/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/081007.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, October 7, 2008, Vol. 12, No. 219 Headlines ACCENTIA BIOPHARMACEUTICALS: Receives NASDAQ Delisting Notice ADELPHIA COMM: Second Circuit Affirms District Court Decision AGATA SKWAREK: Voluntary Chapter 11 Case Summary ALL-AMERICAN SPORTPARK: Settles Cases with Urban Land of Nevada ALLIED HOLDINGS: Court Denies Volvo Parts' Fund Dismissal Plea AMC INVESTORS: Eugenia VI Files Involuntary Chapter 7 AMERICAN ACHIEVEMENT: Fails to Meet Note Condition; Hikes Rate AMERICAN INTERNATIONAL: Sale Can Help Repay Loan, Says UBS Analyst AMERICAN INTERNATIONAL: Discloses 8.4% Equity Stake in eTelecare AMERICAN INTERNATIONAL: Robert Sandler Retires from Firm AMERICAN INTERNATIONAL: Has 33.2% Stake in Transatlantic Holdings AMERICAN INTERNATIONAL: Moody's Cuts Unsecured Debt Rating to 'A3' ARCHWAY COOKIES: Files for Chapter 11 Bankruptcy Protection ARCHWAY COOKIES: Case Summary & 30 Largest Unsecured Creditors ARTHUR DUNHAM: Case Summary & Five Largest Unsecured Creditors ASARCO LLC: Plan Confirmation Hearing Set for November 17 ASF INVESTMENT: Voluntary Chapter 11 Case Summary ASHTON WOODS: Misses Payment on $125 Million in Subordinated Notes ASHTON WOODS: S&P Lowers Ratings to 'D' After Missed Payment ATLANTIC EXPRESS: June 30 Balance Sheet Upside-Down by $51MM ATRIUM CORP: Extends Exchange Offering of 11-1/2% Senior Notes BANCRPH LP: Case Summary & Largest Unsecured Creditor BEARD CO: Geohedral Venture Acquires Mineral Discovery Ownership BETCORP LIMITED: Chapter 15 Petition Summary BIOVEST INT'L: Inks Securities Purchase Deal with Three Investors BLUE HOLDINGS: Reports $4.5 Million Net Loss for March 2008 CADENCE INNOVATION: Court Approves $50,000,000 BofA DIP Financing CADENCE INNOVATION: Can Hire Cole Schotz as Lead Bankr. Counsel CALPINE CORP: Draws $725 Million Under Exit Facility Agreement CATALYST ENERGY: Files for Chapter 11 Protection CENTENNIAL COMMUNICATIONS: Shareholders Okay Stock Option Plan CHET MORRISON: Moody's Withdraws Ratings on Uncompleted Offering CIENA CAPITAL: Court Gives Interim Approval on $5MM Loan CMR MORTGAGE: Reports $1.3 Million Net Income for March 2008 COMMONWEALTH EDISON: ICC Case Decision Cues Moody's to Lift Rtngs COMMUNICATION INTELLIGENCE: Amends SEC Statement for Share Sale CONEXANT SYSTEMS: Expects Up to $125 Million Revenue for Q4 2008 CONEXANT SYSTEMS: Inks Termination Deal with Lewis Brewster CONSTAR INTERNATIONAL: SEC Grants Exclusion on 10-K Information CORPORACION DURANGO: Files for Ch. 15; Affiliates File Ch. 11 CORPORACION DURANGO: Chapter 15 Case Summary CREATIVE LOAFING: Gets Initial OK to Use Atalaya's Cash Collateral DAN RIVER: CONSOR Selling Name, Intellectual Property Portfolio DAN RIVER: Court Sets November 3 Claims Bar Date DELPHI CORP: Court OKs Moelis as Panel's Co-Investment Banker DEMEX ENGINEERING: Case Summary & 20 Largest Unsecured Creditors DIOMED HODLINGS: Pays in Full Debt to Hercules Technology DOWNEAST HERITAGE: Files for Chapter 7 in Maine Court DUKE FUNDING: Moody's Cuts Ratings to 'C' on Four Note Classes EATON VANCE: Moody's Takes Negative Rating Actions on Term Notes EL PASO CHILE: General Unsecured Creditors Will Be Paid in Full ENCAP GOLF: Competing Reorganization Plan Filed ERIE COUNTY PLASTICS: Files Chapter 11 in Erie Federal Court ERIK BENHAM: Chapter 11 Case Converted to Chapter 7 Proceeding ESTATE FINANCIAL: Trustees Reviewing Mortgage Loans, Properties FANNIE MAE: Drops Planned Adverse Market Delivery Charge Increase FIBERTECH POLYMERS: Case Summary & 19 Largest Unsecured Creditors FORD MOTOR: Conditions Satisfied for UAW Settlement Deal FREEDOM COMMS: In Talks with Lenders on Fin. Covenant Compliance FREESCALE SEMICONDUCTOR: Will Sell Cellphone Chip Business FRONTIER AIRLINES: Inks Deal on LT Wage and Benefit Concessions GEMINI AIR: Wants Chapter 11 Case Dismissed GENCORP INC: Names Kathy Reid as Vice President Controller GENERAL DATACOMM: Secures $250,000 Loan from CEO and Board Chair GENERAL GROWTH: Moody's Lowers Debt Ratings to 'Ba3' from 'Ba2' GENERAL MOTORS: Unable to Meet Demand, Factory to Run Overtime GENERAL MOTORS: Amended GSA and MRA Take Effect GENERAL MOTORS: Exchanges 16MM Shares for Series D Debentures HAWAII MEDICAL: Collin Dang Replaces Danelo Canete as CEO HRP MYRTLE: May Extend Season Ticket Passes for Six Months IL LUGANO: Seeks to Employ Zeisler as Local Bankruptcy Counsel IMARX THERAPEUTICS: Saints Capital Discloses 11.57% Equity Stake IMAX CORPORATION: Draws $10 Million from Credit Facility INNOPHOS HOLDINGS: CNA Files Appeal over Water Rate Decision INTERSTATE BAKERIES: Files Amended Plan & Disclosure Statement INTERSTATE BAKERIES: Wants Plan Funding Commitment Deals Approved IVANHOE ENERGY: Wants to Withdraw Amended Form 13G JEFFERSON COUNTY: Two Officials Seek Bankruptcy Vote on Sewer Debt KEYSTONE SURPLUS: Case Summary & 20 Largest Unsecured Creditors KIMBALL HILL: Seeks Until January 16 to File Chapter 11 Plan KIMBALL HILL: Cesari Response Leaves Creditors Committee KING'S BEACH: Case Summary & Six Largest Unsecured Creditors LEAP WIRELESS: Settles Lawsuits with MetroPCS Communications LEHIGH COAL: Court Denies Bid to Oust Management LEHMAN BROTHERS: Case Summary & 49 Largest Unsecured Creditors LUBBOCK MEDICAL: Sells Property at $3MM, Files Plan & Statement MAGUIRE PROPERTIES: Moody's Withdraws Rtngs After Facility Payment MATTRESS DISCOUNTERS: U.S. Trustee Sets 341(a) Meeting for Oct. 20 MEDICOR LTD: Wants Exclusive Plan Filing Period Moved to Dec. 5 MERITAGE HOMES: Wins $111 Million Case Against Greg Hancock MGM MIRAGE: Taps $1.8 Billion of Senior Bank Credit Facility MIAMI ENTERTAINMENT: Voluntary Chapter 11 Case Summary MIRANT CORP: Suspends Share Buyback Program MOUNTAIN ADVENTURE: Objects to Conversion of Case to Chapter 7 NEPTUNE INDUSTRIES: Files Complaint Over Stock Price Manipulation NEUMANN HOMES: To Mail Claim Forms and Bar Date Notice on Nov. 13 NUCRYST PHARMA: Gets Delisting Notice; Has Until March to Comply OPEN ENERGY: SEC Deems Marketing & Distribution Pact Classified PAPER INTERNATIONAL: Voluntary Chapter 11 Case Summary PATRIOT HOMES: Asks Interim Authority to Use Cash Collateral PETTERS AVIATION: Files for Chapter 11 Protection PETTERS AVIATION: Case Summary & 20 Largest Unsecured Creditors PINE RIVER: PolyOne Pays 10% of Preference, Gives Up Claim POWER EFFICIENCY: Files Amendment to Share Registration Statement PRINCETON OFFICE: Files Schedules of Assets and Liabilities RANDLE HEIGHTS: Case Summary & 10 Largest Unsecured Creditors RAFAELLA APPAREL: Moody's Reviews Low-B Ratings for Likely Cut REHRIG INT'L: Gets Final OK to Access $12MM LaSalle DIP Loan REHRIG INT'L: Gets Final OK to Access $12MM LaSalle DIP Loan REHRIG INT'L: Sec. 341 Meeting Slated for October 30 ROBERT ZELLMER: Case Summary & 16 Largest Unsecured Creditors SAGEMARK COMPANIES: Negotiates Deals to Cut Debt, Avoid Bankruptcy SPACEHAB INC: Posts $25.5 Million Loss for Year Ended June 30 SPRINT NEXTEL: Gets Offers for Nextel, Faces Hurdles on Sale SUN COUNTRY: Asks Workers to Defer Half of Wages SYNTAX-BRILLIAN: Ch. 11 Examiner Wants Potter Anderson as Counsel THAYER POWER: Case Summary & 20 Largest Unsecured Creditors THOMAS INDUSTRIES: Milliken Withdraws $24,000,000 Offer THOMAS INDUSTRIES: Committee Taps Hays Financial as Advisors THORNBURG MORTGAGE: Moody's Affirms Preferred Stock Rating at 'Ca' TOSHA RESTAURANTS: Says Queensbury Franchise to Remain Open TRIARC COS: Completes Merger With Wendy's International TROPICANA ENT: Wants to Assume Control of Atlantic City Casino US DATANET: Case Summary & 48 Largest Unsecured Creditors US ENERGY: Says Well Problem Requires Exclusivity Extension VERENIUM CORP: Amends Employment Agreement with CEO Carlos Riva VIACK CORPORATION: Case Summary & 19 Largest Unsecured Creditors WESTAFF INC: Has New Forbearance Deal with Wells Fargo, et al. WESTAFF INC: Selling Aussie and New Zealand Units to Humanis Blue WESTAFF INC: Names Sean Wong as Vice President Controller WREN ALEXANDER: Case Summary & Two Largest Unsecured Creditors XRITE INC: Names New Four Board Members Under Investment Deals * George Bush Signs $700 Billion Bailout Plan Into Law * California May Ask $7BB Emergency Loan from Federal Government * Massachusetts Asks About Federal Loan Amid Market Worries * Upcoming Meetings, Conferences and Seminars ********* ACCENTIA BIOPHARMACEUTICALS: Receives NASDAQ Delisting Notice ------------------------------------------------------------- Accentia Biopharmaceuticals, Inc. disclosed in a Securities and Exchange Commission filing that it received notice from the NASDAQ Stock Market dated Sept. 22, 2008, notifying the Company that it has fallen below the minimum market capitalization required by the NASDAQ Capital Market. To demonstrate compliance with NASDAQ Marketplace Rule 4310(c)(3)(B), Accentia needs to maintain a minimum of $35 million in market value for at least 10 consecutive days before Oct. 22, 2008. If the Company does not regain compliance by Oct. 22, 2008, the NASDAQ staff will notify the Company of its non-compliance. In that event and at that time, the Company may appeal NASDAQ's delisting determination to a NASDAQ Listing Qualifications Panel. This notification has no effect on the listing of Accentia's common stock at this time. About Accentia BioPharmaceuticals Inc. Based in Tampa, Florida, Accentia BioPharmaceuticals Inc. (Nasdaq: ABPI) -- http://www.accentia.net/-- is a vertically integrated biopharmaceutical company focused on the development and commercialization of drug candidates that are in late-stage clinical development and typically are based on active pharmaceutical ingredients that have been previously approved by the FDA for other indications. The company's lead product candidate is SinuNase(TM), a novel application and formulation of a known therapeutic to treat chronic rhinosinusitis. Additionally, the company has acquired the majority ownership interest in Biovest International Inc. and a royalty interest in Biovest's lead drug candidate, BiovaxID(TM) and any other biologic products developed by Biovest. The company also has a specialty pharmaceutical business, which markets products focused on respiratory disease and an analytical consulting business that serves customers in the biopharmaceutical industry. Accentia Biopharmaceuticals Inc.'s consolidated balance sheet at June 30, 2008, showed $30.9 million in total assets, $115.9 million in total liabilities, resulting in a $90.3 million total stockholders' deficit. Going Concern Doubt Aidman, Piser & Company, P.A., in Tampa, Florida, expressed substantial doubt about Accential Biopharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Sept. 30, 2007, and 2006. The auditing firm reported that the company has incurred cumulative net losses of approximately $164.1 million during the three years ended Sept. 30, 2007, $57.8 million of which was attributable to their 76% owned subsidiary, and, as of that date, had a working capital deficiency of approximately $53.1 million. The Company incurred net losses of $44.6 million and used cash from operations of approximately $20.7 million during the nine months ended June 30, 2008, and has a working capital deficit of approximately $83.6 million at June 30, 2008. Net losses for Biovest, whose results are consolidated with the Company, were approximately $11.5 million, during the same nine month period. The Company's registered independent public accounting firm indicated that there was substantial doubt about the Company's ability to continue as a going concern in their report on the Company's September 30, 2007 consolidated financial statements filed on form 10K. ADELPHIA COMM: Second Circuit Affirms District Court Decision ------------------------------------------------------------- The U.S. Court of Appeals for the Second Circuit upholds the ruling of District Court Judge Shira Scheindlin for the Southern District of New York related to an appeal by the Official Committee of Equity Security Holders from Judge Robert Gerber's order confirming the Chapter 11 Plans of Adelphia Communications Corporation and its debtor affiliates. The Appeal was assigned to Judge Scheindlin. The main contention of the Appeal was the transfer of the Equity Committee's derivative claims to a litigation trust made under the Plan. The Equity Committee argued that without its consent, the Bankruptcy Court lacked the authority to transfer the derivative claims. The Bankruptcy Court confirmed Adelphia's Plan which provided for the transfer of the estates' claims, including those asserted by the Equity Committee, to a litigation trust. Recoveries by the litigation trust would first be paid to all Debtors' unsecured creditors, and remaining funds would be distributed to shareholders. Furthermore, the Bankruptcy Court rejected the Equity Committee's objection to the transfer of the derivative claims saying that for value to pour down all the way to equity, the litigation trust would have to recover $6.5 billion. That recovery is seemingly so ambitious that it could fairly be said that "equity is hopelessly out of the money," the Bankruptcy Court noted. Upon review, Judge Scheindlin held that the Appeal was moot and the Equity Committee did not and could not dispute that the Plan has been substantially consummated. The District Court subsequently dismissed the Equity Committee's Appeal in May 2007. Subsequently, the Equity Committee took its Appeal to the Second Circuit. The Equity Committee asserted that the District Court erred in dismissing its Appeal. The Appeal was then brought before Circuit Judges Sotomayor and Newman. The Bankruptcy Code does not expressly authorize committees or individual creditors in contrast to trustees and debtors to sue on behalf of an estate, the Second Circuit points out. Nevertheless, the Second Circuit avers that it recognizes an "implied but qualified" right under Section 1103(c)(5) and 1109(b) of the Bankruptcy Court for an unsecured creditors' committee to assert claims in the event the trustee or debtors unjustifiably failed to bring suit or abused discretion in not suing on colorable claims likely to benefit the reorganized estate. The Second Circuit holds that a court may withdraw a committee's derivative standing and transfer the management of its claims, even in the absence of the committee's consent, if that court concludes that the transfer is in the best interests of the estates. In this light, the Second Circuit opines that "[t]he bankruptcy court not only authorized to confer derivative standing upon the Equity Committee, it has also had the authority to - and did - effectively withdraw that standing when it concluded that the Equity Committee's role was no longer in the best interests of the estate, and to transfer the derivative claims to a litigation trust." Thus, the Second Circuit accede that the Bankruptcy Court has authority to confirm the Plan and transfer the Equity Committee's claims to a litigation trust. The Equity Committee has argued that the trustees of the litigation trust will be less effective in pursuing the derivative claims because, being appointed by the Official Committee of Unsecured Creditors, they possess conflicts of interests. The Equity Committee, however, failed to prove their allegations concerning the conduct of the trustees, Judge Sotomayor states. Thus, the Second Circuit avers, there is no reason for the Equity Committee to second-guess the Bankruptcy Court's judgment. The Equity Committee's argument on creditors' priority is but a rehash of its unsuccessful objection to the Plan, Judge Sotomayor says. The Second Circuit also elaborates that a plan need not satisfy the Absolute Priority Rule so long as any class adversely affected by the variation accepts the plan. The Second Circuit finds that it was not impermissible for Adelphia's interest holders to agree overwhelmingly upon a plan that shared Adelphia's litigation proceeds with other Debtors' creditors. Accordingly, the Second Circuit affirms Judge Scheindlin's devision to dismiss the Equity Committee's Appeal. A full-text copy of the 11-page Second Circuit Opinion is available for free at http://ResearchArchives.com/t/s?32f8 About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bakeries Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) AGATA SKWAREK: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Agata Skwarek 370 Weschester Avenue Port Chester, NY 10573 Bankruptcy Case No.: 08-23433 Chapter 11 Petition Date: October 3, 2008 Court: Southern District of New York (White Plains) Debtor's Counsel: Jerzy Sokol, Esq. jbsokol@yahoo.com 861 Manhattan Avenue, Suite 6 Brooklyn, NY 11222 Tel: (718) 389-5115 Fax: (718) 389-0978 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. ALL-AMERICAN SPORTPARK: Settles Cases with Urban Land of Nevada --------------------------------------------------------------- All-American SportPark, Inc. disclosed in a Securities and Exchange Commission filing that it has entered into a settlement agreement with Urban Land of Nevada, Inc. In December 2005, the Company commenced an arbitration proceeding before the American Arbitration Association against Urban Land seeking reimbursement of an $800,000 paid in settlement of the Sierra SportService matter plus fees and costs pursuant to the terms of the Company's agreements with Urban Land, which owns the property on which the Callaway Golf Center is located. Urban Land filed a counterclaim against the Company seeking to recover damages related to back rent allegedly owed by Company of approximately $600,000. In addition, Urban Land claims the Company misused an alleged $880,000 settlement related to construction defects lawsuits. An arbitrator was appointed and arbitration was scheduled for September 2008. Urban Land also filed another lawsuit against the Company and claims against other parties in the arbitration proceeding. The claims against the Company remain essentially identical. The other parties include, among others, Ronald S. Boreta, the President of the Company; Vaso Boreta, Chairman of the Board of the Company; and Boreta Enterprise, Ltd., a principal shareholder of the Company. The other party claims allege that the Company and others defrauded otherwise injured Urban Land in connection with Urban Land entering into certain agreements in which the Company is a party. The Company filed a motion to dismiss against the plaintiff's claims in the lawsuit but the Court provided the plaintiff with a limited amount of discovery. The discovery process began in 2007 and depositions were taken in September 2007. A summary judgment was awarded in favor of the Company in June 2008, dismissing the claims. The Company asked the court to be awarded a judgment against Urban Land for the legal costs incurred by the Company in connection with the lawsuit. On Feb. 10, 2006, Urban Land filed a notice of default on the CGC ground lease claiming that certain repairs to the property had not been performed or documented. The Company filed a lawsuit in the Eighth Judical District Court of Clark County Nevada to prevent Urban Land from declaring the Company in default of its lease. The claims in the notice of default have been added to the above arbitration proceeding. A Summary Judgment was awarded to the Company in February 2008. As a result of the settlement agreement, an appeal pending before the Nevada Supreme Court and the arbitration proceedings involving the parties have been or will be ended. Urban Land has agreed to pay the Company $850,000 for the Sierra SportService matter. Further, Urban Land will not charge any rent for the ground lease on the Callaway Golf Center for the months of October 2008 through March 2009. Effective on April 1, 2009, the minimum rent under the lease will be approximately $40,140 per month which amount will be subject to certain increases in October 2012 and October 2017. In addition, Urban Land's 35% interest in the Company's All American Golf Center, Inc. subsidiary has been canceled. Urban Land has paid ASI Group, LLC, a principal shareholder of the Company, $185,877 for legal expenses and released certain other related parties from any liability in connection with the legal proceedings. About All-American SportPark Based in Las Vegas, All-American SportPark Inc. (OTC BB: AASP) is engaged in the management and operation of the Callaway Golf Center (CGC), a golf facility located on 42 acres of leased land in Las Vegas, Nevada. The CGC includes a two-tiered, 110-station, driving range. The company also sells golf balls under the Pro-line equipment and popular brand name. In addition to the driving range, the CGC has a lighted, nine-hole, par three golf course, named the Divine Nine. The golf course has several water features, including lakes, creeks, water rapids and waterfalls, golf cart paths, and designated practice putting and chipping areas. Going Concern Doubt L.L. Bradford & Company, LLC, in Las Vegas, expressed substantial doubt about All-American SportPark 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 negative working capital and recurring losses. All-American SportPark Inc.'s consolidated balance sheet at June 30, 2008, showed $1,054,606 in total assets and $10,812,593 in total liabilities, resulting in a $9,757,987 total stockholders' deficit. ALLIED HOLDINGS: Court Denies Volvo Parts' Fund Dismissal Plea -------------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Georgia denied Volvo Parts North America, Inc.'s request to dismiss Allied Holdings Inc.'s complaint for turnover of fund. The Court also denied a request by Volvo for allowance of balances it sought in its claims, including $175,987 as priority administrative expense. The Court ruled that the funds overpaid to Volvo postpetition were property of the Debtor' bankruptcy estate. In addition, Volvo does not have a right of recoupment. The Court directed Volvo to turn over $561,743 to the Debtor. The Debtor argued that Volvo Parts' request for the allowance of an administrative priority claim because Volvo's request: * was untimely filed, * is procedurally improper, and * is substantively invalid. The Reorganized Debtor' counsel, Alisa H. Aczel, Esq., at Troutman Sanders LLP, in Atlanta Georgia, says Volvo failed to provide any explanation why it was unable to file an administrative claim on or before the June 29, 2007 Administrative Expense Claims Bar Date when the Debtor have provided notification to all parties-in-interest about the Bar Date. Ms. Aczel also notes that Volvo failed to clearly articulate whether it seeks to have a portion of one of its Claims reclassified as an administrative priority claim or whether it seeks to have an entirely new claim allowed. Ms. Aczel argues that under either scenario, Volvo's request is improper in the Adversary Proceeding. Ms. Aczel says that the only procedural mechanism through which Volvo can seek allowance of an administrative claim is by seeking allowance of that claim in the Reorganized Debtor' main bankruptcy cases. It is wholly inappropriate for Volvo to seek allowance of an administrative expense claim in the Adversary Proceeding, since "claims against a bankruptcy estate are not brought as lawsuits . . . [but rather] are asserted directly against the estate, within the bankruptcy case, either under the claims procedure of Sections 501 or 502, or under the administrative expense procedures of Section 503, Ms. Aczel contends, citing In re Schechter v. Dept. of Rev. (In re Markos Gurnee P'ship), 182 B.R.211, 216 (Bankr. D.Ill.1995). Ms. Aczel further contends that it is similarly inappropriate to seek reclassification of Volvo's Claims in the Adversary Proceeding. The Reorganized Debtor also points out that Volvo has failed to satisfy the requirements of Section 503(b) of the Bankruptcy Code. Ms. Aczel notes that Volvo seeks administrative priority for $175,987, on account of the Debtor' illegal termination of a service agreement, yet failed to establish the amount and extent of its postpetition claim or demonstrate any correlation between the $175,987 amount and the Reorganized Debtor' postpetition estates. Ms. Aczel says that on its face, Volvo appears to be asserting a claim for rejection damages, which claims are deemed to constitute a prepetition claim. Ms. Aczel relates that the record is unequivocally clear that the Reorganized Debtor undertook no affirmative steps to assume the Service Agreement with Volvo. She says the Reorganized Debtor neither filed a motion nor notified Volvo with any intent to assume the agreement. About Allied Holdings Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provided the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provided financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. On May 11, 2007, the Court confirmed Allied's Second Amended Chapter 11 Plan of Reorganization. Allied emerged from bankruptcy on May 29, 2007. (Allied Holdings Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) * * * As of April 30, 2007, Allied Holdings Inc.'s consolidated balance sheet showed $217,379,000 in total stockholders' deficit resulting from total assets of $309,931,000 and total liabilities of $527,310,000. AMC INVESTORS: Eugenia VI Files Involuntary Chapter 7 ----------------------------------------------------- Bill Rochelle of Bloomberg News reports that Eugenia VI Venture Holdings, Ltd., filed an involuntary Chapter 7 petition with the U.S. Bankruptcy Court for the District of Delaware against AMC Investors, LLC, (Lead Case 08-12264) and an affiliate. Eugenia VI says it has a $10.7 million state court judgment against the alleged Debtors that it has been unable to collect, according to the report. The judgment arose from a loan that Eugenia VI made to AMC Computer Corp., a now-defunct operating company of the Debtors that they guaranteed, according to the report. Eugenia VI describes the judgment as resulting from AMC Computer's falsifying collateral to borrow more money than it was entitled to obtain under the credit agreement, according to the report. AMERICAN ACHIEVEMENT: Fails to Meet Note Condition; Hikes Rate -------------------------------------------------------------- American Achievement Group Holding Corp. disclosed in a Securities and Exchange Commission filing that a condition under the terms of its 14.75% Senior PIK Notes due Oct. 1, 2012, was not met and therefore the interest rate on the notes has increased by 2% as of Aug. 30, 2008. American Achievement issued $150.0 million senior PIK notes in June 2006. On February 24, 2007, the rate at which interest accrues on the senior PIK notes increased by 2.00% per annum, to a rate of 14.75%. The first interest payment on the notes occurred on October 1, 2006. Through April 1, 2011, interest on the notes will be payable in the form of additional notes semi-annually in arrears on April 1 and October 1. On October 1, 2011, and thereafter, interest will be payable in cash semi-annually in arrears on April 1 and October 1. The notes mature on October 1, 2012. In its Form 10-K filing in December 2007, the company disclosed that, at maturity, it is required to repay the notes at a repayment price of 103.188% of the aggregate principal amount thereof, plus accrued and unpaid interest and special interest, if any, to the maturity date. The notes are the company's unsecured obligation and rank equally with all of its future senior obligations and senior to its future subordinated indebtedness. The notes are effectively subordinated to the company's future secured indebtedness to the extent of the assets securing that indebtedness and are structurally subordinated to all indebtedness and other obligations of its subsidiaries. About American Achievement Based in Austin, Texas, American Achievement Group Holding Corp. together with its wholly-owned subsidiary, AAC Group Holding Corp. and its indirect wholly-owned subsidiary, American Achievement Corporation, manufacture and supply class rings, yearbooks and other graduation-related scholastic products for the high school and college markets and of recognition products, such as letter jackets, and affinity jewelry designed to commemorate significant events, achievements and affiliations. Products are and services are marketed primarily in the United States and operates in four reporting segments; class rings, yearbooks, graduation products and other. American Achievement Group Holding Corp.'s consolidated balance sheet at May 31, 2008, showed $489.8 million in total assets and $643.8 million in total liabilities, resulting in a $154.0 million stockholders' deficit. The company reported net income of $18.6 million on net sales of $157.1 million for the third quarter ended May 31, 2008, compared with net income of $15.2 million on net sales of $143.8 million in the same period ended May 26, 2007. * * * As reported in the Troubled Company Reporter on May 22, 2008, Moody's Investors Service affirmed American Achievement Group Holding Corp.'s Corporate family rating at B3; Probability-of- default rating at B3; and $189 million (current value) senior PIK notes due 2012 at Caa2 (LGD5, 87%). Moody's also affirmed AAC Group Holding Corp.'s $124 million (current value) senior discount notes due 2012 at Caa1 (LGD4, 63%), American Achievement Corporation's $150 million senior subordinated notes due 2012 at B2 (LGD3, 34%); $40 million senior secured revolving credit facility due 2010 at Ba3 (LGD1, 7%); and $87 million senior secured term loan due 2011 at Ba3 (LGD1, 7%). The outlook is changed to developing from stable. AMERICAN INTERNATIONAL: Sale Can Help Repay Loan, Says UBS Analyst ------------------------------------------------------------------ The sale of American International Group assets could help repay the $85 billion loan the company secured from the government, Liam Pleven at The Wall Street Journal reports, citing UBS analyst Andrew Kligerman. AIG's CEO Edward Liddy laid out a plan to sell the company's assets, including all of its domestic life-insurance operations and a part of its foreign life business, to pay off the loan, WSJ relates. As reported in the Troubled Company Reporter on Oct. 6, 2008, AIG will refocus the company on its core property and casualty insurance businesses, generate sufficient liquidity to repay the outstanding balance of its loan and address its capital structure. AIG had drawn $61 billion on the Federal Reserve Bank of New York credit facility as of Sept. 30, 2008. WSJ relates that so much of AIG is being put on sale that the company should be able to raise substantial sums. The report states that Mr. Kligerman said, "By my calculations, there's more than enough to cover the loan," even given the upheaval in the markets and there is still a pool of buyers "with reasonably high demand." According to WSJ, Mr. Kligerman said that AIG's domestic life- insurance operations alone could fetch $24 billion. WSJ states that Mr. Liddy will sell American Life Insurance Co., which is in Japan, Europe, and the Middle East, among other places, and other units that sell life insurance in Japan and Taiwan. The report says that the foreign life-insurance operations could be particularly attractive to buyers. Citing Mr. Liddy, WSJ relates that AIG prefers to sell off units to companies with strong brand names, ratings, and balance sheets "because they can be done with speed and you attract larger buyers." Manulife Financial Corp., Prudential Financial Inc., and MetLife Inc., might pursue AIG's offerings, which could earn AIG tens of billions of dollars, WSJ states. Based in New York City, American International Group Inc. -- http://www.aig.com/-- (NYSE: AIG) is an international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. The company is engaged through subsidiaries in General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. The company's British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. AIG owns Ocean Finance, a United Kingdom based company providing home owner loans, mortgages and remortgages. AIG operates in the UK with the brands AIG UK, AIG Life and AIG Direct. It has about 3,000 employees, and sponsors the Manchester United football club. In response to redemption demands, AIG Life (UK) suspended redemptions of its AIG Premier Bond money market fund on Sept. 19, 2008, in order to provide an orderly withdrawal of assets. $85,000,000,000 Federal Reserve Loan The Federal Reserve Bank of New York extended to AIG a revolving credit facility up to $85 billion. AIG's borrowings under the revolving credit facility will bear interest, for each day, at a rate per annum equal to three-month Libor plus 8.50%. The revolving credit facility will have a 24-month term and will be secured by a pledge of assets of AIG and various subsidiaries. The Credit Facility provides for a 79.9% equity interest in AIG. The Credit Facility provides for an initial gross commitment fee of 2% of the total Credit Facility on the closing date. AIG, in a regulatory filing with the Securities and Exchange Commission, said it will pay a commitment fee on undrawn amounts at the rate of 8.5% per annum. Interest and the commitment fees are generally payable through an increase in the outstanding balance under the Credit Facility. Borrowings under the Credit Facility are conditioned on the NY Fed being reasonably satisfied with, among other things, AIG's corporate governance. AIG is required to repay the Credit Facility from, among other things, the proceeds of certain asset sales and issuances of debt or equity securities. These mandatory repayments permanently reduce the amount available to be borrowed under the Credit Facility. In a statement, the company said "AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues." Standard & Poor's