price of the company's common stock closes
at $1.00 per share or more for a minimum of 10 consecutive
business days, NASDAQ will provide written notification that the
company has achieved compliance with the minimum bid price rule,
although NASDAQ may, in its discretion, require that an issuer
maintain a bid price of in excess of $1.00 for a period in excess
of 10 days, but generally no more than 20 days, before determining
that it has demonstrated the ability to maintain long-term
compliance. If NitroMed does not regain compliance with the
minimum bid price rule by March 16, 2009, NASDAQ will provide
written notification that the company's securities will be
delisted from The NASDAQ Global Market. At that time, NitroMed may
appeal NASDAQ's determination to delist the company's securities
to a NASDAQ Listing Qualifications Panel.
Alternatively, in the event the delisting is based solely upon
non-compliance with the minimum bid price rule, NitroMed could
apply to transfer its securities to The NASDAQ Capital Market,
provided that NitroMed satisfies the requirements for initial
listing on such market set forth in NASDAQ Marketplace Rule
4310(c), other than the minimum bid price rule. If the
application were approved and NitroMed otherwise maintains the
listing requirements for The NASDAQ Capital Market, other than the
minimum bid price requirement, NitroMed would be afforded the
remainder of The NASDAQ Capital Market's second 180 calendar day
grace period in order to regain compliance with the minimum bid
price rule.
About NitroMed Inc.
Headquartered in Lexington, Massachusetts, NitroMed Inc. (NASDAQ:
NTMD) -- www.nitromed.com/ -- is the maker of BiDil(R)
(isosorbide dinitrate/hydralazine hydrochloride), an orally
administered medicine available in the United States for the
treatment of heart failure in self-identified black patients.
BiDil is indicated for the treatment of heart failure as an
adjunct to current standard therapy, to improve survival, prolong
time to hospitalization for heart failure and improve patient-
reported functional status.
NOVADEL PHARMA: Issuance of $2.5MM in Secured Notes Approved
------------------------------------------------------------
NovaDel Pharma Inc. disclosed in a Securities and Exchange
Commission filing that at its 2008 Annual Meeting of Stockholders,
four proposals were approved:
(i) Election of six directors to the Company's Board of
Directors to serve until the next Annual Meeting of
Stockholders or until their successors have been duly
elected or appointed and qualified;
(ii) Approval of the issuance and sale of up to $2.525 million
in secured convertible notes and warrants of the Company to
funds affiliated with ProQuest Investments;
(iii) Approval of the potential issuance of 3,250,000 shares of
the common stock resulting from:
-- the removal of the cap of 19.99% on the 3,000,000
warrants issued in the initial closing of the ProQuest
transaction; and
-- the interest shares provision of the secured convertible
notes in the initial closing of the ProQuest
transaction; and
(iv) Ratification of the selection of J.H. Cohn LLP as the
company's independent registered public accounting firm for
the fiscal year ending Dec. 31, 2008.
The total number of outstanding shares of common stock entitled to
vote at the Annual Meeting was 60,692,260.
As a result, the Company may now, at its option, issue and sell an
additional $2.525 million in secured convertible notes and
warrants to funds affiliated with ProQuest Investments. However,
the Company has not determined whether it will draw upon these
funds, or any portion thereof, if at all.
About NovaDel Pharma
Based in Flemington, N.J., NovaDel Pharma Inc. (AMEX: NVD)
-- http://www.novadel.com/-- is a specialty pharmaceutical
company developing oral spray formulations for a broad range of
marketed drugs. The company's proprietary technology offers, in
comparison to conventional oral dosage forms, the potential for
faster absorption of drugs into the bloodstream leading to quicker
onset of therapeutic effects and possibly reduced first pass liver
metabolism, which may result in lower doses.
Going Concern Doubt
J.H. Cohn LLP, in Roseland, N.J., expressed substantial doubt
about NovaDel Pharma Inc.'s ability to continue as a going concern
after auditing the company's financial statements for the years
ended Dec. 31, 2007, and 2006. The auditing firm pointed to the
company's recurring losses from operations and negative cash flows
from operating activities.
OCCULOGIX INC: Nasdaq Grants Temporary Continued Listing
--------------------------------------------------------
OccuLogix Inc. has been notified that the NASDAQ Listing and
Hearing Review Listing Council has called for review the Sept. 8,
2008, decision of the NASDAQ Listing Qualifications Panel pursuant
to which the company's securities were to be delisted from The
NASDAQ Capital Market, effective at the open of business of
Sept. 18, 2008. The matter was called for review by the Listing
Council in order to consider the merits of the Panel Decision.
The Listing Council has also determined to stay the Panel Decision
pending further action by the Listing Council. As a result, the
company's securities will continue to trade on The NASDAQ Capital
Market pending further consideration of this matter by the Listing
Council.
In the notification of its decision, the Listing Council has given
OccuLogix until noon on Oct. 24, 2008, to submit any additional
information that the company wishes the Listing Council to
consider in its review of the matter.
Headquartered in Mississauga, Ontario, Canada, OccuLogix Inc.
(Nasdaq: OCCX; TSX: OC) -- http://www.occulogix.com/-- is a
healthcare company focused on ophthalmic devices for the diagnosis
and treatment of age-related eye diseases.
Going Concern Doubt
Ernst & Young LLP, in Toronto, Canada, expressed substantial doubt
about OccuLogix Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2007, and 2006. The auditing firm
pointed to the company's recurring operating losses and working
capital deficiency.
OPEN ENERGY: Quercus Trust Discloses 45.2% Equity Stake
-------------------------------------------------------
The Quercus Trust and trustees David Gelbaum and Monica Chavez
Gelbaum disclosed in a Securities and Exchange Commission filing
they may be deemed to beneficially own 95,663,041 shares of Open
Energy Corporation's common stock, representing 45.2% of the
211,570,938 shares issued and outstanding.
Solana Beach, Calif.-based Open Energy Corporation (OEGY.OB) --
http://www.openenergycorp.com/-- together with its subsidiaries,
engages in the development and commercialization of solar energy
products and technologies for power production and water
desalination. It offers building-integrated photovoltaic roofing
materials for commercial, industrial, and residential markets.
Going Concern
As reported in the Troubled Company Reporter on Sept 17, 2007,
San Diego, Calif.-based Squar, Milner, Peterson, Miranda &
Williamson, LLP expressed substantial doubt about Open Energy
Corporation's ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended May 31, 2007. The auditing firm pointed to the
company's recurring losses from operations and working capital
deficiency.
The company has incurred losses since inception totaling
$80.7 million through Feb. 29, 2008.
OSAGE EXPLORATION: Ran Furman Quits as CFO to Focus on SEC Suit
---------------------------------------------------------------
Osage Exploration and Development Inc. disclosed in a Securities
and Exchange Commission filing on Sept. 8, 2008, that Ran H.
Furman resigned as Chief Financial Officer and as a member of the
Company's Board of Directors to focus on a pending civil complaint
filed against him by the Commission.
The Board of Directors has named Kim Bradford, President and Chief
Executive Officer of the Company, to serve as interim Chief
Financial Officer. Mr. Furman has indicated his willingness to
assist the Company during this period of transition and will
continue to serve the Company in a non-officer capacity, reporting
to Mr. Bradford.
On Sept. 4, 2008, the Commission filed a complaint in the United
States District Court for the Southern District of California
[Civil Action Case No. CV08-1620 WQH (RBB)] against Retail Pro,
Inc. (fka Island Pacific, Inc.), Barry M. Schecter, Ran H. Furman,
and Harvey Braun.
The Commission's complaint alleges that Mr. Schechter, the former
CEO, Mr. Furman, the former CFO, and Mr. Braun, another former
CEO, caused Island Pacific to improperly record and report
$3.9 million in revenue from a September 2003 barter transaction.
As alleged in the complaint, the barter transaction had little
economic substance or business purpose and was entered into to
artificially inflate Island Pacific's revenues as reported in its
financial statements. The complaint further alleges that as a
result of improperly recognizing and reporting the $3.9 million as
revenue, Island Pacific overstated its revenues for the second
quarter of 2004, for the nine months ending the third quarter of
2004, and for the 2004 fiscal year.
The Commission's civil complaint also alleges that Island Pacific,
Inc., along with the other individual defendants, violated the
anti-fraud provisions of the federal securities laws, improperly
recognized revenue, falsified documents in an attempt to
demonstrate that the recognition of revenue from the barter
transaction was proper, and caused the company to report false
financial results.
The Commission's complaint seeks to:
(1) enjoin the defendants from future violations of the
securities laws;
(2) require Mr. Schecter to disgorge any ill-gotten gains and
pay prejudgment interest;
(3) require all defendants to pay civil monetary penalties;
(4) bar all defendants from serving as officers or directors of
a public company; and
(5) provide other appropriate relief.
About Osage Exploration
Based in La Jolla, Calif., Osage Exploration and Development Inc.
(Pink Sheets: OEDV) -- http://osageenergyinc.com/-- is an
independent exploration and production company with interests in
oil and gas wells and prospects in the United States and Colombia.
Going Concern Doubt
Goldman Parks Kurland Mohidin, LLP, in Encino, Calif., expressed
substantial doubt about Osage Exploration and Development Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements for the years ended
Dec. 31, 2007, and 2006. The auditing firm pointed to the
company's recurring losses from operations and accumulated
deficit.
PANACEA PARTNERS: De La Costa Restaurant Sold for $1.6MM
--------------------------------------------------------
Lorene Yue of Crain's Chicago Business reports that a federal
bankruptcy judge has approved the sale of De La Costa to a Chicago
restaurateur for $1.6 million. De La Costa owned by Panacea
Partners, LLC, was sold to Dock 465 LLC. Dock 465 previously
offered $1 million for the restaurant but raised its bid by
$600,000 at a Sept. 12 auction. The 11,000-square-foot restaurant
had been valued at roughly $2 million by the broker hired to find
a buyer, according to the report.
The sale's closing is contingent upon Dock 465 obtaining a liquor
license from the city, according to the report.
De La Costa in River East Plaza has remained open throughout the
entire bankruptcy process.
Michael Demnicki, member and manager, filed a voluntary Chapter 11
petition on behalf on Panacea Partners, LLC on July 7, 2008
(Bankr. N.D. Ill., Case No.: 08-17391). Michael R. Collins, Esq.,
at Collins & Collins represents the Debtor. The Debtor disclosed
assets of $1 million to $10 million and debts of $1 million to
$10 million when it filed for bankruptcy.
PCG SUMMIT-NORTHWOODS: U.S. Trustee Sets 341(a) Meeting for Oct. 2
------------------------------------------------------------------
The United States Trustee for the Central District of California
will convene a meeting of creditors of PCG Summit-Northwoods LP at
1:00 p.m., on Oct. 2, 2008, in Room 1-159 at 411 W Fourth St. in
Santa Ana, California.
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.
Based in Costa Mesa, California, PCG Summit-Northwoods LP, an
affiliate of PCG Summit Lakeline Station LP, operates a real
estate business. The company filed for Chapter 11 protection on
Aug. 29, 2008 (Bankr. C.D. Calif. Case No. 08-15268). Eric D.
Goldberg, Esq., at Stutman, Treister & Glatt, PC, in Los Angeles,
California, represents the Debtor.
PCG SUMMIT-NORTHWOODS: Files Schedules of Assets and Liabilities
----------------------------------------------------------------
PCG Summit-Northwoods LP delivered to the United States Bankruptcy
Court for the Central District of California its schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------- -----------
A. Real Property Unknown
B. Personal Property $0
C. Property Claimed
as Exempt
D. Creditors Holding $15,745,436
Secured Claims
E. Creditors Holding $0
Unsecured Priority
Claims
F. Creditors Holding $8,488,420
Unsecured Nonpriority
Claims
------- ------------
TOTAL $0 $24,233,856
Based in Costa Mesa, California, PCG Summit-Northwoods LP, an
affiliate of PCG Summit Lakeline Station LP, operates a real
estate business. The company filed for Chapter 11 protection on
Aug. 29, 2008 (Bankr. C.D. Calif. Case No. 08-15268). Eric D.
Goldberg, Esq., at Stutman, Treister & Glatt, PC, in Los Angeles,
California, represents the Debtor.
PEOPLE AGAINST DRUGS: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------------------
Dawn McCarty and Jef Feeley of Bloomberg News report that People
Against Drugs Affordable Public Housing Agency filed for Chapter
11 bankruptcy protection on Sept. 17, 2008, in the U.S. Bankruptcy
Court for the Northern District of Texas (Case No. 08-34696).
The Debtor has spent, according to the report, "millions of
dollars" on a team in the Craftsman Truck Series sponsored by the
National Association for Stock Car Auto Racing, Texas Attorney
General Greg Abbott, Esq. The information was revealed in court
papers filed in June in the case Attorney General Greg Abbott v.
People Against Drugs Affordable Public Housing Agency, 88897,
Probate Court of Travis County, Texas (Austin).
The bankruptcy filing came after state officials in Texas asked a
judge to bar the Debtor from putting more money into the team and
to appoint a receiver to protect its assets, according to the
report.
The Debtor didn't provide an affidavit explaining what prompted
the bankruptcy filing, according to the report.
The charity gets its funding from an an apartment complex it rents
out partly to low-income tenants. State officials claim that the
charity used the money it receives from the apartment complex to
fund activities of Green Light Racing instead of using it to
provide anti-drug messages or low-cost housing to the poor.
Reportedly, Texas investigators also found People Against Drugs
paid Mr. Christensen $102,000 a year as its executive director,
provided him with a car, and a $119,000 no-interest loan.
Mr. Christensen also used at least $94,000 of People Against
Drugs' money in his 2008 Republican primary campaign for a U.S.
House of Representatives seat, according to the report.
Garland, Texas-based People Against Drugs Affordable Public
Housing Agency was a nonprofit founded in 1991 to help schools and
police highlight the dangers of drug abuse and to offer "gang-and-
drug free living environments," the report quotes what Texas state
officials said in a statement in June.
The Debtor listed assets between $10 million and $50 million and
debt between $10 million and $50 million in its bankruptcy filing.
PHILLIP LEE: Case Summary & 11 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Phillip K. Lee
560 Jamaka Rd.
Washington, NC 27889
Bankruptcy Case No.: 08-06477
Chapter 11 Petition Date: September 19, 2008
Court: Eastern District of North Carolina (Wilson)
Judge: J. Rich Leonard
Debtor's Counsel: Trawick H Stubbs, Jr., Esq.
efile@stubbsperdue.com
Stubbs & Perdue, P.A.
P. O. Drawer 1654
New Bern, NC 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
Estimated Assets: $1 million to $10 million
Estimated Debts: $10 million to $50 million
Debtor's 11 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
SunTrust possible deficiency $5,416,690
c/o Robert Cunningham, Esq. on foreclosure sale
777 Gloucester St, Ste 200 of 501 Ocean
Brunswick, GA 31520 Cottage
First South Bank personal guaranty $3,365,511
Attn: Manager or Agent for Farlee, LLC
PO Box 2047
Washington, NC 27889-2047
Wachovia Bank, NA personal guaranty $3,012,481
c/o A. Lee Hodgewood for Roselee
PO Box 17047 Associates, LLC
Raleigh, NC 27619-7047
BB&T judgment for $512,855
c/o James S. Livermon personal guaranty of
PO Box 353 Lee Tractor
loan
Rocky Mount, NC 27802
Grace Bonner security: 1,800,000; $300,000
810 Grace Drive senior lien:
Aurora, NC 27806 $1,950,977
Cooperative Bank $197,832
Blount-Midyette & Co. security: $1,800,000 $100,000
senior lien:
$1,850,977
Business Card personal guaranty $47,093
for Lee Tractor
Northland Group collection of $45,512
Citibank- 1152
Internal Revenue Service unpaid $36,400
employment tax
Law Offices of collection of $25,102
Mitchell N. Kay American Express
credit card- 1009
PHYTOGEN INT'L: Case Summary & 12 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Phytogen International, LLC
Phytogen Life Sciences, Parent
c/o KPMG, Inc. Trustee in Bankruptcy
Attn: Peter D. Gibson
777 Dunsmuir Street, P. O. Box 10426
Vancouer, BC V7Y 1K3
Canada
Tel: (214) 721-8000
Bankruptcy Case No.: 08-20560
Type of business: The Debtor sells pharmaceutical drugs.
Chapter 11 Petition Date: September 19, 2008
Court: District of Wyoming (Cheyenne)
Judge: Peter J. McNiff
Debtor's Counsel: Keith Miles Aurzada, Esq.
kaurzada@pogolaw.com
Powell Goldstein LLP
2200 Ross Avenue, Suite 3300
Dallas, TX 75201
Tel: (214) 721-8041
Fax: (214) 721-8100
Total Assets: $789,679
Total Debts: $20,728,544
Debtor's 12 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Mylan Pharmaceutical Inc. trade debt $17,269,820
1500 Corporate Drive, Ste. 400
Canonsburg, PA 15317
Phytogen Life Sciences Inc. intercompany claim $1,353,144
KPMG Inc., Trustee in
Bankruptcy
Attn: Peter D. Gibson
777 Dunsmuir Street
P.O. Box 10425
Vancouver BC,V7Y 1K3
Drug Royalty Corporation Inc. trade debt $999,675
South Tower, Suite 3120
Box 122, 200 Bay Street
Toronto, Ontario
M5J 2J3 Canada
Sinphar Pharmceutical Co. trade debt $836,622
Ltd.
Laboratories Vita, S.A. trade debt $75,000
Keating John trade $60,824
Fidla Farmaceutici S.p.A trade debt $50,000
Gerot Pharmazeutika trade debt $25,000
Geseltschaft m.b.H
Beacon Pharmaceutical Ltd. trade debt $25,000
Phytogen Inc. intercompany claim $15,895
Canadian Medical Discoveries trade debt $15,583
Brackmount Company Ltd. trade debt $1,969
QUALITY HOME: Creditor Shalom Rubanowitz Files Ch. 11 Plan
----------------------------------------------------------
The Law Offices of Shalom Rubanowitz, Inc., and investor Shalom
Rubanowitz, Esq. filed with the U.S. Bankruptcy Court for the
Central District of California a Chapter 11 Liquidation Plan in
Quality Home Loans and Golden State TD Investments, LLC's
bankruptcy cases.
The Law Offices of Shalom Rubanowitz, Inc. is an unsecured
creditor who performed prepetition and possibly post-petition
legal services for the Debtors. Shalom Rubanowitz, Esq. is an
investor in the Debtor.
The Plan groups claims and interests in or against the Debtors
into six classes:
Class Type of Claim
----- -------------
Unclassified Administrative Claims including Priority Tax
Claims
Class 1 Secured Claims
Class 2 Investor Claims
Class 3 Unsecured Installment Obligations
Class 4 General Unsecured Non-Priority Claims
Class 5 Insider Claims
Class 6 Shareholders
Allowed administrative claims will be paid if full on the
effective date, from funds provided by the Debtor's business
operations.
Secured real estate claims under Class 1 will be paid in full upon
the close of real property sale escrows resulting from sales by
order of the Court. However, if such business operations do not
provide for all or part of such payment, secured claims shall not
receive any funds on the effective date.
Investor claims under Class 2 will be paid in full upon the close
of real property sale escrows resulting from sales by order of the
Court. However, if such business operations do not provide for
all or part of such payment, after Class 1 claims have been paid,
Class 2 claims shall not receive any funds on the effective date.
Investor claims may, through Court order or otherwise, become
unsecured creditors of the Debtors, and fall into Class 4.
Class 3 Claims will be paid their allowed claims from the business
operations or assets of the Debtor, after Class 1 and Class 2
claimants have been paid.
The general unsecured creditors belonging to Class 4 will be paid
1% to 100% of their allowed claims from the business operations of
the Debtor, depending on the outcome of marshaling all the asets
of all related entities.
Insider claims under Class 5 shall not receive any distribution
unless funds remain after satisfying administrative claims and
claimants under Classes 1, 2, 3 and 4. The insider claimants
shall receive 50% of all such remaining funds.
Class 6 claimants shall receive nothing unless funds remain after
all other classes have been paid in full. They shall receive 50%
of all such remaining funds.
Plan Execution
The Plan provides that part or all of the real and personal
property of the Debtors will be sold to the highest bidder, free
and clear of all liens, at a hearing to be determined by the
Court. Opening bids shall be such sum that will pay in full all
administrative claims and Class 1 and 2 claimants only. If no
bidders are found for all the assets, there will be further
auctions in the Court for the sale of certain property. The
creditors in any class may credit bid on the real property, up to
the full amount of their debt. Any unsold personal property items
shall be liquidated by the Chapter 11 trustee for the benefit of
unsecured creditors.
If all of the assets, real and personal, are sold to the highest
bidders, secured claims shall first be paid out of sale escrows to
be established by the Chapter 11 Trustee. The balance of the
funds, net of escrow costs, shall be distributed first to allowed
tax claims, next to allowed administrative claims, and last to
unsecured creditors and then investors up to 100% of their
claims. Remaining proceeds from the sale shall be distributed to
the insiders and shareholders pro rata.
Under the Plan, Mr. Rubanowitz retains the right to modify the
plan in accordance with the provisions of the Bankruptcy Code.
A full-text copy of Chapter 11 Liquidation Plan submitted by The
Law Office of Shalom Rubanowitz, Inc., and investor Shalom
Rubanowitz, Esq. is available for free at:
http://bankrupt.com/misc/QualityHomesRubanowitzPlan.pdf
A full-text copy of the Disclosure Statement explaining the Plan
is available for free at:
http://bankrupt.com/misc/QualityHomeRubanowitzDS.pdf
About Quality Home Loans
Based in Agoura Hills, California, Quality Home Loans --
http://www.qualityhomeloans.com/-- is a residential hard money
lender. The company does business as Clear Credit Capital, Last
Chance Home Loans, Last Option Lending, and Q.H.L. Investments.
The company and its debtor-affiliates filed for Chapter 11
protection on Aug. 21, 2007 (Bankr. C.D. Calif. Case Nos.
07-13003 through 07-13006). Alan J. Frieman, Esq., Kerri A.
Lyman, Esq., and Mike D. Neue, Esq., at Irell & Manella LLP,
Robert Trodella, Esq., at Heller Ehrman LLP, Jeffrey Lee Costell,
Esq., and William N. Lobel, Esq. represent Quality Home Loans as
counsel. David M. Poitras, Esq. at Jeffer, Mangels, Butler &
Marmaro, LLP and Samuel R. Maizel, Esq., at Pachulski Stang Ziehl
& Jones LLP represent Golden State TD Investments, LLC as counsel.
David Gould was appointed by the Court as chapter 11 trustee.
Alan J. Friedman, Esq. at Irell & Manella LLP, David Gould, Esq.,
and Lewis R. Landau, Esq., at Lewis R. Landau Attorney at Law,
Stanley H. Shure, Esq., at the Law Offices of Stanley H. Shure,
and William N. Lobel, Esq. represent the Chapter 11 Trustee as
counsel. David L. Wilson, Esq., Eric E. Sagerman, Esq. and Rolf
S. Woolner, Esq. at Winston & Strawn LLP represent the Committee
of Unsecured Creditors. The Debtors' schedules disclose total
assets of $130,319,336 and total debts of $177,043,476.
RCS-CHANDLER: Wants to Employ Marcus as Broker for Sale
-------------------------------------------------------
The Arizona Republic reports that Elevation Chandler's owner, Jeff
Cline, asks permission from the U.S. Bankruptcy Court for the
District of Arizona to hire Marcus & Millichap Real Estate
Investment Services as broker in the company's sale.
As reported by the Troubled Company Reporter on June 2, 2008, Mr.
Cline disclosed at a May 27, 2008, hearing that he has a potential
buyer for Elevation Chandler. Arizona Republic relates that Mr.
Cline informed the hearing examiner and trial attorney for the
U.S. trustee, Patty Chan, that he filed Chapter 11 papers so he
could reorganize and have the ability to sell the property.
Michael R. Walker, Esq., at Schian Walker P.L.C., the Debtor's
counsel, however, told Ms. Chan they don't have a definitive date
yet as to when the property would be sold.
The Arizona Republic relates that Mr. Cline said that he would pay
Marcus a 2% commission. The report says that Mr. Cline wants to
sell Elevation Chandler for $40 million.
About RCS-Chandler
Headquartered in Phoenix, Arizona, RCS-Chandler LLC, owned by Jeff
Cline, constructs and develops hotels. The company filed for
Chapter 11 protection on April 11, 2008 (Bankr. D. Ariz. Case
No.08-04021). The Debtor filed for bankruptcy one business day
before its property was to be sold at a public auction.
Michael R. Walker, Esq., at Schian Walker P.L.C. represents the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed assets and debts of
between $50 million and $100 million. The Deal reported that the
Debtor had $40 million in assets and $61.6 million in debts.
Construction at Elevation Chandler stopped in April 2006, leaving
a partially built shell on prime real estate south of the mall at
the Santan Freeway and Loop 101, Arizona Republic says.
SAINTS MEDICAL: Fitch Affirms 'BB+' Rating on $54MM Revenue Bonds
-----------------------------------------------------------------
Fitch Ratings affirms its rating at 'BB+' on approximately $54
million Massachusetts Health and Educational Facilities Authority
revenue bonds (Saints Medical Center), series 1993A. The Rating
Outlook is Stable.
The affirmation reflects Saints Medical Center's (Saints;
formerly, Saints Memorial Medical Center) adequate liquidity for
the rating level as well as a new strategic plan, which includes
expanding primary care services to areas outside of Lowell. At
year-end fiscal 2007 (Sept. 30), Saints had 78.2 days cash on hand
and a cash-to-debt ratio of 46.4%, both slightly above Fitch's non
investment grade category medians. Operating profitability has
declined since fiscal 2004, and Saints is expecting an operating
loss in fiscal 2008. Through the first nine months of fiscal
2008, Saints had a negative 1.5% operating margin, with an
operating loss of $1.5 million.
However, Fitch believes that this operating loss was affected more
by one time expenses, including $1 million in subsidy payments to
specialty groups and to investments in a strategic plan, than
operating deficiencies. Saints has recruited 23 new physicians in
the past few years; 11 of which are practicing at sites outside
the City of Lowell.
The Stable Outlook reflects Fitch's view that the strategic
initiatives set in place by management will yield increases in
utilization and revenues in the near term and that Saints will
narrow its operating losses in fiscal 2009. While Saints is
expected to end fiscal year 2008 with an operating loss, Fitch
believes that Saints will return to positive operating margins in
fiscal 2010. Saints is budgeting for a loss in fiscal 2009.
A key rating driver for Saints will be its ability to meet the
2009 budget. A failure to narrow operating losses in fiscal 2009
could result in negative rating pressure on Saints. Additionally,
Saints is actively seeking a partnership with another hospital or
hospital system outside of Lowell. Fitch views this move by
Saints positively as a partnership, especially with larger health
system, could provide Saints with key resources and significantly
enhance Saints' regional competitiveness.
Ongoing credit concerns remain Saints' high debt burden, low debt
service coverage, and competitive service area. At fiscal year-
end 2007, Saints' maximum annual debt coverage by EBITDA was 1.6
times and indicative of its high debt burden. Lowell General
Hospital (LGH; rated 'BBB' with a Negative Outlook by Fitch) is
located very close to Saints is its main competitor. Saint's
strategic focus on growing outside of Lowell where a sizable
patient base exists should help offset direct competition with LGH
while growing the patient base of the medical center.
Saints operates 163 licensed acute-care beds in Lowell,
Massachusetts, approximately 30 miles northwest of Boston. In
fiscal 2007, total operating revenue was $132.8 million. Saints,
the sole obligated group member, is part of the Saints Health
System. Quarterly disclosure to Fitch has been timely, and
includes a balance sheet, income statement and utilization
statistics on a quarterly basis. However, Fitch notes that a
discussion and analysis is not provided on a quarterly basis.
SEARS HOLDINGS: Fitch Cuts Long-Term Issuer Default Rating to B+
----------------------------------------------------------------
Fitch Ratings has downgraded these ratings:
Sears Holdings Corporation
-- Long-term Issuer Default Rating to 'B+' from 'BB';
-- Secured bank facility to 'BB+/RR1' from 'BBB-'.
Sears, Roebuck and Co.
-- Long-term IDR to 'B+' from 'BB'.
Sears Roebuck Acceptance Corp.
-- Long-term IDR to 'B+' from 'BB'.
Sears DC Corp.
-- Long-term IDR to 'B+' from 'BB'.
Kmart Holding Corporation (Kmart)
-- Long-term IDR to 'B+' from 'BB'.
In addition, Fitch has affirmed the senior unsecured and short-
term ratings and assigned Recovery Ratings as:
Sears Holdings Corporation
-- Senior unsecured notes at 'BB/RR1'.
Sears, Roebuck and Co.
-- Senior unsecured notes at 'BB/RR1'.
Sears Roebuck Acceptance Corp.
-- Senior unsecured notes at 'BB/RR1';
-- Short-term IDR at 'B';
-- Commercial paper at 'B'.
Sears DC Corp.
-- Senior unsecured notes at 'BB/RR1'.
Approximately $3.6 billion of total debt was outstanding as of
Aug. 2, 2008. The Rating Outlook is Stable.
The rating actions reflect significant pressure on operating
margins on negative comparable store sales trends and continued
share repurchases in the current challenging operating environment
leading to weaker credit metrics. In addition, the longer term
retail strategy remains unclear, particularly given the announced
changes to Holdings' organizational structure earlier this year,
which could lead to operational disruption in the near term. This
is balanced by Holdings' broad market presence in the moderate
department store, hardline and discounter segments, strong
proprietary brands, and adequate liquidity position.
The company continues to experience negative comparable store
sales at both its Sears and Kmart stores. Sears, with sales of
$27.3 billion in the latest 12 months ended Aug. 2, 2008, has
posted declines in comparable store sales for the past eight
years, reflecting competitive pressures and inconsistent
merchandising execution. The recent deceleration in comparable
store sales is being compounded by overall weakness in apparel and
home-related products. Kmart's sales, which totaled $17 billion
in the LTM period, stabilized in 2005-2006 following three years
of sharp declines, but have been on a decline since then even as
its discounter peers report positive comparable store sales.
The company's challenge will be to generate longer term sales and
earnings growth at both Sears and Kmart in the face of growing
competition within the department store sector and continued share
gains by discounters and big-box specialty retailers.
With a domestic comparable store sales decline of approximately
7.5% in the first half of 2008 (8.6% in the first quarter and 6.2%
in the second quarter), operating income declined to $56 million
from $657 million in the comparable year ago period. As a result,
LTM credit metrics have deteriorated with adjusted debt/EBITDAR at
3.9 times versus 3x times at the end of 2007 and 2.45x at the end
of 2006. LTM EBITDAR/interest plus rents decreased to 2.4x from
2.8x at the end of 2007 and 3.5x at the end of 2006. Credit
metrics are weaker in spite of the reduction in long-term debt
over time. While Sears is taking steps to control expenses and
has reduced comparable inventory by approximately 5% at the end of
the second quarter, Fitch expects leverage could increase further
on continued sales and profit deterioration.
Current liquidity remains solid, supported by a cash balance of
$1.5 billion and $2.2 billion of availability remaining under its
$4 billion credit facility due March 2010. However, future
liquidity levels could decline given lower cash balances and the
potential for reduced excess availability if the bank facility is
downsized. Cash balances have declined from $4 billion at the end
of 2006 due to significant share repurchases of $2.9 billion in
2007 and approximately $0.5 billion in the first half of 2008.
Domestic cash balances have declined from $3.3 billion to $771
million at the end of the second quarter.
The issue ratings shown above are derived from the IDR and the
relevant recovery rating. Holdings' $4 billion senior secured
credit facility is rated 'BB+/RR1', indicating outstanding
(90-100%) recovery prospects in a distressed scenario. Holdings
provides a downstream guarantee for SRAC and Kmart's borrowings
under this facility, and there are cross-guarantees between SRAC
and Kmart. The facility is secured by domestic inventories and
credit card receivables. The collateral can be released in the
event the company achieves certain performance targets or ratings
levels. If the collateral is released, leverage and asset
coverage tests would become effective.
The senior unsecured notes are rated 'BB/RR1', indicating
outstanding recovery prospects but are rated one notch below the
secured facility, indicating a distinction between secured and
unsecured securities. The SRAC senior notes are guaranteed by
Sears, which agrees to maintain SRAC's fixed charge overage at a
minimum of 1.25 times. In addition, Sears DC Corp. benefits from
an agreement by Sears to maintain a minimum fixed-charge coverage
at SDC of 1.005x. Sears also agrees to maintain an ownership of
and a positive net worth at SDC.
SEMGROUP LP: Gets Final OK to Secure $175 Million DIP Financing
---------------------------------------------------------------
Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware authorized SemGroup LP and its debtor-
affiliates, on a final basis, to obtain $175,000,000 in
postpetition financing, to provide for their working capital, and
for other general corporate purposes. The Court previously
granted interim authority for the Debtors to obtain $150,000,000
from the proposed $250,000,000 of DIP Loans from Bank of America
N.A.
Prior to the Final DIP Hearing, the Debtors filed with the Court
an amended DIP Credit Agreement they entered into with Bank of
America, N.A., as administrative agent for the DIP Lenders, to,
among other things:
(a) reduce the maximum DIP Loans available to the Debtors from
$250,000,000 to $175,000,000;
(b) incorporate a trading protocol, which provides that only
$70,000,000 of the Aggregate Commitment can be used for
hedging purposes in accordance with a trading protocol
approved by the DIP Agent and the requisite DIP Lenders;
and
(c) require the Borrowers to maintain not less than
$225,000,000 of cash at the end of each business day.
A blacklined version of the Amended DIP Agreement is available
for free at http://bankrupt.com/misc/semgroup_amendeddip.pdf
In light of the DIP Credit Agreement amendments, the Debtors also
filed an amended 13-Week Budget commencing from the week ending
September 12, 2008, to the week ending December 26, 2008. A
full-text copy of the Amended Budget is available for free at
http://bankrupt.com/misc/semgroup_amendedbudget.pdf
Judge Shannon found that the Debtors have an immediate need to
obtain the DIP Financing and to use the prepetition collateral,
including the Cash Collateral, to preserve the value of the
Debtors' businesses, make payroll, and satisfy their working
capital. The terms of the DIP Agreement are fair and reasonable,
and reflect the Debtors' exercise of prudent business judgment,
Judge Shannon ruled.
Judge Shannon noted that the Debtors were unable to obtain
financing on more favorable terms from other sources aside from
the DIP lenders. The Debtors were also not able to obtain
adequate unsecured credit under Section 503(b)(1) of the
Bankruptcy Code as an administrative expense, nor adequate
secured credit under Sections 364(c)(1), 364(c)(2), and 364(c)(3)
without granting DIP liens and superiority claims.
Except to the extent set forth in respect of a "carve-out," the
DIP Obligations will constitute allowed senior administrative
claims against the Debtors, with priority over all administrative
expenses, adequate protection claims and other claims, whether
those expenses or claims may become secured. The Superpriority
Claims will be payable from, and have recourse to, the
prepetition and postpetition property of the Debtors, excluding
the avoidance actions and their proceeds.
The Carve-Out is:
(i) all fees required to be paid to the Clerk of the Court
and to the Office of the U.S. Trustee, plus interest at
the statutory rate; and
(ii) following a notice by the DIP Agent in the event of a
default under the DIP Agreement, the payment of accrued
and unpaid professional fees and expenses not exceeding
$4,000,000, incurred by the Debtors and any statutory
committee appointed in the bankruptcy cases, and
allowed by the Court.
All objections to the entry of the Final DIP Order that have not
been withdrawn or settled are overruled.
The Final DIP Order provides that there will not be any
presumption that (x) expenditures of Cash Collateral and proceeds
of DIP Financing, in accordance with the Agreed Budget does or
does not constitute Collateral Diminution; provided that every
dollar of Cash Collateral used to complete the White Cliffs
Pipeline project will result in a dollar for dollar Collateral
Diminution entitled to adequate protection.
As additional adequate protection, the Final Order requires the
Debtors to comply with these terms with respect to the White
Cliffs Project:
(a) By no later than October 15, 2008, the Loan Parties will
file a motion with regard to:
-- a sale of either (x) all of the Debtors' equity
interests in White Cliffs Pipeline, LLC, or (y)
substantially all of the assets of White Cliffs; and
-- the establishment of bidding and related proceedings
to be employed in connection with an auction with
respect to the sale of the Debtors' equity interests
in or substantially all of the assets of White
Cliffs;
(b) By no later than November 21, 2008, the White Cliffs
Auction will have been conducted in accordance with the
bidding procedures;
(c) Debtor SemCrude Pipeline, L.L.C., will continue to manage
the day-to-day physical operations of White Cliffs,
subject to the oversight and supervision of PE Pipeline
Services, LLC;
(d) The Debtors will provide the Prepetition Administrative
Agent with access to (a) books, records, permits, and
contracts, (b) bank accounts, (c) employees, officers,
consultants, and advisors, and (d) the physical facilities
of White Cliffs; and
(e) The Debtors will provide the Prepetition Administrative
Agent, the DIP Agent, the DIP Lenders, and the Prepetition
Secured Lenders with regular reports with respect to the
White Cliffs Project, including weekly budgets.