Ratings Services has revised the CreditWatch status of most of its ratings on the AIG group of companies -- including its 'A-' long-term counterparty credit ratings on American International Group Inc. and International Lease Finance Corp. and the 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries -- to CreditWatch developing from CreditWatch negative. Fitch Ratings revised its Rating Watch on American International Group, Inc. to Evolving from Negative. Fitch viewed this transaction as a favorable development that alleviates significant near-term liquidity concerns. The Troubled Company Reporter reported on Sept. 19, 2008 that that Edward Liddy replaced Robert Willumstad as AIG's CEO. * * * In a U.S. Securities and Exchange Commission filing dated Aug. 6, 2008, AIG reported a net loss for the second quarter of 2008 of $5.36 billion compared to 2007 second quarter net income of $4.28 billion. Second quarter 2008 adjusted net loss was $1.32 billion, compared to adjusted net income of $4.63 billion for the second quarter of 2007. The continuation of the weak U.S. housing market and disruption in the credit markets, as well as global equity market volatility, had a substantial adverse effect on AIG's results in the second quarter. Net loss for the first six months of 2008 was $13.16 billion, compared to net income of $8.41 billion in the first six months of 2007. Adjusted net loss for the first six months of 2008 was $4.88 billion, compared to adjusted net income of $9.02 billion in the first six months of 2007. AMERICAN INTERNATIONAL: Discloses 8.4% Equity Stake in eTelecare ---------------------------------------------------------------- American International Group, Inc., Philippine American Life and General Insurance Company, AIG Life Holdings (International) LLC, American International Reinsurance Company, Ltd., American International Assurance Company (Bermuda) Limited, AIG Global Investment Corp. (Asia) Ltd., AIG Asian Opportunity Fund LP and AIG Asian Opportunity G.P., L.L.C. disclosed in a Securities and Exchange Commission filing that they may be deemed to beneficially own 2,457,832 shares of eTelecare Global Solutions, Inc.'s common stock, representing 8.4% of the shares issued and outstanding. Based in New York City, American International Group Inc. -- http://www.aig.com/-- (NYSE: AIG) is an international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. The company is engaged through subsidiaries in General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. The company's British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. AIG owns Ocean Finance, a United Kingdom based company providing home owner loans, mortgages and remortgages. AIG operates in the UK with the brands AIG UK, AIG Life and AIG Direct. It has about 3,000 employees, and sponsors the Manchester United football club. In response to redemption demands, AIG Life (UK) suspended redemptions of its AIG Premier Bond money market fund on Sept. 19, 2008, in order to provide an orderly withdrawal of assets. The Federal Reserve Bank of New York has extended to AIG a revolving credit facility up to $85 billion. AIG's borrowings under the revolving credit facility will bear interest, for each day, at a rate per annum equal to three-month Libor plus 8.50%. The revolving credit facility will have a 24-month term and will be secured by a pledge of assets of AIG and various subsidiaries. The revolving credit facility will contain affirmative and negative covenants, including a covenant to pay down the facility with the proceeds of asset sales. The summary of terms also provides for a 79.9% equity interest in AIG. The corporate approvals and formalities necessary to create this equity interest will depend upon its form. In a statement, the company said "AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues." Standard & Poor's Ratings Services has revised the CreditWatch status of most of its ratings on the AIG group of companies -- including its 'A-' long-term counterparty credit ratings on American International Group Inc. and International Lease Finance Corp. and the 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries -- to CreditWatch developing from CreditWatch negative. Fitch Ratings revised its Rating Watch on American International Group, Inc. to Evolving from Negative. Fitch viewed this transaction as a favorable development that alleviates significant near-term liquidity concerns. The Troubled Company Reporter reported on Sept. 19, 2008, that that Edward Liddy replaced Robert Willumstad as AIG's CEO. * * * In a U.S. Securities and Exchange Commission filing dated Aug. 6, 2008, AIG reported a net loss for the second quarter of 2008 of $5.36 billion compared to 2007 second quarter net income of $4.28 billion. Second quarter 2008 adjusted net loss was $1.32 billion, compared to adjusted net income of $4.63 billion for the second quarter of 2007. The continuation of the weak U.S. housing market and disruption in the credit markets, as well as global equity market volatility, had a substantial adverse effect on AIG's results in the second quarter. Net loss for the first six months of 2008 was $13.16 billion, compared to net income of $8.41 billion in the first six months of 2007. Adjusted net loss for the first six months of 2008 was $4.88 billion, compared to adjusted net income of $9.02 billion in the first six months of 2007. AMERICAN INTERNATIONAL: Robert Sandler Retires from Firm -------------------------------------------------------- American International Group, Inc. disclosed in a Securities and Exchange Commission filing that named executive officer Robert M. Sandler has retired from AIG following a change in his position. Mr. Sandler, 66, had been employed by AIG for over 39 years. On Sept. 22, 2008, AIG's retention program became effective. The program applies to approximately 130 executives and consists of cash awards payable 60 percent in December 2008 and 40 percent in December 2009. In connection with Mr. Sandler's retirement, AIG entered into an agreement and release that implements the retirement benefits of AIG's long-term compensation plans and provides the separation pay and other benefits to which AIG executives are entitled under AIG's Executive Severance Plan for terminations without cause. These benefits include a payment of a total of $2,514,168 in separation pay, payable over two years. Based in New York City, American International Group Inc. -- http://www.aig.com/-- (NYSE: AIG) is an international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. The company is engaged through subsidiaries in General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. The company's British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. AIG owns Ocean Finance, a United Kingdom based company providing home owner loans, mortgages and remortgages. AIG operates in the UK with the brands AIG UK, AIG Life and AIG Direct. It has about 3,000 employees, and sponsors the Manchester United football club. In response to redemption demands, AIG Life (UK) suspended redemptions of its AIG Premier Bond money market fund on Sept. 19, 2008, in order to provide an orderly withdrawal of assets. The Federal Reserve Bank of New York has extended to AIG a revolving credit facility up to $85 billion. AIG's borrowings under the revolving credit facility will bear interest, for each day, at a rate per annum equal to three-month Libor plus 8.50%. The revolving credit facility will have a 24-month term and will be secured by a pledge of assets of AIG and various subsidiaries. The revolving credit facility will contain affirmative and negative covenants, including a covenant to pay down the facility with the proceeds of asset sales. The summary of terms also provides for a 79.9% equity interest in AIG. The corporate approvals and formalities necessary to create this equity interest will depend upon its form. In a statement, the company said "AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues." Standard & Poor's Ratings Services has revised the CreditWatch status of most of its ratings on the AIG group of companies -- including its 'A-' long-term counterparty credit ratings on American International Group Inc. and International Lease Finance Corp. and the 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries -- to CreditWatch developing from CreditWatch negative. Fitch Ratings revised its Rating Watch on American International Group, Inc. to Evolving from Negative. Fitch viewed this transaction as a favorable development that alleviates significant near-term liquidity concerns. The Troubled Company Reporter reported on Sept. 19, 2008, that that Edward Liddy replaced Robert Willumstad as AIG's CEO. * * * In a U.S. Securities and Exchange Commission filing dated Aug. 6, 2008, AIG reported a net loss for the second quarter of 2008 of $5.36 billion compared to 2007 second quarter net income of $4.28 billion. Second quarter 2008 adjusted net loss was $1.32 billion, compared to adjusted net income of $4.63 billion for the second quarter of 2007. The continuation of the weak U.S. housing market and disruption in the credit markets, as well as global equity market volatility, had a substantial adverse effect on AIG's results in the second quarter. Net loss for the first six months of 2008 was $13.16 billion, compared to net income of $8.41 billion in the first six months of 2007. Adjusted net loss for the first six months of 2008 was $4.88 billion, compared to adjusted net income of $9.02 billion in the first six months of 2007. AMERICAN INTERNATIONAL: Has 33.2% Stake in Transatlantic Holdings ----------------------------------------------------------------- American International Group, Inc., AIG Property Casualty Group, INC., and American Home Assurance Company disclosed in a Securities and Exchange Commission filing that they may be deemed to beneficially own 22,018,973 shares of Transatlantic Holdings, Inc.'s common stock, representing 33.2% of the shares issued and outstanding. Based in New York City, American International Group Inc. -- http://www.aig.com/-- (NYSE: AIG) is an international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. The company is engaged through subsidiaries in General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. The company's British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. AIG owns Ocean Finance, a United Kingdom based company providing home owner loans, mortgages and remortgages. AIG operates in the UK with the brands AIG UK, AIG Life and AIG Direct. It has about 3,000 employees, and sponsors the Manchester United football club. In response to redemption demands, AIG Life (UK) suspended redemptions of its AIG Premier Bond money market fund on Sept. 19, 2008, in order to provide an orderly withdrawal of assets. The Federal Reserve Bank of New York has extended to AIG a revolving credit facility up to $85 billion. AIG's borrowings under the revolving credit facility will bear interest, for each day, at a rate per annum equal to three-month Libor plus 8.50%. The revolving credit facility will have a 24-month term and will be secured by a pledge of assets of AIG and various subsidiaries. The revolving credit facility will contain affirmative and negative covenants, including a covenant to pay down the facility with the proceeds of asset sales. The summary of terms also provides for a 79.9% equity interest in AIG. The corporate approvals and formalities necessary to create this equity interest will depend upon its form. In a statement, the company said "AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues." Standard & Poor's Ratings Services has revised the CreditWatch status of most of its ratings on the AIG group of companies -- including its 'A-' long-term counterparty credit ratings on American International Group Inc. and International Lease Finance Corp. and the 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries -- to CreditWatch developing from CreditWatch negative. Fitch Ratings revised its Rating Watch on American International Group, Inc. to Evolving from Negative. Fitch viewed this transaction as a favorable development that alleviates significant near-term liquidity concerns. The Troubled Company Reporter reported on Sept. 19, 2008, that that Edward Liddy replaced Robert Willumstad as AIG's CEO. * * * In a U.S. Securities and Exchange Commission filing dated Aug. 6, 2008, AIG reported a net loss for the second quarter of 2008 of $5.36 billion compared to 2007 second quarter net income of $4.28 billion. Second quarter 2008 adjusted net loss was $1.32 billion, compared to adjusted net income of $4.63 billion for the second quarter of 2007. The continuation of the weak U.S. housing market and disruption in the credit markets, as well as global equity market volatility, had a substantial adverse effect on AIG's results in the second quarter. Net loss for the first six months of 2008 was $13.16 billion, compared to net income of $8.41 billion in the first six months of 2007. Adjusted net loss for the first six months of 2008 was $4.88 billion, compared to adjusted net income of $9.02 billion in the first six months of 2007. AMERICAN INTERNATIONAL: Moody's Cuts Unsecured Debt Rating to 'A3' ------------------------------------------------------------------ Moody's Investors Service has downgraded the senior unsecured debt rating of American International Group, Inc. to A3 from A2. This rating action reflects Moody's view that if AIG successfully completes the divestiture and restructuring plan, its business diversification will be significantly reduced. AIG's long-term ratings and its Prime-1 short-term rating remain on review for possible downgrade, reflecting the substantial execution risk in the restructuring plan, particularly given the current turbulent credit market. In the past year, AIG has reported substantial losses and write- downs associated with mortgage-backed securities, largely through its credit default swap and securities lending portfolios. Significant cash collateral calls and maturities related to these activities in recent weeks have caused the company to borrow heavily under the $85 billion revolving credit facility recently provided by the Federal Reserve Bank of New York. Total borrowings under the two-year secured facility amounted to $61 billion as of September 30, 2008, and more borrowings are expected in the months ahead. Moody's believes that the asset sales plan, if successful, will enable the company to repay borrowings under the Fed facility and emerge as a more focused, albeit less diversified, insurance firm. The continuing review for possible downgrade incorporates the risk that the situation may deteriorate, either because of shortfalls in executing the restructuring plan or because of declines in the business or financial profiles of the operations to be retained. Moody's believes that the risk of such deterioration is materially mitigated by the involvement of the Fed and the enhanced market liquidity that will likely result from the US Government's pending $700 billion financial rescue plan. Following the restructuring, AIG's core businesses are expected to include the US-based Commercial Insurance Group, Foreign General Insurance and a majority stake in American International Assurance. The parent company's A3 senior debt rating is now three notches below the Aa3 insurance financial strength ratings of the CIG companies, the largest core operating unit. A three- notch differential is common among US insurance groups, but this represents an expansion of the notching for AIG, based on Moody's view that AIG will be materially less diversified following the restructuring. AIG's Prime-1 short-term rating reflects the significant protection to short-term creditors afforded by the Fed credit facility in the near term. Moody's also announced rating actions on several AIG subsidiaries whose ratings depend on explicit or implicit parental support. Ratings on most AIG units remain on review for possible downgrade. Moody's expects to revisit the stand-alone ratings, and perhaps the public ratings, for the major life insurance operations over the next few weeks. Certain operating units have been placed on review with direction uncertain, signaling potential sales to buyers whose credit profiles could be stronger, weaker or similar to that of AIG. The success of the restructuring plan, in Moody's view, hinges largely on AIG's ability to contain and reduce risk in its mortgage exposed investment and derivative portfolios. A majority of the borrowings under the Fed credit facility have been used to address liquidity and capital needs stemming from these exposures. Moody's noted that further deterioration in market values within these portfolios could further strain the company's resources through such mechanisms as increased collateral calls or reductions/terminations of funding arrangements. Such strains could weaken the company's credit profile, which may lead to additional rating downgrades. In such an event, contingent additional capital and liquidity needs could be triggered. The rating agency expects that AIG -- with the support and interest of the Fed -- will pursue various means to limit the risks associated with market value volatility in its investment and derivative portfolios. AIG's core insurance operations are fundamentally solid, said Moody's. CIG is the largest US commercial insurer, with a sound capital base, well diversified product offerings and expertise in writing large and complex risks. Foreign General is the top provider of accident & health insurance globally, operating in some 80 countries and adapting to local laws and customs as needed. The AIA companies make up one of the largest and most diversified life insurance groups spanning Asia and Australia. The insurance and other operations identified for sale include market leaders in many business lines and geographic areas. Major units expected to be sold include Domestic Life Insurance and Retirement Services, one of the largest and most diversified life insurance groups in the US; American Life Insurance Company, one of the largest international life insurers, with operations in more than 50 countries; International Lease Finance Corporation, a global leader in leasing and remarketing advanced technology commercial aircraft; and a minority stake in AIA. AIG's sales plans encompass well over a dozen substantial businesses. Moody's noted that all of AIG's operations are subject to significant reputational risk in connection with the recent liquidity strains that gave rise to the Fed credit facility. Challenges facing AIG managers include retaining clients, distributors and employees; demonstrating that the operating companies have ample resources to meet their obligations; generating new business; and facilitating divestitures. It will take time to determine the extent to which recent events may have weakened the companies' standing in their respective markets. Moody's continuing review of the ratings on AIG and its subsidiaries will focus on (i) the firm's evolving liquidity profile, including the level of borrowing under the Fed credit facility; (ii) steps taken to contain and reduce risk in the investment and derivative portfolios, including any associated losses or costs as well as any potential benefit from the US Government's pending $700 billion financial rescue plan; (iii) the timing and amounts of cash proceeds generated from asset sales; (iv) the performance of major operating units, whether they are core operations or targeted for sale; and (v) the resulting financial flexibility profile (e.g., financial leverage and fixed charge coverage) of AIG following the asset sales. For those operations being sold, Moody's will consider their intrinsic financial strength as well as the rating profiles of potential acquirers. The last rating action on AIG took place on September 18, 2008, when Moody's reiterated the existing ratings and the review for possible downgrade, following the activation of the Fed credit facility. Moody's has downgraded these ratings and kept them on review for possible further downgrade: * American International Group, Inc. -- long-term issuer rating to A3 from A2, senior unsecured debt to A3 from A2, subordinated debt to Baa1 from A3; * AGFC Capital Trust I -- backed preferred stock to Baa3 from Baa2; * AIG General Insurance (Taiwan) Co., Ltd. -- insurance financial strength to A3 from A1; * AIG Life Holdings (US), Inc. -- backed senior unsecured debt to A3 from A2; * AIG Retirement Services, Inc. -- backed senior unsecured debt to A3 from A2, backed preferred stock to Baa2 from Baa1; * American General Capital II -- backed trust preferred stock to Baa1 from A3; * American General Finance Corporation -- long-term issuer rating to Baa1 from A3, senior unsecured debt to Baa1 from A3; * American General Institutional Capital A & B -- backed trust preferred stock to Baa1 from A3; * Capital Markets subsidiaries -- AIG Financial Products Corp., AIG Matched Funding Corp., AIG-FP Capital Funding Corp., AIG- FP Matched Funding Corp., AIG-FP Matched Funding (Ireland) P.L.C., Banque AIG -- backed senior unsecured debt to A3 from A2; * Mortgage Guaranty subsidiaries (second-lien and student loans) -- United Guaranty Commercial Insurance Company of North Carolina, United Guaranty Residential Insurance Company of North Carolina -- backed insurance financial strength to Baa1 from A3. Moody's has placed this rating on review for possible downgrade: * American General Finance, Inc. -- short-term debt at Prime-2. These ratings remain on review for possible downgrade: * American International Group, Inc. -- short-term issuer rating at Prime-1; * AIG Edison Life Insurance Company -- insurance financial strength at Aa3; * AIG Financial Products Corp. -- backed short-term debt at Prime-1; * AIG Funding, Inc. -- backed short-term debt at Prime-1; * AIG Liquidity Corp. -- backed short-term debt at Prime-1; * AIG Matched Funding Corp. -- backed short-term debt at Prime-1; * AIG SunAmerica funding agreement-backed note programs -- AIG SunAmerica Global Financing Trusts, ASIF I & II, ASIF III (Jersey) Limited, ASIF Global Financing Trusts -- senior secured debt at Aa3; * AIG SunAmerica subsidiaries -- AIG SunAmerica Life Assurance Company, First SunAmerica Life Insurance Company, SunAmerica Life Insurance Company -- insurance financial strength at Aa3; short-term insurance financial strength at Prime-1; * AIG UK Limited -- insurance financial strength at A1; * American International Assurance Company (Bermuda) Limited -- insurance financial strength at Aa3; * American Life Insurance Company -- insurance financial strength at Aa3; * Commercial Insurance Group subsidiaries -- AIG Casualty Company; AIU Insurance Company; American Home Assurance Company; American International Specialty Lines Insurance Company; Commerce and Industry Insurance Company; National Union Fire Insurance Company of Pittsburgh, Pennsylvania; New Hampshire Insurance Company; The Insurance Company of the State of Pennsylvania -- insurance financial strength at Aa3; * Domestic Life Insurance & Retirement Services subsidiaries -- AIG Annuity Insurance Company, AIG Life Insurance Company, American General Life and Accident Insurance Company, American General Life Insurance Company, American International Life Assurance Company of New York, The United States Life Insurance Company in the City of New York, The Variable Annuity Life Insurance Company -- insurance financial strength at Aa3; * Mortgage Guaranty subsidiaries (first-lien loans) -- United Guaranty Mortgage Indemnity Company, United Guaranty Residential Insurance Company -- backed insurance financial strength at Aa3. Moody's has downgraded the ratings and placed them on review with direction uncertain: * ILFC E-Capital Trusts I & II -- backed preferred stock to Baa3 from Baa2; * International Lease Finance Corporation -- senior unsecured debt to Baa1 from A3, preferred stock to Baa3 from Baa2, senior unsecured debt shelf to (P)Baa1 from (P)A3. Moody's has placed these ratings on review with direction uncertain: * International Lease Finance Corporation -- short-term debt at Prime-2; * Transatlantic Holdings, Inc. -- senior unsecured debt at A3, senior unsecured debt shelf at (P)A3, subordinated debt shelf at (P)Baa1; * Transatlantic Reinsurance Company -- insurance financial strength at Aa3. Moody's maintains a negative outlook on these ratings: * American General Finance Corporation -- short-term debt at Prime 2; * CommoLoco, Inc. -- backed short-term debt at Prime-2. These ratings have been (downgraded and) withdrawn for business reasons: * AIG Capital Corporation -- long-term issuer rating to Baa2 from Baa1; short-term issuer rating at Prime 2. AIG, based in New York City, is a leading international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. The company is engaged through subsidiaries in General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. AIG reported total revenues of $19.9 billion and a net loss of $5.4 billion for the second quarter of 2008. Shareholders' equity was $78.1 billion as of June 30, 2008. ARCHWAY COOKIES: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Dawn McCarty of Bloomberg News reports that Archway Cookies, LLC, and affiliate Mother's Cake & Cookie Co. filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware (Lead Case No. 08-12323) on Oct. 6, 2008, without giving a reason. The Debtors' 30 largest creditors without collateral backing their claims are owed a total of $26.9 million. Their three biggest creditors are Bakery & Confectionary Union Health Benefits & Pension, owed $6 million; Kraft Foods Inc., owed $5.5 million; and Great Brands of Europe, owed $4.8 million. Battle Creek, Michigan-based Archway Cookies, LLC,-- http://www.archwaycookies.com/-- makes soft-baked cookies. and crackers. Michael R. Lastowski, Esq., at Duane Morris, LLP, represents the Debtors in their restructuring efforts. In their filing, the Debtors listed estimated assets of between $50 million and $100 million and estimated debts of between $500 million and $1 billion. In 1998, Specialty Foods Corp. acquired the Debtors' for about $100 million. Parmalat Finanziaria of Italy acquired Mother's Cake and Cookie Company and Archway Cookies from The Specialty Foods Acquisition Corporation for $250 million in 2000. Parmalat later sold its North American Bakery Group, which includes the Archway brands, Mother's brands and the U.S. and Canadian private label cookie businesses, to the private equity firm Catterton Partners and their operating partner Insight Holdings in 2005. Terms were not disclosed at that time. ARCHWAY COOKIES: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Archway Cookies, LLC 67 Wesst Michigan Avenue, Suite 200 Battle Creek, MI 49017 Bankruptcy Case No.: 08-12323 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Mother's Cake & Cookie Co. 08-12326 Type of Business: The Debtors make soft-baked cookies and crackers. In 1998, Specialty Foods Corporation acquired the Debtors for about $100 million. Parmalat Finanziaria of Italy acquired Mother's Cake and Cookie Company and Archway Cookies from The Specialty Foods Acquisition Corporation for $250 million in 2000. Parmalat later sold its North American Bakery Group, which includes the Archway brands, Mother's brands and the U.S. and Canadian private label cookie businesses, to the private equity firm Catterton Partners and their operating partner Insight Holdings in 2005. Terms were not disclosed at that time. See: http://www.archwaycookies.com/ Chapter 11 Petition Date: October 6, 2008 Court: District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtor's Counsel: Michael R. Lastowski, Esq. mlastowski@duanemorris.com Duane Morris LLP 1100 North Market Street, Suite 1200 Wilmington, DE 19801-1246 Tel: (302) 657-4900 Fax: (302) 657-4901 Chief Restructuring Officer: Jeffrey Granger of Focus Management Group USA, Inc. Investment Banker and Financial Advisors: Rothschild Inc. Business Advisors: Alvarez & Marsal North America, LLC Claims Agent: Kurtzman Carson Consultants LLC Communications Advisors: Joele Frank of Wilkinson Brimmer Katcher. Estimated Assets: $50 million and $100 million Estimated Debts: $50 million and $100 million Debtor's 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bakery & Confectionary Union pension withdrawal $5,995,473 Health Benefits & Pension 10401 Connecticut Avenue Kensington, MD 20895 Tel: (301) 468-3700 Kraft trade; subject to $5,495,760 100 Deforest Avenue set-off of about East Hanover, NJ 07960 $4,414,790 Tel: (973) 503-2328 Great Brands of Europe trade; subject to $4,845,124 100 Hillside Ave., 1st Floor set-off of about White Plains, NY 10603 $2,089,368 Tel: (404) 515-0216 Consolidated Biscuit Company trade $3,277,463 Attn: Jonn Appold 312 Rader Road McComb, OH 45858 Tel: (419) 293-2911 ext. 248 Kirin Flexible Packaging trade $979,815 17320 Marquardt Road Cerritios, CA 90703 Tel: (650) 726-4839 Automotive Industries pension withdrawal $892,990 Pension Plan 1640 South Loop Road Alameda, CA 94502 Tel: (312) 653-7854 Connell Purchasing trade $496,883 200 Connell Drive, Suite 4000 Berkeley Heights, NJ 07922 Tel: (352) 563-9913 Pacer Global Logistics trade $386,907 P.O. Box 71-1805 Columbus, OH 43271-1805 Tel: (800) 837-7584 Georgia Pacific trade $384,514 P.O. Box 93350 Chicago, IL 60673-3350 Tel: (404) 652-4402 Ashland County Treasurer property tax $288,622 142 Wast Second Street Ashland, OH 44805 Tel: (419) 282-4236 Lockton Companies insurance $263,653 3 City Place Drive, Suite 900 St. Louis, MO 63141 Tel: (314) 239-8628 Coffman vs Achway Mothers lawsuit $250,000 333 Albert Ave., Suite 500 East Lansing, MI 48823 Tel: (517) 351-6200 Donald Keeton compensation $209,847 Cockrum Compan trade $206,654 Ernst & Young trade $195,646 Mennel Milling trade $171,352 Blommer Chocolate trade $161,909 Master Packaging trade $139,385 GSMSI trade $137,291 Bunge North America trade $136,619 CH Robinson trade $134,788 Knichel Logistics trade $131,398 Voyager trade $130,861 Strasburger & Price trade $129,369 Innovative Packaging trade $128,101 Berberian Nut Company trade $122,482 Strive Logistics trade $114,273 Cowen Truck Line trade $109,118 ARTHUR DUNHAM: Case Summary & Five Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Arthur Wilbur Dunham, III 5206 Ridgeview Court Midland, MI 48642 Bankruptcy Case No.: 08-22959 Chapter 11 Petition Date: October 3, 2008 Court: Eastern District of Michigan (Bay City) Judge: Daniel S. Opperman Debtor's Counsel: Rozanne M. Giunta, Esq. rmgiunta@lambertleser.com 916 Washington Avenue, Suite 309 Bay City, MI 48708 Tel: (989) 893-3518 Fax: (989)894-2232 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Best Buy Credit Card $765 Retail Services Purchases P.O. Box 15521 Wilmington, DE 19850-5521 Chase Card Services Credit Card $15,779 P.O. Box 15298 Purchases Wilmington, DE 19850-5298 Discover Card Credit Card $4,965 P.O. Box 30943 Purchases Salt Lake City, UT 84130 Fifth Third Bank Unknown Customer Service MD 1MOC2G-4050 38 Fountain Square Plaza Cincinnati, OH 45263 Independent Bank $2,300,000 c/o Sandra Jasinski Bodman LLP P.O. Box 405 Cheboygan, MI 49721 Valenti Trobec Chandler Inc. Unknown 1175 West Long Lake Road, Suite 200 Troy, MI 48098 ASARCO LLC: Plan Confirmation Hearing Set for November 17 --------------------------------------------------------- Creditors of ASARCO LLC received their ballots to vote on the company's reorganization plan. On Sept. 29, Alix Partners, LLP, the company's balloting agent, mailed a solicitation package to all creditors of record as of Sept. 23, 2008. This was done in compliance with a bankruptcy court order issued September 25. "Mailing out the solicitation packages represents a key milestone in our quest to emerge from chapter 11," Joseph F. Lapinsky, president and chief executive officer of ASARCO LLC, said. "We are moving resolutely toward a successful reorganization by the end of this year," he added. The solicitation package includes the bankruptcy court order approving separate disclosure statements for the plan of ASARCO LLC well as for the competing plan proposed by its parents, ASARCO Incorporated and Americas Mining Corporation, which are under the control of Grupo Mexico, S.A. de C.V. Creditors may vote for or against one or both plans well as express a preference for one of the two plans. The bankruptcy court will take account of creditor preferences in his decision to confirm a plan. Ballots are due back to Alix Partners by 4:00 p.m. Central Time on Monday, Oct. 27, 2008. The U.S. Bankruptcy Court in Corpus Christi, Texas, has set a confirmation hearing on the plans to begin Monday, Nov. 17, 2008. The balloting agent must submit to the court by November 12 a voting report, summarizing the results by creditor class and dollar amount of the claims. Questions regarding the ballots or any aspect of the solicitation package must be directed to Alix Partners at 1-888-727-9235 or CMS_Noticing@alixpartners.com. ASARCO LLC stated that the plan was the result of a settlement with all major creditors in the proceeding. It was reached after three years of negotiation, litigation and mediation between the company and its principal creditors. The plan finally came together under the guidance of a federal bankruptcy judge from Louisiana who was appointed as a mediator in the case. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The company filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former Judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Amended versions of the competing plans have been filed with the Court. Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York. (ASARCO Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASF INVESTMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: ASF Investment, LLC Suite L-4 11285 Elkins Road Roswell, GA 30076 Bankruptcy Case No.: 08-79523 Chapter 11 Petition Date: October 2, 2008 Court: Northern District of Georgia (Atlanta) Judge: Mary Grace Diehl Debtor's Counsel: Rex Cornelison, Esq. The Cornelison Group, LLC Building D, Suite 1 500 Sun Valley Drive Roswell, GA 30076-5636 Tel: (770) 587-0082 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million ASF Investment did not file a list of largest unsecured creditors. ASHTON WOODS: Misses Payment on $125 Million in Subordinated Notes ------------------------------------------------------------------ Bill Rochelle of Bloomberg News reports that Ashton Woods USA, LLC, was blocked from making an Oct. 1, 2008, interest payment on $125 million in subordinated notes as a consequence of an outstanding covenant violation on its credit facility. Ashton Woods said in a statement on Oct. 1 if such interest payment default is not cured or otherwise waived in 30 days, it will become an event of default under the Subordinated Notes, giving the note holders the right to accelerate the maturity of the Subordinated Notes. The company said in a press release dated August 22, 2008 and Form 10-K for the fiscal year ended May 31, 2008, it is prohibited from making any payments to the holders of Subordinated Notes as a result of the Notice of Default delivered by the lenders under its senior credit facility related to certain covenant defaults under that facility. The Company continues to have discussions with both its lenders under the senior credit facility and the holders of the Subordinated Notes. However no agreements have been reached at this point in the negotiations. Troubled Company Reporter reported on Sept. 2 that KPMG LLP in Atlanta, Georgia, expressed substantial doubt about Ashton Woods' ability to continue as a going concern after it audited the company's financial statements for the years ended March 31, 2008 and 2007. The auditing firm, according to the report, pointed out that company defaulted certain covenants under its senior credit facility, as amended, and was below the required tangible net worth level contained in the subordinated notes. At May 31, 2008, Ashton Woods' consolidated balance sheets showed total assets of $260,097,000 and total debts of $200,968,000, resulting in a stockholders' equity of $58,699,000. Headquartered in Atlanta, Georgia, Ashton Woods USA L.L.C. is a homebuilder with operations in Atlanta, Dallas, Houston, Orlando, Phoenix, Denver and Tampa. ASHTON WOODS: S&P Lowers Ratings to 'D' After Missed Payment ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit ratings on Ashton Woods USA LLC and its subsidiary, Ashton Woods Finance Co., to 'D' from 'CCC' and downgraded Ashton Woods' $125 million 9.5% senior subordinated notes due 2015 to 'D' from 'CC' after the company failed to make its Oct. 1, 2008, interest payment on this obligation. The recovery rating on the senior subordinated notes remains a '6'. The ratings were on CreditWatch negative before being lowered, where they were placed on Aug. 6, 2008. Ashton Woods has yet to obtain a waiver or negotiate an amended credit facility, which is currently in default. As such, the company is prohibited from paying interest on the senior subordinated notes. Consequently, the company could not make its scheduled Oct. 1, 2008, interest payment as required by the bond indenture governing the senior subordinated notes. The company has a 30-day grace period to make the payment; however, there is uncertainty regarding whether the company can reach an agreement with its credit facility lenders during this period. Separately, Ashton Woods' tangible-net-worth will have been below the $60 million covenant minimum for two consecutive quarters when the company files its 10-Q for the quarter ending Aug. 30, 2008. As a result, the company will be required to offer to repurchase 10% of the aggregate principal amount of the senior subordinated notes, as defined under the indenture. If Ashton Woods can successfully resolve the technical default under its credit agreement and becomes current on its senior subordinated notes interest obligation, we could raise the ratings to their previous levels. Assuming the credit agreement is resolved, the ultimate ratings and/or outlook would also be affected by the company's ongoing negotiations with its senior subordinated noteholders. If Ashton Woods does not complete an amendment or tender offer, liquidity will be hampered by the company's need to redeem a portion of these notes. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE Ashton Woods USA LLC To From Corporate credit D/--/-- CCC/Watch Neg/-- Senior subordinated D (RR: 6) CC/Watch Neg (RR: 6) Ashton Woods Finance Co. To From Corporate credit D/--/-- CCC/Watch Neg/-- ATLANTIC EXPRESS: June 30 Balance Sheet Upside-Down by $51MM ------------------------------------------------------------ Atlantic Express Transportation Corp.'s balance sheet at June 30, 2008, showed total assets of $180.05 million and total liabilities of $231.64 million, resulting in a shareholders' deficit of $51.59 million. Atlantic Express Transportation Corp. reported net loss of $34.35 million for fiscal year ended June 30, 2008, compared to $17,10 million for the same period in the previous year. Liquidity and Capital Resources Capital expenditures for the fiscal years ended June 30, 2007, and June 30, 2008, totaled $18.2 million and $10.8 million. As of June 30, 2008, total current assets were $82.6 million and total current liabilities were $30.9 million. At June 30, 2008, the company�s debt under its $35.0 million Amended and Restated Credit Facility was $6.0 million, and it had $13.2 million of borrowing availability after $6.8 million of reserves, based on the company�s borrowing base calculations. Approximately $9.3 million of the company�s $10.0 million letter of credit facility was used as of the same date. On Sept. 15, 2008, under the company's Amended and Restated Credit Facility the company had a credit balance of $3.9 million, and it had $8.3 million in borrowing availability after $7.8 million of reserves, based upon the company�s borrowing base calculations. At June 30, 2008, the company's debt under its $35.0 million Amended and Restated Credit Facility was approximately $6.0 million, and it had $13.2 million of borrowing availability after $6.8 million of reserves, based on the company's borrowing base calculations. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?335d About Atlantic Express Headquartered in New York City, Atlantic Express Transportation Corp. -- http://www.atlanticexpress.com/-- is a provider of school bus transportation in the United States and the leading provider in New York City. The company has contracts with approximately 104 school districts in New York, Missouri, Massachusetts, California, Pennsylvania, New Jersey, and Illinois. For fiscal 2008, the company has a contract to provide paratransit services in New York to physically and mentally challenged passengers who are unable to use standard public transportation. The company also provides other transportation services, including fixed route transit, express commuter line and charter and tour buses through its coach services. As of March 31, 2008, the company had a fleet of approximately 5,600 vehicles operating from approximately 50 facilities. ATRIUM CORP: Extends Exchange Offering of 11-1/2% Senior Notes -------------------------------------------------------------- Atrium Corporation, ACIH, Inc., a subsidiary of Atrium Corp., and Atrium Companies, Inc., a subsidiary of ACIH, are amending and extending the private exchange offer and consent solicitation of the 11-1/2% Senior Discount Notes due 2012 issued by ACIH in a private placement for new 15.0% senior subordinated notes due 2012 to be issued by the Issuer and warrants to purchase shares of Atrium Corp's Series C Preferred Stock convertible into 10.0% of Atrium Corp's common stock on a fully diluted basis at an exercise price of $0.01 per share, subject to adjustment. The CUSIP numbers of the Old Notes are 00087E AA3 and U0045R AA 2. The exchange offer was amended to clarify and provide details with respect to the distribution by Atrium Corp, after all debt and other liabilities have been paid, of equity proceeds in the event of a sale, merger, liquidation, winding down or dissolution of Atrium Corp or other liquidation event for cash or stock to holders of its equity securities, including holders of Atrium Corp's Series B and Series C Preferred Stock. The Exchange Offer was scheduled to expire at 5 p.m. New York City time on Sept. 29, 2008. The amended Exchange Offer will expire at 5 p.m. New York City time on Oct. 10, 2008. As of 5 p.m. on Sept. 29, 2008, of the $174,000,000 Old Notes, $169,435,000, or 97.4% had been tendered. One of the conditions of the Exchange Offer is that holders of at least 97% of the total principal amount of outstanding Old Notes tender their Old Notes in the Exchange Offer. The terms and conditions of the Exchange Offer are set forth in the offering memorandum and consent solicitation statement dated Aug. 22, 2008, as amended by the Supplement dated Sept.29, 2008. The consummation of the Exchange Offer is conditioned upon the satisfaction or waiver of the conditions set forth in the Offering Memorandum. Copies of the Offering Memorandum and related Letter of Transmittal may be obtained from the information agent, Mackenzie Partners,Inc., by calling (800)322-2885. About Atrium Corporation Headquartered in Dallas, Texas, Atrium Corporation is a manufacturer and supplier of residential windows and doors in North America. The company has approximately 5,100 employees and 63 manufacturing facilities and distribution centers in 21 states, Canada and Mexico. Forbearance and Lockup Agreements As reported in the Troubled Company Reporter on July 24, 2008, Atrium Corporation and its key affiliates reached an agreement with each of their major creditor groups to restructure debt. Atrium also has entered into forbearance and lockup agreements with requisite majorities of the holders of each tranche of Atrium's funded indebtedness. BANCRPH LP: Case Summary & Largest Unsecured Creditor ----------------------------------------------------- Debtor: Bancrph, L.P. 5151 Flynn Parkway, Suite 308 Corpus Christi, TX Bankruptcy Case No.: 08-20558 Type of Business: The Debtor is a single real estate asset debtor. Chapter 11 Petition Date: October 3, 2008 Court: Southern District of Texas (Corpus Christi) Judge: Richard S. Schmidt Debtor's Counsel: William A. Whittle ecf@whittlelawfirm.com The Whittle Law Firm, PLLC 308 Atrium Plaza I 5151 Flynn Parkway Corpus Christi, Texas 78411 Tel: (361) 887-6993 Fax: (361) 887-6999 Total Assets: $2,530,045 Total Debts: $2,489,846 Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Whittle Law Firm, PLLC Attorney Fees $0 308 Atrium Plaza I 5151 Flynn Parkway Corpus Christi, TX 78411 BEARD CO: Geohedral Venture Acquires Mineral Discovery Ownership ---------------------------------------------------------------- The Beard Co. disclosed in a Securities and Exchange Commission filing that Geohedral LLC -- in which Beard owns a 23.16% interest -- has completed staking claims covering approximately 49,000 acres of Federal and State lands located near the town of Yakutat in southern Alaska. The claims encompass an area of more than 76 square miles and consist of black sand ridges that Geohedral estimates contain probable reserves of 891 million metric tons of Magnetite (iron ore) and 696 million metric tons of Ilmenite (iron titanium oxide ore). The ridges range from 25 feet to 110 feet in height above ground level and can be easily seen on satellite and aerial photographs. They are estimated to contain more than two billion cubic yards of black sand. The volume of black sand in the ridges was determined with three dimensional information obtained from topographic maps, stereo aerial photography and high resolution satellite imagery. An independent laboratory analyzed samples of black sand taken from the ridges and concluded that they contained an average of 28.4% by weight of Magnetite and 22.2% by weight of Ilmenite. The estimated reserves do not include potential below-ground reserves, which could appreciably enhance the potential value of the discovery. Geohedral has engaged a well-known international engineering firm to: (1) supervise the coring of up to 28 holes that will be drilled to a depth of 150 feet; and (2) provide a reserve estimate once the cores have been recovered and analyzed. All such activities will be conducted under strict chain-of-custody parameters. The black sand ridges were discovered and sampled by Dr. P. Jan Cannon, a geologist and remote sensing specialist who has spent more than 30 years exploring and evaluating mineral deposits in the area using satellite imagery and other technologies. Dr. Cannon, with a 19.45% equity interest, is the second-largest owner in Geohedral, which was formed in July 2006. He has more than 35 years of professional experience in geology and remote sensing applications. Dr. Cannon has a Ph.D. in Geology from the University of Arizona and earned his B.S. and M.S. degrees in Geology and Chemistry from the University of Oklahoma. Staking of the claims has been financed by a group of investors (including several Beard affiliates) that contributed a total of $3,155,000 in May and June of this year for a 23.66% interest in the project. Geohedral is currently contacting its equity owners to invest an additional $1,640,000 in the company to finance the coring operations. Beard will contribute its $380,000 share of such costs. "Beard management team believes this exciting mineral project has the greatest upside potential of any project we have ever been involved with," stated Herb Mee, Jr., President of Beard. "Although the final reserves remain to be determined, with Magnetite selling for $140 or more per metric ton and Ilmenite selling for more than $100 per metric ton, the potential value to the ownership group, including Beard shareholders, could be substantial. In addition to the Magnetite and Ilmenite, tests and assays confirm the existence of meaningful quantities of rutile, garnets and precious metals, including gold, silver and platinum." "The discovery is considered to be particularly important due to the increasing global demand for steel, titanium and other strategic commodities in recent years," continued Mr. Mee. "The Ilmenite reserves have particular strategic significance since the principal supplier of titanium is Russia, which is not considered a very reliable source from a geopolitical perspective. The demand for titanium has escalated sharply in recent years as the needs of the aerospace industry have grown." About The Beard Company Based in Oklahoma City, The Beard Company (OTC BB: BRCO) http://www.beardco.com/-- through its subsidiaries, is principally engaged in coal reclamation in the United States. It operates in four segments: Coal Reclamation, Carbon Dioxide, e-Commerce, and Oil and Gas. Going Concern Doubt As reported in the Troubled Company Reporter on April 23, 2008, Cole & Reed, P.C., in Oklahoma City, expressed substantial doubt about The Beard Company'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. Cole & Reed pointed to the company's recurring losses and negative cash flows from operations. The Beard Company's consolidated balance sheet at June 30, 2008, showed $2,301,000 in total assets and $9,106,000 in total liabilities, resulting in a $6,805,000 total shareholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,300,000 in total current assets available to pay $3,154,000 in total current liabilities. The company reported a net loss of $516,000 on revenues of $373,000 for the second quarter ended June 30, 2008, compared with a net loss of $611,000 on revenues of $330,000 in the same period last year. Continuing operations posted a net loss of $283,000 compared to $333,000 for the same period in 2007. Financial results also included losses of $233,000 from discontinued operations for the second quarter of 2008 compared to $278,000 for the same period in 2007, as a result of the discontinuance of three of the company's segments. BETCORP LIMITED: Chapter 15 Petition Summary -------------------------------------------- Chapter 15 Petitioner: Simon John Cathro Chapter 15 Debtor: Betcorp Limited aka Consolidated Gaming Corporation Limited Level 16, 525 Collins Street Melbourne, Victoria 3000 Austrailia Bankruptcy Case No.: 08-21594 Type of Business: The Debtor offers online betting game products. See: http://www.betcorp.com.au/ Chapter 15 Petition Date: October 2, 2008 Court: District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: J. Colby Williams, Esq. tiffany@campbellandwilliams.com Wade W. Rabenhorst, Esq. wwr@campbellandwilliams.com Campbell & Williams 700 S. Seventh St. Las Vegas, NV 89101 Tel: (702) 382-5222 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: Less than $50,000 BIOVEST INT'L: Inks Securities Purchase Deal with Three Investors ----------------------------------------------------------------- Biovest International, Inc., disclosed in a Securities and Exchange Commission filing that on Sept. 22, 2008, it entered into definitive agreements with three investors related to a private placement of its 15% Secured Convertible Debentures. The definitive documents permit the company to place up to $5,000,000 in principal amount of its Debentures. The Company has sold $1,150,000 in principal amount of its Debentures to three investors. The Debentures are convertible into the Company's common stock at $0.32 per share and, provided certain conditions are satisfied, the Company may, at its option, redeem the Debentures for an amount equal to 110% of the then outstanding principal. Each purchaser of Debentures in the Private Placement has the right to elect to be repaid in one of these methods: -- Commencing six months after closing, the Debentures will be amortized through 12 equal monthly payments; or -- A single lump-sum payment of all remaining outstanding principal and accrued interest shall be made on March 31, 2010. All principal amortization payments and monthly interest payments will be made in cash or the Company may elect to make the payments in shares of its common stock. The Company's ability to pay interest with shares of Company common stock will be subject to specified conditions, including the existence of an effective registration statement covering the resale of the shares issued in payment of redemption amount unless the shares may be resold pursuant to Rule 144 of the Securities Act of 1933 without volume or manner-of-sale restrictions or current public information requirements. Any common stock delivered in satisfaction of an amortization payment will be valued at the lesser of: -- the conversion price in effect at the time of the amortization payment; or -- 90% of the average of the daily volume weighted average price of the shares for the 20 trading days prior to the amortization payment date. The Company has the ability to make payment of interest with shares of the Company's common stock if the conditions stated herein are not met, upon the consent of the holder of the Debenture, and in that event the common stock delivered in satisfaction of an amortization payment will be valued at the lesser of: -- the conversion price in effect at the time of the amortization payment; or -- 80% of the average of the daily volume weighted average price of the shares for the 20 trading days prior to the amortization payment date. As a part of the Initial Tranche of the Private Placement, the Company issued Warrants to the purchasers of the Debentures giving them the right to purchase 1,796,875 shares of the Company's common stock at an exercise price of $0.40 per share . The warrant exercise prices are subject to adjustment for stock splits, stock dividends, and the like. Additionally, the Debentures issued in the Initial Tranche permit the holders to convert into 3,593,750 shares of the Company's common stock. In the event that the Company issues or grants in the future any rights to purchase any of the Company's common stock, or other securities convertible into the Company's common stock, for an effective per share price less than the Conversion Price or in the instance of warrants the Exercise Price then in effect, the conversion price of all unconverted Debentures and the Exercise Price of all unexercised Warrants will be decreased to equal such lower price. The adjustments to the Conversion Price and Exercise Price for future stock issuances by the Company will not apply to certain exempt issuances, including stock issuances pursuant to employee stock option plans and strategic transactions. In connection with the Private Placement, the Company and the purchasers of the Debentures entered into a Security Agreement under which the obligations pursuant to the Debentures and other transaction documents are secured by a second lien in the Company's assets. In connection with the Private Placement, the Company and the purchasers of the Debentures entered into a Registration Rights Agreement under which the Company is required, on or before Nov. 3, 2008, to file a registration statement with the SEC covering the resale of the shares of Company common stock issuable pursuant to the Debentures and Warrants, or the maximum portion of such issuable shares allowable pursuant to SEC Guidance, and to use its best efforts to have the registration declared effective at the earliest date -- but in no event later than 150 days after filing if there is no SEC review of the registration statement, or 165 days after filing if there is an SEC review. The Company shall not be required to maintain the effectiveness, or file another Registration Statement pursuant to the Registration Rights Agreement with respect to any shares that are eligible for resale without volume or manner-of-sale restrictions pursuant to Rule 144. On Sept. 26, 2008, the Company agreed to issue to two of the Purchasers in the Private Placement -- both of whom are affiliates of the Company -- warrants to purchase a total of 625,000 shares of the Company's common stock at an exercise price of $0.40 per share, vested immediately with a five-year term. These warrants were issued in consideration of the agreement of these Purchasers to extend the maturity date of their promissory notes certain existing promissory notes which had previously reached maturity. A copy of the Securities Purchase Agreement is available free of charge at http://researcharchives.com/t/s?335a About Biovest International Based in Tampa, Florida, Biovest International Inc. (OTC BB: BVTI) -- http://www.biovest.com/-- is a pioneer in the development of advanced individualized immunotherapies for life-threatening cancers of the blood system. Biovest is a majority-owned subsidiary of Accentia Biopharmaceuticals Inc., with its remaining shares publicly traded. Biovest International Inc.'s consolidated balance sheet at June 30, 2008, showed $5.9 million in total assets, $36.8 million in total liabilities, and $4.6 million in non-controlling interests in variable interest entities, resulting in a $35.5 million total stockholders' deficit. Going Concern Doubt Aidman Piser & Company P.A., in Tampa, Florida, expressed substantial doubt about Biovest International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Sept. 30, 2007, and 2006. The auditing firm pointed to the company's cumulative net losses since inception, cash used in operating activities, and working capital deficiency. At June, 2008, the company had an accumulated deficit of approximately $108.1 million. BLUE HOLDINGS: Reports $4.5 Million Net Loss for March 2008 ----------------------------------------------------------- Blue Holdings, Inc., reported a $4,555,545 net loss on net sale of $8,554,119 for the three months ended March 31, 2008, compared to a $26,057 net loss on net sale of $8,440,222 for the same period a year earlier. The company's condensed consolidated balance sheets at March 31, 2008, showed $13,006,874 in total assets and $18,555,475 resulting in a $5,548,601 stockholders' deficit. The company's condensed consolidated balance sheets further showed strained liquidity with $11,329,409 in total current assets available to pay $17,858,808 in total current liabilities. A full-text copy of the company's regulatory filing is available for free at http://ResearchArchives.com/t/s?3368 Going Concern Doubt On April 8, 2008, Weinberg & Company, P.A., of Los Angeles, California, expressed substantial doubt about Blue Holdings 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 firm reported that the company has incurred a loss from operations during the year ended Dec. 31, 2007, and a working capital and stockholders' deficits as of that date. About Blue Holdings Based Commerce, California, Blue Holdings, Inc., through its subsidiaries, engages in the design, development, marketing, and distribution of fashion jeans, apparel, and accessories for women, men, and children. CADENCE INNOVATION: Court Approves $50,000,000 BofA DIP Financing ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted Cadence Innovation LLC and its affiliate authority to avail $50,000,000, in the form of revolving loans, from Bank of America, N.A., as agent for lenders under a DIP Credit Agreement. The Debtors intend to use the bankruptcy loan to pay their debt to their pre-bankruptcy lenders and pay the cost of administering their bankruptcy cases. The loan will also be used for working capital and general corporate purposes. In return for the financing, the Debtors will grant "superpriority claim status" to BofA, on behalf of the lenders. The Debtors will also grant the lenders first priority security interests and liens on their properties, including cash, accounts receivable, inventories, equipment, real property and 100% of their capital stock. The collateral, however, does not include the capital stock and other equity of foreign subsidiaries, among others. The hearing to consider final approval of the proposed DIP financing is set on September 18, 2008. Creditors and other concerned parties have until September 11, 2008, to file their objections. The hearing was later adjourned to Oct. 2, at 3:30 p.m. (Eastern Time). H.S. Die & Engineering Inc., in September slammed the Debtors' proposed borrowing, saying it would give Bank of America "superpriority priming liens" on the Debtors' assets. In a statement filed with the Court, H.S. Die said that it holds priority liens on some assets including machinery and trump, that should not be primed by BofA's liens without giving the company adequate protection. "The Debtors proposed adequate protection only for the lenders," said Carl Kunz III, Esq., at Morris James LLP, in Wilmington, Delaware, on behalf of H.S. Die. "H.S. Die disputes that the Debtors can adequately protect the lenders whose claims are inferior to H.S. Die's claims, yet not provide adequate protection to the [company]." According to Mr. Kunz, the Debtors did not propose to pay H.S. Die's claims in cash or assure the company that they would make periodic cash payments. He pointed out that the Debtors do not have unencumbered assets on which H.S. Die may have an additional or replacement lien. H.S. Die allegedly holds a secured claim for $654,670 for the tools it supplied to the Debtors before their bankruptcy filing. The Debtors have also contracted the company to manufacture certain tools for a purchase price of $2,753,710, which have not yet been delivered to date. H.S. Die says it obtained and perfected its first priority liens in the unpaid tooling under applicable Michigan Law. It also properly filed and timely filed Uniform Commercial Code financing statements with the Delaware Secretary of State listing the tooling as collateral. Several other parties tried to block the Debtors' request: A. Creditors Committee The Official Committee of Unsecured Creditors said it does not object to Cadence Innovation LLC's postpetition loan and accommodation agreements with its pre-bankruptcy lender, and with its two largest customers, Chrysler LLC and General Motors Corporation. The Creditors Committee, however, said the agreements accord Chrysler and General Motor substantially all of the rights and protections of a pre-bankruptcy lender, which makes the agreements objectionable. "By broadly incorporating the customers into the DIP loan agreement as proposed lender, the Debtors have elevated the customers' status to that of a disinterested third-party lender instead of an interested customer," said Mark Desgrosseilliers, Esq., at Montgomery, McCracken, Walker & Rhoads, in Wilmington, Delaware. Mr. Desgrosseilliers argued that Chrysler and General Motors do not occupy the same role as the pre-bankruptcy lender, and they are not providing financing to the Debtors on the same basis. "To the extent that any financing is being provided by the customers, the financing is more than adequately protected and is supported by other valuable consideration," he said. "As such, the customers are not entitled to the protections afforded to the existing lender under the Bankruptcy Code." Mr. Desgrosseilliers also said the Debtors granted certain protections to their pre-bankruptcy lender under the DIP loan agreement, which they find appropriate. He said the Debtors are only availing about $6,000,000 from their pre-bankruptcy lender, however, they offered as collateral the value of their previously unencumbered assets, through their pre- bankruptcy lender's priming lien and super-priority claims granted under Section 364 of the Bankruptcy Code. "Any such priming liens or super-priority claims must be limited, at most, to the $6 million of new funding," Mr. Desgrosseilliers further said. The Creditors Committee is also concerned that the DIP Loan Agreement, as currently envisioned, is inadequate to cover the costs of administration of the Debtors' bankruptcy cases. "Despite apparent efforts to encourage the extension of postpetition trade credit, the DIP Loan Agreement does not provide for the payment of administrative expense claims that are accrued but unpaid at the time the loan facility terminates," Mr. Desgrosseilliers said. "Similarly, the DIP Loan Agreement does not provide for the possibility of a delay in the sale of a business segment, a failure to consummate one or more sales, and any wind-down or post-sale costs," he further said, adding that the terms of the DIP Loan Agreement ensure that significant postpetition administrative claims will be at risk of non-payment. B. Delta Tooling Delta Tooling Co. slammed the Debtors' proposed borrowing of $50,000,000, saying it would give Bank of America "superpriority priming liens" on their assets. In a court filing, Delta Tooling said that it holds priority liens on some assets of the Debtors that should not be primed by BofA's liens without giving the company adequate protection. "The Debtors proposed to subordinate the liens held by Delta Tooling without providing or even suggesting any type of adequate protection to Delta Tooling," Delta said. Delta Tooling said it is owed $1,308,043 on account of raw materials it delivered to the Debtors before their bankruptcy filing. The company added that it obtained and perfected its first priority liens on the raw materials under the Michigan law, and properly filed its Uniform Commercial Code financing statements listing the materials as collateral. C. Hope Global Hope Global of Detroit asked the Court to deny the proposed DIP financing to the extent the postpetition liens of BofA would prime the company's liens on the Debtors' property without giving it adequate protection. Hope Global asserts a secured claim for $380,000 against the Debtors. "The Debtors proposed adequate protection only for the lenders," Anthony Saccullo, Esq., at Ciardi Ciardi & Astin, in Wilmington, Delaware, said in a court filing. "The Debtors cannot be permitted to adequately protect the lenders whose claims are inferior to Hope Global's claims, yet not provide adequate protection to Hope Global." According to Mr. Saccullo, the Debtors did not propose to pay Hope Global's claims in cash or assure the company that they would make periodic cash payments. He pointed out that the Debtors do not have unencumbered assets on which Hope Global may have an additional or replacement lien. D. AIG Commercial AIG Commercial Equipment Finance said the Debtors should not be permitted to encumber the equipment they leased from the company. AIG said it holds "first priority, purchase money security interest" in the equipment and that it cannot be primed by the Debtors unless the company is given adequate protection. Debtors Respond In a statement, the Debtors informed the Court that they have agreed with the DIP Lender, H.S. Die & Engineering, Delta Tooling, and Hope Global to revise the definition of the so- called "permitted liens" to address the concerns of the three suppliers. The Debtors said the revision would ensure that any of their suppliers that have perfected lien senior to the lender, would retain their lien without being impaired by the postpetition liens and priority claim granted to the lender. "With this revision, the objections filed by the [suppliers] should be deemed to be fully resolved, or if any [supplier] still maintains its objection, any such objection should be overruled," said Norman Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A., in Wilmington, Delaware. Mr. Pernick said the revision would also ensure that AIG's rights on the leased equipment would be unimpaired by the lender's rights. "Accordingly, AIG's objection has been fully resolved and if AIG were to maintain its objection, it should be overruled," he said. With respect to the Creditors Committee's objection, the Debtors clarified that BofA is not willing to provide funds to ensure payment of all administrative expenses. "The reality of the Debtors' circumstances requires a recognition that the Committee's wish for these additional financing commitments must go unfulfilled, absent BofA's and the [automotive original equipment manufacturers'] agreement," Mr. Pernick said. "While the Debtors would welcome any agreement on the part of BofA and the OEMs with respect to funding any shortfall in administrative and priority expenses necessary to continue a plan in exchange for the collective use of the chapter 11 process to sell and reorganize the Debtors' businesses, the Debtors must leave such matters to the negotiations between those parties," Mr. Pernick further said. Meanwhile, Mr. Pernick asked the Court to dismiss the Creditors Committee's suggestion to limit BofA's postpetition liens or priority liens. "BofA's prepetition claim, in the amount of approximately $43.8 million, has been paid in full from collections of the Debtors' prepetition accounts, and the entire balance owed to BofA is for postpetition advances," he explained. "Accordingly, there is no legal basis to limit BofA's postpetition liens or priority claim in the manner suggested by the Creditors Committee's objection." As of the Petition Date, according to Mr. Pernick, Bank of America was owed as Mr. Pernick noted, $43,830,997 which includes outstanding letters of credit. About Cadence Innovation Headquartered in Troy, Michigan, Cadence Innovation LLC -- http://www.cadenceinnovation.com/-- manufactures and sells auto parts to its customers GM and Chrysler. The company has at least 4,200 employees in the United States and Europe, including Hungary and Czech Republic. The company and its debtor-affiliate, New Venture Real Estate Holdings, LLC, filed for Chapter 11 reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08-11973). Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed assets of between $10 million and $50 million, and debts of between $100 million and $500 million. (Cadence Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CADENCE INNOVATION: Can Hire Cole Schotz as Lead Bankr. Counsel --------------------------------------------------------------- Cadence Innovation LLC, and its affiliate, New Venture Real Estate Holdings LLC, obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Cole Schotz Meisel Forman & Leonard, P.A., as their lead bankruptcy counsel. Cole Schotz is expected to: (1) advise the Debtors of their rights, powers and duties as debtors-in-possession as well as advise them regarding matters of bankruptcy law; (2) represent the Debtors in proceedings and hearings; (3) prepare legal papers on behalf of the Debtors; (4) provide assistance, advice, and representation concerning the confirmation of any proposed plan and solicitation of acceptances for that plan, or responding to objections to those plans; (5) advise the Debtors and assist them in the negotiations concerning financing agreements, debt restructuring, cash collateral arrangements, and related transactions; (6) provide assistance, advice, and representation concerning any possible sale of the Debtors' assets; (7) review the nature and validity of liens asserted against the Debtors' property, and advise them concerning the enforceability of those liens; (8) provide assistance, advice and representation concerning any further investigation of the Debtors' assets, liabilities and financial condition that may be required under local, state, or federal law; (9) prosecute and defend litigation matters; and (10) provide counseling and representation with respect to the assumption or rejection of executory contracts and leases, asset sale, among other things. In exchange for Cole Schotz' services, the firm will be paid on an hourly basis and reimbursed for the expenses incurred. The firm's professionals and their hourly rates are: Members $320 - $625 Associates $195 - $325 Paralegals $130 - $190 Cole Schotz received a $626,039 retainer from the Debtors for the planning, preparation of documents and proposed employment during the Debtors' bankruptcy. Of that amount, $230,977 was applied to pay pre-bankruptcy fees and expenses incidental to the preparation and filing of the cases, and $2,078 for the filing fees. Norman Pernick, Esq., at Cole Schotz, assured the Court that the firm does not hold or represent any interest adverse to the Debtors. He added that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Cadence Innovation Headquartered in Troy, Michigan, Cadence Innovation LLC -- http://www.cadenceinnovation.com/-- manufactures and sells auto parts to its customers GM and Chrysler. The company has at least 4,200 employees in the United States and Europe, including Hungary and Czech Republic. The company and its debtor-affiliate, New Venture Real Estate Holdings, LLC, filed for Chapter 11 reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08-11973). Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed assets of between $10 million and $50 million, and debts of between $100 million and $500 million. (Cadence Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) CALPINE CORP: Draws $725 Million Under Exit Facility Agreement -------------------------------------------------------------- Calpine Corporation said on October 1, 2008, that it is drawing approximately $725,000,000 under its $1,000,000,000 Senior Secured Revolving Facility under its Exit Financing, which expires on March 29, 2014. The Credit Agreement, dated January 31, 2008, was entered among Calpine, as Borrower, and the Lenders, with General Electric Capital Corporation, as Sub-Agent; Goldman Sachs Credit Partners, L.P., Credit Suisse, Deutsche Bank Securities, Inc., and Morgan Stanley Senior Funding, Inc., as Co-Syndication Agents and Co- Documentation Agents; and Goldman Sachs Credit Partners, L.P., as Administrative Agent and Collateral Agent. The borrowing, Calpine disclosed in a regulatory filing with the U.S. Securities and Exchange Commission, will bear interest initially at the base rate (currently 5%) plus the applicable margin of 1.875%, and is payable quarterly. At the end of each interest period, the interest rate on the borrowing may be continued at the base rate plus the applicable margin, or converted to a LIBOR rate, plus a margin of 2.875%, at Calpine's option. The borrowing, which will mature on March 29, 2014, may be prepaid prior to maturity without penalty. A full-text copy of the Credit Agreement is available for free at http://ResearchArchives.com/t/s?27df "This draw is a proactive financial decision to preserve our liquidity by increasing our cash position during this period of uncertainty in the capital markets," said Zamir Rauf, interim executive vice president and chief financial officer. "This draw is not being made to satisfy any near-term needs but to enhance the quality of our liquidity." Calpine said that with the draw, it expects to have an estimated $1,265,000,000 of corporate unrestricted cash on Oct. 1, 2008: Corporate Unrestricted Cash $1,250,000,000 Revolver/LC Availability 15,000,000 ------------- Liquidity (current) $1,265,000,000 Calpine said the $1.250 million corporate unrestricted cash is pro forma for $725,000,000 revolver draw, and excludes balances subject to project finance facilities and lease agreements of approximately $246,000,000, which would be included in cash and cash equivalents, the most comparable GAAP measure. Calpine's current liquidity of $1.265 million does not include $350,000,000 of contingent liquidity from the Knock-In and Contingent Commodity Revolver facilities, the company said. About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. On Dec. 19, 2007, the Court confirmed the Debtors' Plan. The Amended Plan was deemed effective as of Jan. 31, 2008. (Calpine Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000) CATALYST ENERGY: Files for Chapter 11 Protection ------------------------------------------------ Madlen Read at The Associated Press reports that Catalyst Energy Group, Inc., filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Georgia. Margaret Newkirk at The Atlanta (Georgia) Journal-Constitution relates that Catalyst Energy lost a line of credit and contracted fuel supply with Constellation Energy. Utility regulators will decide if Catalyst Energy can continue to sell gas in Georgia, as state law requires marketers to have enough credit to pay for the gas it orders, The Atlanta Journal states. The state Public Service Commission, says the report, can suspend Catalyst Energy's license and pull out the company's 30,000 clients to put them to other marketers. According to the report, Catalyst Energy's CEO Fernando de Aguero and vice president for regulatory affairs Steve Moore, said that the firm would collaborate with the PSC to guarantee that clients got service. Atlanta, Georgia-based Catalyst Energy Group, Inc. -- http://www.catalystenergy.com/-- and its affiliates, Catalyst Natural Gas, LLC, and Catalyst Supply Services, Inc, are energy providers. The company and its affiliates filed for Chapter 11 protection on Oct. 1, 2008 (Bankr. N. D. Ga. Case No. 08-79392). Leon S. Jones, Esq., at Jones & Walden, LLC, represents the Debtors in their restructuring efforts. Catalyst Energy listed assets of less than $50,000. According to The Atlanta Journal-Constitution, the company said that it has $20 million in liabilities. CENTENNIAL COMMUNICATIONS: Shareholders Okay Stock Option Plan -------------------------------------------------------------- Centennial Communications Corp. disclosed in a Securities and Exchange Commission filing that at its 2008 Annual Meeting of Stockholders on Sept. 25, 2008, stockholders approved the Centennial Communications 2008 Stock Option and Restricted Stock Purchase Plan. The company'board of Directors had adopted the 2008 Stock Plan, subject to stockholder approval. About Centennial Communications Based in Wall, New Jersey, Centennial Communications Corp. (Nasdaq: CYCL) - http://www.centennialwireless.com/-- provides regional wireless and integrated communications services in the United States and the Puerto Rico with approximately 1.1 million wireless subscribers and 582,200 access lines and equivalents. The US business owns and operates wireless networks in the Midwest and Southeast covering parts of six states. Centennial's Puerto Rico business owns and operates wireless networks in Puerto Rico and the U.S. Virgin Islands and provides facilities-based integrated voice, data and Internet solutions. Welsh, Carson, Anderson & Stowe is a significant shareholder of Centennial. * * * Centennial Communications Corp. continues to carry Moody's Investor Services' 'Caa1' senior unsecured debt rating, which was placed in September 2006. As reported by the TCR on Aug. 4, 2008, Centennial Communications' consolidated balance sheet at May 31, 2008, showed $1.38 billion in total assets, $2.42 billion in total liabilities, and $4.9 million in minority interest in subsidiaries, resulting in a $1.04 billion stockholders' deficit. CHET MORRISON: Moody's Withdraws Ratings on Uncompleted Offering ---------------------------------------------------------------- Moody's Investors Service has withdrawn the ratings for Chet Morrison Contractors, Inc. since the company's proposed senior secured notes offering has not been completed. CMC has no rated debt at this time. The ratings being withdrawn are the B3 Corporate Family Rating, the B3 Probability of Default Rating and the B3 (LGD4, 50%) rating on the proposed $100 million of senior secured notes due 2013. CMC is a privately held oilfield services company based in Houma, Louisiana. CIENA CAPITAL: Court Gives Interim Approval on $5MM Loan -------------------------------------------------------- Bill Rochelle of Bloomberg News reports that the United States Bankruptcy Court for the Southern District of New York gave interim approval on Oct. 2, 2008, to Ciena Capital, LLC, and its debtor-affiliates to borrow $5 million to keep the Debtors' loan servicing business alive. New York, New York-based Ciena Capital, LLC,-- http://www.cienacapital.com/-- offers commercial real estate finance services including loans and long term investment property financing. The Debtors filed for Chapter 11 bankruptcy protection separately on September 30, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-13783). Peter S. Partee, Esq., at Hunton & Williams LLP, represents the Debtors in their restructuring efforts. In its filing, the Lead Debtor listed estimated assets between $100 million to $500 million and estimated debts between $100 million to $500 million. CMR MORTGAGE: Reports $1.3 Million Net Income for March 2008 ------------------------------------------------------------ CMR Mortgage Fund II, LLC reported $1,336,663 net income on total interest income of $3,100,745 for the three months ended March 31, 2008, compared with $1,490,987 net income on total interest income of $3,697,004 for the same period a year ago. The company's condensed balance sheets at March 31, 2008, showed total assets of $116,600,653 and total liabilities of $28,200,950 resulting in a $88,399,703 stockholders' equity. In March, the company's manager, California Mortgage and Realty Inc., suspended indefinitely monthly cash distributions of net income and members' redemption requests in response to the market conditions to conserve cash and build cash reserve. As of March 31, 2008 and August 31, 2008, outstanding member redemption requests totaled $24,598,595 and $35,812,117, respectively. Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 14, 2008, Perry-Smith LLP raised on July 21, 2008, substantial doubt about the ability of CMR Mortgage Fund II, LLC, which is managed by California Mortgage and Realty, Inc., to continue as a going concern after auditing the Fund's financial statements for the year ended Dec. 31, 2007. The auditor reported that the Fund has experienced a significant decrease in cash flows. In addition, a number of the Fund's loans are in default. The Fund's illiquid position may prevent the Fund from protecting its position with respect to the property securing the defaulted loans. A full-text copy of the company's regulatory filing is available for free at http://ResearchArchives.com/t/s?3350 About CMR Mortgage Fund II CMR Mortgage Fund II, LLC, is a California limited liability company formed on Sept. 5, 2003, for the purpose of making or investing in business loans secured by deeds of trust or mortgages on real properties located primarily in California. The real properties predominantly consist of land held by businesses or individuals, or commercial buildings. The land can be income- producing or may be held for commercial or residential development. Currently, most of the land securing the Fund's loans are held for development or is in some stage of application for development entitlements or building permits. Its loans are arranged and serviced by a managing company, California Mortgage and Realty,Inc., a Delaware corporation, which is licensed as a California real estate broker and a California finance lender. COMMONWEALTH EDISON: ICC Case Decision Cues Moody's to Lift Rtngs ----------------------------------------------------------------- Moody's Investors Service upgraded the long-term unsecured ratings of Commonwealth Edison Company including the senior unsecured debt rating to Baa3 from Ba1 and the short-term rating for commercial paper to Prime-3 from Not Prime. ComEd's senior secured debt rating of Baa2 remains unchanged. The rating outlook is stable. The upgrade largely reflects Moody's assessment of the distribution rate case decision rendered by the Illinois Commerce Commission on September 10. Under the order, effective Sept. 16, the distribution base rate will increase by $273.6 million, which represents slightly more than 75% of ComEd's original request of $361 million. Of particular note is the fact that the order, which resulted in a slightly higher outcome than the settlement reached with the ICC staff, was nearly $55 million higher than an Administrative Law Judge recommendation and substantially higher than recommendations offered by other interveners. The order allows ComEd the ability to recover and earn a return on capital investment made by the utility through June 30, 2008, which mitigates a degree of regulatory lag that had existed in past ComEd rate case decisions. In short, Moody's views the outcome of this rate case decision along with other recent rate case decisions rendered by the ICC as being supportive of utility credit quality. The upgrade also factors in the improved financial flexibility that exists at ComEd as the first mortgage collateral, which had previously secured the company's $1 billion revolving credit facility was released and replaced by a similar sized unsecured revolving credit facility that expires in February 2011. With first mortgage bond collateral released from the bank credit facility, ComEd has the ability to issue up to $2.3 billion of first mortgage bond debt as of June 30, 2008. Moody's estimates that following the impact of the September rate case decision, internal funds are expected to cover about 75% of the company's capital investment needs in fiscal 2009. While Moody's recognizes that ComEd may face challenges in future regulatory proceedings from political and consumer groups given the degree of statewide pushback that occurred last year, Moody's believes that the outcome of this distribution rate case, the broad-based settlement agreement completed last year among the utilities and the generators, as well as the existence of a financial hedge for base load capacity between ComEd and its affiliate Exelon Generation Company that expires in 2013 collectively help to provide a more benign business environment for utilities operating in Illinois over the next several years. The stable outlook reflects Moody's expectation that the company will be able to generate financial metrics consistent with a low investment grade quality utility, such as cash flow to adjusted debt of at least 13.0% and interest coverage of 3.0x. Additionally, the stable outlook incorporates Moody's view that the ICC will continue to provide credit supportive regulatory decisions over the next several years as the company completes its sizeable capital investment program. Moody's last rating action on ComEd occurred on August 29, 2007 when the ratings were confirmed with a stable outlook following passage of Senate Bill 1592, which broadly restructured the electric utility industry in Illinois. Upgrades: Issuer: ComEd Financing III -- Preferred Stock Preferred Stock, Upgraded to Ba1 from Ba2 -- Preferred Stock Shelf, Upgraded to (P)Ba1 from (P)Ba2 Issuer: Commonwealth Edison Company -- Commercial Paper, Upgraded to P-3 from NP -- Issuer Rating, Upgraded to Baa3 from Ba1 -- Multiple Seniority Shelf, Upgraded to a range of (P)Ba2 to (P)Baa3 from a range of (P)Ba3 to (P)Ba1 -- Senior Unsecured Bank Credit Facility, Upgraded to Baa3 from Ba1 -- Senior Unsecured Medium-Term Note Program, Upgraded to Baa3 from Ba1 -- Senior Unsecured Regular Bond/Debenture, Upgraded to Baa3 from Ba1 Headquartered in Chicago, Illinois, Commonwealth Edison Company is a regulated electricity transmission and distribution company, and is a wholly-owned subsidiary of Exelon Corporation. COMMUNICATION INTELLIGENCE: Amends SEC Statement for Share Sale --------------------------------------------------------------- Communication Intelligence Corporation has filed an amendment to its Registration Statement regarding the sale of 33,410,714 shares of its common stock issuable to certain stockholders. The amendment was filed to delay the effective date of the registration statement until the company files a further amendment which specifically states that the Statement has become effective in accordance with the Securities Act of 1933, or until the Registration Statement become effective on the date the Commission may determine. A copy of Communication Intelligence's sale prospectus is available for free at http://researcharchives.com/t/s?3366 About Communication Intelligence Headquartered in Redwood Shores, Calif., Communication Intelligence Corp. (OTC BB: CICI) -- http://www.cic.com/-- is a supplier of electronic signature solutions for business process automation within the Financial Services Industry. CIC's products enable companies to fully execute Business Process Automation initiatives resulting in truly paperless workflow and legally binding electronic transactions. CIC sells directly to enterprises and through system integrators, channel partners and OEMs. Going Concern Doubt As reported in the Troubled Company Reporter on May 26, 2008, Denver-based GHP Horwath, P.C., expressed substantial doubt about Communication Intelligence Corporation'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 significant recurring operating losses and accumulated deficit. Except for 2004, the company has incurred significant losses since its inception and, at June 30, 2008, the company's accumulated deficit was approximately $93,574,100. Communication Intelligence Corp. reported a net loss of $1,087,000, on total revenues of $407,000, for the second quarter ended June 30, 2008, compared with a net loss of $843,000, on total revenues of $555,000, in the same period ended last year. CONEXANT SYSTEMS: Expects Up to $125 Million Revenue for Q4 2008 ---------------------------------------------------------------- Conexant Systems, Inc. disclosed in a Securities and Exchange Commission filing that its core operating income and core net income for the fourth quarter of fiscal 2008 will exceed the guidance provided by the company on July 31, 2008. The company expects fourth fiscal quarter revenues to be within the range provided in July, which was $120 million to $125 million. "When we established expectations for the fourth fiscal quarter two months ago, we anticipated non-GAAP core operating income in a range between $14 million and $16 million, and core net income of $0.13 to $0.17 per share," said Scott Mercer, Conexant's chairman and chief executive officer. "At that time, we expected core gross margins of 51.5 percent to 52.5 percent of revenues. Because of a richer-than-anticipated product mix, we now expect core gross margins of 54 percent to 55 percent. During the quarter, our team also made better-than-expected progress reducing core operating expenses. "As a result, we now expect to deliver core operating income in a range between $19 million and $20 million, resulting in core net income of $0.24 to $0.26 per share," Mr. Mercer said. Conexant's fourth fiscal quarter ends on Friday, October 3, 2008. The company will announce complete financial results for the quarter after the close of the U.S. markets on Thursday, Oct. 30, 2008. About Conexant Headquartered in Newport Beach, California, Conexant Systems, Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- has a comprehensive portfolio of innovative semiconductor solutions which includes products for Internet connectivity, digital imaging, and media processing applications. Conexant is a fabless semiconductor company that recorded revenues of US$809.0 million in fiscal year 2007. Outside the United States, the company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore and Israel. At June 27, 2008, the company's consolidated balance sheet showed US$624.7 million in total assets and US$757.2 million in total liabilities, resulting in a US$132.5 million stockholders' deficit. The company's consolidated balance sheet at June 27, 2008, also showed strained liquidity with US$428.0 million in total current assets available to pay US$471.4 million in total current liabilities. * * * Conexant currently carries Standard & Poor's Ratings Services' B- rating with a negative outlook. Moody's Investor Service placed Conexant Systems Inc.'s long term corporate family and probability of default ratings at 'Caa1' in October 2006. The ratings still hold to date with a stable outlook. CONEXANT SYSTEMS: Inks Termination Deal with Lewis Brewster ----------------------------------------------------------- Conexant Systems Inc. disclosed in a Securities and Exchange Commission filing that it has entered into an agreement with Lewis C. Brewster, effective as of Sept. 24, 2008, pursuant to which Mr. Brewster will receive certain payments and other consideration as a result of his voluntary termination of employment with the Company. Mr. Brewster's service as Executive Vice President and General Manager, Broadband Media Processing, of the Company ceased effective as of August 8, 2008, the closing date of the sale by the Company of its Broadband Media Processing product lines to NXP B.V. Pursuant to the Agreement, and because Mr. Brewster transitioned to NXP B.V. with our Broadband Media Processing Business, Mr. Brewster will not be required to repay any amount of his $150,000 retention bonus granted by the Company in June 2007, and he will receive a lump sum separation payment in full and final settlement of matters relating to his employment with the Company of $55,000, less applicable taxes and withholdings, to be paid within 30 days of Sept. 24, 2008. In addition, Mr. Brewster is restricted from soliciting: -- employees of the Company until Aug. 8, 2011, and -- customers of the Company until Aug. 8, 2009. About Conexant Headquartered in Newport Beach, California, Conexant Systems, Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- has a comprehensive portfolio of innovative semiconductor solutions which includes products for Internet connectivity, digital imaging, and media processing applications. Conexant is a fabless semiconductor company that recorded revenues of US$809.0 million in fiscal year 2007. Outside the United States, the company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore and Israel. At June 27, 2008, the company's consolidated balance sheet showed US$624.7 million in total assets and US$757.2 million in total liabilities, resulting in a US$132.5 million stockholders' deficit. The company's consolidated balance sheet at June 27, 2008, also showed strained liquidity with US$428.0 million in total current assets available to pay US$471.4 million in total current liabilities. * * * Conexant currently carries Standard & Poor's Ratings Services' B- rating with a negative outlook. Moody's Investor Service placed Conexant Systems Inc.'s long term corporate family and probability of default ratings at 'Caa1' in October 2006. The ratings still hold to date with a stable outlook. CONSTAR INTERNATIONAL: SEC Grants Exclusion on 10-K Information --------------------------------------------------------------- Constar International, Inc. disclosed in a Securities and Exchange Commission filing that the SEC's Division of Corporation Finance has granted its request for confidential treatment for information it excluded from exhibits to a Form 10-K filed on March 31, 2008. Patti J. Dennis, Chief of SEC's Office of Disclosure Support, said that the concerned information qualifies as confidential commercial or financial information under the Freedom of Information Act. Excluded information from these exhibits will not be released to the public for the time periods specified: Exhibit Time Period ------- ----------- 10.4c. Amendment dated Aug. 23, 2007 through Dec. 31, 2008 to Supply Agreement 10.4d. Amendment dated Nov. 9, 2007 through Dec. 31, 2008 to Supply Agreement 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. CORPORACION DURANGO: Files for Ch. 15; Affiliates File Ch. 11 ------------------------------------------------------------- Hugh Collins and Tiffany Kary of Bloomberg News report that Corporacion Durango S.A.B. de C.V. filed for Chapter 15 bankruptcy with the U.S. Bankruptcy Court for the Southern District of New York (Lead Case No. 08-13911) on Oct. 6, 2008, after missing a $26.5 million interest payment on 10.5 percent bonds due in 2017. Two of its affiliates filed for Chapter 11 protection separately with the same court on the same day. The Lead Debtor is seeking to restructure $1.5 billion of debt, according to the report. Gabriel Villegas Salazar, the Debtors' general counsel, said that the Debtors have "...faced significant challenges stemming in large part from an unprecedented, unexpected and sustained rise in global energy prices," according to the report. Mr. Salazar cited costs of raw materials and freight that increased by $72.3 million in the first half of 2008 as proof of the rising energy prices, according to the report. Durango, Mexico-based Corporacion Durango S.A.B. de C.V. produces brown paper and packaging products. Its packaging division, Empresas Titan, manufactures corrugated packaging in Mexico. It also produces newsprint through Grupo Pipsamex. John K. Cunningham, Esq., at White & Case, LLP, represents the Debtors in their restructuring efforts. In its filing, the Lead Debtor listed estimated assets of more than $1 billion and estimated debts of more than $1 billion. CORPORACION DURANGO: Chapter 15 Case Summary -------------------------------------------- Chapter 15 Debtor: Corporacion Durango S.A.B. de C.V. Torre Corporativa Durango Potasio 150 Cuidad Industrial, Durango Durango, Mexico 34208 Bankruptcy Case No.: 08-13911 Type of Business: The company produces brown paper and packaging products and its packaging division, Empresas Titan, manufactures corrugated packaging in Mexico. The Debtor is a producer of newsprint through Grupo Pipsamex. The First Federal District Court in Durango, Mexico, has approved the Debtor's plan of reorganization and declared the termination of its "Concurso Mercantil" proceeding. As reported in the Troubled Company Reporter on Sept. 3, 2008, Standard & Poor's Ratings Services assigned on Aug. 29, 2008, its issue and recovery ratings to the Debtor's $520 million senior unsecured notes maturing in 2017. The notes are rated 'CCC-' (the same as the long-term corporate credit rating) with a recovery rating of '4', indicating that lenders can expect an average (30% to 50%) recovery in the event of a payment default. Two of the Debtor's affiliates also filed for bankruptcy under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Fiber Management 08-13918 of Texas, Inc. Paper International, Inc. 08-13917 See: http://www.corpdgo.com/ Chapter 11 Petition Date: October 6, 2008 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: John K. Cunningham, Esq. jcunningham@whitecase.com White & Case, LLP 200 South Biscayne Boulevard, Suite 4900 Miami, FL 33131 Tel: (305) 995-5252 Fax: (305) 358-5744 Estimated Assets: More than $1 billion Estimated Debts: More than $1 billion CREATIVE LOAFING: Gets Initial OK to Use Atalaya's Cash Collateral ------------------------------------------------------------------ The Hon. Carly E. Delano of the United States Bankruptcy Court for the Middle District of Florida authorized Creative Loafing, Inc., and its debtor-affiliates to use, on the interim basis, cash collateral securing repayment of secured loan to Atalaya Administrative LLC, Atalaya Funding II LP, and BIA Digital Partners SBIC II LP. A preliminary hearing is continued to Oct. 8, 2008, at 3:00 p.m., in Courtroom 10B, Sam B. Gibbons United States Courthouse at North Florida Avenue in Tampa, Florida. The Debtors told the Court that they intends to use cash collateral for ordinary expenses under the cash flow forecast budget. The Debtors assured the Court that it will not exceed the budget by more than 5%. In July 2007, the Debtors entered into a separate secured financing agreement with (i) Anacapa Funding I LLC, as agent and lender, to provide up to $30 million in term loan, and (ii) BIA Digital Partners to provide up to $10 million in loan. Atalaya Administrative notified the Debtors that certain rights, interest and obligations of Anacapa have been assigned to Atalaya. In connection with the facilities, the Debtors executed security agreements purporting to grant Anacapa and BIA certain liens and security interest in substantially all of their personal property, which constitute "cash collateral" in accordance to Section 363(a) of the Bankruptcy Code. As adequate protection, Atalaya Administrative, et al., are granted replacement liens to the same extent, validity and priority as existed on the Debtors' bankruptcy filing. A full-text copy of the Debtors' cash flow forecast budget is available for free at http://ResearchArchives.com/t/s?336c About Creative Loafing Headquartered in Tampa, Florida, Creative Loafing, Inc. -- http://www.creativeloafing.com/-- publish newspapers and magazines. The company and eight of its affiliates filed for Chapter 11 protection on September 29, 2008 (Bankr. M.D. Fla. Lead Case No. 08-14939). Chad S. Bowen, Esq., and David S. Jennis, Esq., Jennis & Bowen, P.L., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of between $10 million and $50 million each. DAN RIVER: CONSOR Selling Name, Intellectual Property Portfolio --------------------------------------------------------------- La Jolla, Calif.