The Final Order further provides that Net Cash Proceeds from a
sale, lease or other disposition of the Collateral, other than
the New Equity Collateral Proceeds and the Litigation Proceeds,
will be paid to and held by the Prepetition Administrative Agent.
The Final Order also provides that following the indefeasible
payment in full in cash of all DIP Obligations, the full cash
collateralization of all outstanding letters of credit issued
under the DIP Documents and the termination of the Commitments,
the Debtors will pay in cash to the Prepetition Administrative
Agent all proceeds from a sale, lease or disposition of the New
Equity Collateral, after deducting any direct costs incurred by
the Debtors.
A full-text copy of the Debtors' Final DIP Order is available for
free at http://bankrupt.com/misc/SemGroupFinalDIPOrder.pdf
"Our objection was overruled, but the judge made it clear that
this isn't the end of the case," Bloomberg News quoted the
counsel representing the Official Committee of Unsecured
Creditors, Susheel Kirpalani, Esq., at Quinn Emanuel Urquhart
Oliver & Hedges, LLP, in New York, as saying.
According to the report, Lisa Donahue, the Debtors' chief
restructuring officer, testified during the September 17, 2008,
hearing on the DIP Motion, that the terms of the DIP Facility
"were stricter than she liked."
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. 12; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
SEMGROUP LP: Gets Final Approval to Access BofA Cash Collateral
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
SemGroup LP and its debtor-affiliates, on a final basis, to use
the Cash Collateral, and all other prepetition collateral, under
the DIP Agreement to provide adequate protection to prepetition
secured parties, and to ensure sufficient working capital and
liquidity to maintain the value of the Debtors' estates.
Prior to the hearing on the Cash Collateral Motion, the Official
Committee of Unsecured Creditors asked the Court to permit the
Debtors, as a precondition to operating as debtors-in-possession,
to make use of their Cash Collateral securing their prepetition
loans in accordance with a budget.
The Budget, which was filed under seal for proprietary and
confidentiality reasons, provides for the the Debtors to use the
Cash Collateral to continue to pay their employees, maintain
business relationships with their customers in the ordinary
course of business, and satisfy critical operating and
restructuring expenses. The current budget, according to the
Committee's counsel, Susheel Kirpalani, Esq., at Quinn Emanuel
Urquhart Oliver & Hedges LLP, in New York, allows for a modest
inventory accumulation in Debtors SemStream L.P. and
SemMaterials, L.P., to allow these business to "keep their heads
above water" as going concerns.
At a minimum, the Debtors require the use of $20 million in Cash
Collateral on an interim basis, and $70 million on a final basis,
in part to begin procuring seasonal inventory to operate
SemStream and SemMaterials, Mr. Kirpalani told Judge Shannon.
After the Creditors' Committee has been afforded the opportunity
to discuss the current Cash Collateral budget with the Debtors,
the Committee reserves the right to seek use of additional Cash
Collateral that may be necessary to buy inventory and lock in
profit on valuable storage, gathering, and process assets.
Time, Mr. Kirpalani asserted, is particularly of the essence with
respect to SemStream, which generally builds inventory in fall
and sells as prices and demand for heating fuel peak in the
winter months. Due to the narrowing window of opportunity in
this regard, interim use of Cash Collateral is necessary to avoid
the immediate and irreparable harm that the Debtors' would suffer
if this narrowing business opportunity were to close, the
Committee asserts.
The Committee also sought approval of a hedging protocol, that
was rejected by Bank of America N.A. Mr. Kirpalani asserted that
approval of the Hedging Protocol as part of the Cash Collateral
Budget is necessary to enable the responsible hedging of existing
inventory and facilitate the purchase and hedging of new
inventory and locking in profits on the Debtors' assets.
A full-text copy of the Hedging Protocol is available for free at
http://bankrupt.com/misc/semgroup_commtradingprotocol.pdf
Mr. Kirpalani further argued that interim use of the Cash
Collateral is necessary to avoid the immediate and irreparable
harm that the Debtors would suffer should construction efforts at
the White Cliffs Project cease.
The Committee also argued that use of the Cash Collateral is
better than using the DIP Financing. The Committee reveals that,
as of Sept. 15, 2008, the Debtors have accumulated in excess of
$450,000,000 in Cash Collateral. If permitted to use that cash to
buy and build inventory, the Debtors could harvest the value of
their gathering, processing, distribution, and storage assets, and
thereby generate significantly positive EBITDA.
Mr. Kirpalani, on behalf of the Committee, told the Court that
upon entry of the proposed Cash Collateral Order, the Debtors
will be required under the defaulted DIP Credit Agreement to cash
collateralize $70 million in letters of credit at 105%.
The Committee asked the Court to schedule October 1, 2008, as the
hearing date for final approval of the Debtors' use of Cash
Collateral, and direct the Debtors to provide to the Committee's
investment banker all documents considered by the Debtors'
financial advisor in valuing the Unencumbered Assets.
BofA, administrative agent for the DIP Lenders, counter-argued
that the Debtors have a real need for the DIP Facility,
particularly with respect to the issuance of letters of credit to
provide Court-ordered adequate assurance of payment to
postpetition suppliers of products and services to the Debtors.
Moreover, BofA asserted that there is nothing sinister about the
Debtors' "eye-popping cash build-up" that necessitates an in
camera hearing. BofA related that the Debtors' crude and fuel
businesses have been effectively self-liquidating due to lack of
support from suppliers and the intensive capital requirements for
buying product for resale. The cash generated from these
liquidations constitutes the proceeds of the prepetition lenders'
collateral, mainly receivables and inventory.
The DIP Facility is nevertheless required to fund the Debtors'
other ongoing businesses to maximize the going concern value of
those businesses, BofA maintained. BofA added that the
construction of the White Cliffs Project needs financing because
it is being marketed as a completed project.
Furthermore, BofA told the Court that the DIP Lenders and the
Debtors are in discussions concerning the use of cash draws and
letters of credit under the DIP Facility to fund a hedging
protocol that will afford the Debtors appropriate flexibility to
hedge inventory purchases by certain of their ongoing business
units.
BofA also pointed out that the Committee places into the public
record recent prior misinformed views of the proposed DIP
Facility and the Debtors' businesses. BofA said it has made
significant concessions to address the Committee's previous
objections to the DIP Facility, including the concession to
extend the DIP Facility's term to nine months, extend to 90 days
the Committee's investigative period, increase the funds
available to conduct that investigation to $250,000, and agreeing
to the Committee's standing to sue.
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. 12; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
SHANDONG ZHOUYUAN: Files Amended 2007 Annual Report
---------------------------------------------------
Shandong Zhouyuan Seed and Nursery Co. Ltd., filed Sept. 8, 2008,
an amended annual report for the year ended Dec. 31, 2007, with
the U.S. Securities and Exchange Commission. The annual report
was originally filed on April 15, 2008.
The company's management evaluated the effectiveness of the design
and operation of its disclosure controls and procedures. Based
upon the evaluation, its chief executive officer and its chief
financial officer have concluded that for the year ended Dec. 31,
2007, the company's disclosure controls and procedures were
effective.
Management also revised the Consolidated Financial Statements to
reflect the business combination between Infolink Pacific Limited
and Zhouyuan as reorganization of entities under common control.
A copy of the consent of the company's auditors, Kempisty &
Company CPAs PC, was filed with the SEC together with the amended
documents.
Shandong Zhouyuan posted US$843,695 in net losses on US$702,602 in
net revenues for the year ended Dec. 31, 2007, compared with
US$347,706 in net losses on US$424,709 in net revenues for the
year ended Dec. 31, 2006.
At Dec. 31, 2007, Shandong Zhouyuan had US$3,495,009 in total
assets, US$3,083,171 in total liabilities, US$248,020 in
minority interest, and US$163,818 in stockholders' equity.
The company's balance sheet at Dec. 31, 2007, showed strained
liquidity with US$343,532 in total current assets available to pay
US$3,083,171 in total current liabilities.
A full-text copy of the company's amended 2007 annual report is
available for free at http://ResearchArchives.com/t/s?322a
Going Concern Doubt
Kempisty & Company CPAs PC in New York expressed substantial doubt
about Shandong Zhouyuan Seed & Nursery Co. Ltd.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Dec. 31,
2007. The auditing firm said that the company had net losses of
US$813,341 and US$322,586 for the years ended Dec. 31, 2007, and
2006, respectively, and an accumulated deficit of US$2,636,401 at
Dec. 31, 2007. The auditing firm added that the company was in
default on its bank loans as of Dec. 31, 2007, totaling
US$1,764,834, as of Dec. 31, 2007.
Management said the recoverability of a major portion of the
company's recorded asset is dependent upon its continued
operations, which in turn is dependent upon the its ability to
raise additional capital, obtain financing and succeed in its
future operations. The financial statements do not include any
adjustments relating to the recoverability and classification of
recorded asset amounts or amounts and classification of
liabilities that might be necessary should the company be unable
to continue as a going concern.
The company is actively pursuing additional funding and a
potential merger or acquisition candidate and strategic partners,
which would enhance stockholders' investment.
About Shandong Zhouyuan
Shandong Zhouyuan Seed and Nursery Co. Ltd. (OTC BB: SZSN) --
http://www.chinaseedcorp.com/-- was originally incorporated in
the State of North Carolina. The company, through its
consolidated subsidiary, Shandong Zhouyuan Seed and Nursery Co.
Ltd., a company formed under the laws of the People's Republic of
China, is engaged in the business of developing, distributing and
selling agricultural seeds in China.
The company's executive offices are located at Laizhou, Shandong
Province, People's Republic of China.
SHUMATE INDUSTRIES: Sells Machine Works Unit to American Int'l
--------------------------------------------------------------
Shumate Industries Inc. and its wholly owned subsidiary Shumate
Machine Works, Inc., entered on Aug. 29, 2008, into an asset
purchase agreement with American International Industries, Inc.,
pursuant to which American International agreed to acquire
substantially all of the assets and assume certain liabilities of
Machine Works. The Purchase Price will be $5,000,000 plus
assumption of certain assumed liabilities.
The Purchaser will pay $5,000,000 by either:
(i) federal wire transfer;
(ii) assumption of our term notes with Stillwater National
Bank and Trust Company in an amount not to exceed
$5,000,000; or
(iii) a combination of (i) and (ii) totaling $5,000,000.
The Purchaser will assume certain liabilities.
The Purchase Agreement also contains a purchase price adjustment
whereby if the Assumed Liabilities exceed the accounts receivable,
inventory, cash and pre-paid assets, then the company will issue
Purchaser that number of shares of Common Stock equal to the
Negative Working Capital up to a maximum of $700,000 of Common
Stock (based on the market price of the company's Common Stock on
the Closing Date of determination, provided that such price will
not exceed $0.40).
The transaction is subject to certain closing conditions,
including receipt by Purchaser from Stillwater National Bank and
Trust Company of:
(i) adequate financing to perform all of its obligations under
the Purchase Agreement and the transactions contemplated
thereby, including, without limitation, the payment of the
Purchase Price;
(ii) a new term note, amending and restating the Assumed
Stillwater Notes, in an amount equal to $5,000,000; and
(iii) a $1,000,000 revolving credit facility.
The company expects to close this deal Oct. 1, 2008.
About Shumate Industries
Based in Conroe, Texas, Shumate Industries Inc. (OTC BB: SHMT)
-- http://www.shumateinc.com/-- is an energy field services
company. The company operates through two wholly owned
subsidiaries, Shumate Machine Works, a contract machining and
manufacturing division, and Hemiwedge Valve Corporation, a
proprietary new valve technology that targets mid-stream process
and flow control markets with its Hemiwedge(R) Cartridge valve
product line, sub-sea via a pending licensing deal for
Hemiwedge(R) sub-sea high pressure valve product line, and
Hemiwedge(R) down-hole valves under development for drilling
applications.
Going Concern Doubt
As reported in the Troubled Company Reporter on June 13, 2008,
Houston-based Malone & Bailey, PC, expressed substantial doubt on
Shumate Industries Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2007, and 2006. The auditing firm stated
that Shumate requires significant amount of cash in its operations
and does not have sufficient cash to fund its operations for the
next 12 months.
As of June 30, 2008, Shumate Industries Inc.'s consolidated
balance sheet showed $4.9 million in total assets and $12.4
million in total liabilities, resulting in a $7.4 million in
stockholders' deficit.
Shumate incurred recurring losses from operations of $3,107,251
for the six months ended June 30, 2008, and has an accumulated
deficit of $30,550,139. These conditions, the Company said in an
August 2008 regulatory filing, raise substantial doubt as to its
ability to continue as a going concern.
Shumate has sought recapitalization with debt and equity during
2008, however there can be no assurance that it will successfully
recapitalize. In addition, management is trying to continue to
increase Shumate's revenues and improve its results of operations
to a level of profitability including revenues and cash flow from
its Hemiwedge Valve Corporation subsidiary. New sales
representative agreements have been executed during 2008 to assist
in the sales and marketing efforts to improve our results of
operations.
Shumate believes that it will not be able to fund its operations,
working capital requirements, and debt service requirements
through fiscal year 2008 through cash flows generated by
operations alone. The Company said management will seek to raise
additional capital in fiscal year 2008, and possibly beyond 2008
if Shumate's results of operations do not continue to improve or
if the need otherwise arises.
SINOBIOMED INC: Names Lionel Choong as Chief Financial Officer
--------------------------------------------------------------
Sinobiomed Inc. has appointed Lionel Choong as Chief Financial
Officer beginning Sept. 1, 2008. The current CFO of Sinobiomed,
Mr. Asher Zwebner, has resigned effective Aug. 31, 2008.
As CFO, Mr. Choong will oversee the Company's various financial
functions, including finance and accounting, financial planning
and analysis, regulatory and risk management, and facilities and
strategic growth. He will also be involved with other corporate
activities and serve as a strategic partner with the CEO as the
Company develops its unique strategies and tactics for long-term
impact.
Mr. Choong, 46, most recently led the corporate finance department
of Kennic L.H. Lui & Co, a Certified Public Accounting firm in
Hong Kong. A former partner with Deloitte Touche Tohmatsu in Hong
Kong and former CFO of Byford International Ltd., a company listed
on the Hong Kong Stock Exchange, he has more than 20 years of
experience in corporate finance, business development, IPO and
M&A, and financial management and reporting in a variety of
industries in Hong Kong, China and overseas. A Chartered
Accountant with an Institute of Chartered Accountants in England
and Wales Advanced Diploma in Corporate Finance, Mr. Choong has an
MBA from J. L. Kellogg School of Management at Northwestern
University.
"I am looking forward to helping Sinobiomed achieve its full
potential as a public company," said Mr. Choong. "The Company
team is first rate and there is tremendous scope for growth both
in Asia and around the world. It is my intention to work with the
team to effectively implement strategy and further strengthen the
Company's finance team, transparency and corporate governance".
"With the current new funding from Accelera Ventures, and
anticipated intermediate-term funding to prepare for the next
phase of growth, it is imperative to have a solid finance team,"
Banyun Yang, Sinobiomed CEO, commented. "Lionel's deep experience
will create the cornerstone for that."
Sinobiomed extends its sincere thanks to Mr. Zwebner for his
services to the Company as Chief Financial Officer and wishes him
every success as he pursues other interests.
About Sinobiomed Inc.
Sinobiomed Inc. formerly CDoor Corp. (OTC BB: SOBM)
-- http://www.sinobiomed.com/-- was incorporated in the State of
Delaware. The company is a leading Chinese developer of
genetically engineered recombinant protein drugs and vaccines.
Based in Shanghai, Sinobiomed currently has 10 products approved
or in development: three on the market, four in clinical trials
and three in research and development. The company's products
respond to a wide range of diseases and conditions, including:
malaria, hepatitis, surgical bleeding, cancer, rheumatoid
arthritis, diabetic ulcers and burns, and blood cell regeneration.
Going Concern Doubt
Schumacher & Associates Inc., in Denver, expressed substantial
doubt about Sinobiomed Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007. The auditing firm
reported that the company has experienced losses since
commencement of operations and has negative working capital and a
stockholders' deficit.
The company is in the process of researching, developing, testing
and evaluating proposed new pharmaceutical products and has not
yet determined whether these products are technically or
economically feasible. Management's plan is to actively search
for new sources of capital, including government and non-
government grants toward research projects and new equity
investment.
Sinobiomed Inc.'s consolidated balance sheet at June 30, 2008,
showed $8.6 million in total assets, including $1.9 million in
current assets, and $16.1 million in liabilities all due within
the next 12 months, resulting in a $7.4 million stockholders'
deficit.
The company reported a net loss of $1,2 million on sales of
$359,228, for the second quarter ended June 30, 2008.
SMALL PLATES: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Small Plates - Royal Oak, LLC
310 South Main Street
Royal Oak, MI 48067
Bankruptcy Case No.: 08-62793
Type of Business: The Debtor offers food services.
Chapter 11 Petition Date: September 19, 2008
Court: Eastern District of Michigan (Detroit)
Judge: Phillip J. Shefferly
Debtor's Counsel: Kenneth M. Schneider, Esq.
kschneider@schneidermiller.com
Kimberly Ross Clayson, Esq.
kclayson@schneidermiller.com
645 Griswold, Suite 3900
Detroit, MI 48226
Tel: (313) 237-0850
Total Assets: $657,115
Total Debts: $1,409,238
A list of the Debtor's largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/mieb08-62793.pdf
SMARTIRE SYSTEMS: Patent Infringement Suit vs. Schrader Settled
---------------------------------------------------------------
SmarTire Systems Inc. disclosed in a Securities and Exchange
Commission filing that on Aug. 21, 2008, the company and Schrader-
Bridgeport International, Inc. entered into a Confidential
Settlement and License Agreement, terminating a lawsuit between
the parties.
On Sept. 12, 2007, that company filed a complaint against Siemens
VDO Automotive Corp. and Schrader-Bridgeport in the United States
District Court for the Eastern District of Virginia alleging
infringement of its United States Patent No. 5,231,872, entitled
"Tire Monitoring Apparatus and Method." The case was styled
SmarTire Systems, Inc. v. Siemens VDO Automotive Corp., Schrader-
Bridgeport International, Inc. and Schrader Electronics Ltd.,
Civil Action No. 1:07cv932 (E.D. Virginia).
In a stipulated judgment that was entered by the district court on
Aug. 26, 2008, Schrader also acknowledged the validity and
enforceability of the Company's United States Patent No.
5,231,872.
About SmarTire Systems
Headquartered in Richmond, British Columbia, Canada, SmarTire
Systems Inc. (OTC BB: SMTR) -- http://smartire.com/-- develops,
subcontracts its manufacturing, and markets tire pressure
monitoring systems (TPMSs), which monitor tire pressure and tire
temperature in a range of vehicles. The company sells TPMSs for
trucks, buses, recreational vehicles, passenger cars and
motorcycles. It has three wholly owned subsidiaries: SmarTire
Technologies Inc., SmarTire USA Inc. and SmarTire Europe Limited.
SmarTire Systems Inc.'s consolidated balance sheet at April 30,
2008, showed $3,240,386 in total assets, $38,162,990 in total
liabilities, and $3,565,585 in preferred shares, resulting in a
$38,488,189 stockholders' deficit.
Going Concern Doubt
BDO Dunwoody LLP, in Vancouver, Canada, expressed substantial
doubt about SmarTire Systems Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the years ended July 31, 2007, and 2006. The
auditing firm pointed to the company's accumulated deficit and
working capital deficiency.
The company has incurred recurring operating losses and as of
April 30, 2008, had an accumulated deficit of $146,822,824 and a
working capital deficiency of $33,864,927 of which $33,739,519 is
potentially convertible into shares of common stock of the
company, subject to certain restrictions.
SPECTRUM BRANDS: David B. Williams Disclose 10.35% Equity Stake
---------------------------------------------------------------
David B. Williams and Cookie Jar LLC disclosed in a Securities and
Exchange Commission filing that they may be deemed to beneficially
own 5,462,302 shares of Spectrum Brands Inc's common stock,
representing 10.35% of the shares issued and outstanding.
In a separate regulatory filing, Williams Cookie Jar Foundation
disclosed that it may be deemed to beneficially own 211,070 shares
of Spectrum Brands' common stock, representing 0.4% of the shares
issued and outstanding.
Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE:
SPC) -- http://www.spectrumbrands.com/-- is a supplier of
consumer batteries, lawn and garden care products, specialty pet
supplies, shaving and grooming products, household insect control
products, personal care products and portable lighting.
At March 30, 2008, the company's consolidated balance sheet showed
$3.31 billion in total assets and $3.54 million in total
liabilities, resulting in a $232.9 million total stockholders'
deficit.
* * *
As reported in the Troubled Company Reporter on July 22, 2008,
Moody's Investors Service affirmed Spectrum Brands Inc.'s
Corporate family rating at Caa1 and Probability-of-default rating
at Caa2.
SPECTRUM BRANDS: David B. Williams Disclose 10.35% Equity Stake
---------------------------------------------------------------
David B. Williams and Cookie Jar LLC disclosed in a Securities and
Exchange Commission filing that they may be deemed to beneficially
own 5,462,302 shares of Spectrum Brands Inc.'s common stock,
representing 10.35% of the shares issued and outstanding.
Williams Cookie Jar Foundation disclosed in a separate Securities
and Exchange Commission filing that it may be deemed to
beneficially own 211,070 shares of Spectrum Brands Inc.'s common
stock, representing 0.4% of the shares issued and outstanding.
About Spectrum Brands
Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE:
SPC) -- http://www.spectrumbrands.com/-- is a supplier of
consumer batteries, lawn and garden care products, specialty pet
supplies, shaving and grooming products, household insect control
products, personal care products and portable lighting.
At March 30, 2008, the company's consolidated balance sheet showed
$3.31 billion in total assets and $3.54 million in total
liabilities, resulting in a $232.9 million total stockholders'
deficit.
* * *
As reported in the Troubled Company Reporter on July 22, 2008,
Moody's Investors Service affirmed Spectrum Brands Inc.'s
Corporate family rating at Caa1 and Probability-of-default rating
at Caa2.
SPORTS COLLECTIBLES: Files for Chapter 11 Bankruptcy in Delaware
----------------------------------------------------------------
Dawn McCarty of Bloomberg News reports that Sports Collectibles
Acquisition Corp. dba BC Sports Collectibles filed a voluntary
petition under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court for the District of Delaware
when it failed to complete a turnaround on its own.
The Chapter 11 filing, Bloomberg relates, will permit the company
to (i) continue implementation of its pre-petition restructuring
efforts, (ii) shed onerous leases for underperforming store
locations and (iii) obtain new financing to purchase inventory
for the upcoming holiday season.
Bloomberg, citing papers filed with the Court, says the company
listed assets and debts of both between $10 million and $50
million. The company owes about $1.9 million to unsecured
creditors including Sports Licensed Division of the Adidas Group
LLC, owed $524,061; The Upper Deck Co., $193,964; and Sports Image
Inc., $190,319, Bloomberg reports.
The company acquired BC Sports Collectibles owned by Electronic
Boutique Holding Corp. in 2002, Bloomberg notes.
Headquartered in West ChesterSports Collectibles Acquisition Corp.
-- http://www.bcsports.com/-- operates 45 retail stores located
in regional shopping malls around the United States. The company
offers sports related merchandise and apparel.
SPORTS COLLECTIBLES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Sports Collectibles Acquisition Corp.
1345 Enterprise Drive, Suite 300
West Chester, PA 19380
Bankruptcy Case No.: 08-12170
Type of Business: The Debtor sells sports apparel.
Chapter 11 Petition Date: September 21, 2008
Court: District of Delaware (Delaware)
Debtor's Counsel: Andrew C. Kassner, Esq.
andrew.kassner@dbr.com
Howard A. Cohen, Esq.
howard.cohen@dbr.com
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103
Tel: (215) 988-2554
Fax: (215) 988-2757
Financial Advisors: Traxi LLC
120 West 45th Street
New York, New York 10036
The Debtor entered into a $13 million senior secured superpriority
debtor-in-possession credit agreement with GMAC CF, as lender
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Sports Licensed Division trade $524,061
of the Adidas Group LLC
8677 Logo Athletic Court
Indianapolis, IN 46219
The Upper Deck Company trade $193,963
135 S. LaSalle
Dept. 1466
Chicago, IL 60674-1466
Sports Images, Inc. trade $190,318
1913 Atlantic Avenue
Manasquan, NJ 08736
The Topps Company trade $137,963
Dallas Cowboys Merchandising trade $114,733
12/31/87 Kim Trusts rent $108,348
VF ImageWear Inc. trade $71,555
AETNA, Inc. insurance $51,717
ACT Capital Management loan $50,000
G III/Licensing Division trade $49,530
Mayflower Cape Cod LLC rent $46,538
Continental Chester LLC rent $46,377
PF Framing trade $41,352
Rouse SI Shopping Center LLC rent $40,431
Photo File, Inc. trade $39,668
Danbury Fair Mall LLC rent $37,500
McFarlane Toys trade $35,290
Diamond Collectible Inc. trade $35,285
Marketville, Inc. trade $35,000
Rockingham Park Mall rent $34,776
STOCKERYALE INC: Gets Continued Listing of Stocks Until Dec. 23
---------------------------------------------------------------
StockerYale Inc. received an extension from the Nasdaq Listing
Qualifications Panel to regain compliance with the $1.00 minimum
bid price requirement of The Nasdaq Stock Market until Dec. 23,
2008. In order for the company to maintain its listing on the
Nasdaq Stock Market beyond that date, its common stock must have a
closing bid price of $1.00 or more for a minimum of ten
consecutive trading days prior to Dec. 23, 2008.
The company disclosed that on Dec. 28, 2007, the company received
a notice from The Nasdaq Stock Market indicating that it was not
in compliance with Nasdaq Marketplace Rule 4450(a)(5) because, for
30 consecutive business days, the bid price of the company's
common stock had closed below the minimum $1.00 per share. The
company did not regain compliance with the minimum bid price
requirement and, accordingly, on June 26, 2008, the company
received written notification from The Nasdaq Stock Market stating
that the company's common stock would be subject to delisting as a
result of the deficiency unless the company requested a hearing
before the Panel.
On July 3, 2008, the company requested a hearing before the Panel
to address the minimum bid price deficiency, which was held on
Aug. 14, 2008. At the hearing, the company presented a plan to
regain compliance with the minimum bid price requirement.
The extension granted by the Panel is subject to the company's
continuing compliance with all requirements for continued listing
on the Nasdaq Capital Market. There can be no assurance that the
company will maintain compliance with the continued listing
requirements of The Nasdaq Stock Market or achieve the minimum bid
price of $1.00 for a minimum of ten consecutive trading days.
About StockerYale Inc.
Headquartered in Salem, New Hampshire, StockerYale Inc. (NASDAQ:
STKR) -- http://www.stockeryale.com-- is an independent designer
and manufacturer of structured light lasers, LED modules, and
specialty optical fibers for industry leading OEMs. In addition,
the company manufactures fluorescent lighting products and phase
masks. The company serves markets including the machine vision,
industrial inspection, defense, telecommunication, sensors, and
medical markets. StockerYale has offices and subsidiaries in the
U.S., Canada, and Europe.
SYNTAX-BRILLIAN: Files More Proof Olevia Breached Contract
----------------------------------------------------------
Bill Rochelle of Bloomberg News reports that Syntax-Brillian Corp.
and its debtor-affiliates filed more than 30 pages of papers with
the U.S. Bankruptcy Court for the District of Delaware explaining
how there was no breach of contract with TCV Industries Co.
affiliate Olevia International Group, LLC, on the purchase of the
Debtor's assets.
Olevia International, the report recalls, accused the Debtors on
Sept. 10 of violating their sale contract by losing business from
Target Corp., the Debtors' main customer. The following day, the
Debtors filed a lawsuit asking the Court to compel Olevia
International to complete the purchase.
The Debtors say Target didn't give written notice it was no longer
doing business, according to the report. It only canceled
outstanding purchase orders, the report quotes the Debtors as
saying.
In addition, the Debtors say Olevia International refused to sign
an agreement with Target containing the terms under which it
would do business after the acquisition, thus explaining why
Target canceled purchase orders, according to the report.
Olevia has denied the Debtors' allegations in the lawsuit and
demanded that the Debtors return its $5 million deposit. Olevia
insisted that it fulfilled all of its pre-Closing obligations
under the Purchase Agreement.
The sale contract had been scheduled for completion on Sept. 15,
the report recalls. The contract calls for Olevia International
to assume $60 million in secured debt, the report says.
The Debtors are separately negotiating to sell the Vivitar camera
business with headquarters in the U.K.
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.
THORNBURG MORTGAGE: Clarifies Georgeson Compensation Issue
----------------------------------------------------
Thornburg Mortgage, Inc. sent a letter to the Securities and
Exchange Commission in response to comments relating to the
Company's Preliminary Proxy Statement on Schedule 14A.
In a letter to Thornburg Mortgage on July 18, 2008, the SEC asked
the company for a detailed analysis of why the exemption under
Section 3(a)(9) of the Securities Act of 1933 is available given
the compensation to be paid to Georgeson Inc. as information
agent, relating to an Exchange Offer and Consent Solicitation for
all outstanding shares of the Company's 8.00% Series C Cumulative
Redeemable Preferred Stock, Series D Adjusting Rate Cumulative
Redeemable Preferred Stock, 7.50% Series E Cumulative Convertible
Redeemable Preferred Stock and 10% Series F Cumulative Convertible
Redeemable Preferred Stock.
In response, Thornburg Mortgage noted that compensation
arrangement between the company and Georgeson is in no way related
to the amount of securities tendered in the exchange.
Thornburg Mortgage also noted that SEC has confirmed that third
parties may be compensated for providing certain assistance to an
issuer in an exchange offer pursuant to Section 3(a)(9) so long as
the third party is not engaged in soliciting the exchange plan or
offer.
Thornburg Mortgage clarifies that it nor Georgeson intends that
the information agent shall play any role other than related to
the limited tasks related to certain mechanical and
administrative matters of the exchange offer.
The Company says certain of its officers and employees will be
involved in the solicitation and recommendation of the Company's
3(a)(9) exchange. The employees that will be involved in the
exchange solicitation will only be compensated by their regular
salaries and shall not receive any bonuses or special commissions
for their activities related to the exchange solicitation. The
Company notes that none of the employees involved have been hired
for the purpose of the exchange solicitation.
About Thornburg Mortgage Inc.
Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA)
-- http://www.thornburgmortgage.com/-- is a
single-family
residential mortgage lender focused principally on prime and
super-prime borrowers seeking jumbo and super-jumbo adjustable-
rate mortgages. It originates, acquires, and retains investments
in adjustable and variable rate mortgage assets. Its ARM assets
comprise of purchased ARM assets and ARM loans, including
traditional ARM assets and hybrid ARM assets.
* * *
As reported in the Troubled Company Reporter on June 27, 2008,
Moody's Investors Service affirmed Ca and C senior debt and
preferred stock ratings, respectively of Thornburg Mortgage Inc.
Thornburg's Ca debt rating remains under review for possible
downgrade.
Moody's said that Thornburg's efforts to raise capital to avoid
default under its repo agreements have resulted in the
reconfiguration of its balance sheet with adverse impact on its
debt and preferred equity holders.
As reported in the Troubled Company Reporter on Aug. 11, 2008,
Standard & Poor's said that the completion of Thornburg Mortgage
Inc.'s tender offer for its preferred shares will have an impact
on the rating once complete. If Thornburg is successful in the
tender offer, S&P would view this as a positive sign.
TIMKEN COMPANY: Moody's Withdraws 'Ba1' POD and CF Ratings
----------------------------------------------------------
Moody's Investors Service upgraded its ratings for The Timken
Company, raising its senior unsecured ratings to Baa3 from Ba1.
The rating outlook is stable. The upgrade considered the
company's steady progress in reducing leverage, improving
profitability, and navigating a challenging transition that has
reduced its reliance on the North American automotive market,
although recognizes that weakness in this market continues to
impact Timken's performance.
Timken's portfolio shift has been accomplished by strategic
expansion into other industrial sectors and geographies, targeted
acquisitions, and restructuring, capacity management and cost
control with respect to automotive-based operations. In the same
rating action, Moody's withdrew Timken's Ba1 corporate family
rating and probability of default rating.
Timken's Baa3 rating reflects its market position as a leading
producer of tapered roller and needle bearings, its well-regarded
reputation and long operating history, and its role as a provider
of highly engineered products, systems and technical support
services to a diverse set of customers and industries that rely on
Timken to provide solutions to demanding friction management and
power transmission applications. Over the last three years, the
company has generated strong operating cash flow and has reduced
its underfunded pension plan, giving it increased financial
flexibility.
Timken's performance and its ratings also encompass its low
operating margins, the competitive nature of the bearing and steel
industries, potential for input cost pressure, the cyclicality of
many of the industries Timken serves, and Moody's expectation that
capital expenditures and acquisitions will be higher than normal
as the company continues to transform its business and operating
profile. As a result, in an economic downturn, sales and earnings
could come under pressure and free cash flow could be negative for
multiple quarters.
Upgrades:
Issuer: Timken Company (The)
-- Senior Unsecured Medium-Term Note Program, Upgraded to Baa3
from Ba1
-- Senior Unsecured Regular Bond/Debenture, Upgraded to Baa3
from Ba1
-- Senior Unsecured Shelf, Upgraded to (P)Baa3 from (P)Ba1
Outlook Actions:
Issuer: Timken Company (The)
-- Outlook, Changed To Stable From Positive
Withdrawals:
Issuer: Timken Company (The)
-- Probability of Default Rating, Withdrawn, previously rated
Ba1
-- Corporate Family Rating, Withdrawn, previously rated Ba1
-- Senior Unsecured Medium-Term Note Program, Withdrawn,
previously rated 46 - LGD3
Moody's last rating action on Timken was in August 2007, when a
positive outlook was assigned to the company and its Ba1 senior
unsecured ratings were affirmed.
The Timken Company, headquartered in Canton, Ohio, is a global
manufacturer of highly engineered bearings, power transmission
systems and high-quality alloy steels and a provider of related
products and services. The company is the world's largest
manufacturer of tapered roller bearings, the largest North
American-based bearings manufacturer, and a leading producer of
alloy steel bars and seamless mechanical steel tubing. Timken has
facilities in 27 countries on six continents. In 2007, Timken had
net sales of approximately $5.2 million.
[Erroneous story redacted Sept. 23, 2008]
UNI-MARTS: Court Approves $17.7MM Sale to Atlantis Petroleum
------------------------------------------------------------
Michael Bathon of Bloomberg News reports that the U.S. Bankruptcy
Court for the District of Delaware approved the request of Uni-
Marts, LLC, and its debtor-affiliates to be bought by Atlantis
Petroleum LLC for at least $17.7 million.
According to the report, the Court approved the sale saying it
will provide greater recovery for the Debtors than any other
alternative, according to court documents filed today in
Wilmington, Delaware.
The Debtors, according to the report, named Atlantis the lead, or
stalking-horse, bidder at an August auction. Atlantis won the bid
when no competing offers were submitted, and the auction was
canceled, court papers show according to the report.
Facing a lawsuit by their gas-station operators and a weakening
U.S. economy, the Debtors tried to find a buyer before
filing for bankruptcy protection on May 29, 2008. According to
the report, the Debtors have 283 stores with annual sales of
$550 million, down from 485 stores in 2004 when it was taken
private by Green Valley Acquisition Co., according to court
papers.
Atlantis, according to the report, agreed to buy the Debtors'
assets in Pennsylvania, New York and Ohio, according to court
documents. In addition to the $17.7 million, Atlantis will pay an
undisclosed amount for vehicles and unsold fuel plus 73 percent to
85 percent of the value of store inventory, according to the
report.
The report, citing court filings, said Uni-Marts agreed to pay
Exxon Mobil Corp. $4.9 million and the BP America Inc. unit, BP
Products North America, $4.7 million for canceling its contracts.
The sale must be completed by Sept. 30, the Debtors said according
to the report.