-based CONSOR Intellectual Asset Management is selling Dan River, Inc.'s name and intellectual property, Home Textiles Today, the weekly newspaper of the home textiles industry, reported. Among the assets the firm has listed for sale are: -- The Dan River name. -- No Trace Patents: 6,861,520 and 7,109,324, which cover the application of cyclodextrins to cellulosic textiles and the products made using such textiles. "The chemistry creates an odor trapping and neutralizing system that can be recharged with a simple rinse or wash. Applications include hunting apparel, military apparel, athletic apparel, institutional bedding, undergarments, pet bedding and much more," according to the seller. -- The Bed-in-a-Bag designation, which is covered by two trademarks. -- Dan River's design library, which contains more than 100 years of original, hand painted designs as well as vintage textiles purchased from design libraries in France, Italy, Israel, London, New York and elsewhere. The library includes proprietary weaves along with loom instructions for hundreds of apparel, linen, and bedding lines. Consor is also open to licensing deals on the assets in the Dan River IP portfolio. About Dan River Inc. Headquartered in Danville, Virginia, Dan River Inc. -- http://www.danriver.com/-- manufactures and markets textile products for the home fashions, apparel fabrics and industrial markets. The company first filed for chapter 11 protection on March 31, 2004 (Bankr. N.D. Ga. Case No. 04-10990). James A. Pardo, Jr., Esq., at King & Spalding, represented the Debtor in its restructuring efforts. The Debtor listed $441,800,000 in total assets and $371,800,000 in total debts. The Court confirmed the Debtors' Plan of Reorganization on Jan. 18, 2005, and the plan took effect on Feb. 14, 2005. Dan River's operations were acquired by GHCL Ltd. in January 2006 for approximately $93 million consisting of $17 million in cash plus the assumption of $76 million in short- and long-term debt. On March 24, 2008, GHCL announced plans to close its home textiles sourcing and manufacturing segment, affecting Dan River as well as GHCL's HW Baker and Best Textiles divisions. Dan River Holdings LLC, Dan River Inc. and three other affiliates filed for Chapter 11 protection on April 20, 2008, (Bankr. D. Del. Lead Case No. 08-10727). Margaret M. Manning, Esq., at Whiteford Taylor & Preston, LLP represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 appointed creditors serve on an Official Committee of Unsecured Creditors. Donald J. Detweiler, Esq., Sandra G. Selzer, Esq., and Dennis A. Merino, Esq., at Greenberg Traurig, LLP represent the Creditors' Committee. In their schedules, Dan River Holdings LLC, et al. listed assets of $69,249,420 and debts of $143,294,152. DAN RIVER: Court Sets November 3 Claims Bar Date ------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware set Nov. 3, 2008, as the last day for filing of proofs of claim against Dan River Holdings LLC and its debtor-affiliates, pursuant to Bankruptcy Rule 3003(c)(3) and Section 502(b)(9) of the Bankruptcy Code. Proofs of Claim must be sent to the Debtors' court-approved claims agent, Epiq Bankruptcy Solutions, LLC on or before the General Bar Date, as follows: -- If by U.S. mail or overnight delivery: Dan River Holdings LLC Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC FDR Station, P.O. Box 5015 New York, NY 10150-5015 -- If by hand delivery: Dan River Holdings LLC Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC 757 Third Avenue, 3rd Floor New York, N.Y. About Dan River Inc. Headquartered in Danville, Virginia, Dan River Inc. -- http://www.danriver.com/-- manufactures and markets textile products for the home fashions, apparel fabrics and industrial markets. The company first filed for chapter 11 protection on March 31, 2004 (Bankr. N.D. Ga. Case No. 04-10990). James A. Pardo, Jr., Esq., at King & Spalding, represented the Debtor in its restructuring efforts. The Debtor listed $441,800,000 in total assets and $371,800,000 in total debts. The Court confirmed the Debtors' Plan of Reorganization on Jan. 18, 2005, and the plan took effect on Feb. 14, 2005. Dan River's operations were acquired by GHCL Ltd. in January 2006 for approximately $93 million consisting of $17 million in cash plus the assumption of $76 million in short- and long-term debt. On March 24, 2008, GHCL announced plans to close its home textiles sourcing and manufacturing segment, affecting Dan River as well as GHCL's HW Baker and Best Textiles divisions. Dan River Holdings LLC, Dan River Inc. and three other affiliates filed for Chapter 11 protection on April 20, 2008, (Bankr. D. Del. Lead Case No. 08-10727). Margaret M. Manning, Esq., at Whiteford Taylor & Preston, LLP represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 appointed creditors serve on an Official Committee of Unsecured Creditors. Donald J. Detweiler, Esq., Sandra G. Selzer, Esq., and Dennis A. Merino, Esq., at Greenberg Traurig, LLP represent the Creditors' Committee. In their schedules, Dan River Holdings LLC, et al. listed assets of $69,249,420 and debts of $143,294,152. DELPHI CORP: Court OKs Moelis as Panel's Co-Investment Banker ------------------------------------------------------------- The Official Committee of Unsecured Creditors in Delphi Corp.'s Chapter 11 cases obtained approval from the U.S. Bankruptcy Court for the Southern District of New York, on an interim basis, to retain Moelis & Company LLC, as co-investment banker to the Committee, in cooperation with Jefferies & Company Inc. According to Committee Chairperson David Daigle, the Jefferies employees primarily responsible for investment banking services to the Committee have ceased to be employed by Jefferies and are now employed by Moelis. The Committee has determined that it requires these professionals' knowledge of the Debtors and the Chapter 11 cases, as well as their expertise. "At this critical juncture, the Committee needs to be fully engaged in assessing the Debtors' reorganization alternatives without the delay or undue cost that would be incurred by losing the knowledge and expertise the Moelis professionals have. Losing access to these professionals could hinder the Committee's ability to effectively respond to new developments and necessary modifications to the Plan", Mr. Daigle asserts. The Moelis professionals primarily responsible for providing services to the Committee are (i) William Q. Derrough, (ii) Isaac Lee, and (iii) David Groban. The Committee selected Moelis as its investment banker for the purpose of providing assistance and advice, in cooperation with Jefferies, with respect to any potential strategy for restructuring the Debtors' outstanding indebtedness, labor costs or capital structure, whether pursuant to a reorganization plan, a sale of assets pursuant to Section 363 of the Bankruptcy Code, a liquidation or otherwise, Mr. Daigle relates. The Committee seeks to continue to use the services of the Jefferies as its co-investment banker. Jefferies will be primarily responsible for services related to asset sales, analysis of debtor-in-possession financing and labor, pension and OPEB issues. Jefferies and Moelis have entered into an agreement whereby they would allocate between themselves the fees earned from the services rendered to the Committee, Mr. Daigle explains. Moelis will be entitled to receive, from the Debtors' estates, as compensation for its services: (1) $131,250 monthly fee; and (ii) and a transaction fee of 1/3 of (i) 0.50% of total consideration greater than $0.50 and up to $0.75 per $1 of allowed unsecured claim and (ii) 0.75% of Total Consideration, as defined in the Engagement letter, greater than $0.75 per $1 of allowed unsecured claim. The transaction fee will not be less than $670,000 or greater than $3,330,000, however, Moelis has reserved the right to request modification of the cap. For purposes of clarification, the engagement Letter defines Total Consideration as "[T]he total aggregate consideration paid by the Debtors on account of allowed unsecured claims against the Debtors pursuant to a plan or plans of reorganization in the Cases, including any amounts in escrow, but excluding any unsecured claims of, and consideration paid by the Debtors on account of claims of, the Pension Benefit Guaranty Corporation or any assignee of the PBGC. A full-text coy of the Engagement Letter is available for free at http://ResearchArchives.com/t/s?335f Moelis' professional compensations do not alter the total amount of monthly fees and possible transaction fees that would be payable by the Debtors. Rather, these simply reflect the agreement between Jefferies and Moelis regarding the allocation of fees between themselves. Mr. Daigle emphasized that the Debtors will not be obligated to pay any additional fees as a result of the Committee's decision to engage Moelis as its co-investment banker. In light of these, the Committee believes that this decision redounds to the benefits of itself and the Debtors. Jefferies and Moelis will coordinate with each other to reduce expenses to be reimbursed by the Debtors. William Q. Derrough, managing director at Moelis, assured the Court that his firm does not hold or represent any interest adverse to the Debtors and the firm is a disinterested person within the meaning of Section 101(14), as modified by Section 1107(b) of the Bankruptcy Code. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News, Issue 146; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DEMEX ENGINEERING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Demex Engineering, Inc. 5 Thomas Mellon Circle, Suite 244 San Francisco, CA 94134 Bankruptcy Case No.: 08-31873 Type of Business: The Debor offers demolition, drilling, underpinning, shoring and excavation services. See: http://www.demexengineering.com/ Chapter 11 Petition Date: October 3, 2008 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Alan E. Ramos, Esq. aramos@lawnrs.com Nevin, Ramos and Steele 700 Ygnacio Valley Rd. #220 Walnut Creek, CA 94596-3859 Tel: (925) 280-1700 Total Assets: $1,990,481 Total Debts: $2,491,723 A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/califnb08-31873.pdf DIOMED HODLINGS: Pays in Full Debt to Hercules Technology --------------------------------------------------------- Diomed Holdings Inc. has settled in full its loan with Hercules Technology Growth Capital, Inc., with the payment at the end of September of $1.1 million in accrued interest and loan fees, in addition to the full repayment of $6.0 million of principal which was made in April 2008, Hercules Technology said in a press release Wednesday. "We are pleased that we were able to get full repayment of the loan principal plus accrued interest and fees," said Manuel A. Henriquez, co-founder, chairman and chief executive officer of Hercules. According to the press release, Diomed Holdings received $7.0 million as a result of the settlement agreement with AngioDynamics Inc. which resolved the patent infringement lawsuit between the companies originally filed in January 2004. Of the $7.0 million settlement proceeds, $6.0 million was used to repay the outstanding loan principal balance to Hercules. As reported in the Troubled Company Reporter on Sept. 25, 2008, Bill Rochelle of Bloomberg News reported that the United States Bankruptcy Court for the District of Massachusetts will convene a hearing on Nov. 4, 2008, to consider confirmation of the liquidating Chapter 11 plan of Diomed Holdings, Inc., and its debtor-affiliate Diomed, Inc. Diomed agreed to sell its U.S. operations to AngioDynamics in April. AngioDynamics closed the sale of Diomed Holdings Inc.'s U.S. businesses on June 17. About Diomed Holdings Based in Andover, Massachussetts, Diomed Holdings Inc. (AMEX: DIO) -- http://www.evlt.com/and http://www.diomedinc.com/-- develops and commercializes minimal and micro-invasive medical procedures that use its proprietary laser technologies and disposable products. Diomed's EVLT(R) laser vein ablation procedure is used in varicose vein treatments. Diomed also provides photodynamic therapy for use in cancer treatments, and dental and general surgical applications. Diomed Holdings has no assets other than its 100% ownership in Diomed Inc., its operating unit. Diomed Inc. owns 100% of Diomed Ltd. in the United Kingdom and Diolaser Mexico SA de CV in Mexico. The company also has an affiliate in Asia through Diomed Hong Kong. The company and its affiliate, Diomed Inc., filed for Chapter 11 protection on March 14, 2008 (Bankr. D. Mass. Case Nos. 08-40750 and 08-40749). Douglas R. Gooding, Esq., at Choate Hall & Stewart LLP, is the Debtors local counsel and McGuireWoods LLP is its general counsel. Goulston & Storrs P.C. is counsel to the Official Committee of Unsecured Creditors. The company's schedules show total assets of $19,936,479 and total liabilities of $14,743,485. In connection with the Chapter 11 filings, Diomed Ltd. filed for Administration under the laws of the United Kingdom in the Cambridge County Court. Steven Mark Law of Ensors was named as administrator. DOWNEAST HERITAGE: Files for Chapter 7 in Maine Court ----------------------------------------------------- Diana Graettinger of Bangor (Maine) Daily News reports that The Downeast Heritage Museum has filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in Bangor. The museum's trustees said a $600,000 mortgage that USDA Rural Development holds and a $1 million second mortgage with the Department of Commerce's Economic Development Administration were the only bills of Downeast that remained unpaid. Dan Lacasse of Calais, attorney for the museum said the $1 million grant was tied to a condition that it remains a museum or a philanthropic organization. The $600,000 owed Rural Development was what remains of a $3.2 million debt that was restructured when the museum filed for protection under Chapter 11 with the federal bankruptcy court in late 2006. After the bankruptcy filing, the museum continued to lose money, the report said. Court papers show the museum has only $1,294 in its checking account while it spends $5,000 a month for operations. The museum will continue to operate under bankruptcy and tenants are expected to remain in the building. Maine Indian Education is now paying for utilities with money it receives from the Bureau of Indian Affairs, the report said. A disclosure hearing is scheduled for later this month at the bankruptcy court in Bangor. The $6 million museum opened in June 2004. It focuses on the cultural heritage of the area. Jim Porter is the chairman of the board of trustees of the museum. Downeast Heritage first filed for Chapter 11 protection on September 12, 2006 (Bankr. D.M., Case No.: 06-10360). At that time, the Debtor listed total assets of $768,082 and total debts of $3,272,891. The museum has $13,500 in personal property including office furnishings, remaining gift shop inventory and the St. Croix Island Exhibit as well as other artifacts, according to the report. DUKE FUNDING: Moody's Cuts Ratings to 'C' on Four Note Classes -------------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible downgrade the rating of one class of notes issued by Duke Funding High Grade VI, Ltd.: Class Description: $13,500,000 Class X Senior Secured Floating Rate Notes Due 2014 -- Prior Rating: Aaa -- Prior Rating Date: 11/30/2007 -- Current Rating: Ba1, on review for possible downgrade Additionally, Moody's announced that it has downgraded the ratings of 5 classes of notes: Class Description: $83,000,000 Class A-1LA Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Baa1, on review for possible downgrade -- Prior Rating Date: 5/29/2008 -- Current Rating: Ca Class Description: $12,000,000 Class A-1LB Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Ba1, on review for possible downgrade -- Prior Rating Date: 5/29/2008 -- Current Rating: C Class Description: $25,000,000 Class A-2L Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: B1, on review for possible downgrade -- Prior Rating Date: 5/29/2008 -- Current Rating: C Class Description: $45,000,000 Class A-3L Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: B3, on review for possible downgrade -- Prior Rating Date: 5/29/2008 -- Current Rating: C Class Description: $92,000,000 Class B-1L Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ca -- Prior Rating Date: 5/29/2008 -- Current Rating: C According to Moody's, these rating actions are as a result of the deterioration in the credit quality of the transaction's underlying collateral pool consisting primarily of structured finance securities. EATON VANCE: Moody's Takes Negative Rating Actions on Term Notes ---------------------------------------------------------------- Moody's Investors Service has taken the negative rating actions on capital notes and medium term notes issued by Eaton Vance Variable Leverage Fund Ltd.: Medium-Term Notes Program ($455,000,000 currently outstanding) -- Current Long-Term Rating: Aa3, on review for downgrade -- Prior Long-Term Rating: Aa3 -- Prior Rating Date: March 20, 2008 Capital Notes (US$ 209,000,000 currently outstanding) -- Current Long-Term Rating: Caa3, on review for downgrade -- Prior Long-Term Rating: Caa3 -- Prior Rating Date: June 24, 2008 EVVLF is a structured investment vehicle that invests primarily in the leveraged bank loan market where the obligors are typically corporations with non-investment grade ratings. EVVLF is managed by Eaton Vance Management. The rating actions reflect the deterioration of the market value of the vehicle's asset portfolio. Moody's will review whether the expected losses of the Medium-Term Notes Program and the Capital Notes are consistent with the expected losses implied by Aa3 and Caa3 ratings, respectively. EL PASO CHILE: General Unsecured Creditors Will Be Paid in Full --------------------------------------------------------------- El Paso Chile Company, Inc., and its debtor-affiliate Desert Pepper Trading Co. filed a Disclosure Statement explaining its Plan of Reorganization with the U.S. Bankruptcy Court for the Western District of Texas. Funding of the Plan Payments to creditors will be made from future earnings of the Debtors. Treatment of Claims Class 1 claims, which include the secured claim of the City of El Paso totaling $11,014, will be paid in full in 60 equal monthly installments, starting on the plan's effective date. The Class 2 claim of Sovereign Business Credit, totaling $2,334,475, will be paid in an amount of $17,405, over a period of 59 months from the effective date, with a final balloon payment on the 60th month. The foregoing payment schedule represents a 20- year amortization of the outstanding indebtness with a 5-year call utilizing a fixed rate of interest of 6-1/2% per annum. The Class 3 claim of CIT Small Business Lending Corporation, totaling $645,883, will be paid in a monthly installment of $4,031, until the claim is paid in full. An extra $2,015 per month will be received by CIT from the debtors' affiliate, United Gourmet LP. The Class 4 secured claim of Berlin Packaging LLC, totaling, $48,474, will be paid in full through a monthly payment of $2,437. The $19,475 Class 5 secured claim of the Bank of West, which is secured by a lien on a 2006 Chrysler 300 automobile, will be paid $595 per month until maturity on July 12, 2011. Holder of Class 6 general unsecured claims, totaling $1,483,875, will be paid in full over a period of 59 months from the effective date and a lump sum payment on the 60th month. Class 7 equity interest owners will retain their interests, however, they will not receive any dividends or distributions on account of their shares until all allowed claims are paid in full. Based in El Paso, Texas, El Paso Chile Company Inc. and its affiliate Desert Pepper Trading Co. -- http://www.elpasochile.com/ -- pack and process food spices, condiments, and drinks. El Paso Chile filed for Chapter 11 protection on June 25, 2008 (Bankr. W.D. Tex. Case Nos. 08-30948 and 08-30949). Bernard R. Given, II, Esq., at Beck & Given P.C., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets of $1 million to $100 million, and debts of $1 million to $100 million. ENCAP GOLF: Competing Reorganization Plan Filed ----------------------------------------------- Russell Ben-Ali and Mark Mueller at The Star-Ledger (New Jersey) report that EnCap Golf Holdings, LLC, has filed a reorganization plan in the U.S. Bankruptcy Court for the District of New Jersey. Meanwhile, Bill Rochelle of Bloomberg News reports that Trump Organization filed its own Chapter 11 plan with U.S. Bankruptcy Court for the District of New Jersey on Oct. 1, 2008, to compete with the plan filed by EnCap Golf on Sept. 30. Trump's plan offers $22.5 million for distribution to creditors, according to the report. The EnCap Golf Plan According to The Star-Ledger, EnCap Golf hopes that the Plan involves finishing landfill cleanup and prepping a 785-acre Meadowlands property for sale in hopes of keeping claim holders at bay. The Star-Ledger relates that EnCap Golf said the proposal would maximize investors' assets by remediating the contaminated site. The Star-Ledger states that the state killed EnCap Golf's $1 billion project with Trump Organization to build a golf course and 2,600 housing units in the Meadowlands, which court documents say had become bogged down by delays, environmental violations, and cost overruns. Years of costly, taxpayer-financed litigation could follow if the Plan were rejected, The Star-Ledger says, citing EnCap Golf. Michael Sirota, an attorney for EnCap Golf, said that private stakeholders could also face tremendous risk, the report says. The Star-Ledger relates that the Plan proposes that a working group of stakeholders choose a nationally recognized developer to complete remediation and closure of environmentally contaminated landfills, and EnCap Golf wants to use $116 million, which was previously earmarked for remediation. About EnCap Golf Headquartered in East Rutherford, New Jersey, EnCap Golf Holdings, LLC, a subsidiary of Cherokee Investment Partners of North Carolina, develops closed landfills and other brownfield properties into golf courses. The company and its affiliate, NJM Capital LLC, filed for Chapter 11 protection on May 8, 2008 (Bankr. D. N.J. Lead Case No. 08-18581). Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, New Jersey, represents the Debtors. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Greenberg Traurig LLP represents the Committee in this case. The Debtors' schedules disclose total assets of $70,056,038 and total liabilities of $458,587,968. ERIE COUNTY PLASTICS: Files Chapter 11 in Erie Federal Court ------------------------------------------------------------ Erie County Plastics Corp. has filed for Chapter 11 bankruptcy protection with the Federal Court in Erie County, Pennsylvania, in order to protect the company from the threat of creditors' lawsuits while it undergoes reorganization, Jim Martin of the Erie Times News (Pennsylvania) reported Wednesday. Paul Roche, chief executive of the company, said the current banking crisis made it difficult "to put things right." "It's too tough of a business environment right now," Mr. Roche said. "This is the best way to clean things up." "We are confident that the molded plastic packaging business of Erie Plastics will be best positioned to support customer needs on an ongoing basis through the Chapter 11 process," the company said in a statement. Mr. Roche said earlier this month that Ed Crawford, chief executive of Park Ohio Corp., indicated interest in purchasing the company. The deal is yet to be finalized. "They are obviously interested, but they have to make their own deal with the bank," mr. Roche said. Headquartered in Corry, Pennsylvania, Erie County Plastics Corp. -- http://www.erieplastics.com/-- makes custom injection molders of plastics packaging and components including lids, closures and vials. The company filed for Chapter 11 relief on Sept.29, 2008 (Bankr. W.D. Pa. Case No. 08-11860). Lawrence C. Bolla, Esq., at Quinn Buseck Leemhuis Toohey & Kroto Inc. represents the Debtor as counsel. When the company filed for protection from its creditors, it listed assets and debts of $10 million to $50 million, and debts of $10 million to $50 million. ERIK BENHAM: Chapter 11 Case Converted to Chapter 7 Proceeding -------------------------------------------------------------- The Honorable Robon Riblet of the U.S. Bankruptcy Court for the Central District of California entered an order converting the Chapter 11 case of Erik Benham to a Chapter 7 proceeding on Thursday. Court documents show that at the initial status conference, Brian D. Fittipaldi appeared for the U.S. Trustee and Kenneth Russak appeared for creditor Security Pacific Bank. No appearance was made on behalf of the Debtor. Mr. Benham's counsel, Vaughn C. Taus, told the Court he failed to attend the initial status conference due to the matter not appearing in any of the three calendars maintained in Mr. Taus' office. The counsel has no substantial explanation for the oversight in calendaring. The office calendar is entered into the attorney's calendar, a second hard copy in the office and outlook on the computer of the calendar clerk. Staff recalls printing out the scheduling order but it was not entered into any calendar. Mr. Benham has requested the Court to grant relief from the order converting the Chapter 11 case to a Chapter 7 proceeding. Mr. Benham's motion relates that he has very substantial equity to protect and reorganize under Chapter 11. Mr. Benham has an excellent opportunity to propose a confirmable plan of reorganization. Erk Benham, with residence at 309 East Tunnel Street, Santa Maria, California, filed for Chapter 11 protection on June 24, 2008 (C.D. Calif. Case No. 08-11432). Vaughn C. Taus, Esq., in San Luis Obispo, California, represents the Debtor. According to Schedules filed with the Court, Mr. Benham listed assets of $36,806,132 and liabilities of $28,380,924. ESTATE FINANCIAL: Trustees Reviewing Mortgage Loans, Properties --------------------------------------------------------------- Thomas P. Jeremiassen, the duly appointed chapter 11 trustee for debtor Estate Financial, Inc., won permission from the Hon. Robin Riblet of the U.S. Bankruptcy Court for the Central District of California to sell the estate's interest in a residential real property at 412 Montebello Drive, in Paso Robles, for $439,500, subject to higher and better offers. Charles R. Reed, Jr. and Melanie Reed have been identified as buyers of the property. Mr. Jeremiassen also won permission to pay closing costs, including portion of brokerage commission, reimburse advances, and distribute the balance of the proceeds. Bradley D. Sharp, the duly appointed chapter 11 trustee of the Estate Financial Mortgage Fund, Inc. -- of which EFI is or was the manager under the Fund's operating agreement -- and Mr. Jeremiassen have begun the process of reviewing and inspecting properties securing loans and those properties that have already been foreclosed. Before the bankruptcy filing, EFI solicited investments for, and arranged and made, real estate secured Loans. EFI also was the sole manager of the Fund, which is a California limited liability company that was organized for the purpose of making or investing in loans secured by first deeds of trust encumbering commercial and residential real estate located primarily in California. EFI has been investing in mortgage loans since 2002. According to Mr. Jeremiassen, there are currently 544 outstanding Loans, including approximately 42 Loans as to which the properties have been foreclosed upon or deeded to EFI or its investors in lieu of foreclosure and thus is real estate owned by EFI or investors including EFI or the Fund. As of September 4, all of the remaining Loans are in default, and the Fund Trustee and the EFI Trustee are working closely together to service those Loans and as necessary foreclose upon the properties and projects to obtain control of the properties for the benefit of the two bankruptcy estates and their constituencies. "At this time, none of the borrowers are making payments on the Loans. Although several of the Loans are in foreclosure, EFI ran out of money and was not able to complete the process. The Trustees currently are contacting each of the borrowers to seek repayment of the Loan or transfer of title to the property in lieu thereof," Robert B. Orgel, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California, says on behalf of the EFI Trustee. Mr. Orgel says the properties are in various stages of completion, ranging from raw land to completed houses. The Trustees, he says, are going to develop an action plan for each of the properties to maximize values. The Trustees have decided to augment their and their general accountants' and financial advisors' real estate experience. They have retained experienced real estate consulting firms to assist in the decision-making and to help create and implement their action plan. Options for action plans include: -- Immediate sale; -- Perform additional work to complete construction of improvements and then sell; and -- Hold for future sale. Prior to the appointment of the Trustees, EFI, as debtor-in- possession of its estate sought to sell a certain real property -- the Bates View Court Property -- free and clear of a disputed mechanic's lien of roughly $20,000, requesting that various sums be deducted from the proceeds to repay EFI. The Trustee's supported the sale and the EFI Trustee adopted it as his own providing, however, that until matters could be sorted out, all of the net proceeds of sale should be segregated and held by the EFI Trustee. The Court approved the sale and the EFI Trustee is holding $475,471.55 in a segregated account, subject to the mechanic's lien claim and investor claims, which the EFI Trustee is investigating. Five creditors of Paso Robles, California-based Estate Financial Inc. -- http://www.estatefinancial.com/-- filed an involuntary chapter 11 petition against the real estate broker on June 25, 2008 (Bankr. C.D. Calif. Case Number 08-11457). Petitioner Steve Gardality asserted a claim of $6,269,768. Estate Financial Inc. consented to the bankruptcy filing on July 16, 2008. A Chapter 11 trustee, Thomas P. Jeremiassen, was appointed by the Court on July 23, 2008. Paso Robles, California-based Estate Financial Mortgage Fund, LLC, and its debtor-affiliate, Estate Financial, Inc., filed for Chapter 11 protection on July 1, 2008 (Bankr. C.D. Ca. Case No. 08-11535). Lewis R. Landau, Esq., at Calabasas, California, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets of more than $100,000,000 and estimated debts of $100,000 to $1,000,000. Bradley D. Sharp was appointed as Chapter 11 trustee for the case. FANNIE MAE: Drops Planned Adverse Market Delivery Charge Increase ----------------------------------------------------------------- Fannie Mae will cancel the planned increase in its adverse market delivery charge. The 0.25% increase was scheduled to go into effect for whole loan purchases and mortgage loans delivered into MBS with issue dates on or after Nov. 1, 2008. Fannie Mae President and CEO Herb Allison said, "Our expectation is that this decision to forgo the across-the-board increase in our delivery charges will be passed on to borrowers in the form of lower mortgage costs. The market has changed substantially since we announced this increase to our pricing in early August. We are evaluating all of our risk-management, underwriting guidelines, pricing and costs in light of these changing conditions. As we move forward, we will seek to balance our responsibility to provide the most market support possible with our obligation to protect the company and its many stakeholders, including taxpayers." Fannie Mae said its expectation was that lenders would waive the additional 0.25% charge for borrowers who have not yet closed on their mortgage loans. Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. In 2008, we mark our 70th year of service to America's housing market. James R. Hagerty at The Wall Street Journal relates that the Fannie Mae's companies' regulator -- the Federal Housing Finance Agency -- and the U.S. Treasury have been urging executives at Fannie and Freddie to find ways to make home loans more affordable. According to WSJ, Fannie's CEO Herbert Allison said that the company is evaluating its risk management, lending guidelines and pricing "to provide the most market support possible with our obligation to protect the company and its many stakeholders, including taxpayers." WSJ reports that the canceled adverse market delivery charge increase would have added $750 to the cost of a new $300,000 mortgage, which could have been paid through higher fees for the borrower or a small increase in the interest rates. According to the report, these fees are charged to lenders whose home mortgages are purchased or guaranteed by Fannie and Freddie Mac. About Fannie Mae The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) -- commonly known as Fannie Mae, is a shareholder-owned U.S. government-sponsored enterprise. Fannie Mae has a federal charter and operates in America's secondary mortgage market, providing mortgage bankers and other lenders funds to lend to home buyers at low rates. Fannie Mae was created in 1938, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America. The government established Fannie Mae to expand the flow of mortgage funds in all communities, at all times, under all economic conditions, and to help lower the costs to buy a home. In 1968, Fannie Mae was re-chartered by the U.S. Congress as a shareholder-owned company, funded solely with private capital raised from investors on Wall Street and around the world. Fannie Mae is the U.S. largest mortgage buyer, according to The New York Times. FIBERTECH POLYMERS: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: FiberTech Polymers, Inc. 2150 S. Parco Avenue Ontario, CA 91761 Tel: (909) 418-6800 Bankruptcy Case No.: 08-23608 Type of Business: The Debtor converts paper mill waste to industrial and consumer products. See: http://www.fibertechpolymers.com/ Chapter 11 Petition Date: October 3, 2008 Court: Central District Of California (Riverside) Judge: Richard M Neiter Debtor's Counsel: Todd C. Ringstad, Esq. becky@ringstadlaw.com Ringstad & Sanders LLP 2030 Main St., #1200 Irvine, CA 92614 Tel: (949) 851-7450 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ True Line Molding & trade debt $150,000 Engineering Attn: Ray Atkins 12205 Hansen Road Hebron, IL 60034 Tel: (815) 648-2739 Packaging Corp. of America trade debt $148,000 Attn: Lori Witt 36596 Treasury Center Chicago, IL 60694 Cusumano/IBC Partners trade debt $123,810 Attn: Charlie Cusimano 101 S. First Street, Suite Burbank, CA 91502 Accuried International Inc. trade debt $81,872 Orrick, Herrington & Sutcliffe legal fees $75,000 Strutkol trade debt $46,848 CRST International trade debt $41,315 Talco Plastics trade debt $40,486 Jackson, Demarco & Peckenpaugh legal fees $36,835 Jewett Cameron Lumber Corp. trade debt $26,861 Pillsbury Winthrop Shaw legal fees $25,082 Pittman Melton trade debt $25,077 Maag Pump Sytems trade debt $20,652 Priority Business Services trade debt $18,354 Knowledge Centric trade debt $17,679 Yellow Freight trade debt $17,575 Securitas Security Services trade debt $15,512 System Transport trade debt $14,046 FORD MOTOR: Conditions Satisfied for UAW Settlement Deal -------------------------------------------------------- Ford Motor Co. disclosed in a Securities and Exchange Commission filing that it is updating certain of the guidance provided in its Quarterly Report on Form 10-Q for the period ended June 30, 2008. Due to deteriorating economic conditions and other factors, the company expects that results for its Volvo segment will be worse, instead of improved, in the second half of 2008 compared with the first half of this year. Ford, the UAW, and class representatives of former UAW-represented Ford employees filed a Settlement Agreement with a federal district court in April 2008 relating to retiree health care coverage. The Settlement Agreement provides that a new retiree health care plan, to be funded by a new Voluntary Employee Beneficiary Association trust, would become permanently responsible for providing retiree health care benefits to covered UAW employees and eligible spouses and dependents on the later of December 31, 2009 or final court approval of the Settlement Agreement and Ford's completion of discussions with the Securities and Exchange Commission regarding satisfactory accounting treatment. Ford would fund the New VEBA through a number of sources, including funds that currently existed in voluntary employee beneficiary association trusts, Ford-issued convertible and term notes, and cash on hand. The parties to the Settlement Agreement acknowledged that Ford's obligations to pay into the New VEBA are fixed and capped as provided in the Settlement Agreement and that Ford is not responsible for, and does not provide a guarantee of: (1) the payment for future benefits to plan participants; (2) the asset returns of the funds in the New VEBA; or (3) the sufficiency of assets in the New VEBA to fully pay the obligations of the New VEBA or the New Plan. Effectiveness of the Settlement Agreement was conditioned upon each of these: (1) issuance of a class certification order by the United States District Court for the Eastern District of Michigan that defined the class in the same manner as Class is defined in the Settlement Agreement; (2) Court approval of the Settlement Agreement in a form acceptable to Ford, the UAW and the Class; and (3) successful completion of discussions between Ford and the SEC regarding satisfactory accounting treatment. As of Sept. 30, 2008, each of the conditions has been satisfied, and the period for appeal of Court approval has expired with no appeal having been filed. The company will re-measure its UAW hourly retiree health care obligations, and expect to record a significant curtailment gain in the third quarter of 2008. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Aug. 5, 2008, Fitch Ratings has downgraded the issuer default rating of Ford Motor Company and Ford Motor Credit Company LLC to 'B-' from 'B'. The Rating Outlook remains Negative. The downgrade reflects: the further deterioration in Ford's U.S. sales as a result of economic conditions, an adverse product mix and the most recent jump in gas prices; portfolio deterioration at Ford Credit and heightened concern regarding economic access to capital to support financing requirements; and escalating commodity costs that will remain a significant offset to cost reduction efforts. FREEDOM COMMS: In Talks with Lenders on Fin. Covenant Compliance ---------------------------------------------------------------- Freedom Communications, Inc. notified the administrative agent for its senior credit facility that it believes it may not be in compliance with formula-based financial covenants for the fiscal quarter ended Sept. 30, 2008, which requires the maintenance of certain specified ratios. The company is in discussions with its enders and intends to work closely with them to address the current situation. The company has and generates sufficient cash to meet its working capital requirements. In addition, in response to the uncertainty in the financial markets several weeks ago, Freedom Communications determined it was rudent to draw down on the balance of its revolver line of credit. In addition to sustained weakness in newspaper and broadcast advertising and increased competition for advertising revenue from online media, the company's businesses have been negatively affected by newspaper circulation declines, the economic slowdown, and vulnerability to markets feeling the real estate collapse, which make up a significant portion of revenues. The company said that while it has made considerable progress in transforming its business over the past several months, including streamlining its cost model and making it more dependent on variable costs, it will also continue to examine other strategic alternatives. As part of these efforts, the company also said that it will be realigning the structure of its Mesa, Arizona newspaper, East Valley Tribune. "The initiatives we have undertaken were designed to strengthen our business, better position our publications to compete for advertising revenues, and right size the cost structure of the business," Scott Flanders, President and CEO, said. "Deleveraging our balance sheet to better reflect current revenue streams will be another important step in our company's transformation." Freedom Communications has implemented a number of initiatives, including: * Re-aligning the organization to focus on its core competencies of selling local advertising and creating local content; * Improving management of newsprint and ink consumption; * Consolidating, regionalizing or outsourcing non-core functions to achieve synergies and lower fixed costs; * Continuing investment in Interactive utilizing dollars captured from efficiencies and synergies created by streamlining processes. "By continuing to take important steps to transform the company's business, we are optimistic that we are creating a sustainable business model that allows us to continue serving our communities for many more years to come," Mr. Flanders concluded. About Freedom Communications Inc. Based in Irvine, California, Freedom Communications Inc. is a newspaper and television broadcasting operator. For the LTM period ended Sept. 30, 2007, the company recorded total revenues of $864 million. * * * As reported in the Troubled Company Reporter on Sept. 10, 2008, Moody's Investors Service downgraded Freedom Communications, Inc.'s probability of default rating to Caa1 from B3. FREESCALE SEMICONDUCTOR: Will Sell Cellphone Chip Business ---------------------------------------------------------- Don Clark and Sara Silver at The Wall Street Journal report that Freescale Semiconductor Inc. will sell or find a joint venture partner for its cellphone chip business. Freescale Semiconductor's cellphone chip unit is a major supplier to Motorola Inc. According to WSJ, Freescale Semiconductor said that the unit brings in $1 billion in annual revenues, about 20% of the company's revenues. CreditSights analyst Ping Zhao believes the business would fetch less than $1 billion, the report says. Freescale Semiconductor was spun off from Motorola in 2004 and later went public. In 2006, Freescale Semiconductor was taken private in a $17.6 billion leveraged buyout that left the firm with a heavy debt load. WSJ relates that Freescale Semiconductor subsequently ran into other problems, including a decrease in cellphone sales by Motorola. According to WSJ, Freescale Semiconductor's CEO Rich Beyer admitted in an interview on Thursday that the company faces big hurdles in improving its position, including clients' demands for multi-function chips and software that would require the firm to invest more in the business. "The scale necessary to continue to compete at the level of some of the players that are larger than us" is beyond Freescale Semiconductor's capability, WSJ quoted Mr. Beyer as saying. Citing Forward Concepts market researcher Will Strauss, WSJ relates that Freescale Semiconductor has had difficulty in finding clients for its 3G phones because Motorola held rights to software associated with those handsets and it was too late when Freescale Semiconductor decided to license that software. WSJ reports that the collapse of Motorola's cellphone business affected Freescale Semiconductor, which derived 94% of its wireless sales and 24% of its revenue overall from Motorola in 2007. According to the report, Motorola has blamed high costs and production delays at Freescale Semiconductor for its problems in producing phones at competitive prices. Freescale Semiconductor said that Motorola is paying an undisclosed sum to relieve it of its remaining purchase obligations, the report states. Motorola will continue to purchase products and design Freescale chips into future phones, while Freescale will continue to sell products, the report says, citing Mr. Beyer. About Freescale Semiconductor Headquartered in Austin, Texas, Freescale Semiconductor Inc. (NYSE: FSL) -- http://www.freescale.com/ -- designs and manufactures embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The company has design, research and development, manufacturing or sales operations in more than 30 countries. * * * As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings revised the rating outlook on Freescale Semiconductor Inc. to negative from stable and affirmed these ratings: (i) issuer default rating at 'B+'; (ii) senior secured bank revolving credit facility at 'BB+/RR1'; (iii) senior secured term loan at 'BB+/RR1'; (iv) senior unsecured notes at 'B/RR5'; and (v) senior subordinated notes at 'CCC+/RR6'. FRONTIER AIRLINES: Inks Deal on LT Wage and Benefit Concessions --------------------------------------------------------------- Frontier Airlines reached a tentative agreement with one of its unions for long-term wage and benefit concessions. Leaders of the Transportation Workers Union, which represents the airline's dispatchers, agreed to wage and benefit concessions through September 2012. The agreement will be presented for ratification by the union membership and for approval by the court overseeing Frontier's Chapter 11 case. "I applaud the TWU leadership for recognizing the necessity of these concessions and working cooperatively with us," said Frontier president and CEO Sean Menke. "This is another very important step in our Chapter 11 reorganization process, helping us to meet the cost targets required by our business plan." "The TWU appreciates the joint effort made in achieving this restructuring agreement," TWU Local 540 President David Durkin, said. "We hope that this will be the first step in achieving agreements with the other groups which will allow Frontier to exit bankruptcy as quickly as possible." Frontier continues to negotiate to obtain long-term concessions from its other two unions: the Frontier Airline Pilots Association, which represents Frontier's pilots, and the International Brotherhood of Teamsters, which represents Frontier's mechanics, tool room employees, aircraft appearance agents and material specialists. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provides air transportation for passengers and freight. It operates jet service carriers linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, as well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh R. McCullough, Esq., at Davis Polk & Wardwell, represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. (Frontier Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) GEMINI AIR: Wants Chapter 11 Case Dismissed ------------------------------------------- Bill Rochelle of Bloomberg News reports that Gemini Air Cargo, Inc., asked the U.S. Bankruptcy Court in the Southern District of Florida to dismiss its Chapter 11 case. The Debtor asked the Court to schedule a hearing on Oct. 10, 2008, to consider its request for dismissal. The report notes that the Debtor has been unable to find a buyer and is being forced to shut down the narrow-body air cargo business. Without a buyer, the Debtor, according to the report, gave up its last major assets when it transferred the property in exchange for $15 million in debt held by the secured lender Laurus Master Fund Ltd., which was owed $23.5 million on a term loan and revolving credit. The Debtor, according to the report, said there is no reason for keeping the case in Chapter 11 because any recoveries on lawsuits, such as preference suits, would go to Laurus as part of its collateral. Based in Dulles Virginia, Gemini Air Cargo, Inc. -- http://www.geminiaircargo.com/-- provides airfreight services. It operates cargo schedules and charters on a wet-lease basis. The Debtor and a debtor-affiliate first filed for chapter 11 protection on March 15, 2006, (Bankr. S.D. Florida Case Nos. 06- 10870 and 06-10872). Kourtney P. Lyda, Esq., at Haynes and Boone, LLP, represents the Debtor. The Debtors emerged from bankruptcy five months later in August 2006. The Debtor filed for chapter 22 protection together with its three debtor-affiliates on June 18, 2008 (Bankruptcy S.D. Fla. Lead Case No. 08-18175). Paul Steven Singerman, Esq., at Berger Singerman P.A., represents the Debtors in their restructuring efforts. The Debtor's financial condition as of the petition date showed estimated assets of between $100 million and $500 million and debts of between $100 million and $500 million. GENCORP INC: Names Kathy Reid as Vice President Controller ---------------------------------------------------------- GenCorp. Inc. disclosed in a Securities and Exchange Commission filing that on Sept. 26, 2008, Yasmin R. Seyal, senior vice president and chief financial officer; and R. Leon Blackburn, vice president-controller, left the Company to pursue other interests. On Sept. 26, 2008, GenCorp appointed Kathy Redd, vice president, controller and acting chief financial officer. Ms. Redd, 47, has served as vice president-finance of the Company since August 2006. Prior to that, Ms. Redd served as assistant corporate controller for the Company from August 2002 to August 2006. Prior to joining the Company, Ms. Redd was vice president of finance for Grass Valley Group in Nevada City, California (April 2001 - July 2002); and vice president of finance and controller for Jomed Inc. in Rancho Cordova, California (April 1996 - April 2001). There are no understandings or arrangements between Ms. Redd and any other person pursuant to which Ms. Redd was selected or appointed as the vice president-controller and acting chief financial officer of the Company. Ms. Redd does not have any family relationship with any director, executive officer or person nominated or chosen by the Board of Directors to become an executive officer. Other than her employment with the Company, Ms. Redd did not have any material interest, direct or indirect, in any material transaction to which the Company was a party since Dec. 1, 2006, or which is presently proposed. About GenCorp Headquartered in Rancho Cordova, Calif., GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a leading technology-based manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the entitlement, sale and leasing of the company's excess real estate assets. GenCorp Inc.'s balance sheet as of Aug. 31, 2008, showed $1.01 billion in total assets, $1.04 billion in total liabilities, resulting to $30.9 million in shareholders' deficit. GenCorp posted $2.7 million in net losses on $172.5 million in net revenues for the third quarter ended Aug.31, 2008, compared with $15.6 million in net profit on $198.5 million in net revenues for the third quarter ended 2007. GENERAL DATACOMM: Secures $250,000 Loan from CEO and Board Chair ---------------------------------------------------------------- General DataComm Industries, Inc., borrowed $250,000 from Howard S. Modlin, chairman of the board and chief executive officer. The company disclosed that on Sept. 18, 2008, it had also borrowed $175,000 from Mr. Modlin. The loans are reflected by demand promissory notes bearing interest at the rate of 10% per annum from the date of loan secured by the assets of the company. The proceeds of the loans are to be used by the company for working capital purposes. The company also disclosed other development which included: -- on Sept. 29 and 30, 2008, it implemented further employee compensation reductions, including a combination of salary reductions, benefit reductions and job eliminations for an anticipated annual savings of approximately $1.2 million. -- debentures in the principal amount of $19,453,000 matured on Oct. 1, 2008. While a subordinated security agreement signed by the indenture trustee on behalf of the debenture holders provides that no payments may be made to debenture holders while senior secured debt is outstanding, in the absence of such provision the company does not have the ability to repay the debentures. Senior secured debt in the principal amount of $7,255,945 was outstanding at Oct. 1, 2008. Therefore, no payments to debenture holders have been made as of the maturity date. About General DataComm Based in Naugatuck, Connecticut, General DataComm Industries Inc. (Other OTC: GNRD.PK) -- http://www.gdc.com/-- provides secure, NEBS-compliant networking for telcos, governments and businesses. GDC's solutions help customers to bridge technologies, maximize their investments in existing voice and data networks, and transition to the newest network architectures. GDC's product offerings enable legacy and DSL network access; bandwidth management, multiprotocol label switching (MPLS), voice over IP (VoIP), Ethernet, power over Ethernet (PoE), and wireless networking, and are supported by services for network installation, maintenance, operations, repair, enterprise security management and complete network outsourcing. Going Concern Doubt Eisner LLP, in New York, expressed substantial doubt about General DataComm Industries Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2007. The auditing firm reported that the company has both a working capital and stockholders' deficit at Sept. 30, 2007, and has no current ability to obtain new financing. The company has no current ability to borrow additional funds. It must, therefore, fund operations from cash balances, cash generated from operating activities and any cash that may be generated from the sale of non-core assets such as real estate and others. The company has $28,306,954 of debentures including accrued interest which mature on Oct. 1, 2008, which it is presently unable to pay. GENERAL GROWTH: Moody's Lowers Debt Ratings to 'Ba3' from 'Ba2' --------------------------------------------------------------- Moody's Investors Service has lowered the ratings on General Growth Properties, Inc., certain of its subsidiaries and The Rouse Company LP (to Ba3 from Ba2 senior secured bank debt; to Ba3 from Ba2 senior unsecured debt) and placed the ratings on review for possible downgrade. The rating action reflects General Growth's strained financial flexibility, and substantial uncertainty of the REIT's liquidity position and credit profile given significant near term refinancing and development funding needs, coupled with expected earnings pressure due to a likely protracted downturn in the economy. The earnings pressures have eroded General Growth's credit metrics and the cushion for both the secured debt and interest coverage covenants for the Rouse debt. Furthermore, given the current capital constrained environment, Moody's believes there is an increased likelihood that the unencumbered portfolio and unencumbered net operating income of Rouse will be negatively affected. Moody's also believes the severity of the deteriorating global credit environment provides little breathing room for the REIT as it struggles to refinance $1.1 billion in mortgages due in November and $600mm in unsecured bonds due within six months. The company has been exploring several alternatives to meet their urgent capital needs. Moody's review will focus on the REIT's ability to manage through its substantial funding needs in the near term, as well as its ultimate capital structure, asset composition, and earnings strength and stability. The Ba3 rating reflects the company's current credit metrics, solid NOI growth across the portfolio on a consolidated basis, and consistent operating margins in the 60%-65% range. Their operating performance is supported by a high quality, well-diversified portfolio of regional malls operating throughout the United States. A further downgrade would likely reflect any refinancing missteps, any weakening of current credit metrics and an acute reversal in earnings strength or stability, or a breach in bond covenants. A return to a stable outlook would be contingent upon the REIT's ability to successfully manage through its funding needs in the near term, maintain good operating performance at its retail centers, preserve current credit metrics on a consolidated basis, and comply with bond covenants. These ratings were downgraded and placed under review down for possible downgrade: * GGP Limited Partnership - Senior secured bank debt to Ba3 from Ba2, and senior unsecured debt shelf to (P)Ba3 from (P)Ba2. * General Growth Properties, Inc. - Senior secured bank debt to Ba3 from Ba2, and preferred stock shelf to (P)B2 from (P)B1. * The Rouse Company LP - Senior unsecured debt to Ba3 from Ba2. General Growth Properties, Inc. [NYSE: GGP] is headquartered in Chicago, Illinois, and is one of the largest owners and operators of regional malls in the United States. The REIT reported assets of $29.5 billion, and equity of $1.9 billion, at June 30, 2008. GENERAL MOTORS: Unable to Meet Demand, Factory to Run Overtime -------------------------------------------------------------- Sharon Terlep at Dow Jones Newswires reports that General Motors Corp. said that it will keep its sole U.S. compact-car factory running on overtime for the remainder of this year According to Dow Jones, GM is still unable to meet demand for fuel-efficient small cars. It is running short on Chevrolet Cobalt cars despite adding a third shift at its Lordstown, Ohio, assembly plant, the report says. Dow Jones relates that GM's global sales analyst Mike DiGiovanni said in a conference call on Wednesday, "The increased availability [of Cobalt] is still kind of out in front of us. We're in good shape and we think we'll have adequate availability to sell into that segment, which is a pretty good segment right now." GM won't build new car assembly plants or covert truck factories, and will manage the rising demand by adding shift as existing locations, Dow Jones reports. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. At June 30, 2008, the company's balance sheet showed total assets of $136.0 billion, total liabilities of $191.6 billion, and total stockholders' deficit of $56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of $15.4 billion over net sales and revenue of $38.1 billion, compared to a net income of $891.0 million over net sales and revenue of $46.6 billion for the same period last year. GENERAL MOTORS: Amended GSA and MRA Take Effect ----------------------------------------------- General Motors Corporation disclosed in a Securities and Exchange Commission filing that an Amended Global Services Agreement and the Master Restructuring Agreement between the company and Delphi Corporation, as approved by the U.S. Bankruptcy Court for the Southern District of New York on Sept. 26, 2008, became effective on Sept. 29, 2008. A full-text copy of the Amended GSA and MRA is available for free at http://ResearchArchives.com/t/s?3330 About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News, Issue 146; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. At June 30, 2008, the company's balance sheet showed total assets of $136.0 billion, total liabilities of $191.6 billion, and total stockholders' deficit of $56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of $15.4 billion over net sales and revenue of $38.1 billion, compared to a net income of $891.0 million over net sales and revenue of $46.6 billion for the same period last year. GENERAL MOTORS: Exchanges 16MM Shares for Series D Debentures ------------------------------------------------------------- General Motors Corporation disclosed in a Securities and Exchange Commission filing that it has issued an aggregate of 16,000,000 shares of its common stock, par value $1-2/3 per share in exchange for $176,417,800 principal amount of its 1.50% Series D Convertible Senior Debentures due 2009, beneficially owned by a qualified institutional holder of the Debentures. The Agreement provided that the amount of Common Stock GM exchanged for the Debentures was based on the daily volume weighted average price of the Common Stock on the New York Stock Exchange during a three-day pricing period. GM did not receive any cash proceeds as a result of the exchange of its Common Stock for the Debentures, which Debentures have been retired and cancelled. GM entered into the Agreement to reduce its debt and interest costs, increase its equity and, thereby, improve its liquidity. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. At June 30, 2008, the company's balance sheet showed total assets of $136.0 billion, total liabilities of $191.6 billion, and total stockholders' deficit of $56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of $15.4 billion over net sales and revenue of $38.1 billion, compared to a net income of $891.0 million over net sales and revenue of $46.6 billion for the same period last year. HAWAII MEDICAL: Collin Dang Replaces Danelo Canete as CEO --------------------------------------------------------- Pacific (Hawaii) Business News reports that Hawaii Medical Center has appointed cardiovascular surgeon Collin Dang to replace Danelo Canete as its new chief executive. According to Pacific Business, Dr. Canete is a cardiologist and has been Hawaii Medical's CEO since the company purchased two former St. Francis hospitals in January 2007. The report says that Dr. Canete will return to private practice. Kristen Consillio at Starbulletin.com relates that as Hawaii Medical's CEO, Dr. Canete had to make difficult decisions to keep the hospitals running, while also maintaining his own practice. About Hawaii Medical Honolulu, Hawaii-based Hawaii Medical Center is only for-profit, physician-owned hospital. It is a partnership of CHA Hawaii, an affiliate of Cardiovascular Hospitals of America. It has two specialty units, including Adult and Pediatric and Intensive Care. Wichita, Kansas-based CHA Hawaii LLC, and its affiliates -- including Hawaii Medical Center LLC -- filed for Chapter 11 protection on Aug. 29, 2008 (Bankr. D.Del. Case No. 08-12027). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtors in their restructuring efforts. The Debtors listed assets of between $1 million and $10 million and liabilities of between $50 million and $100 million when they filed for bankruptcy. HRP MYRTLE: May Extend Season Ticket Passes for Six Months ---------------------------------------------------------- HRP Myrtle Beach Holdings, LLC disclosed Tuesday that Hard Rock Park has received Bankruptcy Court approval to offer its Annual and Season Pass Holders a six-month extension, Nicole Boone, WBTW News13 Anchor (Myrtle Beach, S.C, )reports. Public Relations Manager, Megan Winnett, disclosed in a press release Tuesday that anyone still holding unused tickets to the Park will be able to exchange their unused tickets for a 2009 ticket in the near future. The approval of refunds, however, at this time, was not permitted by the Bankruptcy Court. Headquartered in Myrtle Beach, South Carolina, HRP Myrtle Beach Holdings, LLC -- owns and operates Hard Rock Park, a rock-n-roll theme park in Myrtle Beach, South Carolina, under a long-term license agreement with Hard Rock Cafe International (USA), Inc. The company and six of its affiliates filed for Chapter 11 protection on Sept. 24, 2008 (Bankr. D. Del. Lead Case No. 08-12193). Paul, Hastings, Janofsky & Walker LLP represents the Debtors in their restructuring efforts. The Debtors selected Richards, Layton & Finger as their co-counsel. The Debtors also selected RAS Group Inc. as their financial advisor. Steven Goodwin will serve as the Debtors' chief executive officer. The U.S. Trustee for Region 3 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed assets and debts of between $100 million and $500 million each. IL LUGANO: Seeks to Employ Zeisler as Local Bankruptcy Counsel -------------------------------------------------------------- IL Lugano, LLC, seeks the U.S. Bankruptcy Court for the District of Connecticut's permission to appoint Zeisler & Zeisler, P.C. as its local bankruptcy counsel. The Firm will, among other things, advise the Debtor of its rights, powers, and duties and in the negotiation and documentation of financing agreements, debt restructuring, cash collateral orders and related transactions. The Firm will charge the Debtor for its legal services on an hourly basis in accodance with its ordinary and customary hourly rates in effect on the date the services are rendered. The Firm will maintain detailed records of any actual and necessary or appropriate costs and expenses incurred in connection with the legal services rendered. The Firm received a retainer of $100,000 from the Debtor, a portion of which was applied on account of legal fees and expenses incurred in representing the Debtor prior to the bankrutpcy filing and in contemplation of and in connection with the Debtor's Chapter 11 case. The Firm will seek the Court's permission for compensation for services rendered and reimbursement of exp[enses incurred post-petition in accordance with the applicable provisions of the Bankruptcy Codes, the Banrkutcy Rules, and the Local Rules of Bankruptcy Procedure. Court documents didn't indicate the hourly rates that the Firm will charge the Debtor. James Berman, Esq., a principal of the Firm, assures the Court of the Firm's disinterestedness and that the Firm represents no interest adverse to the Debtor or to its estate. Headquartered in Fort Lauderdale, Florida, IL Lugano LLC -- http://www.illugano.com/-- owns a condominium-hotel property in Fort Lauderdale, Florida, and is a wholly owned subsidiary of SageCrest Vegas LLC. An upscale Todd English restaurant is in the process of being completed and opened on the prperty and is expected to generate significant additional revenue. The company filed for chapter 11 protection on Aug. 29, 2008 (Bankr. D. Conn. Case No. 08-50811). James Berman, Esq., at Zeisler and Zeisler, represents the Debtor. When the Debtor filed for protection from its creditors, it listed assets between $50 million and $100 million and debts between $1 million and $10 million. IL Lugano filed for bankruptcy to prevent any adverse judgment and subsequent enforcement actions against IL Lugano in a lawsuit filed by EPI NCL, LLLC, in the Circuit Court of the 17th Judicial Circuit of Broward County, Florida, which was set for trial on Sept. 2, 2008, and to allow adquate time for completion of the restaurant and sale of the property. Enforcement actions by EPI at a time when the restaurant is being completed that is expected to generate significant additional cash flow for IL Lugano would be detrimental to the creditors of IL Lugano and the investors of SageCrest II, LLC. The bankruptcy will allow time for the restaurant to be completed and opened and for cash flow to improve so that the property can be sold at a time and in a manner to maximize value for all creditors and investors. On Aug. 17, 2008, SageCrest II, LLC, and SageCrest Finance LLC each filed a voluntary petition for Chapter 11 protection. IMARX THERAPEUTICS: Saints Capital Discloses 11.57% Equity Stake ---------------------------------------------------------------- Saints Capital Everest, L.P. disclosed in a Securities and Exchange Commission filing that it may be deemed to beneficially own 1,176,471 shares of ImaRx Therapeutics Inc.'s common stock, representing 11.57% of the shares issued and outstanding. Based in Tucson, Ariz., ImaRx Therapeutics Inc. (Nasdaq: IMRX) -- http://www.imarx.com/-- is a biopharmaceutical company developing and commercializing therapies for vascular disorders. The company's research and development efforts are focused on therapies for stroke and other vascular disorders using its proprietary microbubble technology. The company's commercialization efforts are currently focused on its