About Uni-Marts
Headquartered in State College, Pennsylvania, Uni-Marts LLC sells
consumer goods. The company and six of its affiliates filed for
Chapter 11 protection on May 29, 2008 (Bankr. D. Del. Lead Case
No.08-11037). Michael Gregory Wilson, Esq., at Hunton & Williams
LLP represents the Debtors in their restructuring efforts. The
Debtor selected Epiq Bankruptcy Solutions LLC as its claims,
notice and balloting agent. The U.S. Trustee for Region 3
appointed seven creditors to serve on an Official Committee of
Unsecured Creditors. The Committee selected Blank Rome LLP as its
counsel in these cases.
UST INC: Agrees to Altria Group's $11.7 Billion Acquisition Offer
------------------------------------------------------------------
UST Inc. disclosed in a Securities and Exchange Commission filing
that it entered into a definitive agreement with Altria Group,
which would acquire all outstanding shares of the company.
Under the terms of the agreement, shareholders of UST will receive
$69.50 in cash for each share of common stock held. The
transaction is valued at approximately $11.7 billion, which
includes the assumption of approximately $1.3 billion of debt.
"The combination of Altria and UST creates the premier tobacco
company in the United States with leading brands in cigarettes,
smokeless tobacco and machine-made large cigars," said Michael E.
Szymanczyk, Chairman and Chief Executive Officer of Altria. "We
are excited about this strategic and financially attractive
acquisition as it will enhance our ability to deliver superior
shareholder return that is expected to exceed our 12% goal. This
transaction is consistent with our growth strategy of making
disciplined investments in adjacent categories. UST provides
Altria with the leading premium brands, Copenhagen and Skoal, in
the highly profitable MST category. We will also acquire Ste.
Michelle Wine Estates, a premium wine business, as part of the
transaction."
Upon completion of the transaction, Altria's operating companies
will offer adult tobacco consumers a diverse range of superior
premium tobacco products with strong brands including Marlboro,
Copenhagen, Skoal and Black & Mild.
"This all cash transaction delivers compelling value to UST's
shareholders," said Murray S. Kessler, Chairman and Chief
Executive Officer of UST. "UST's growth strategy will clearly be
enhanced by Altria's resources and infrastructure."
Based on UST's three-month average stock price of $53.90, this
offer represents a premium of 28.9% to UST's shareholders.
The transaction is subject to UST shareholder approval and
customary regulatory approvals, which will be pursued promptly. A
copy of the agreement containing all the terms of the transaction
is filed today with the U.S. Securities and Exchange Commission.
The transaction does not change Altria's 2008 guidance for
adjusted full-year diluted earnings per share from continuing
operations, which is expected to be in the range of $1.63 to
$1.67. This range represents a 9% to 11% growth rate from an
adjusted base of $1.50 per share in 2007.
Financial Benefits
Altria expects the acquisition of UST to be accretive to adjusted
diluted earnings per share within twelve months of closing and to
generate an attractive double-digit economic return.
The integration is anticipated to generate around $250 million in
annual synergies by 2011, primarily driven by reduced selling,
general and administrative and corporate expenses. Altria
believes that these estimated synergies will enable the company to
deliver increased shareholder and consumer value.
The UST acquisition is expected to grow and diversify Altria's
operating income and net revenues. For the first half of 2008,
reported operating income for Altria and UST was $2.6 billion and
$451 million, respectively. If Altria had owned UST since the
beginning of 2008, Altria's first half of 2008 net revenues would
have increased 10.3% to $10.4 billion as shown in Table 1 below.
In conjunction with the acquisition agreement, Altria has modified
its share repurchase program. The Board of Directors has approved
a three-year (2008 to 2010) $4.0 billion program, replacing a
previously announced two-year $7.5 billion program. This modified
program facilitates financing the UST acquisition. Altria spent
approximately $1.2 billion repurchasing 53.5 million shares of its
stock in 2008, and the company expects to resume purchasing stock
against this modified program in 2009.
Financing
Altria has received new committed bridge financing totaling
$7.0 billion from Goldman Sachs & Co. and J.P. Morgan which,
together with its existing credit facilities and cash, is expected
to be more than sufficient to fund the transaction. Altria
intends to access the public-debt market to refinance a portion of
its credit facilities. To help Altria achieve the highest credit
ratings on such refinancings, Philip Morris USA Inc., a wholly
owned subsidiary of Altria, has issued guarantees for Altria's
debt.
Management
Under the terms of the agreement, UST will become a wholly owned
subsidiary of Altria. Following the completion of the
transaction, Murray S. Kessler will be named Vice Chair of Altria,
reporting directly to Michael E. Szymanczyk, and will oversee the
integration.
"I look forward to working closely with Mike and his management
team to integrate our outstanding brands and employees into the
Altria organization," said Mr. Kessler.
"We are pleased that Murray has agreed to stay on board during the
integration period to help complete the transition," said Mr.
Szymanczyk. "U.S. Smokeless Tobacco Company is the leading and
most profitable moist smokeless producer and marketer due to the
efforts of Murray, his management team and employees. They have a
deep understanding of the growing smokeless tobacco category. It
is my pleasure to welcome UST's talented employees to the Altria
family of companies."
Advisors
Goldman Sachs & Co., Centerview Partners and J. P. Morgan acted as
financial advisors to Altria. Hunton & Williams LLP acted as
corporate counsel, Arnold & Porter LLP acted as regulatory counsel
and Sutherland Asbill & Brennan LLP acted as tax counsel.
Citigroup acted as lead financial advisor and Skadden, Arps,
Slate, Meagher & Flom LLP acted as lead legal counsel to UST.
Perella Weinberg Partners LP acted as lead financial advisor and
Sullivan & Cromwell LLP acted as lead legal counsel to UST's Board
of Directors.
About UST Inc.
Headquartered in Stamford, Connecticut, UST Inc. (NYSE: UST)
-- http://www.ustinc.com/-- is a holding company for its
principal subsidiaries: U.S. Smokeless Tobacco Company and Ste.
Michelle Wine Estates. U.S. Smokeless Tobacco Company is the
leading producer and marketer of moist smokeless tobacco products
including Copenhagen, Skoal, Red Seal and Husky. Ste. Michelle
Wine Estates produces and markets premium wines sold nationally
under 20 different labels including Chateau Ste. Michelle,
Columbia Crest, Stag's Leap Wine Cellars and Erath, as well as
exclusively distributes and markets Antinori products in the
United States.
At June 30, 2008, the company's consolidated balance sheet showed
$1.42 billion in total assets, $1.81 billion in total liabilities,
and $30.0 million in minority interest and put arrangement,
resulting in a roughly $423.6 million stockholders' deficit.
Net earnings declined 0.2 percent to $139.7 million versus
$140.0 million in the second quarter ended June 30, 2007.
For the second quarter ended June 30, 2008, net sales increased 3
percent to $506.2 million and operating income increased 4.4
percent to $237.7 million. During the quarter, the company
repurchased 1.3 million shares at a cost of $66.8 million.
UTENDAHL INSTITUTIONAL: Moody's Slashes Rating from Aaa to B
------------------------------------------------------------
Moody's Investors Service downgraded the rating of Utendahl
Institutional Money Market Fund from Aaa to B. The rating remains
on review for possible further downgrade.
The downgrade action follows Utendahl's decision to suspend
redemptions in the Fund. Utendahl and the Fund's Board of
Trustees at the same time made a decision to close the Fund and
distribute all fund assets to shareholders. The decision was made
in the face of significant redemptions and serious constraints on
liquidity in money market instruments. Moody's considers the
decision to discontinue cash redemptions a material deviation from
the fund's stated objective to protect principal and provide daily
liquidity.
Moody's review will focus on the ultimate plan adopted by the
Fund, the strategies that it uses to execute its plan, the
performance of the portfolio during this period, and the impact,
if any, that the U.S. Treasury Department's announcement regarding
the establishment of a temporary guaranty program for U.S. money
market funds might have on the portfolio and its liquidation.
Utendahl Institutional Money Market Fund is a constant net asset
value money market fund managed by Utendahl Capital Management,
L.P. The Fund, whose mark-to-market net asset value calculated on
September 17, 2008 was $0.9976 per share, does not hold any
impaired assets as of the September 17, 2008 portfolio report, as
provided by the Company.
As of the September 17, 2008 portfolio report, the top 2
concentrations in the Fund are Aa2 rated Societe Generale and Aaa
rated General Electric which represent 10.6 % of Fund's $646.5
million in total net assets. The potential loss to investors as a
result of Utendahl's action is uncertain at this time. According
to Utendahl, the Fund and its Board of Trustees are working to
develop a detailed plan of distribution, with the goal of
providing shareholders with the opportunity to receive
distributions as expeditiously as possible.
Utendahl Capital Management, L.P is a minority and women owned and
operated registered investment adviser founded in 1992. The firm
specializes in fixed income asset management for institutional
investors.
V&B ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: V & B Enterprise of Oklahoma LLC
P.O. Box 36236
Oklahoma City, OK 73162
Bankruptcy Case No.: 08-14135
Chapter 11 Petition Date: September 19, 2008
Court: Western District of Oklahoma (Oklahoma City)
Debtor's Counsel: Cynthia Rowe D'Antonio, Esq.
cynthiad@smithdantoniolaw.com
Smith & D'Antonio
500 N. Walker Ave., Suite 100
Oklahoma City, OK 73102
Tel: (405) 488-3800
Fax: (405) 488-3802
Estimated Assets: $100,000 to $500,000
Estimated Debts: $1,000,000 to $10,000,000
A list of the Debtor's largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/okwb08-14135.pdf
VIREXX MEDICAL: TSX to Delist Common Shares on October 17
---------------------------------------------------------
The Toronto Stock Exchange said that the common shares of ViRexx
Medical Corp. are suspended from trading effective immediately for
failure to meet the continued listing requirements of TSX. The
company's common share will be delisted at the close of the market
on Oct. 17, 2008.
Based in Edmonton Alberta, ViRexx Medical Corp. (TSX: VIR; AMEX:
REX) -- http://www.virexx.com/-- develops vaccines for treatment
of patients with chronic hepatitis C and C virus infections.
VIRGIN MOBILE: SK Telecom Discloses 63.1% Equity Stake
------------------------------------------------------
SK Telecom Co., Ltd. disclosed in a Securities and Exchange
Commission filing that it may be deemed to beneficially own
52,040,314 shares of Virgin Mobile USA, Inc.'s common stock,
representing 63.1% of the shares issued and outstanding.
The shares include:
(i) 2,941,176 shares of Class A common stock issuable upon
conversion of the Series A Preferred Stock of issuer
beneficially owned by SK Telecom, subject to stockholder
approval of the issuer;
(ii) 10,999,373 shares of Class A common stock issuable upon
conversion of the Common Units of Virgin Mobile USA,
L.P. (an indirect, majority-owned subsidiary of the
issuer) beneficially owned by SK Telecom; and
(iii) 193,368 shares of Class A common stock beneficially
owned by Helio, Inc., currently controlled by SK Telecom
USA Holdings, Inc.
This also includes 37,906,397 shares of Class A common stock of
issuer beneficially owned by Sprint Ventures, Inc. and Corvina
Holdings Limited (together with its affiliates).
About Virgin Mobile USA Inc.
Headquartered in Warren, New Jersey, Virgin Mobile USA Inc. (NYSE:
VM) -- http://www.virginmobileusa.com/-- is a provider of
wireless, pay-as-you-go communications services without annual
contracts. Voice pricing plans range from monthly options with
unlimited nights and weekends to by-the-minute offers, allowing
consumers to adjust how and what they pay according to their
needs. Virgin Mobiles full slate of handsets, including the Wild
Card, Super Slice and Cyclops, are available at top retailers in
more than 35,000 locations nationwide and online, with Top-Up
cards available at more than 130,000 locations.
As reported in The Troubled Company Reporter on Aug. 18, 2008, at
June 30, 2008, the company's balance sheet showed total assets of
$255.1 million and total liabilities of $656.1 million, resulting
in a $400.9 million stockholders' deficit.
VTA OKLAHOMA: Seeks Authority to Use Lender's Cash Collateral
-------------------------------------------------------------
VTA Oklahoma City, LLC doing business as Shepherd Mall, has
requested the U.S. Bankruptcy Court for the Western District of
Oklahoma for authority to use up to $190,000 in cash collateral to
continue paying operating and other expenses through Dec. 31,
Marie Price of The Journal Record reported Friday. The report
adds that the court filing says that the Debtor has no financing
source other than cash collateral.
The mall's owners have also requested for an extension of the 30-
day period in which utility companies are prohibited from
terminating or refusing service.
Ms. Price says the Debtor sought Chapter 11 protection because its
major lender, LB-UBS Commercial Mortgage Trust, would not extend
the maturity date of a $34.9 million note on the Northwest 23rd
Street property.
The filing also cited uncertainty over getting a new tenant to
lease the former AOL space.
"Due to the dramatic and historically unprecedented liquidity
crisis in the United States' credit markets and the uncertainty
surrounding a major tenant lease, the debtor has been unable to
refinance the note," the filing stated. "As a result of lender's
refusal to extend the maturity date, the debtor filed this case to
preserve value of the property for the benefit of creditors and
equity holders."
In December 2006, America Online closed its call center in the
mall. The 80,000-square-foot space is still leased to AOL, who
has the option to terminate the arrangement in November.
"AOL has vacated its space and it is anticipated AOL will exercise
the right to terminate its lease," the filing stated. "Debtor
believes this space can readily be re-let, but cannot begin
marketing of the AOL space until the lease is formally
terminated."
The Debtor told the Court that the property was appraised in June
2008 at more than $60 million. VTA purchased the mall in June
2005 for $48.5 million.
Some 18 state agencies occupy offices in about 173,000 square feet
of the mall, housing about 800 employees, Ms. Price disclosed.
About VTA Oklahoma City
Based in Oklahoma city, VTA Oklahoma City, LLC dba Shepherd Mall,
filed for Chapter 11 protection on Sept. 10, 2008 (Bankr. W.D.
Okla. 08-13982). Joseph A. Friedman, Esq., at Coleman & Logan PC,
represents the Debtor as counsel.
When the Debtor filed for protection from its creditors, it listed
assets of between $50 million and $100 million, and debts of
between $10 million and $50 million.
WASHINGTON MUTUAL: Citigroup, Canadian Bank Might Bid
-----------------------------------------------------
Citigroup Inc. is considering making a bid for Washington Mutual
Inc., David Enrich, Robin Sidel, and Dan Fitzpatrick at the Wall
Street Journal report, citing people familiar with the situation.
According to WSJ, sources said that Citigroup and several other
parties that include Banco Santander SA and Wells Fargo & Co. are
reviewing WaMu's books, which are packed with shaky mortgages.
People close to J.P. Morgan Chase & Co. said that the company is
biding its time on a potential bid, WSJ states.
Kirsten Grind at Puget Sound Business Journal relates that
Toronto-Dominion Bank of Canada was reportedly interested in
bidding for Citigroup.
Ari Levy and Zach Mider at Bloomberg News report that while
bidders are primarily interested in WaMu's 2,300 branches and $143
billion in retail deposits, they must also contend with up to $19
billion in mortgage losses during the next two and a half years.
The bidders, Portland Business Journal states, want a government
assisted takeover of WaMu.
According to Puget Sound, a source familiar with WaMu said the
$700 billion federal bailout plan might help pave the way for a
sale. The source said that the plan might put potential acquirers
in a better position to buy the bank, the report says.
Bloomberg relates that the bailout plan might not erase enough of
its soured mortgages to lure bidders. "There could be an in-limbo
case, where potential buyers are unwilling to take on WaMu's
troubled mortgage book until issues are ironed out. But the
company needs to raise incremental capital in the meantime,"
Bloomberg quoted CreditSights Inc. analyst David Hendler as
saying.
About Citigroup Inc.
Headquartered on New York City, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com/citigroup/-- a leading global financial
services company, has some 200 million customer accounts and does
business in more than 100 countries, providing consumers,
corporations, governments and institutions with a broad range of
financial products and services, including consumer banking and
credit, corporate and investment banking, securities brokerage,
and wealth management. The company's major brand names include
Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and
Nikko.
The company has reported three consecutive quarters of net losses
beginning the fourth quarter of 2007. Aggregate net losses for
the last three quarters totaled $17.4 billion.
Citigroup reported a net loss for the 2008 second quarter of
$2.5 billion. Solid results in the core franchise were offset by
write-downs and credit costs. Results include $7.2 billion in
pre-tax write-downs in Securities and Banking. Additionally,
credit costs increased $4.5 billion, mainly driven by Consumer
Banking in North America and Global Cards.
About Washington Mutual Inc.
Washington Mutual Inc. (NYSE: WM) -- http://www.wamu.com/-- is a
consumer and small business banking company with operations in
United States markets. The Company is a savings and loan holding
company. It owns two banking subsidiaries, Washington Mutual Bank
and Washington Mutual Bank fsb, as well as numerous non-bank
subsidiaries. The company operates in four segments: the Retail
Banking Group, which operates a retail bank network of 2,257
stores in California, Florida, Texas, New York, Washington,
Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada,
Utah, Idaho and Connecticut; the Card Services Group, which
operates a nationwide credit card lending business; the Commercial
Group, which conducts a multi-family and commercial real estate
lending business in selected markets, and the Home Loans Group,
which engages in nationwide single-family residential real estate
lending, servicing and capital markets activities.
As reported in the Troubled Company Reporter on Sept. 16, 2008,
Standard & Poor's Ratings Services lowered its counterparty credit
rating on WaMu to 'BB-/B' from 'BBB-/A-3'.
As reported by the TCR on Sept. 22, Fitch Ratings placed the
ratings of Washington Mutual, Inc. ('BBB-/F3'), Washington Mutual
Bank ('BBB/F3') and related entities on Rating Watch Evolving.
This action reflects recent market developments, specifically, the
waiver by WaMu's largest investors of the price reset rights under
their investment agreement and warrants associated with their June
2008 capital investments.
WELLMAN INC: Amends DIP Credit Agreement with Deutsche Bank
-----------------------------------------------------------
Wellman Inc. and its affiliates, Deutsche Bank Securities Inc.,
and Deutsche Bank Trust Company Americas amended the DIP Credit
Agreement, requiring the Debtors to follow this timetable:
September 30 Enter into a backstop agreement that would
provide $70 million of additional funding
to the Debtors
October 7 Obtain an exit financing commitment
October 20 Obtain approval from the U.S. Bankruptcy Court
for the Southern District of New York of the
disclosure statement
October 31 Provide documentation for the exit
financing, backstop commitment and other
financial accommodations.
December 5 Obtain a court order confirming the Plan
December 10 Exit bankruptcy
The parties also agreed to (i) reduce the maximum amount
available under the DIP Credit Agreement to $120 million on
November 1; (ii) eliminate any increase in the required minimum
available liquidity so that it remains at $20 million; and (iii)
limit to $14 million the amount of cash the Debtors can spend
before December 1 relating to the closure of their fibers and
engineering resins business.
The amended DIP Credit Agreement also requires the Debtors to
stop purchasing raw materials for their fibers and engineering
resins businesses by October 15, and to achieve these EBITDA
targets, considering only the operations of their polyethylene
terephthalate (PET) resins business:
Minimum Monthly
Months PET Resin EBITDA
------ ----------------
September 2008 $0
October 2008 $2,000,000
November 2008 $2,500,000
December 2008 $3,000,000
January 2009 $1,500,000
The amended DIP Credit Agreement also limits the amount the
Debtors can include in their borrowing base for their fibers and
engineering resins business to:
Max. Non-PET Resin Business
Borrowing Base Component
---------------------------
Sept. 30 to but excluding Oct. 31 $68,000,000
Oct. 31 to but excluding Nov. 30 $41,200,000
Nov. 30 to but excluding Dec. 31 $17,600,000
On or after Dec. 31 $0
About Wellman Inc.
Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]:
WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and
markets packaging and engineering resins used in food and
beverage packaging, apparel, home furnishings and
automobiles. They manufacture resins and polyester staple fiber a
three major production facilities.
The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No.
08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP,
in New York City, represents the Debtors. Lazard Freres & Co.,
LLC, acts as the Debtors' financial advisors and investment
bankers. Conway, Del Genio, Gries & Co., LLC, was also retained
as the Debtors' chief restructuring advisor.
The United States Trustee for Region 2 has appointed seven members
to the Official Committee of Unsecured Creditors. Mark R.
Somerstein, Esq., at Ropes & Gray LLP, serves as the Committee's
bankruptcy counsel. FTI Consulting, Inc., acts as the panel's
financial advisors.
Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.
On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $512,400,000 in total assets and $730,500,000 in
liabilities as of June 30, 2008.
Wellman filed a restructuring plan before the Bankruptcy Court on
June 25, 2008. (Wellman Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
WESTAFF INC: Has Until March 9 to Comply with Nasdaq's Price Rule
-----------------------------------------------------------------
Westaff Inc. received a letter from The Nasdaq Stock Market
indicating that, for the last 30 consecutive business days, the
bid price of Westaff's common stock had closed below the minimum
$1.00 per share requirement for continued inclusion under Nasdaq
Marketplace Rule 4450(a)(5). As Sept. 16, 2008, Westaff's common
stock has not been delisted and continues to be listed on the
Nasdaq Global Market.
In accordance with Nasdaq Marketplace Rule 4450(e)(2), Westaff has
180 calendar days from the date of the Nasdaq letter, or until
March 9, 2009, for the bid price of its common stock to close at
$1.00 per share or more for a minimum of 10 consecutive business
days to regain compliance.
In the event that Westaff does not regain compliance by March 9,
2009, Nasdaq will provide notice to Westaff that its common stock
will be delisted. At that time, Westaff would be permitted to
appeal Nasdaq's determination to delist Westaff's common stock to
a Nasdaq Listing Qualifications Panel. Alternatively, Nasdaq
Marketplace Rule 4310(c) may permit, upon approval by Nasdaq,
Westaff to transfer its common stock to the Nasdaq Capital Market
if Westaff's common stock satisfies all criteria, other than
compliance with the minimum bid price rule, for initial inclusion
on such market. In the event of such a transfer, the Nasdaq
Marketplace Rules provide that Westaff would be afforded an
additional 180 calendar days to comply with the minimum closing
bid price rule while listed on the Nasdaq Capital Market.
About Westaff Inc.
Based in Walnut Creek, California, Westaff Inc. (Nasdaq: WSTF)
-- http://www.westaff.com/-- provides staffing services and
employment opportunities for businesses in global markets.
Westaff annually employs in excess of 125,000 people and services
more than 20,000 client accounts from more than 177 offices
located throughout the United States, Australia and New Zealand.
Forbearance Agreement
As reported in the Troubled Company Reporter on Sept 4, 2008,
Westaff Inc. entered into a Forbearance Agreement with U.S. Bank
National Association and Wells Fargo Bank, National Association,
effective Aug. 27, 2008. The agreement relates to bank covenant
defaults which occurred on April 19, 2008, under the Financing
Agreement dated Feb. 14, 2008. Under the terms of this
Forbearance Agreement, the banks have agreed to forebear from
exercising any remedies that they may have against the company as
a result of such events of default through Sept. 30, 2008.
WHITEHALL JEWELER: Interim DIP Financing Extended Until Sept. 24
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
convene a hearing on Wednesday, September 24, 2008, to consider
further extension of the Debtor-In-Possesion Interim Financing for
Whitehall Jewelers Holdings, Inc., and Whitehall Jewelers, Inc.
On June 23, 2008, the Debtors sought permission from the Court to
borrow up to $80,000,000 in post-petition financing and grant the
DIP Lenders security interests and superpriority administrative
expense status pursuant to Section 364 of the Bankruptcy Code.
The Debtors also sought permission to use cash collateral securing
their obligations to their prepetition secured lenders pursuant to
Section 363, and provide adequate protection for any diminution in
value of the collateral.
On June 27, 2008, the Court permitted the Debtors to borrow up to
$22,000,000 from the DIP facility, and use cash collateral.
Details of the Court order is available at:
http://bankrupt.com/misc/whitehall_interimOrder
On Sept. 2, 2008, the Court issued a Fourth Agreed Order initially
extending the DIP Interim Financing through Sept. 23, 2008, and
scheduling a final hearing on the extension on Sept. 12, 2008.
The Debtors; Bank of America, N.A., as the DIP Agent; LaSalle
Bank, N.A., as agent, as well as the lenders under their February
2007 revolving credit facility; PWJ Lending II LLC, as agent for
the Debtors' prepetition Term Loan, as well as the Term Lenders;
and counsel for the Official Committee of Unsecured Creditors then
agreed to ask the Court to extend the Fourth Agreed Order for the
DIP Interim Financing to Sept. 24, 2008, and to schedule the Final
Hearing at 10:00 a.m. on the same date.
The Debtors need to obtain funds from the DIP Facility to continue
operations and to administer and preserve the value of their
estates.
About Whitehall Jewelers
Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings
Inc. -- http://www.whitehalljewellers.com/-- owns and operates
375 stores jewelry stores in 39 states. The company operates
stores in regional and regional shopping malls under the brand
names Whitehall Jewellers, Marks Bros. Jewellers and Lundstrom
Jewellers. The Debtors' retail stores operate under the names
Whitehall (271 locations), Lundstrom (24 locations), Friedman's
(56 locations, and Crescent (22 locations). As of June 23, 2008,
the Debtors have about 2,852 workers.
The company and its affiliates, Whitehall Jewelers Inc., filed for
Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case
No. 08-11261). Scott Rutsky, Esq., Peter Antoszyk, Esq., Adam T.
Berkowitz, Esq., and Jesse I. Redlener, Esq., at Proskauer Rose
LLP in New York; and Laura Davis Jones, Esq., and James O'Neill,
Esq., at Pachulski, Stang Ziehl & Jones LLP in Wilmington,
Delaware, represent the Debtors in their restructuring efforts.
Epiq Bankruptcy Solutions LLC is their claims, noticing and
balloting agent. The Official Committee of Unsecured Creditors is
represented by Lawrence L. Ginsburg, Esq., Alan E. Gamza, Esq.,
Christopher J. Caruso, Esq., and Alan Kolod, Esq., at Moses &
Singer LLP in New York; and Charlene D. Davis, Esq., Mary E.
Augustine, Esq., and Justin K. Edelson, Esq., at Bayard P.A. in
Wilmington, Delaware.
When the Debtors filed for protection against their creditors,
they listed total assets of $207,100,000 and total debts of
$185,400,000.
WHITEHALL JEWELERS: Court Okays Global Pact on Consignment Goods
----------------------------------------------------------------
The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District
of Delaware approved Whitehall Jewelers Holdings, Inc., and
Whitehall Jewelers, Inc.'s Global Settlement Agreement and Release
and Related Settlements Regarding Treatment of Consignment Goods.
The Debtors had filed a motion to sell all assets pursuant to
Section 363 of the Bankruptcy Code. The proposed sale process was
complicated by uncertainty regarding competing interests in more
than $60 million of consignment goods inventory on hand as of the
filing of the bankruptcy petition. Because of this, the Debtors
had requested authorization to include the Memo Goods in their
Section 363 sale. On July 28, 2008, the Court denied the request.
That order didn't resolve the substantive rights and competing
claims and interests asserted in the Memo Goods by the Consignment
Vendors, Bank America, N.A., LaSalle Bank National Association,
PWJ Lending II LLC, and the Debtors. As a result, more than 120
adversary proceedings would need to be initiated and litigated to
fully determine the status and priority of the Parties' competing
interests in the Memo Goods. Such litigation would be time
consuming and expensive -- requiring, among other things,
discovery into the discrete facts and cirmcumstances surrounding
the claims of more than 120 Consignment Vendors.
The Official Committee of Unsecured Creditors and certain
Consignment Vendors alleged various defenses to the $40 million of
secured claims of PWJ, thejunior secured lender in these cases,
and other claims and causes of action against PWJ and certain of
its affiliates, including claims for equitable subordination of
PWJ's claims. The Committee filed an objection to the entry of a
final debtor-in-possession financing order. The objection created
uncertainty over the uninterrupted funding of the Debtors' cases,
as PWJ has informed the Debtors that it would not otherwise
consent to the proposed DIP financing or the use of any of PWJ's
cash collateral. PWJ denied and disputed all other assertions
made by the Committee and other parties.
The Debtors told the Court that unless a global settlement was
achieved among all major constituencies, these estates would
become mired in protracted, time-consuming and expensive
litigation, which could jeopardize the Debtors' efforts to sell
their assets in an orderly fashion and maximize recoveries for the
benefit of all creditors.
The Debtors reached the Global Settlement Agreement with:
-- the Committee;
-- LaSalle Bank as agent for the pre-petition revolving
lender under the Pre-Petition Revolving Credit
Facility;
-- PWJ Lending as Administrative Agent, Collateral Agent
and a pre-petition lender under the Pre-Petition Term
Loan Agreement; and
-- Bank America as agent for the post-petition lenders
under the DIP Facility.
On Aug. 18, 2008, the Debtors sought Court approval of the Global
Settlement Agreement and Release, and Related Settlements
Regarding Treatment of Consignment Goods.
The Global Settlement Agreement and the Vendor Agreements also
constitute an important first step toward the formulation and
ultimate approval of a liquidating plan. Under the Global
Settlement Agreement and the Vendor Agreements, PWJ has agreed to
subordinate a portion of its secured claim to the fuding of
administrative expenses of these estates. PWJ and the
Paricipating Consignment Vendors have agreed to subordinate their
rights to distributions to certain specified creditors in
the Global Settlement Agreement and the Vendor Agreements.
The Global Settlement Agreement Order also authorized the Debtors
to enter into and implement additional Vendor Agreements on the
same terms and conditions as the original Vendor Agreements
without further order of the Court.
The Global Settlement Agreement is available at:
http://bankrupt.com/misc/Whitehall_Global_Settlement_Agreement
About Whitehall Jewelers
Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings
Inc. -- http://www.whitehalljewellers.com/-- owns and operates
375 stores jewelry stores in 39 states. The company operates
stores in regional and regional shopping malls under the brand
names Whitehall Jewellers, Marks Bros. Jewellers and Lundstrom
Jewellers. The Debtors' retail stores operate under the names
Whitehall (271 locations), Lundstrom (24 locations), Friedman's
(56 locations, and Crescent (22 locations). As of June 23, 2008,
the Debtors have about 2,852 workers.
The company and its affiliates, Whitehall Jewelers Inc., filed for
Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case
No. 08-11261). Scott Rutsky, Esq., Peter Antoszyk, Esq., Adam T.
Berkowitz, Esq., and Jesse I. Redlener, Esq., at Proskauer Rose
LLP in New York; and Laura Davis Jones, Esq., and James O'Neill,
Esq., at Pachulski, Stang Ziehl & Jones LLP in Wilmington,
Delaware, represent the Debtors in their restructuring efforts.
Epiq Bankruptcy Solutions LLC is their claims, noticing and
balloting agent. The Official Committee of Unsecured Creditors is
represented by Lawrence L. Ginsburg, Esq., Alan E. Gamza, Esq.,
Christopher J. Caruso, Esq., and Alan Kolod, Esq., at Moses &
Singer LLP in New York; and Charlene D. Davis, Esq., Mary E.
Augustine, Esq., and Justin K. Edelson, Esq., at Bayard P.A. in
Wilmington, Delaware.
When the Debtors filed for protection against their creditors,
they listed total assets of $207,100,000 and total debts of
$185,400,000.
WHITEHALL JEWELERS: Leases in Illinois for Sale, DJM Reveals
------------------------------------------------------------
Leases for Whitehall Jewelers Holdings Inc. in Chicago, Aurora,
Calumet City, Evergreen Park, Lombard, Matteson and West Dundee
are on the market, Crain's Chicago Business reports. They range
from 700 to 2,155 square feet and have expiration dates ranging
from Dec. 31 of this year to Jan. 31, 2016, according to DJM
Realty, which has been hired to handle the bankruptcy sale of 355
Whitehall leases nationwide, the report said.
As reported by the Troubled Company Reporter on Sept. 17, 2008,
Whitehall Jewelers selected DJM Realty, to exclusively manage the
national disposition of all remaining retail store leases in the
United States.
Included in the disposition project are leases of former Friedman
Jewelers and Crescent Jewelers which Whitehall acquired earlier
this year.
The engagement of DJM Realty, which is subject to bankruptcy court
approval, anticipates an auction to be conducted on these
properties in late October. For more information regarding the
disposition assignment please contact Michael Jerbich at DJM
Realty at (312) 928-1900 or mjerbich@djmrealty.com. Property
details are available at www.djmrealty.com.
About Whitehall Jewelers
Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings
Inc. -- http://www.whitehalljewellers.com/-- owns and operates
375 stores jewelry stores in 39 states. The company operates
stores in regional and regional shopping malls under the brand
names Whitehall Jewellers, Marks Bros. Jewellers and Lundstrom
Jewellers. The Debtors' retail stores operate under the names
Whitehall (271 locations), Lundstrom (24 locations), Friedman's
(56 locations, and Crescent (22 locations). As of June 23, 2008,
the Debtors have about 2,852 workers.
The company and its affiliates, Whitehall Jewelers Inc., filed for
Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case
No. 08-11261). James E. O'Neill, Esq., Kathleen P. Makowski,
Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl &
Jones, LLP, represent the Debtors in their restructuring efforts.
Epiq Bankruptcy Solutions LLC is their claims, notice and
balloting agent.
When the Debtors' filed for protection against their creditors,
they listed total assets of $207,100,000 and total debts of
$185,400,000.
WOODSIDE GROUP: List of 20 Largest Unsecured Creditors
------------------------------------------------------
Woodside Group LLC and its debtor-affiliates' 20 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
JP Morgan Chase Bank, NA Bank Debt $47,589,186
Attn: Dept. AZ1-1328
201 North Central Avenue
14th Floor
Phoenix, AZ 55004
Snell & Wilmer LLP
David Sprentall, Esq. &
Donald Gaffney, Esq.
One Arizona Center
400 East Van Buren 10th Fl
Phoenix, AZ 85004-2202
Tel: 602-382-6000
Fax: 602-382-6070
Bank of America Bank Debt $47,589,186
Real Estate Managed
Assets
201 E. Washington Street
Phoenix, AZ 85004
Alan H. Martin, Esq.
Sheppard Mullin Richter &
Hampton, LLC
650 Town Center Drive
4th Floor
Costa Mesa, CA 92626-1993
Tel: 714-513-5100
Fax: 714-513-5130
Alliance Capital Management Noteholder Debt $40,000,000
Corp.
1345 Avenue of the
Americas 39th Floor
New York, NY 10105
Bingham McCutchen LLP
Michael J. Reilly, Esq. &
Mark W. Deveno, Esq.
399 Park Avenue
York, NY 10022-4689
Tel: 212-705-7000
Fax: 212-752-5378
Metropolitan Life Insurance Noteholder Debt $40,000,000
Company Investments
10 Park Avenue
PO Box 1902
Morristown, NJ 07962
Bingham McCutchen LLP
Michael J. Reilly, Esq. &
Mark W. Deveno, Esq.
399 Park Avenue
New York, NY 10022-4689
Tel: 212-705-7000
Fax: 212-752-5378
John Hancock Life Insurance Noteholder Debt $39,250,000
Co.
Attn: Isaac
Epps
197 Clarendon Street C-2
Boston, MA 02117
Bingham McCutchen LLP
Michael J. Reilly, Esq. &
Mark W. Deveno, Esq.
399 Park Avenue
New York, NY 10022-4689
Tel: 212-705-7000
Fax: 212-752-5378
The Guardian Life Insurance Noteholder Debt $38,000,000
Company of America
7 Hanover Square
New York, NY 10004-2616
Bingham McCutchen LLP
Michael J. Reilly, Esq. &
Mark W. Deveno, Esq.
399 Park Avenue
New York, NY 10022-4689
Tel: 212-705-7000
Fax: 212-752-5378
Wachovia Bank NA Bank Debt $35,691,889
Wachovia Capital Markets,
LLC
Attn: Kathy Harkness
301 South College Street,
NC0537
Charlotte, NC 28288
Snell & Wilmer LLP
David Sprentall, Esq. &
Donald Gaffney, Esq.
One Arizona Center
400 East Van Buren 10th Fl
Phoenix, AZ 85004-2202
Tel: 602-382-6000
Fax: 602-382-6070
ING Investment Management Noteholder Debt
$30,000,000.00
LLC
5780 Powers Ferry Rd.
NW #300
Atlanta, GA 30327-4349
Bingham McCutchen LLP
Michael J. Reilly, Esq. &
Mark W. Deveno, Esq.
399 Park Avenue
New York, NY 10022-4689
Tel: 212-705-7000
Fax: 212-752-5378
Guaranty Bank Bank Debt $28,553,511
Corporate Lending
Headquarters
8333 Douglas Avenue
Dallas, TX 75225
Snell & Wilmer LLP
David Sprentall, Esq. &
Donald Gaffney, Esq.
One Arizona Center
400 East Van Buren 10th Fl
Phoenix, AZ 85004-2202
Tel: 602-382-6000
Fax: 602-382-6070
Washington Mutual Bank Bank Debt $28,553.511
Corporate Headquarters
1301 Second Avenue
Seattle, WA 98101
Snell & Wilmer LLP
David Sprentall, Esq. &
Donald Gaffney, Esq.
One Arizona Center
400 East Van Buren 10th Fl
Phoenix, AZ 85004-2202
Tel: 602-382-6000
Fax: 602-382-6070
US Bank, NA Bank Debt $23,794,593
US Bancorp Center
800 Nicollet Mall
Minneapolis, MN 55402
Snell & Wilmer LLP
David Sprentall, Esq. &
Donald Gaffney, Esq.
One Arizona Center
400 East Van Buren 10th Fl
Phoenix, AZ 85004-2202
Tel: 602-382-6000
Fax: 602-382-6070
Hare & Co. Noteholder Debt $20,571,429
c/o The Bank of NY
PO Box 11203
New York, NY 10286
Bingham McCutchen LLP
Michael J. Reilly, Esq. &
Mark W. Deveno, Esq.
399 Park Avenue
New York, NY 10022-4689
Tel: 212-705-7000
Fax: 212-752-5378
Keybank NA Bank Debt $19,035,674
Corporate Headquarters
127 Public Square
Cleveland, OH 44144
Marc S. Cohen, Esq.
Kaye Scholer LLP
19999 Avenue of the
Stars, Ste 1700
Los Angeles, CA 90067
Tel: 310-788-1000
Fax: 310-788-1200
New York Life Insurance Co. Noteholder Debt $18,500,000
c/o New York Life
Investment Mgmt.
51 Madison Avenue
New York, NY 10010
Bingham McCutchen LLP
Michael J. Reilly, Esq. &
Mark W. Deveno, Esq.
399 Park Avenue
New York, NY 10022-4689
Tel: 212-705-7000
Fax: 212-752-5378
Bank of the West Bank Debt $16,656,215
Real Estate Managed Asset
Department
3000 Oak Road, Suite 400
Walnut Creek, CA 94597
Snell & Wilmer LLP
David Sprentall, Esq. &
Donald Gaffney, Esq.
One Arizona Center
400 East Van Buren 10th Fl
Phoenix, AZ 85004-2202
Tel: 602-382-6000
Fax: 602-382-6070
Regions Bank (succesor by Bank Debt $16,656,215
merger to AmSouth Bank)
Special Assets Department
Mail Stop BH10701B
Attn: Carl M. Ferris
1901 6th Avenue North
Brimingham, AL 35203
Snell & Wilmer LLP
David Sprentall, Esq. &
Donald Gaffney, Esq.
One Arizona Center
400 East Van Buren 10th Fl
Phoenix, AZ 85004-2202
Tel: 602-382-6000
Fax: 602-382-6070
Metroplitan Life Insurance Noteholder Debt $12,000,000
Company of Ct.
10 Park Avenue
PO Box 1902
Morristown, NJ 07962
Bingham McCutchen LLP
Michael J. Reilly, Esq. &
Mark W. Deveno, Esq.
399 Park Avenue
New York, NY 10022-4689
Tel: 212-705-7000
Fax: 212-752-5378
Union Bank of California, Bank Debt $11,897,296
N.A.
Special Assets Department
Attn: Joel Steiner
445 South Figueroa Street, 4th
Floor
Los Angeles, CA 90071
Snell & Wilmer LLP
David Sprentall, Esq. &
Donald Gaffney, Esq.
One Arizona Center
400 East Van Buren 10th Fl
Phoenix, AZ 85004-2202
Tel: 602-382-6000
Fax: 602-382-6070
Wells Fargo Bank NA Bank Debt $11,897,296
Attn: Loan Adjustment Group
MAC U1228-062
299 South Main Street, 6th
Floor
Salt Lake City, UT 84111
Snell & Wilmer LLP
David Sprentall, Esq. &
Donald Gaffney, Esq.
One Arizona Center
400 East Van Buren 10th Fl
Phoenix, AZ 85004-2202
Tel: 602-382-6000
Fax: 602-382-6070
CUNA Mutual Life Insurance Noteholder Debt
$11,250,000.00
Society
Attn: Managing Director -
Investments
5910 Mineral Point Road
Madison, WI 53705
Bingham McCutchen LLP
Michael J. Reilly, Esq. &
Mark W. Deveno, Esq.
399 Park Avenue
New York, NY 10022-4689
Tel: 212-705-7000
Fax: 212-752-5378
Woodside Group LLC and its debtor-affiliates --
http://www.woodside-homes.com/-- are homebuilders. The Debtor
group, together with several other homebuilders, is continuing to
develop the Inspirada master-planned community in Henderson,
Nevada.
On March 31, 2008, Woodside AMR 107, Inc. and Woodside Portofino,
Inc. filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code. On August 20, 2008, an Ad Hoc
Group of Noteholders commenced the filing of involuntary petitions
against the remaining 185 debtors. On August 20, 2008, JPMorgan
Chase Bank, N.A., on behalf of the Bank Group, commenced the
filing of certain Joinders in the Involuntary Petition. On
September 16, 2008, the Debtors filed a "Consolidated Answer to
Involuntary Petitions and Consent to Order for Relief" and the
Court entered the "Order for Relief Under Chapter 11."
The 187 Debtors are jointly administered under Case No. 08-20682.
The Bankruptcy Cases are currently pending before the Honorable
Peter Carroll in the United States Bankruptcy Court for the
Central District of California (Riverside).
Jeremy V. Richards, Esq., Linda F. Cantor, Esq., Debra I.
Grassgreen, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Los Angeles, California, represent the
Debtors. Susy Li, Esq., and Michael A. Sherman, Esq., at Bingham
McCutchen LLP, in Los Angeles; and Michael J. Reilly, Esq.,
Jonathan B. Alter, Esq., and Mark W. Deveno, Esq., at Bingham
McCutchen in Hartford, Connecticut, act as counsel to the Ad Hoc
Group of Noteholders. Donald L. Gaffney, Esq., at Snell & Wilmer
LLP, in Phoenix, Arizona; and Michael B. Reynolds, Esq., and Eric
S. Pezold, Esq., at Snell & Wilmer in Costa Mesa, California,
serve as counsel for JPMorgan Chase Bank, N.A., as Administrative
Agent to Participant Lenders.
During 2007, the Woodside Entities generated revenues exceeding
$1 billion on a consolidated basis. As of December 31, 2007, the
Woodside Entities had consolidated assets and liabilities of
approximately $1.5 billion and $1.1 billion, respectively. As of
the September 16, 2008 petition date, the Debtors have
approximately $70 million in cash. The Woodside Entities employ
approximately 494 employees.
WOODSIDE GROUP: Wants to Continue Selling Homes in Ordinary Course
------------------------------------------------------------------
Bill Rochelle of Bloomberg News reports that Woodside Group, LLC,
and its debtor-affiliates seek authority from the United States
Bankruptcy Court for the Central District of California to
continue selling homes in the ordinary course of business.
The Debtors, according to the report, said they have 800
outstanding contracts to build and sell homes.
The Debtors note that they are obligated to customers on account
of an estimated $7.1 million in outstanding Deposits related to
the Sale Contracts, of which approximately $6.9 million has been
transferred into the Debtors' central operating account.
If the Debtors breach a Sale Contract, the Deposit is owed to the
purchaser. The Debtors estimate they may owe up to $375,000
related to pre-Petition Date Deposits for cancellations. The
Debtors relate that it is conceivable that they could have later
obligations to return Deposits under the Sale Contracts.
The insurance companies that filed the nearly 200 involuntary
petitions said that the Debtors secretly carried out a
restructuring in July where more than one hundred companies were
merged into 11 newly formed entities in violation of the credit
agreement, according to the report.
In addition to the $407 million owing to the insurance companies,
the Debtors, according to the report, owes another $335 million
under a bank credit agreement, according to JPMorgan Chase Bank
NA, the agent for the lenders.
About Woodside Group
Woodside Group LLC and its debtor-affiliates --
http://www.woodside-homes.com/-- are homebuilders. The Debtor
group, together with several other homebuilders, is continuing to
develop the Inspirada master-planned community in Henderson,
Nevada.
On March 31, 2008, Woodside AMR 107, Inc. and Woodside Portofino,
Inc. filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code. On August 20, 2008, an Ad Hoc
Group of Noteholders commenced the filing of involuntary petitions
against the remaining 185 debtors. On August 20, 2008, JPMorgan
Chase Bank, N.A., on behalf of the Bank Group, commenced the
filing of certain Joinders in the Involuntary Petition. On
September 16, 2008, the Debtors filed a "Consolidated Answer to
Involuntary Petitions and Consent to Order for Relief" and the
Court entered the "Order for Relief Under Chapter 11."
The 187 Debtors are jointly administered under Case No. 08-20682.
The Bankruptcy Cases are currently pending before the Honorable
Peter Carroll in the United States Bankruptcy Court for the
Central District of California (Riverside).
Jeremy V. Richards, Esq., Linda F. Cantor, Esq., Debra I.
Grassgreen, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Los Angeles, California, represent the
Debtors. Susy Li, Esq., and Michael A. Sherman, Esq., at Bingham
McCutchen LLP, in Los Angeles; and Michael J. Reilly, Esq.,
Jonathan B. Alter, Esq., and Mark W. Deveno, Esq., at Bingham
McCutchen in Hartford, Connecticut, act as counsel to the Ad Hoc
Group of Noteholders. Donald L. Gaffney, Esq., at Snell & Wilmer
LLP, in Phoenix, Arizona; and Michael B. Reynolds, Esq., and Eric
S. Pezold, Esq., at Snell & Wilmer in Costa Mesa, California,
serve as counsel for JPMorgan Chase Bank, N.A., as Administrative
Agent to Participant Lenders.
During 2007, the Woodside Entities generated revenues exceeding
one billion dollars on a consolidated basis. As of December 31,
2007, the Woodside Entities had consolidated assets and
liabilities of approximately $1.5 billion and $1.1 billion,
respectively. As of the September 16, 2008 petition date, the
Debtors have approximately $70 million in cash. The Woodside
Entities employ approximately 494 employees.
WOODSIDE GROUP: Noteholders Ask Court to Oust Management
--------------------------------------------------------
The Ad Hoc Group of Noteholders of Woodside Group LLC and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Central
District of California to direct the appointment of a Chapter 11
Trustee; or alternatively, direct both (i) the appointment of an
examiner in these cases for certain specified purposes and (ii)
the termination of the Debtors' exclusive periods in which to file
and confirm a plan of reorganization.
The Noteholders are prepared to participate in any meeting of
creditors to elect the trustee and suggest a qualified party for
the role.
The Noteholders contend that both pre- and post-petition, the
Debtors' senior managers have demonstrated their inability to
operate the business of the Debtors in a manner consistent with
the fiduciary duties of a debtor-in-possession. According to the
Noteholders, based on management's conduct in managing the
Debtors' affairs, the estates and their creditors appear to hold
significant potential claims against the Debtors' senior managers,
all of which should be investigated during these cases -- ideally
by an independent third party, such as a trustee. Whether
ultimately pursued as claims for breaches of fiduciary duties or
claims in the nature of fraudulent transfer related to hundreds of
millions of dollars of dividends, potential tax refunds and real
estate transfers, the Noteholders intend to see these claims
investigated and pursued (as appropriate) during the bankruptcy
cases. The Noteholders believe the bank lenders share this view.
As an example to Management's conflicted self interest and gross
mismanagement of the Debtors' affairs, the Noteholders relate that
on July 25, 2008 -- after at least two months of planning -- the
Debtors consummated a massive corporate reorganization. Despite
extensive efforts by the Noteholders and the bank lenders to
engage the Debtors in a restructuring dialogue, the Debtors
planned and consummated the Tax Reorganization without disclosing
it to either creditor constituency. "In fact, the Noteholders and
the Bank Lenders were not the only parties kept in the dark," the
Noteholders say.
According to the Noteholders, the Debtors' senior managers opted
to withhold disclosure of the Tax Reorganization from both their
own restructuring professionals and from the Court. The
Noteholders allege that the Tax Reorganization had been structured
with the sole purpose of accelerating tax refunds for the Equity
Holders through a paper transaction. The Noteholders point the
Court to postpetition disclosures by the Debtors, including an
Ernst & Young power point presentation regarding the steps
necessary to complete the Tax Reorganization.
The Noteholders also inform the Court that in June 2008, the
Debtors transferred a number of assets to six of their Non-Debtor
affiliates that are subject to a loan agreement with Zions First
National Bank, a local Utah bank operating in the same
jurisdiction as the Debtors' home offices. The assets can be
valued anywhere between $13 million and $30 million. According to
the Noteholders, the Debtors contend that the transfers were
intended merely to correct administrative glitches by which the
relevant properties were previously titled in the wrong entities.
The Noteholders relate that these steps were not only withheld
from the Noteholders and the Bank Lenders, but also withheld from
the Debtors' own restructuring professionals.
On August 19, 2008, in response to a state court legal action
filed by Zions Bank, Woodside Group caused the Zions Borrowers to
provide Zions with various sources of collateral. According to
the Noteholders, the collateral serves to potentially subordinate
intercompany claims of both Debtors and non-debtors against the
Zions Borrowers, and acts to the detriment of all creditors of
these cases other than Zions. The Noteholders relate that the
Debtors' senior managers sought the legal counsel of their
traditional corporate lawyers rather than their restructuring
professionals when both defending the state court action and
executing the collateral agreements.
"Amazingly, the collateral granted by the Zions Borrowers was
provided pursuant to a three month standstill agreement (with no
assurance of a full restructuring with Zions)," the Noteholders
say.
"Overall, the granting of collateral to Zions once again raises
questions about the senior managers' understanding of the
bankruptcy process. When considering bankruptcy petitions for
portions of the corporate chain, why grant liens that favor one
creditor at six entities in return for a three month standstill?
Collateral that subordinates other claims in return for a three
month standstill that might ultimately unravel is simply
untenable. Moreover, pressed on the issue of whether the Debtors
might consider filing bankruptcy petitions for the Zions Borrowers
at some point, the Debtors have expressed no willingness to
consider moving in such a direction. As a result, with every
passing day the preference window on the liens granted to Zions
shortens.
"Alone, the Zions transactions would be troubling, but combined
with management's consistent pattern of operating with a
conflicted self interest, a fundamental misunderstanding of the
bankruptcy process and a staunch willingness to act (sometimes
covertly) without the advice of restructuring professionals, the
transactions are simply unacceptable, warranting close scrutiny."
According to the Noteholders, given the creditors' lack of
confidence in existing management, these cases -- absent the
appointment of a trustee -- run the risk of becoming highly
contentious proceedings with attendant costs that will dwarf the
costs associated with appointing a trustee. Moreover, it is
difficult to imagine the Noteholders or the Bank Lenders
supporting any plan of reorganization that does not include the
formation of a litigation trust to pursue claims against the
senior managers. As a result, affording the managers time to
produce alternative plans would be futile, and, ultimately, will
result in further deterioration of assets pending the ultimate
termination of exclusivity, the Noteholders say.
"Appointment of a trustee is appropriate under the circumstances,
and, in fact, is the only adequate means by which to ensure the
preservation of estate assets and the prompt facilitation of a
productive plan process," the Noteholders tell the Court.
JP Morgan Chase Bank, N.A., on behalf of itself and as the
administrative agent for various other lenders of the Debtors,
supports the Noteholders' request.
About Woodside Group
Woodside Group LLC and its debtor-affiliates --
http://www.woodside-homes.com/-- are homebuilders. The Debtor
group, together with several other homebuilders, is continuing to
develop the Inspirada master-planned community in Henderson,
Nevada.
On March 31, 2008, Woodside AMR 107, Inc. and Woodside Portofino,
Inc. filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code. On August 20, 2008, an Ad Hoc
Group of Noteholders commenced the filing of involuntary petitions
against the remaining 185 debtors. On August 20, 2008, JPMorgan
Chase Bank, N.A., on behalf of the Bank Group, commenced the
filing of certain Joinders in the Involuntary Petition. On
September 16, 2008, the Debtors filed a "Consolidated Answer to
Involuntary Petitions and Consent to Order for Relief" and the
Court entered the "Order for Relief Under Chapter 11."
The 187 Debtors are jointly administered under Case No. 08-20682.
The Bankruptcy Cases are currently pending before the Honorable
Peter Carroll in the United States Bankruptcy Court for the
Central District of California (Riverside).
Jeremy V. Richards, Esq., Linda F. Cantor, Esq., Debra I.
Grassgreen, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Los Angeles, California, represent the
Debtors. Susy Li, Esq., and Michael A. Sherman, Esq., at Bingham
McCutchen LLP, in Los Angeles; and Michael J. Reilly, Esq.,
Jonathan B. Alter, Esq., and Mark W. Deveno, Esq., at Bingham
McCutchen in Hartford, Connecticut, act as counsel to the Ad Hoc
Group of Noteholders. Donald L. Gaffney, Esq., at Snell & Wilmer
LLP, in Phoenix, Arizona; and Michael B. Reynolds, Esq., and Eric
S. Pezold, Esq., at Snell & Wilmer in Costa Mesa, California,
serve as counsel for JPMorgan Chase Bank, N.A., as Administrative
Agent to Participant Lenders.
During 2007, the Woodside Entities generated revenues exceeding
one billion dollars on a consolidated basis. As of December 31,
2007, the Woodside Entities had consolidated assets and
liabilities of approximately $1.5 billion and $1.1 billion,
respectively. As of the September 16, 2008 petition date, the
Debtors have approximately $70 million in cash. The Woodside
Entities employ approximately 494 employees.
WORLD HEART: Regains Compliance with Shares Minimum Price Value
---------------------------------------------------------------
World Heart Corporation disclosed that after a review by a NASDAQ
Listing Qualifications Panel, NASDAQ has determined that
WorldHeart's common stock will continue to be listed on The Nasdaq
Capital Market. Additionally, WorldHeart received a letter from
the NASDAQ stating that the company has regained compliance with
the requirement to have a minimum market value of publicly held
shares of $1,000,000 for at least 10 consecutive trading days as
required by the The Nasdaq Capital Market pursuant to Marketplace
Rule 4310(c)(7).
On June 25, 2008, the company received a staff deficiency letter
from the NASDAQ informing the company that for the previous 30
consecutive trading days it had not maintained the minimum market
value of publicly held shares of $1,000,000 and that the company
had 90 calendar days, or until Sept. 23, 2008, to regain
compliance. That matter is now closed.
On July 31, 2008, WorldHeart completed a $30,000,000 private
placement transaction and recapitalization that resulted in the
issuance of 300,000,000 common shares. This private placement
cured the Company's shareholders' equity deficiency or non-
compliance with Marketplace Rule 4310(c)(3), disclosed on
March 31, 2008.
In addition, on Aug. 21, 2008, the company initiated a phased
consolidation plan which the company expects will reduce its
expenses and increase the likelihood that the company will
maintain compliance in the longer term. The company remains
within the grace period for its bid price deficiency through
Oct. 27, 2008, but has filed a proxy statement seeking shareholder
approval for a reverse stock split to increase its share price and
cure its bid price deficiency set forth under Marketplace Rule
4310(c)(4).
About World Heart Corp.
World Heart Corp. -- http://www.worldheart.com/-- is a
developer of mechanical circulatory support systems. The company
is headquartered in Oakland, Calif. with additional facilities in
Salt Lake City, and Herkenbosch, Netherlands. WorldHeart's
registered office is Ottawa, Ontario, Canada.
As reported on the Troubled Company Reporter on Sept. 11, 2008,
World Heart Corp.'s consolidated balance sheet at June 30, 2008,
showed $2,394,260 in total assets and $9,819,747 in total
liabilities, resulting in a $7,425,487 stockholders' deficit.
W.R. GRACE: Files Joint Chapter 11 Plan and Disclosure Statement
----------------------------------------------------------------
W. R. Grace & Co. filed a Plan of Reorganization and an
accompanying Disclosure Statement with the U.S. Bankruptcy Court
for the District of Delaware. The Official Committee of Asbestos
Personal Injury Claimants, the Representative for Future Asbestos
Personal Injury Claimants, and the Official Committee of Equity
Security Holders are co-proponents of the Plan. The documents are
consistent with the terms of the previously announced asbestos
personal injury settlement.
"[The] filing brings Grace an important step closer to resolving
its asbestos-related liabilities and exiting Chapter 11," said
Fred Festa, Grace's Chairman, President and Chief Executive
Officer. "It's an equitable plan that enjoys wide-spread support.
People who have been injured by asbestos exposure will be fairly
compensated while employees and shareholders retain control of a
financially strong company that is poised to succeed in today's
challenging global marketplace."
A hearing on the Disclosure Statement is scheduled to begin on
October 27, 2008.
The Financial Information assumes these terms of the Plan:
(1) Asbestos Related Claims
Asbestos-related personal injury claims will be resolved
through the contribution of cash, warrants, deferred payments
and proceeds received under third party arrangements to a
trust established under Section 524(g) of the Bankruptcy Code.
The specific components of the Grace contribution to the
Asbestos PI Trust are:
* Cash of $359 million, including $250 million pursuant to
the asbestos personal injury settlement announced in
April 2008 and $109 million. To ensure that the Sealed
Air Indemnified Parties and the Fresenius Indemnified
Parties obtain Section 524(g) protection with respect to
all asbestos PI and property damage claims, Cryovac and
Fresenius will pay a total of $109 million to the
Asbestos PD Trust, which amount would otherwise have
been paid by Grace for resolved PD claims. As an
offset, the Cryovac and Fresenius payments to the
Asbestos PI Trust will be reduced by a total of
$109 million and Grace's payment to the Asbestos PI
Trust will be increased by $109 million.
* Warrants to acquire 10 million shares of Grace common
stock at an exercise price of $17 per share expiring one
year after the Effective Date.
* Deferred payments of $110 million per year for five
years beginning January 2, 2019, and of $100 million per
year for ten years beginning January 2, 2024.
* Rights to proceeds under Grace's asbestos-related
insurance coverage.
(2) Asbestos-related PD claims, including the US ZAI PD Claims,
will be resolved through the payment by Cryovac and Fresenius
of $109 million to a trust established under Section 524(g)
and the contribution by Grace of the Asbestos PD Note. The
Asbestos PD Note will represent an obligation of Grace to pay
the Asbestos PD Trust for Asbestos PD Claims allowed after the
Effective Date. At the Effective Date, the Asbestos PD Note
will have no balance.
Grace will resolve the Canadian ZAI PD Claims through the
payment of approximately $6.4 million to the CDN ZAI PD Claim
Fund as set forth in the Plan. Cryovac will contribute
directly to the Asbestos PI Trust and the Asbestos PD Trust a
total of (i) cash of $512.5 million plus accrued interest of
5.5% from December 21, 2002, and (ii) 18 million shares of
Sealed Air Corporation common stock. Fresenius will
contribute directly to the Asbestos PI Trust and Asbestos PD
Trust a total of $115 million.
(3) Other Claims: Grace will pay approximately $1,049 million,
estimated as of June 30, 2008, of cash to satisfy other claims
payable at the Effective Date. In addition, "Emergence
Contingencies" in the amount of $125 million have been
included for bank fees, legal fees, and other allowable
claims.
(4) Ongoing Liabilities: Grace will satisfy all other liabilities
subject to compromise, as they become due and payable over
time. Those liabilities are estimated at approximately $352
million as of June 30, 2008, and include amounts for
post retirement benefits, environmental remediation, income
tax contingencies, and probable payments under the Asbestos PD
Note.
The Financial Information assumes Grace pays claims with existing
cash and investments, borrowings under a new credit facility and
future operating cash flow. The Financial Information assumes a
new $1,750 million credit facility to fund allowed claims payable
on the Effective Date and to provide working capital and letters
of credit for continuing operations. Of that amount, $1,500
million is assumed funded at emergence, with $250 million of
revolver capacity undrawn and available for future needs. In
addition, Grace is assumed to have cash and investment securities
of approximately $381 million on the Effective Date to fund
working capital and strategic capital needs and any contingencies.
The Financial Information assumes a 9% interest rate on
outstanding borrowings.
Classification and Treatment of Claims Under Plan
The Joint Plan of Reorganization filed by W.R. Grace & Co., et
al., the Official Committee of Asbestos Personal Injury Claimants,
the Asbestos PI Future Claims Representative, and the Official
Committee of Equity Security Holder, dated September 19, 2008,
provides for these classifications and treatment of claims
asserted against the Debtors:
Class Description Recovery Under the Plan
----- ----------- -----------------------
N/A Administrative Each holder will be paid either (i)
Expense Claims in full, in Cash, by the Reorganized
Debtors, on the Effective Date, or
(ii) upon such other less favorable
terms as may be mutually agreed upon
between the Holder of an Allowed
Administrative Expense Claim and the
Reorganized Debtors.
Estimated Claim Amount: $33,800,000
Estimated Percentage Recovery: 100%
N/A Priority Tax Each holder will be paid either (i)
Claims in full in Cash on the Effective
Date, or (ii) upon such other terms
as may be agreed upon by the Holder
of an Allowed Priority Tax Claim, or
(iii) in equal quarterly Cash
payments commencing on the Initial
Distribution Date in an aggregate
amount equal to the Allowed Priority
Tax Claim, together with interest at
4.19% per annum, over a period not
exceeding six years after the date of
assessment of the Allowed Priority
Tax Claim.
Each Holder of a Priority Tax Claim,
which by operation of the Fresenius
Settlement Agreement is an obligation
for Fresenius Indemnified Taxes
promptly will be paid in full in Cash
as the Fresenius Indemnified Taxes
become due and payable.
Estimated Claim Amount: $33,400,000
Estimated Percentage Recovery: 100%
1 Priority Claims Each Holder will be paid the Allowed
Amount of its Allowed Priority Claim
with interest at 4.19%, from the
Petition Date, compounded annually,
or if pursuant to an existing
contract, interest at the non-default
contract rate, at the option of the
Reorganized Debtors, either:
(i) in full, in Cash, on the
later of (A) the Effective
Date or (B) the date
the
Priority Claim becomes an
Allowed Priority Claim; or
(ii) upon such other less
favorable terms as may be
agreed upon by the Holder of
an Allowed Priority Claim.
Unimpaired.
Estimated Claim Amount: $709,873
Estimated Percentage Recovery: 100%
2 Secured Claims Each Holder will be paid the Allowed
Amount with interest at 4.19%, from
the Petition Date, compounded
annually, or if pursuant to an
existing contract, interest at the
non-default contract rate, at the
option of the Reorganized Debtors,
either:
* in full, in Cash, on the later
of (A) the Effective Date or (B)
the date the Secured Claim
becomes an Claim;
* upon such other less favorable
terms as may be agreed upon by
the Holder of an Allowed Secured
Claim;
* by the surrender to the Holder
or Holders of any Allowed
Secured Claim of the property
securing that Secured Claim; or
* by reinstatement in accordance
with Section 1124(2)(A)-(D) of
the Bankruptcy Code.
Unimpaired.
Estimated Claim Amount: $5,754,4965,
which includes amounts to be paid on
the Effective Date: $562,100, amounts
paid after the Effective Date in
accordance with their terms:
$3,500,000, and unliquidated amounts
that would be Class 2 claims if
allowed: $1,692,396.
Estimated Percentage Recovery: 100%
3 Employee Benefit Will be reinstated under the Plan
Claims and paid pursuant to the written
benefit plan that the Debtors intend
to continue pursuant to the Plan.
Unimpaired.
Estimated Claim Amount: $165,300,000,
which includes $70.9 million of
post-retirement benefits, and
$94.4 million of unfunded special
pension arrangements. Includes
amounts to be paid on the Effective
Date: $15.8 million, and amounts paid
after the Effective Date in
accordance with their terms:
$149.5 million.
Estimated Percentage Recovery: 100%
4 Workers' Allowed Claims have already been paid
Compensation pursuant to first day orders and
Claims continue to be paid in the ordinary
course as they become due.
The Plan leaves unaltered the legal,
equitable, and contractual rights to
which each Workers' Compensation
Claim entitled the holder of such
Claim. In no event will any of the
Sealed Air Indemnified Parties nor
the Fresenius Indemnified Parties
have any liability with respect to
any Workers' Compensation Claim.
Unimpaired.
Estimated Percentage Recovery: 100%
5 Intercompany The Plan leaves unaltered the legal,
Claims equitable, and contractual rights to
which each Workers' Compensation
Claim entitled the holder of such
Claim. In no event will any of the
Sealed Air Indemnified Parties nor
the Fresenius Indemnified Parties
have any liability with respect to
any Workers' Compensation Claim.
For pro forma cash flow purposes, all
claims will have no impact on the
Plan as all payments under the Plan
are based on the Debtors and
Non-Debtor Affiliates as
consolidated.
Unimpaired.
Estimated Percentage Recovery: 100%
6 Asbestos PI All Asbestos PI Claims will be
Claims resolved in accordance with the
Asbestos PI Trust Agreement and the
TDP.
Impaired.
Estimated Claim Amount: N/A
Estimated Percentage Recovery:
Unknown
7 Asbestos Each Holder of an Asbestos PD Claim
Claims that is Allowed as of the Effective
Date will be paid the Allowed Amount
in Cash in full by the Asbestos PD
Trust.
Asbestos PD Claims, other than US ZAI
PD Claims, that are unresolved prior
to the Effective Date will be paid
pursuant to:
* In connection with confirmation
of the Plan, the Court will
enter a case management order
setting forth procedures for
determining the allowance or
disallowance of the Unresolved
Asbestos PD Claims; and
* Allowed Unresolved Asbestos PD
Claims will be paid in full, in
Cash, by the Asbestos PD Trust
pursuant to the terms of the
Asbestos PD Trust Agreement.
A list of the Unresolved Asbestos PD
Claims is available for free at:
http://bankrupt.com/misc/Exhibit21.pdf
Unimpaired.
Estimated Claim Amount: $109 million
Estimated Percentage Recovery: 100%
8 CDN ZAI PD All CDN ZAI PD Claims will be
Claims resolved in accordance with the terms
of the CDN ZAI Minutes of Settlement.
Impaired.
Estimated Claim Amount: $6.5 million
Estimated Percentage Recovery:
Unknown
9 General Each holder of an Allowed General
Unsecured Unsecured Claim will be paid the
Claims Allowed Amount of its Allowed General
Claim with postpetition interest
either:
* in Cash in full on the later of
(A) the Effective Date or (B)
the date the General Unsecured
Claim becomes an Allowed General
Unsecured Claim; or
* on such other less favorable
terms as may be agreed upon by
the Holder of an Allowed General
Unsecured Claim.
Postpetition interest on Allowed
General Unsecured Claims will be
determined as follows:
(i)(A) for holders of Prepetition
Credit Facilities, post-
petition interest will be
calculated from the Petition
Date through December 31, 2005
at the rate of 6.09% and
thereafter at floating prime,
in each case compounded
quarterly; and
(i)(B) for all other General
Unsecured Claims, postpetition
interest will be calculated
from the Petition Date at the
rate of 4.19%, compounded
annually, or if pursuant to an
existing contract, interest at
the non-default contract rate,
unless the General Unsecured
Claim includes an allowed and
liquidated amount for
postpetition and future
liability, in which case the
interest to be paid on the
Claim will begin to run from
the date of the stipulation or
order allowing the claim in
the liquidated amount; or
(ii) on such other less favorable
terms as those that may be
agreed upon by the Holder of an
Allowed General Unsecured Claim.
Unimpaired.
Estimated Claim Amount:
$826.3 million
Estimated Percentage Recovery: 100%
10 Equity Interests On the Effective Date, Class 10
in the Parent Equity Interests in the Parent will
be retained, subject to the issuance
of the Warrant and the terms of the
Share Issuance Agreement.
Impaired.
Estimated Claim Amount: N/A
Estimated Percentage Recovery: 100%
11 Equity Interests The Plan leaves unaltered the legal,
in Debtors other equitable, and contractual rights to
than the Parent which each Equity Interest in the
Debtors other than the Parent
entitles the Holders of those Equity
Interests.
Unimpaired.
Estimated Claim Amount: N/A
Estimated Percentage Recovery: 100%
Liquidation Analysis
W.R. Grace & Co., and the other plan proponents prepared a
liquidation analysis, which is an estimate of the proceeds that
may be generated as a result of a hypothetical Chapter 7
liquidation of the assets of the Debtors and non-debtor
affiliates.
For purposes of the liquidation analysis, the Effective Date is
assumed to be December 31, 2008. The Analysis assumes that the
hypothetical Chapter 7 liquidation is effected via the orderly
sale of the businesses of the Debtors and Non-Debtor Affiliates as
going concerns.
W.R. Grace, et al.
Liquidation Analysis
($ in millions)
Chapter 7 Chapter 11
Liquidation Reorganization
Low High Low High
Calculation of
Estimated Value Available:
Estimated Value of
Reorganized Debtors and
Non-Debtor Affiliates $3,200 $3,700 $3,200 $3,700
Less: Discount Factor (1,600) (1,850) - -
------ ------ ------ ------
Estimated Value of
Reorganized Debtors
and Non-Debtor
Affiliates 1,600 1,850 3,200 3,700
Plus:
Cash 443 443 443 443
Fresenius Payment - - 115 115
Cryovac Payment - 1,047 1,144 1,144
Insurance Recovery 500 500 500 500
------ ------ ------ ------
Estimated Value Before
Provision for Chapter 7
Costs, Chapter 11 Costs,
Administrative Expenses
and Claims 2,543 3,840 5,402 5,902
Less:
Costs Associated with
Chapter 11 Reorganization
Exit Financing & Legal Fees - - 70 70
Costs Associated with
Chapter 7 Liquidation
Professional Fees 24 24 - -
Trustee Fees 30 50 - -
Additional Brokerage Fees 8 9 - -
Administrative Expenses 29 29 34 34
Priority Tax Claims and
Priority Claims 34 34 34 34
Secured Claims 6 6 6 6
------ ------ ------ ------
Estimated Value Before
Provision for General
Unsecured Claims,
Asbestos PI and PD
Claims and Equity
Interests 2,412 3,688 5,257 5,757
Provision for General
Unsecured Claims 978 978 1,330 1,330
Provision for Asbestos
PI and PD Claims - - 2,857 2,538
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., as financial advisor.
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 $3,712,000,000.
* Oregon's Housing Market Still Hasn't Reached Bottom
-------------------------------------------------------
-
Portland and Seattle, which along with Charlotte, were the top
three housing markets in the Standard & Poor's Case-Shiller index
as recently as February, had fallen to the fifth and sixth
strongest markets by June, Ryan Frank of The Oregonian reports.
The report says that places such as Denver, Dallas and Boston show
signs that they've hit bottom. Portland's prices in June fell
5.8% compared with the same month in 2007 and Seattle's market is
down 7.1% compared with last year, but Portland and Seattle are
still outperforming the nation as a whole.
Mr. Franks goes on to say that Oregon homebuilders are "stuck
holding millions of dollars in unsold homes and lots," and have
cut back on new construction.
The report also discloses that some of Oregon's mills have closed
as a result of slowing demand for wood products. The Western Wood
Products Association reported Thursday that the 2007 lumber
production in Western sawmills fell to its lowest level since
1996.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Share
Total -holders Working
Assets Equity Capital
Company Ticker ($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
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
CHENIERE ENERGY LNG US 2,832 (202) 293
CHOICE HOTELS CHH US 349 (115)
(16)
CINCINNATI BELL CBB US 2,031 (666) 12
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)
EXTENDICARE REAL EXE-U CN 1,569 (20) 128
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 IMX CN 216 (89)
(4)
IMAX CORP IMAX US 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
RASER TECHNOLOGI RZ US 73 (11)
(12)
REGAL ENTERTAI-A RGC US 2,688 (214)
(124)
RESVERLOGIX CORP RVX CN 17 (8) 13
REVLON INC-A REV US 884 (1,063) 110
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)
THERAVANCE THRX US 281 (112) 202
UAL CORP UAUA US 21,336 (570)
(2,522)
UST INC UST US 1,417 (394) 165
VALENCE TECH VLNC US 37 (60) 11
WARNER MUSIC GRO WMG US 4,519 (99)
(750)
WEIGHT WATCHERS WTW US 1,107 (893)
(210)
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,
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*********
S U B S C R I P T I O N I N F O R M A T I O N
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