product, urokinase, for the treatment of acute massive pulmonary embolism. Going Concern Doubt Ernst & Young LLP, in Phoenix, Ariz., expressed substantial doubt about ImaRx Therapeutics 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 said that the company has recurring losses, which has resulted in an accumulated deficit of $81.2 million at Dec. 31, 2007. Subsequent to the end of the quarter, the company paid $5.2 million to satisfy all outstanding liabilities to Abbott Laboratories, including the $10.8 million balance on the $15.0 million non-recourse note. ImaRx Therapeutics Inc. reported a net loss of $7.3 million for the second quarter ended June 30, 2008, compared to a net loss of $1.9.4 million for the same period last year. IMAX CORPORATION: Draws $10 Million from Credit Facility -------------------------------------------------------- IMAX Corporation disclosed in a Securities and Exchange Commission filing that on Sept. 24, 2008, it drew $10.0 million of funds under its loan agreement for a secured revolving credit facility with Wachovia Capital Finance Corporation (Canada), as lender. The borrowing brings the cumulative amount of drawdowns outstanding under the Credit Facility to $20.0 million. The Company previously drew $10.0 million under the Credit Facility on July 17, 2008. The funds will be used for general corporate purposes, inventory purchases and prospective capital funding requirements associated with its joint revenue sharing arrangement roll-out. Borrowings under the Credit Facility bear interest at the applicable prime rate or LIBOR plus an applicable margin as specified in the Credit Facility and are collateralized by a first priority security interest in all of the current and future assets of the Company. Payments of the principal amounts of borrowings under the Credit Facility are due no later than Oct. 31, 2010. The Company currently has approximately $10.4 million remaining under the Credit Facility. About IMAX Headquartered in Ontario, Canada, IMAX Corporation (Nasdaq: IMAX)(TSX: IMX) -- http://www.imax.com/-- is a digital entertainment and technology company. As of Dec. 31, 2007, there were 299 IMAX theatres operating in 39 countries. The company's groundbreaking IMAX DMR digital remastering technology allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality. At June 30, 2008, IMAX Corp.'s balance sheet showed total assets of $216.4 million and total liabilities of $305.2 million, resulting in an $88.7 million stockholders' deficit. For the quarter ended June 30, 2008, the company reported a net loss of $12.1 million over $21.1 million revenues, compared to a net loss of $4.5 million over $27.1 million revenues for the same period last year. INNOPHOS HOLDINGS: CNA Files Appeal over Water Rate Decision ------------------------------------------------------------- Innophos Holdings Inc. disclosed in a Securities and Exchange Commission filing that its Mexican counsel informed the company on September 23, 2008, that the Mexican National Waters Commission timely filed an appeal to an intermediate Mexican appeals court relating a decision of the Mexican Court of Fiscal & Administrative Justice to overturn resolutions issued in 2004 by CNA, to the company's Mexican affiliate, Innophos Fosfatados, seeking to impose higher water rates on fresh water consumed at the company's Coatzacoalcos, Veracruz, Mexico plant from 1998 through 2002. CNA has 15 business days in which to file an appeal of that decision. Innophos acquired its Mexican operations in August 2004 from affiliates of Rhodia, S.A. Subsequently, Innophos obtained a judgment in the New York State courts confirming its right to full indemnity from Rhodia for CNA water resolution-related liabilities arising prior to the acquisition. The CNA fresh water resolutions, if sustained, could amount to a potential liability of up to $33 million for the period 1998 through 2002, and would be fully indemnified by Rhodia. About Innophos Holdings Headquartered in Cranbury, N.J., Innophos Holdings Inc. (Nasdaq: IPHS) -- http://www.innophos.com/-- the holding company for a leading North American manufacturer of specialty phosphates, serves a diverse range of customers across multiple applications, geographies and channels. Innophos offers a broad suite of products used in a wide variety of food and beverage, consumer products, pharmaceutical and industrial applications. Innophos has manufacturing operations in Nashville, Tenn.; Chicago Heights, Ill.; Chicago (Waterway), Ill.; Geismar, Los Angeles; Port Maitland, Ontario (Canada); and Coatzacoalcos, Veracruz and Mission Hills, Guanajuato (Mexico). * * * As reported by the Troubled Company Reporter on April 17, 2007, Standard & Poor's Ratings Services assigned its 'CCC+' rating to $66 million of senior unsecured notes due 2012 to be issued by Innophos Holdings, parent company of Innophos Inc. The rating still holds to date. S&P also affirmed the 'B' corporate credit rating and other ratings on Innophos Inc. The TCR reported on April 18, 2008 that Moody's Investors Service assigned a B1 corporate family rating to Innophos Holdings Inc. and a B3 rating to the company's new $66 million senior unsecured notes due 2012. The ratings still hold to date. The new notes are being issued by Innophos Holdings to refinance $61 million of debt of its subsidiary, Innophos Investments Holdings Inc. INTERSTATE BAKERIES: Files Amended Plan & Disclosure Statement -------------------------------------------------------------- Interstate Bakeries Corporation (IBC) (OTC:IBCIQ) filed an amended Plan of Reorganization and related Disclosure Statement with the U.S. Bankruptcy Court for the Western District of Missouri on October 4, 2008. The filing of the Plan of Reorganization and related Disclosure Statement was made in connection with the plan funding commitments, on September 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. The funding commitments form a basis for IBC to emerge from Chapter 11 as a stand-alone company, under the Plan of Reorganization filed with the Bankruptcy Court. The Plan of Reorganization and related Disclosure Statement filed on October 4, 2008, reflect a substantially impaired recovery for pre-petition senior secured creditors. For general unsecured creditors and equity security holders, the amended Plan of Reorganization and related Disclosure Statement reflect no recovery, although on October 3, 2008, the Company and its pre-petition secured creditors reached a compromise with the Official Committee of Unsecured Creditors appointed in the cases. As a result of the compromise, the Official Committee of Unsecured Creditors withdrew its previously filed objection to the Company's efforts to obtain Bankruptcy Court approval of the plan funding commitments and agreed to support the Company's Plan of Reorganization as it will be subsequently amended to reflect the compromise. The Plan of Reorganization has the support of approximately 53.8% of the pre petition secured debt holders. The compromise reached with the Official Committee of Unsecured Creditors, which is subject to definitive documentation, provides for, among other things, the establishment of a creditors' trust upon IBC's emergence from Chapter 11 for the benefit of the general unsecured creditors. The creditors' trust will be funded through a cash payment of $5 million. Costs of administering the trust will be paid from the trust assets. The creditors' trust will also receive rights to pursue certain litigation claims at the expense of the creditors' trust. Finally, the creditors' trust will potentially receive a cash payment upon a future liquidity event with such payment based on the increase, if any, in value of a 3% equity ownership stake in the reorganized IBC in excess of 150% of the investment equity value paid by the Equity Investor. There can be no assurance that the litigation claims or the potential cash payment described above will result in any distributable value for general unsecured creditors. The filing of the Plan of Reorganization and related Disclosure Statement is an important step in IBC's ongoing efforts to emerge from Chapter 11. Going forward, the Company intends to amend the filed Plan of Reorganization and related Disclosure Statement to reflect the compromise reached with the Official Committee of Unsecured Creditors and seek Bankruptcy Court approval of the amended Disclosure Statement and confirmation of the amended Plan of Reorganization through the Chapter 11 process. About Ripplewood Holdings L.L.C. Based in New York, Ripplewood Holdings L.L.C. is a leading private equity firm established in 1995 by Timothy C. Collins. Through five institutional private equity funds managed by Ripplewood, the firm has invested over $4.5 billion of equity in transactions in the U.S., Asia, Europe and the Middle East. About IBC Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8, 2007. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received court approval of the first amended Disclosure Statement. IBC did not received any qualifying alternative proposals for funding its plan of reorganization in accordance with the court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The deadline for submission of alternative proposals was Jan. 15, 2008. A new plan filing deadline was set for June 30, 2008; no plan was filed as of that date. (Interstate Bakeries Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Wants Plan Funding Commitment Deals Approved ------------------------------------------------------------------ Interstate Bakeries Corp. and its debtor-affiliates sought authority from the United States Bankruptcy Court for the Western District of Missouri to enter into commitment letters with respect to plan funding commitments they received on September 12, 2008, from lenders holding approximately 53% of IBC's prepetition secured debt: * equity commitment letter with IBC Investors I, LLC, an affiliate of Ripplewood Holdings L.L.C.; * revolving loan or ABL Facility Commitment Letter with General Electric Capital Corporation and GE Capital Markets, Inc.; and * a term loan commitment letter with Silver Point Finance, LLC, and Monarch Master Funding Ltd. According to the Debtors, the Commitment Letters lay out an investment to be made in Reorganized IBC in connection with the confirmation and consummation of a Chapter 11 plan of reorganization. Contemplated Transactions "Speculative at Best" The Official Committee of Unsecured Creditors states that the Debtors "are seeking to unconditionally commit the estates to significant fees and reimbursement obligations in connection with a transaction whose prospects of being consummated remain speculative at best." Moreover, the Debtors have offered no explanation for how unsecured creditors will benefit if their request is approved, the Creditors Committee contends. Representing the Creditors Committee, Scott Cargill, Esq., at Lowenstein Sandler PC, in Roseland, New Jersey, tells the Court that under the Commitment Letters, the Debtors are seeking approval to pay and incur, among others, at least $23,300,000 in non-refundable commitment fees, of which $3,250,000 will be payable to Ripplewood upon the Court's approval of the request. Mr. Cargill points out that while the amounts are huge, the consummation of the transactions contemplated under the Commitment Letters are highly speculative, to the extent that they are: -- conditioned on the non-occurrence of developments, conditions or circumstances that had or could reasonably be expected to have a material adverse effect on the business, operations, property, condition or prospects of the Debtors; -- contingent upon the modification and ratification of agreements with all of the Debtors' unions; and -- conditioned on confirmation of a plan of reorganization, a prospect that is very speculative. Additionally, under the Plan Term Sheet, the Debtors must satisfy certain financial conditions, which include, among other things, having no more than (i) $113,000,000 of Adjusted Net Debt and (ii) $28,000,000 of Identified Claims, as of the Effective Date -- which the Debtors have not assured to be achievable, says the Committee. Mr. Cargill maintains that the Transactions are conditioned upon confirmation of a reorganization plan incorporating the terms of the Plan Term Sheet. However, at least 25% of the funded Prepetition Debt does not appear to support the Plan Term Sheet. Moreover, the Debtors have failed to even identify the many significant objections that the Committee and other parties-in- interest will advance in opposition to confirmation of a Ripplewood Plan, he says. Mr. Cargill points out that the International Brotherhood of Teamsters' and other unions' support to the Plan Term Sheet does not guarantee that each of the Union locals will, in fact, ratify the required modifications to the collective bargaining agreements. The Creditors Committee submits that, because it is speculative whether the transaction can close, there is no reasonable basis to approve the Transaction Fees, Mr. Cargill says, citing In re Made in Detroit, Inc., 299 B.R. 170, 176-78 (Bankr. E.D. Mich. 2003). "In essence, the Debtors are committing to pay up to $23,300,000, plus expenses without a cap, to parties who, under existing circumstances, may never close," Mr. Cargill states. No Distribution for Unsecured Creditors Mr. Cargill points out that the Plan Term Sheet provides for no distribution to unsecured creditors. However, the Debtors propose to release the Prepetition Lenders from all claims, including those arising from the Debtors' Bank Complaint, which, according to the Creditors Committee's preliminary estimates, have potential recoveries in excess of $370,000,000. The Debtors Bank Complaint, which was filed on September 20, 2006, by the Debtors against certain third party prepetition lenders, sought to, among other things, (i) avoid certain transfers made by the Debtors to the Preference Lenders during the 90 days prior to the Petition Date, (ii) avoid certain unperfected liens and interests in the Debtors' property, and (iii) avoid certain postpetition transfers made by the Debtors to the Preference Lenders that were not authorized. The Debtors do not address the value of the Claims, or what benefit the Debtors' estates and creditors are receiving in exchange for giving up the Claims. Similarly, the Debtors have not explained why it is in the best interests of their estates to release claims against all of the Prepetition Lenders, Mr. Cargill says. The parties most affected by the proposed release -- the unsecured creditors -- do not benefit in any way from it; hence, they will be deemed to reject the Ripplewood Plan. The Debtors also provide for releases in favor of all their officers and directors who served during the pendency of their Chapter 11 cases, but have not provided the benefit of the Releases to their estates. Accordingly, D&O Claims should not be released, but should instead be transferred to a creditor trust for the benefit of the general unsecured creditors, Mr. Cargill avers. Similarly, he continues, the Creditors Committee submits that the Vendor Preference Claims, which are estimated to be worth in excess of $100,000,000 and vest to the Reorganized Debtors, should be transferred to a creditor trust, and benefits received from the prosecution of the Claims should inure to the benefit of the general unsecured creditors. The Debtors have not justified the necessity to offer equity in the Reorganized Debtors to induce lenders to provide financing under the Term Loan Facility, according to Mr. Cargill. In the same manner, the Debtors have not proven that they could not obtain Term Loan Facility financing under less favorable circumstances than to grant participating lenders an equity position in the Reorganized Debtors. Mr. Cargill argues that the Non-Solicitation Clause is inappropriate, as it prevents the Debtors from testing whether the contemplated Transactions are the best option available to their estates, thereby failing to ensure maximum value for the benefit of creditors, which is an overarching goal of the bankruptcy process. Fees and Expenses Must Be Reviewed Mr. Cargill submits that while the reimbursement of expenses incurred by the Ripplewood Investors is warranted, these should be (i) contingent upon a review by all parties-in-interest, and (ii) subject to a cap. In the same way, the Debtors should be compelled to disclose the terms of the commitment fee and the expense reimbursement payable to GECC in connection with the Revolver Facility, Mr. Cargill says, pointing the Court to In re Alterra Healthcare Corp., 353 B.R. 66, 73 (Bankr. D. Del. 2006). All parties-in-interest, including the unsecured creditors that are to receive no distribution under the Ripplewood Plan, should have the ability to review all fees to be paid in connection with the implementation of that Plan. Against this backdrop, the Creditors Committee asks Judge Venters to deny the Debtors' request. Debtors Respond The Debtors point out that the Creditors Committee's estimated $23,000,000 in fees and expenses to be paid to various investors and lenders under the Plan Funding Commitments is excessive and unwarranted. Even considered in the aggregate, the fees amount to less than 4% of the overall financing package of approximately $600,000,000; and are well within the range of reasonableness especially given the current market conditions, the amount of leverage that the Debtors will have upon emergence and the overall risk of the proposed Transaction, J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, points out. Components of the Proposed Exit Financing Mr. Ivester explains that the first component of the Debtors' proposed Exit Financing consists of two "new money" loans to fund the Plan. Together, the Loans will provide approximately $464 million in liquidity to the Debtors which "is simply not available elsewhere in the market on any terms." The fees are not payable upon the Court's approval of the Plan Funding Commitment Letters, but are due on the Plan Effective Date, or in certain other instances if the Plan is not confirmed, Mr. Ivester clarifies. Mr. Ivester further contends that the fees payable in connection with (i) the First Lien Term Loan, approximately $16,800,000 or 4.96% of the $339,000,000 loan amount, are reasonable, and (ii) the $125,000,000 revolving credit loan, the ABL Facility Commitment Fees, are also reasonable. Mr. Ivester says that GE Capital, as the revolving loan lender, has insisted on confidentiality for its fees and expense reimbursement provisions, which terms and conditions have been shared by the Debtors with the Creditors Committee and other key parties subject to confidentiality agreements. "This [fees and expenses condition] is consistent with prior practice in these cases and, in those prior instances, the Creditors Committee has had no complaint about this procedure being 'secretive' -- until now," Mr. Ivester says. In addition, the proposed Exit Financing includes third party investments, which provide for these fees: Cash Investment In Exchange Commitment Fee ---------- -------------------- -------------- $44,200,000 17% of the New Common Stock, $2,210,000 or for an additional 15% 5% of the of the New Common Stock on Investment a fully diluted basis $85,800,000 New Convertible Notes $4,290,000 or convertible into 33% of 5% of the the New Common Stock of investment the Plan Effective Date According to Mr. Ivester, the Debtors insisted that no Commitment Fees will be payable to the Investors until the precise terms of the proposed investment were determined. Thus, the first installment of the fees to which the Investors are entitled are not payable until approval by the Court of an Investment Agreement which contains more specific terms and conditions with respect to the Investors' rights and obligations. The only amounts payable upon entry of an order approving the Plan Funding Motion are the reasonable out-of-pocket costs and expenses incurred thus far by the parties to the Plan Funding Commitments in connection with the proposed Transaction, he maintains. Plan Funding Commitments: Only Viable Basis For Emergence The Debtors submit that no plan of reorganization can succeed without union support, "and since the union leadership is now fully committed to the Transaction, this condition no longer is the stumbling block it once was," Mr. Ivester tells the Court. Similarly, the Debtors fully expect to satisfy the Adjusted Net Debt and Identified Claims limits, and the Creditors Committee objection does not hold merit, he adds. Certain claimholders' disagreement to the Transactions contemplated under the Plan Funding Commitments does not preclude the Plan from being approved by a class of creditors and subsequently confirmed, or crammed down on a particular class of creditors even if they are deemed to have rejected the Plan. The Debtors already have substantial support from the Prepetition Lender class, Mr. Ivester says. The Prepetition Lenders, who will continue to be holders of the debt of the Reorganized Debtors, have replacement liens on the proceeds of any avoidance actions; hence, the Reorganized Debtors can retain the Actions, especially where the Lenders are getting only a 50% recovery on their secured claims, Mr. Ivester reasons out. While the Creditors Committee "mischaracterizes" the Plan Funding Commitments as options under which the Lenders and the Investors may collect up-front fees and then decline to fund or invest, the Commitments represent the highest and best value to the Debtors' estates after an exhaustive search process and in the face of turbulent markets and an initially reluctant union, Mr. Ivester contends. For these reasons, the Debtors ask the Court to overrule the Creditors Committee's objections. * * * At the behest of the Debtors and a group of creditors, Judge Venters will convene a hearing today to consider approval of the Debtors' request, according to The Associated Press. The hearing was originally set for October 2. About IBC Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8, 2007. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received court approval of the first amended Disclosure Statement. IBC did not received any qualifying alternative proposals for funding its plan of reorganization in accordance with the court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The deadline for submission of alternative proposals was Jan. 15, 2008. A new plan filing deadline was set for June 30, 2008; no plan was filed as of that date. (Interstate Bakeries Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) IVANHOE ENERGY: Wants to Withdraw Amended Form 13G -------------------------------------------------- Ivanhoe Energy Inc. has filed a request with the Securities and Exchange Commission to withdraw the Schedule 13G/A, Amendment No. 3, filed on Feb. 10, 2008. Kris G. Radhakrishnan, Ivanhoe Energy chief financial officer, wrote to the SEC that the withdrawal was requested as a result of a filing erroneously filed on behalf of Ivanhoe Energy, relating to improper EDGAR coding. The Schedule 13G/A (Amendment No. 3) was erroneously filed by Ivanhoe Energy the evening of February 10, with a 6:00 a.m. next day posting date. It was correctly filed the following morning with Ivahoe Mines LTD. named as the subject company. A copy of the requested Schedule 13G/A is available for free at http://researcharchives.com/t/s?3369 Vancouver, British Columbia, Canada, Ivanhoe Energy Inc. (TSX: IE; Nasdaq: IVAN) -- http://www.ivanhoe-energy.com/-- is an independent international heavy oil development and production company focused on pursuing long-term growth in its reserve base and production using advanced technologies, including its proprietary, patented heavy-oil upgrading process (HTL). Core operations are in the United States and China, with business development opportunities worldwide. Ivanhoe Energy has established a number of geographically focused entities. The parent company, Ivanhoe Energy Inc., will pursue HTL opportunities in the Athabasca oilsands of Western Canada and will hold and manage the core HTL technology. Two new subsidiaries have been established, one for Latin America and one for the Middle East & North Africa, complementing Sunwing Energy Ltd., Ivanhoe Energy's existing, wholly-owned company for China. Ivanhoe Energy Inc. owns 100% of each of these subsidiaries, although the percentages are expected to decline as they develop their respective businesses and raise capital independently. At June 30, 2008, the company's consolidated balance sheet showed $235.2 million in total assets, $65.5 million in total liabilities, and $169.6 million in total stockholders' equity. Going Concern Doubt Ivanhoe Energy Inc. believes that existing conditions cast substantial doubt about its ability to continue as a going concern. The company incurred a net loss of $8.5 million for the three-month period ended March 31, 2008, and as at March 31, 2008, had an accumulated deficit of $168.5 million and negative working capital of $8.8 million. In addition, the company currently anticipates incurring substantial expenditures to further its capital investment programs and the company's cash flows from operating activities will not be sufficient to both satisfy its current obligations and meet the requirements of these capital investment programs. Moreover, recovery of capitalized costs related to potential HTL(TM) and GTL projects is dependent upon finalizing definitive agreements for, and successful completion of, the various projects, the outcome of which is uncertain. JEFFERSON COUNTY: Two Officials Seek Bankruptcy Vote on Sewer Debt ------------------------------------------------------------------ Martin Z. Braun of Bloomberg News reports that Commissioners Jim Carns and Bobby Humphreys of Jefferson County, Alabama, are sponsoring a resolution authorizing the county to file for bankruptcy rather than raise taxes or divert revenue to resolve the county's sewer debt crisis. The resolution, which would come before a vote of the full commission on Oct. 14, 2008, is aimed at pressing creditors to strike a deal to restructure the $3.2 billion securities, according to the report. A bankruptcy filing would allow the county to get answers about the "irresponsible financings," Mr. Carns said according to the report. "It is my hope that the positions of those responsible for the financial fiasco will be subordinated to those who are innocent of wrongdoing, and that a bankruptcy plan will be fairer to all creditors and to the county than the likely result of the current negotiations," Mr. Carns added according to the report. The two commissioners have long advocated bankruptcy, a move that three of the five commissioners have resisted in favor of negotiations, according to the report. County Commission President Bettye Fine Collins called the move by Mr. Carns and Mr. Humphreys "more political posturing," according to the report. Banks led by JPMorgan Chase & Co., according to the report, that hold at least $850 million of the county's floating-rate bonds and are counterparties on more than $5 billion of interest-rate swaps have offered to forgive $1 billion of the debt in exchange for a share of sales-tax revenue generated by a 1 percent county sales tax for school construction, Ms. Collins said. Alabama Governor Bob Riley is leading negotiations on behalf of the county, according to the report. Jefferson County faces an Oct. 8 deadline to reach an agreement with creditors to avoid default on the sewer debt, according to the report. About Jefferson County Jefferson County has its seat in Birmingham. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. The Birmingham firm of Bradley Arant Rose & White, represents Jefferson County. Porter, White & Co. in Birmingham is the county's financial adviser. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion, set by Orange County, California in 1994. * * * As reported by the Troubled Company Reporter on June 10, 2008, Standard & Poor's Ratings Services' ratings on Jefferson County, Ala.'s series 1997A, series 2001A, series 2003 B-1-A through 2003 B-1-E, and series 2003 C-1 through 2003 C-10 sewer system revenue bonds ('CCC' underlying rating [SPUR]) remain on CreditWatch with developing implications. As reported by the TCR on July 22, 2008, Moody's Investors Service's continues to review the Caa3 rating on Jefferson County's (AL) $3.2 billion in outstanding sewer revenue warrants for possible downgrade. KEYSTONE SURPLUS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Keystone Surplus Metals, Inc. dba Keystone Specialty Metals, Inc. 1670 Winchester Rd. Bensalem, PA 19020 Bankruptcy Case No.: 08-16450 Type of Business: The Debtor offers home furnishing services. See: http://www.keystonespecialtymetals.com Chapter 11 Petition Date: October 3, 2008 Court: Eastern District of Pennsylvania (Philadelphia) Judge: Stephen Raslavich Debtor's Counsel: David A. Kasen, Esq. dkasen@kasenlaw.com Kasen Kasen & Braverman 1874 E. Marlton Pike P.O. Box 4130 Cherry Hill, NJ 08034 Tel: (215) 928-9199 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 ------ --------------- ------------ J.T. Ryerson & Son, Inc. c/o inventory purchase $3,944,636 Magdeline D. Coleman, Esquire Buchanan Ingersoll & Rooney, PC 1835 Market St., 14th Floor Philadelphia, PA 19103 O'Neal Steel, Inc. inventory purchase $2,203,520 744 41st Street Birmingham, AL 35222 Steel Sales inventory purchase $971,407 300 Mt. Lebanon Blvd., Suite 308 Pittsburgh, PA 15234 Thyssenkrupp Nirosta NA, inventory purchase $552,522 Inc. 2275 Halfday Rd., Suite 160 Charlestown Aluminum inventory purchase $487,847 480 Frontage Rd. Gaston, SC 29053 Global Stainless inventory purchase $431,042 1150 Mayerside Drive Mississauga, ON Samuel & Son Co., Inc. inventory purchase $361,940 1700 Ridgely St. Baltimore, MD 21230 Albert Kauffman loans $305,000 1670 Winchester Rd. Bensalem, PA 19020 Ace Steel Supply inventory purchase $274,869 203 Blue Bell Rd. Houston, TX 77037 Stainless Distributors, Inc. inventory purchase $250,441 1215 Knox Drive Yardley, PA 19067 Materials Technology inventory purchase $224,741 Solutions Integrity Stainless inventory purchase $203,826 Brookfield Wire Co., Inc. inventory purchase $186,422 Olympic Steel Inc. inventory purchase $167,765 Metal Mark, Inc. inventory purchase $146,978 Anderson Metals inventory purchase $101,812 Unimet Metal Supply inventory purchase $100,558 International Metals Outlet inventory purchase $96,531 Allegheny Plant Services, Inc. freight $88,155 Jie Jin Material Science inventory purchase $87,587 KIMBALL HILL: Seeks Until January 16 to File Chapter 11 Plan ------------------------------------------------------------ Kimball Hill Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the Northern District of Illinois to further extend: (a) through January 16, 2009, the period within which they can exclusively propose and file a Chapter 11 plan; and (b) through March 16, 2009, the period within which they can exclusively solicit and obtain acceptances for that plan. Section 1121(d) of the Bankruptcy Code provides that on request of a party-in-interest, after notice and a hearing, the court may for cause reduce or increase the 120-day exclusive plan filing period or the 180-day exclusive solicitation period. Section 1121(d) provides that the Exclusive Plan Filing Period may be extended up to 18 months and the Exclusive Solicitation Period up to 20 months after the Petition Date for cause. Since the initial extension of the Debtors' Exclusive Periods, the Debtors continued to make progress with respect to case administration, claims reconciliation, asset sales, identification of key contracts, as well as toward negotiation of a consensual plan, Ray Schrock, Esq., at Kirkland & Ellis LLP, in New York, tells the Court. The recent financial crisis, however, has created a major distraction for a number of parties- in-interest and the homebuilding industry, he says. Moreover, the initial exclusivity extension was limited so that the cumulative effect of seeking an additional three-month extension comports with the five- and six-month initial exclusive period extensions commonly granted in cases of the Debtors' size and complexity in the Northern Illinois and other districts, Mr. Schrock notes. The Debtors maintain that they are seeking to extend their Exclusivity Periods in good faith and that they are paying their bills as they become due. The Debtors, Mr. Schrock avers, have reasonable prospects for filing a viable Plan. Mr. Schrock adds that the Debtors intend to use the proposed extension to continue negotiations with the Prepetition Lenders and the Official Committee of Unsecured Creditors regarding the terms of a plan and to take other actions in support of the plan, including addressing certain substantial claims. The request extension will not prejudice the Debtors' creditors and other parties-in-interest in their Chapter 11 cases, Mr. Schrock assures the Court. The Court will consider the Debtors' request at an October 14, 2008 hearing. Objections to the extension request must be filed on or before October 9. Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Fort Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. The Debtors have until Oct. 20, 2008, to exclusively file a bankruptcy plan. (Kimball Hill Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). KIMBALL HILL: Cesari Response Leaves Creditors Committee -------------------------------------------------------- Stephen G. Wolfe, Esq., counsel to William T. Neary, United States Trustee for Region 11, notifies the United States Bankruptcy Court for the Northern District of Illinois that Cesari Response Television, Inc., represented by Tim O'Brien, resigned from the Official Committee of Unsecured Creditors of the Chapter 11 cases of Kimball Hill Inc. and its 29 debtor affiliates. The remaining Creditors Committee members are: Member Representative ------ -------------- US Bank National Association Cindy Woodward Indenture Trustee Corporate Trust Services 60 Livingston Avenue St Paul, MN 55107 SMH Capital Advisors, Inc. Stephen Cooke 4800 Overton Plaza Suite 300 Fort Worth, TX 76109 California National Bank Jon Simon 221 S. Figueroa Los Angeles, CA 90012 Tower Crossing Jamie Hadac Homeowner's Association 6400 Shafer Court Suite 175 Rosemont, IL 60018 Masco Builder Cabinet Group Stacy L. Lapham 21001 Van Born Road Taylor, MI 48180 Builders Gypsum Supply David Groom 2015 Pasket Lane Houston, TX 77092 Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operates within 12 markets, including, among others, Chicago, Dallas, Fort Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. The Debtors have until Oct. 20, 2008, to exclusively file a bankruptcy plan. (Kimball Hill Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). KING'S BEACH: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------ Debtor: King's Beach Inc. 2171 W. Williams #267 Fallon, NV 89406 Bankruptcy Case No.: 08-51876 Chapter 11 Petition Date: October 3, 2008 Court: District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Alan R. Smith, Esq. mail@asmithlaw.com Law Offices of Alan R. Smith 505 Ridge St. Reno, NV 89501 Tel: (775) 786-4579 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/nvb08-51876.pdf LEAP WIRELESS: Settles Lawsuits with MetroPCS Communications ------------------------------------------------------------ Leap Wireless International, Inc., disclosed in a Securities and Exchange Commission filing that the company and MetroPCS Communications, Inc., have entered into a national roaming agreement and an agreement to exchange wireless spectrum, and have settled all outstanding litigation between them. The new nationwide roaming agreement, which has an initial term of 10 years, covers the companies' existing and future markets, which the parties expect could ultimately encompass virtually all of the top 200 markets in the nation. This agreement will enable wireless subscribers from each company to utilize their wireless services in both companies' markets at a more attractive and competitive price. Additionally, the companies entered into a spectrum exchange agreement covering licenses in certain markets, with Leap acquiring an additional 10 MHz of spectrum in San Diego, Fresno, Seattle and certain other Washington and Oregon markets, and MetroPCS acquiring an additional 10 MHz of spectrum in Dallas-Ft. Worth, Shreveport-Bossier City, Lakeland-Winter Haven, Florida and certain other North Texas markets. Completion of the spectrum exchange is subject to customary closing conditions, including the consent of the Federal Communications Commission (FCC). The settlement resolves litigation relating to the companies' intellectual property. The companies have entered into a cross- license agreement for intellectual property related to the litigation and for other intellectual property that is held or applied for by either company. All pending litigation between the parties will be dismissed. "We appreciate the manner in which both companies seized the opportunity to work together to achieve these mutually positive results," said Doug Hutcheson, President and Chief Executive Officer of Leap. "Both companies are pleased to have enhanced their spectrum portfolio in several key markets as we seek to provide our customers with the best wireless products and services. These agreements provide opportunities for both MetroPCS and Leap to deliver greater value to our customers across the country." "We are very pleased to have entered into the nationwide roaming agreement with Leap. The expanded coverage which MetroPCS and Leap can offer as a result of this agreement will be a major benefit to our customers," said Roger Linquist, Chairman, President and Chief Executive Officer of MetroPCS. "These agreements benefit both parties and allow each of us to focus on the growth of our respective businesses." About Leap Wireless Based in San Diego, Leap Wireless International Inc. (Nasdaq: LEAP) -- http://www.leapwireless.com/-- provides innovative, high-value wireless services. With the value of unlimited wireless services as the foundation of its business, Leap pioneered its Cricket(R) service. The company and its joint ventures now operate in 29 states and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat- rate service plans, Cricket offers customers a choice of unlimited voice, text, data and mobile Web services. * * * As reported in the Troubled Company Reporter on June 24, 2008, Moody's Investors Service assigned a Caa1 rating to Leap Wireless International Inc.'s $200 million convertible notes, due 2014. Moody's also assigned a B2 corporate family rating to Leap Wireless International Inc. Rating outlook is Stable. As disclosed in the Troubled Company Reporter on June 23, 2008, Standard & Poor's Rating Services assigned its 'CCC' rating to Leap Wireless International Inc.'s proposed $200 million of convertible senior notes due 2014, with a '6' recovery rating, indicating the expectation for negligible (0%-10%) recovery in the event of a payment default. At the same time, S&P assigned a 'B-' rating to funding unit Cricket Communications Inc.'s proposed $200 million of senior notes due 2015 with a '4' recovery rating, indicating the expectation for average (30%-50%) in the event of a payment default. These are being issued under Rule 144A with registration rights. S&P also affirmed San Diego-based Leap's existing ratings, including its 'B-' corporate credit rating. The outlook is stable. LEHIGH COAL: Court Denies Bid to Oust Management ------------------------------------------------ Bill Rochelle of Bloomberg News reports that the U.S. Bankruptcy Court of the Middle District of Pennsylvania denied a motion to oust the management of Lehigh Coal & Navigation Co. on Oct. 1, 2008. Mr. Rochelle says the estate won't be taken over by a Chapter 11 trustee as the result. In September, the Court called for an investigation by an examiner, according to the report. The examiner issued a preliminary report saying more study is required before deciding whether anyone acted "in a detrimental manner" toward the Debtor, according to the report. The Debtor, according to the report, consented to being in Chapter 11 on Aug. 29 after facing an involuntary petition. Pottsville, Pennsylvania-based Lehigh Coal & Navigation Co. -- http://www.lcncoal.com/-- has been mining anthracite coal since the late 1700's, with 8,000 acres of coal-producing properties. The third Chapter 11 involuntary petition was filed against the Alleged Debtor in less than four years on July 15, 2008 (Bankr. M.D. Penn. Case No. 08-51957). Jeffrey Kurtzman, Esq., at Klehr, Harrison, Harvey, Branzburg and Ellers, LLP, represents the Alleged Debtor's petitioners. LEHMAN BROTHERS: Case Summary & 49 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Lehman Brothers Holdings Inc. 745 Seventh Avenue New York, NY 10019 Bankruptcy Case No.: 08-13555 Type of Business: The Debtor is an investment bank. The company serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1850, Lehman Brothers is involved in equity and fixed income sales, trading and research, investment banking, private investment management, asset management and private equity. The company operates in three segments: Capital Markets, Investment Banking, and Investment Management. It has regional headquarters in London and Tokyo, and operates in a network of offices around the world. It has about 28,000 full-time employees. See: http://www.lehman.com/ Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- LB 745 LLC 08-13600 PAMI Statler Arms LLC 08-13664 Lehman Brothers Commodity Services Inc. 08-13885 Lehman Brothers Finance SA 08-13887 Lehman Brothers Special Financing Inc. 08-13888 Lehman Brothers Derivative Products Inc. 08-13899 Lehman Commercial Paper Inc. 08-13900 Lehman Brothers Commercial Corporation 08-13901 Lehman Brothers Financial Products Inc. 08-13902 Fundo de Investimento Multimercado Credito Privado 08-13903 Lehman Scottish Finance L.P. 08-13904 CES Aviation LLC 08-13905 CES Aviation V LLC 08-13906 CES Aviation IX LLC 08-13907 East Dover Limited 08-13908 Chapter 11 Petition Date: September 15, 2008 Court: Southern District of New York (Manhattan) Debtor's Counsel: Harvey R. Miller, Esq. harvey.miller@weil.com Richard P. Krasnow, Esq. Lori R. Fife, Esq. Shai Y. Waisman, Esq. Jacqueline Marcus, Esq. Weil, Gotshal & Manges, LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 http://www.weil.com/ Total Assets Total Debts ------------ ----------- Lehman Brothers $639 billion $613 billion LB 745 More than $1 billion More than $1 billion Lehman Brothers More than $1 billion More than $1 billion Commodity Lehman Brothers More than $1 billion More than $1 billion Finance Lehman Brothers More than $1 billion More than $1 billion Special Lehman Brothers More than $1 billion More than $1 billion Derivative Lehman Commercial More than $1 billion More than $1 billion Paper Lehman Brothers More than $1 billion More than $1 billion Commercial Lehman Brothers More than $1 billion More than $1 billion Financial Fundo de More than $1 billion More than $1 billion Investimento Lehman Scottish More than $1 billion More than $1 billion Finance CES Aviation More than $1 billion More than $1 billion LLC CES Aviation More than $1 billion More than $1 billion V LLC CES Aviation More than $1 billion More than $1 billion IX LLC East Dover More than $1 billion More than $1 billion Limited PAMI Statler $20 million $38 million A. Lehman Brothers' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citibank, N.A., as indenture bond debt $138,000,000,000 trustee, and The Bank of New York Mellon Corporation (with respect to the Euro Medium Term Notes only, as indenture trustee, under the Lehman Brothers Holdings. Senior Notes. Citibank, N.A. 399 Park Avenue New York, NY 10043 Attn: Wafaa Orfy Tel: (800) 422-2066 Fax: (212) 816-5773 The Bank of New York One Canada Square Canary Wharf, London E14 5AL Attn: Raymond Morison Tel: 44-207-964-8800 The Bank of New York bond debt $15,000,000,000 Mellon Corporation, as indenture trustee under the Lehman Brothers Holdings Inc. subordinated debt. The Bank of New York Mellon Corporation 101 Barclay Street New York, NY 10286 Attn: Chris O'Mahoney Tel: (212) 815-4107 Fax: (212) 815-4000 AOZORA bank loan $463,000,000 1-3-1 Kudan-Minami Chiyoda-ku, Tokyo 102-8660 Tel: 81-3-5212-9631 Fax: 81-3-3265-9810 Mizuho Corporate Bank Ltd. bank loan $289,000,000 Global Syndicated Financi Division 1-3-3, Marunochi, Chiyoda-ku Tokyo, Japan 100-8210 Timothy White Managing Director - Head of Originations Corporate and Investment Bank Department 1251 Avenue of the Americas 32nd floor New York, NY 10020-1104 Tel: (212) 282-3360 Fax: (212) 282-4487 Citibank N.A. Hong Kong bank loan $275,000,000 Branch Financial Institutions Group Asia Pacific 44f Citibank Tower 3 Garden Rd. Central Hong Kong Michael Mauerstein MD - FIG 388 Greenwich Street New York, NY 10013 Tel: (212) 816-3431 BNP Paribas bank loan $250,000,000 787 7th Avenue New York, NY 10019 Tel: (212) 841-2084 Shinesi Bank Ltd. bank loan $231,000,000 1-8, Uchisaiwaicho 2- Chome Chiyoda-ku, Tokyo 100-8501 Tel: 81-3-5511-5377 Fax: 81-3-4560-2834 UFJ bank Limited bank loan $185,000,000 2-7-1, Marunouchi Chiyoda-ku, TKY 100-8388 Stephen Small vice president head of financial institutions Bank of Tokyo-Mitsubishi UFJ Trust Company 1251 Avenue of the Americas New York, New York 10020-1104 Tel: (212) 782-4352 Fax: (212) 782-6445 Sumitomo Mitsubishi bank loan $177,000,000 Bank Corp. 13-6 Nihobashi- Kodenma-Cho, Chuo-ku, Tokyo, 103-0001 Yas Imai Senior Vice President Head of Financial Institution Group Sumitomo Mistui Banking Corporation 277 Park Avenue New York, NY 10172 Tel: (212) 224-4031 Fax: (212) 224-4384 Svenska Handelsbanken letter of credit $140,610,543 153 E. 53rd St., 37th floor New York, NY 10022 Tel: (212) 258,9487 KBC Bank letter of credit $100,000,000 125 W. 55th St. New York, NY 10019 Tel: (212) 258-9487 Mizuho Corporate Bank Ltd. bank loan $93,000,000 1-3-3, Marunouchi Chiyoda-ku, TKY 100-8219 Timothy White Managing Director - Head of Originations Corporate and Investment Bank Department 1251 Avenue of the Americas 32nd floor New York, NY 10020-1104 Tel: (212) 282-3360 Shinkin Central Bank bank loan $93,000,000 8-1, Kyobashi 3-Chome Chuo-ku, Tokyo 104-0031 Shuji Yamada Deputy General Manager Financial Institution Dept. Shinkin Central Bank 3-7, Yaesu 1-chome, Chuo-ku Tokyo 104-0028 Tel: 81-3-5202-7679 Fax: 81-3-3278-7051 The Bank of Nova Scotia bank loan $93,000,000 Singapore Branch 1 Raffles Quay #201-01 One Raffles Quay North Tower Singapore 0485583 George Neofitidis Director Financial Institutions Group One Liberty Plaza New York, NY 10006 Tel: (212) 225-5379 Fax: (212) 225-5254 Chuo Mitsui Trust & Banking bank loan $93,000,000 3-33-1 Shiba, Minato-ku, Tokyo, 105-0014 Tel: 81-3-5232-8953 Fax: 81-3-5232-8981 Lloyds Bank letter of credit $75,381,654 1251 Avenue of the Americas 39th Floor P.O. Box 4873 New York, NY 10163 Tel: (212) 930-8967 Fax: (212) 930-5098 Hua Nan Commercial Bank bank loan $59,000,000 Ltd. 38 Chung-King South Road Section 1 Taipei, Taiwan Bank of China bank loan $50,000,000 New York Branch 410 Madison Avenue New York, NY 10017 Tel: (212) 936-3101 Fax: (212) 758-3824 Nippon Life Insurance Co. bank loan $46,000,000 1-6-6, Marunouchi, Chiyoda-ku, Tokyo 100-8288 Takayuki Murai Deputy General Manager Corporate Finance Dept. #1 Nippon Life Insurance Co. Tel: 81-3-5533-9814 Fax: 81-3-5533-5208 ANZ Banking Group bank loan $44,000,000 Limited 18th Floor Kyobo Building 1 Chongro 1 Ku, Chongro Ka, Seoul, Korea Michael Halevi Director, Financial Institutions ANZ Banking Group 1177 Avenue of Americas New York, NY 10036 Tel: (212) 810-9871 Fax: (212) 801-9715 Standard Chartered Bank bank loan $41,000,000 One Madison Avenue New York, NY 10010-3603 Bill Hughes SVP-FIG Standard Chartered bank One Madison Avenue New York, NY 10010-3603 Tel: (212) 667-0355 Fax: (212) 667-0273 Standard Chartered Bank letter of credit $36,114,000 One Madison Avenue New York, NY 10010-3603 Bill Hughes SVP-FIG Standard Chartered bank One Madison Avenue New York, NY 10010-3603 Tel: (212) 667-0355 Fax: (212) 667-0273 First Commercial Bank bank loan $25,000,000 Co. Ltd. New York Agency 750 3rd Avenue, 34th Floor New York, NY 10017 Jason C. Lee Deputy General Manager First Commercial Bank Co. Ltd. New York Agency 750 3rd Avenue, 34th Floor New York, NY 10017 Tel: (212) 599-6868 Fax: (212) 599-6133 Bank of Taiwan bank loan $25,000,000 New York Agency 100 Wall Street, 11th Floor New York, NY 1005 Eunice S.J. Yeh Senior Vice President & General Manager 100 Wall Street, 11th floor New York, NY 10005 Tel: (212) 968-0580 Fax: (212) 968-8370 DnB NOR Bank ASA bank loan $25,000,000 NO-0021, Olso, Norway Stranden 21, Aker Brygge Tel: 47 22 9487 46 Fax: 47 22 48 29 84 Australia and New Zealand bank loan $25,000,000 Banking Group Limited Melbourne Office Level 6, 100 Queen Street Victoria Melbourne, VIC 3000 Australia Michael Halevi Director, Financial Institutions ANZ Banking Group 1177 Avenue of Americas New York, NY 10036 Tel: (212) 810-9871 Fax: (212) 801-9715 Australia National Bank letter of credit $12,588,235 1177 Avenue of the Americas, 6th Floor New York, NY 10036 Michael Halevi Director, Financial Institutions ANZ Banking Group 1177 Avenue of Americas New York, NY 10036 Tel: (212) 810-9871 Fax: (212) 801-9715 National Australia Bank letter of credit $10,294,163 245 Park Avenue, 28th Fl. New York, NY 10167 Michael Halevi Director, Financial Institutions ANZ Banking Group 1177 Avenue of Americas New York, NY 10036 Tel: (212) 810-9871 Fax: (212) 801-9715 Taipei Fubon Bank, New bank loan $10,000,000 York Agency 100 Wall Street, 14th floor NY NY 10005 Tel: (212) 968-9888 Fax: (212) 968-9800 B. LB 745's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rocky-Forty-Ninth LLC ground lease $0 c/o The Rockefeller Group 1221 Avenue of the Americas New York, NY 10020 C. PAMI Statler's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Steingass trade debt $76,372 754 Progress Drive Medina, OH 44256 Statler Arms Garage LLC litigation $50,000 1111 Euclid Ave. claim Cleveland, OH 44115 Illuminating trade debt $40,182 P.O. Box 3638 Akron, OH 44309 TD Security trade debt $19,795 P.O. Box 81357 Cleveland, OH 44181 Marble Care trade debt $16,270 5184 Richmond Rd Cleveland, OH 44146 IGS trade debt $13,901 P.O. Box 631919 Cincinnati, OH WCCV trade debt $13,598 3479 State Rd. Cuyahoga Falls, OH 44223 Demann trade debt $9,350 16919 Walden Cleveland, OH 44128 Dominion trade debt $5,335 P.O. Box 26225 Richmond, VA 23260 Midwest Realty Advisors, LLC trade debt $5,000 37848 Euclid Avenue Willoughby, OH 44094 RMC trade debt $3,340 P.O. Box 31315 Rochester, NY 14603 Republic Waste trade debt $3,338 P.O. Box 9001826 Louisville, KY 40290 Division Water trade debt $3,124 P.O. Box 94540 Cleveland, OH 44101 NorthEast trade debt $3,088 P.O. Box 9260 Akron, OH 44305 Time Warner trade debt $2,831 P.O. Box 0901 Carol Stream, IL 60132 Best Karpet trade debt $2,689 1477 E 357 street EastLake, OH 44095 AT&T trade debt $2,232 P.O. 8100 Aurora, IL 60507 Account Temps trade debt $2,087 12400 Collections Drive Chicago, IL 60693 Rentokil trade debt $1,742 8001 Sweet Valley Dr Valleyview, OH 44125 LUBBOCK MEDICAL: Sells Property at $3MM, Files Plan & Statement --------------------------------------------------------------- Bill Rochelle of Bloomberg News reports that Lubbock, Texas- Highland Medical Center, LP, sold its hospital for $3 million and filed a Chapter 11 plan and explanatory disclosure statement with the U.S. Bankruptcy Court for the Northern District of Texas on the week ended Oct. 4, 2008. Unsecured creditors will receive nothing under the plan, the report says. Together with collections of accounts receivable, the Debtor expects to have $3.5 million, an amount insufficient to pay secured claims, according to the report. About Lubbock Texas-Highland Medical Center Lubbock, Texas-Highland Medical Center, L.P., doing business as Highland Community Hospital and Highland Medical Center -- http://www.highlandcommunityhospital.com-- provides general medical and surgical care for inpatient, outpatient, and emergency room patients, and participates in the Medicare and Medicaid programs. Highland employs about 100 workers. The Debtor filed for chapter 11 bankruptcy protection on May 31, 2008, before the U.S. Bankruptcy Court for the Northern District of Texas (Case No. 08-50202). Max Ralph Tarbox, Esq., at McWhorter, Cobb & Johnson, LLP, in Lubbock, Texas, represents the Debtor. When it filed for bankruptcy, the Debtor disclosed $10 million to $50 million in estimated assets and debts of the same range. MAGUIRE PROPERTIES: Moody's Withdraws Rtngs After Facility Payment ------------------------------------------------------------------ Moody's Investors Service has withdrawn the ratings of Maguire Properties, Inc. (B1 Corporate Family Rating; B1 senior secured rating on revolving credit facility). These ratings have been withdrawn because Maguire paid off the revolving credit facility, which comprised all of its rated debt. These ratings were withdrawn: * Maguire Properties, Inc. -- Corporate family rating at B1 * Maguire Properties, L.P. -- Senior secured revolving credit facility at B1 Maguire Properties, Inc. [NYSE: MPG], based in Los Angeles, California, USA, is a REIT specializing in class A office properties in Southern California. As of June 30, 2008, the REIT reported $5.6 billion in total assets and $189 million in equity. MATTRESS DISCOUNTERS: U.S. Trustee Sets 341(a) Meeting for Oct. 20 ------------------------------------------------------------------ The United States Trustee for the District of Maryland will convene a meeting of creditors of Mattress Discounters Corporation and its debtor-affiliate Mattress Discounters Corporation East at 9:00 a.m., on Oct. 20, 2008, at the 341 meeting rooms in Greenbelt, Maryland. 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 Upper Marlboro, Maryland, Mattress Discounters Corp. is a specialty mattress retailer. The company and Mattress Discounters Corporation East filed separate petitions for Chapter 11 relief on Sept. 10, 2008 (Bankr. Md. Case Nos. 08-21642 and 08-21644). C. Kevin Kobbe, Esq., at DLA Piper LLP (US) represents the Debtors as counsel. When Mattress Discounters Corp. filed for protection from its creditors, it listed assets of between $10 million and $50 million, and debts of between $10 million and $50 million. This is the second bankruptcy filing for Mattress Discounters Corp. The Debtor first filed for Chapter 11 protection on Oct. 23, 2002 (Bankr. D. Md. Case No. 02-22330). Mary Joanne Dowd, Esq., at Arent Fox LLP, represented the Debtor as counsel. The Debtor emerged from its first bankruptcy filing on March 14, 2003. MEDICOR LTD: Wants Exclusive Plan Filing Period Moved to Dec. 5 --------------------------------------------------------------- Bill Rochelle of Bloomberg News reports that MediCor Ltd. and its debtor-affiliates asked the United States Bankruptcy Court for the District of Delaware on Sept. 30, 2008, to further extend the Debtors' exclusive periods for proposing a Chapter 11 plan to Dec. 5. The Debtors are also working out details to effectuate a previously reached settlement with the Nevada state court receiver for Southwest Exchange, Inc., who was claiming a constructive trust over company funds on behalf of creditors, according to the report. The Debtors, according to the report, explained that the settlement with the receiver can't be implemented without approval from state and federal courts, coupled with certification of a class-action suit and a class-action settlement. About MediCor Based in North Las Vegas, Nevada, MediCor Ltd. -- http://www.medicorltd.com/-- manufactures and markets products primarily for aesthetic, plastic and reconstructive surgery and dermatology markets. The company and seven of its affiliates filed for chapter 11 protection on June 29, 2007 (Bankr. D. Del. Case No. 07-10877) to effectuate the orderly marketing and sale of their business. Kenneth A. Rosen, Esq., Jeffrey D. Prol, Esq., and Jeffrey A. Kramer, Esq., at Lowenstein Sandler PC represent the Debtors in their restructuring efforts. Dennis A. Meloro, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, acts as the Debtors' Delaware counsel. The Debtors engaged Alvarez & Marsal North America LLC as their restructuring advisor. David W. Carickhoff, Jr., Esq., and Jason W. Staib, Esq., at Blank Rome LLP serve as the Official Committee of Unsecured Creditor's counsel. In its schedules of assets and debts filed with the Court, Medicor disclosed total assets of $96,553,019, and total debts of $158,137,507. MERITAGE HOMES: Wins $111 Million Case Against Greg Hancock ----------------------------------------------------------- Meritage Homes Corporation disclosed in a Securities and Exchange Commission filing that it was awarded $111 million in a unanimous jury verdict in Federal District Court in Phoenix. Meritage filed the lawsuit on Feb. 24, 2004, against Greg Hancock, a former division president of Meritage Homes. Mr. Hancock is the current owner of Phoenix homebuilder Hancock Communities. In 2001, Mr. Hancock sold his homebuilding business to Meritage, at which time he concurrently entered into an employment agreement with the Company. The jury found that Mr. Hancock breached contractual and fiduciary duties owed to Meritage and that he had immediately began to commit fraud against the Company by engaging in side businesses that stole corporate opportunities and goodwill belonging to the Company while he was President of Meritage's Phoenix division. The jury awarded Meritage $57 million in compensatory damages and another $54 million in punitive damages against Hancock. The Court's official judgment has not been entered and it is possible that the amount of the judgment may differ from the verdict. The verdict also is subject to customary post-trial motions and appeals. Meritage is confident the verdict and judgment will stand, and intends to vigorously pursue various collection options to recover the award from Mr. Hancock; accordingly, the timing and ultimate amount of any collections cannot be predicted at this time. Steve Hilton, chief executive officer of Meritage said, "We are pleased with the verdict which favorably addressed all nine claims asserted by the Company. We believe this was a well-reasoned and thoughtful verdict after a three week trial. This is a victory for our shareholders and employees." Tim White, executive vice president and general counsel for Meritage, added, "This jury verdict sends a clear signal to Mr. Hancock and corporate officers in general that malfeasance and undisclosed self-dealing by officers of public companies will not be tolerated." About Meritage Homes Headquartered in Scottsdale, Arizona, Meritage Homes Corporation (NYSE: MTH) -- http://www.meritagehomes.com/-- builds primarily single-family homes across the southern and western United States under the Meritage, Monterey and Legacy brands. Meritage has active communities in Houston, Dallas/Ft. Worth, Austin, San Antonio, Phoenix/Scottsdale, Tucson, Las Vegas, the California East Bay/Central Valley and Inland Empire, Denver and Orlando. The company was ranked by Builder magazine in 2007 as the 12th largest homebuilder in the U.S. and ranked #803 on the 2008 Fortune 1000 list. Meritage Homes has reported five consecutive quarterly net losses beginning the second quarter ended June 30, 2007. * * * As disclosed in the Troubled Company Reporter on June 16, 2008, Fitch Ratings has downgraded Meritage Homes Corporation's Issuer Default Rating and other outstanding debt ratings as: IDR to 'B+' from 'BB-'; and Senior subordinated debt to 'B-/RR6' from 'B'. Fitch has also affirmed Meritage Homes' senior unsecured debt at 'BB-' and assigned a Recovery Rating of 'RR3'. The Rating Outlook remains Negative. MGM MIRAGE: Taps $1.8 Billion of Senior Bank Credit Facility ------------------------------------------------------------ MGM Mirage disclosed in a Securities and Exchange Commission filing that CityCenter, its joint development project with Dubai World, has completed the first phase of its $3.0 billion financing package by securing a $1.8 billion senior bank credit facility. The facility, which matures in April 2013, is expected to be increased to a total amount of $3.0 billion as additional commitments are received. CityCenter has received additional signed commitment letters totaling in excess of $500 million, which commitments are expected to be added to the facility once completed. Both MGM MIRAGE and Dubai World continue to work with additional lenders and will seek the remaining commitment amounts through a syndication process beginning on Oct. 7, 2008. "Even in the current difficult lending environment, strong well- conceived projects attract financing -- CityCenter is such a project. We appreciate the strong support CityCenter has received from these participating financial institutions," said Dan D'Arrigo, Executive Vice President and CFO of MGM MIRAGE. "We and our partner are actively in discussions with additional financial institutions to obtain the additional funding of the credit facility and are receiving strong interest in the syndication process set to launch this week." The credit facility consists of a $250 million revolver with the remaining amount being in the form of term loans and is secured by substantially all of the assets of CityCenter. The facility is initially priced at LIBOR plus 3.75% through the construction period. This facility is led by Bank of America, Royal Bank of Scotland, UBS, BNP Paribas, and Sumitomo Mitsui. In addition, other current participants include Deutsche Bank, Morgan Stanley, and the Bank of Nova Scotia. "MGM's strong balance sheet and long track record of superior financial performance combined with the substantial financial resources of our partner uniquely position CityCenter in an obviously difficult credit market," said Mr. D'Arrigo. The estimated net project budget for CityCenter is $8.6 billion, after net residential proceeds of approximately $2.7 billion. The gross project budget consists of $9.3 billion of construction costs (including capitalized interest), $1.7 billion of land, $0.2 billion of preopening expenses, and $0.1 billion of intangible assets. CityCenter is scheduled to be completed in December 2009. About Infinity World and Dubai World Infinity World Investments LLC is a wholly-owned subsidiary of Dubai World -- http://www.dubaiworld.ae/-- which is a major investment holding company with a portfolio of businesses that includes DP World, Jafza, Nakheel, Dubai Drydocks, Maritime City, Istithmar, Kerzner, One & Only, Atlantis, Barney's, Island Global Yachting, Limitless, Inchcape Shipping Services, Tejari, Technopark and Tamweel. The Dubai World Group has more than 50,000 employees in over 100 cities around the globe. The group also has real estate investments in the US, the UK and South Africa. In the last five years, Dubai World has developed 80,000 luxury residential villas and apartments and approximately three million square feet of retail space. About MGM Mirage Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported in the Troubled Company Reporter on Sept. 5, 2008, Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based MGM MIRAGE to negative from stable. Ratings on the company, including the 'BB' corporate credit rating, were affirmed. As reported in the Troubled Company Reporter on Aug. 12, 2008, Fitch Ratings has affirmed MGM MIRAGE's ratings and revised its Outlook to Negative from Stable as: Issuer Default Rating 'BB'; Senior credit facility 'BB'; Senior notes 'BB'; and Senior subordinated notes 'B+'. MIAMI ENTERTAINMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Miami Entertainment, Inc. 4001 Presidential Parkway Atlanta, GA 30340 Bankruptcy Case No.: 08-79618 Type of Business: The Debtor operates a night club. Chapter 11 Petition Date: October 3, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Rodney L. Eason, Esq. reason@easonlawfirm.com The Eason Law Firm 6150 Old National Highway, Suite 200 College Park, GA 30349-4367 Tel: (770) 909-7200 Fax: (770) 909-0644 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Miami Entertainment did not file a list of largest unsecured creditors. MIRANT CORP: Suspends Share Buyback Program ------------------------------------------- Mirant Corp., in a press release dated Sept. 22, 2008, said it has suspended its program of returning cash to its stockholders after purchasing approximately 110 million of its shares since November 2007 for $3,856,000,000. The company now has 156,000,000 basic shares outstanding, having repurchased approximately 43% of its basic outstanding shares over the past 11 months. In November 2007, when Mirant announced that it would return $4,600,000,000 of cash to its owners, it stated that it was sizing the amount based on four factors: (1) the outlook for the business, (2) preserving the company's credit profile, (3) maintaining adequate liquidity, including for capital expenditures, and (4) maintaining sufficient working capital. "We have continued to evaluate those four factors as we have returned cash," said Edward R. Muller, chairman and chief executive officer of Mirant. "Although we continue to be optimistic about the value of the company and the company has no liquidity issues, our analysis of those four factors under current market conditions has led us to conclude that we should suspend our program of returning cash." "A significant consideration in our evaluation is that we recently submitted proposals for new generating plants at our facilities in Northern California in response to a request for offers from Pacific Gas & Electric. If our proposals are accepted, we want to ensure that we have funds for the required capital expenditures, and for other requirements of the business, even if turmoil in the credit markets continues and commodity prices are depressed," Mr. Muller continued. Mirant disclosed in a Form 10-Q for the quarter ended June 30, 2008, filed with the Securities and Exchange Commission that it entered in July 2008 into a cash-collateralized letter of credit facility of $10,000,000 in support of its response to a PG&E request for proposals for new power generation. Mirant said it will continue to evaluate its need for cash using the same four factors. Mirant Stock Drops After Buybacks Halted Mirant's stocks dropped 8.3% on Sept. 22, 2008, after the suspension of the stock buybacks, Bloomberg News reported. According to the report, Mirant fell $2.11 to $23.47 in the New York Stock Exchange composite trading. Mirant, according to Bloomberg, submitted proposals in July with Pacific Gas & Electric to supply power from expanded plants near San Francisco. "They're just being cautious," Angie Storozynski, an analyst at Macquarie Securities in New York who rates Mirant shares "neutral," told Bloomberg. "If there's one company in the sector that doesn't have liquidity issues, it's Mirant." Mirant shouldn't have constraints meeting its financial obligations because the company locked in coal costs through 2009 and sold in advance the power it will generate from that fuel, Ms. Storozynski further told Bloomberg. "We don't see a clear growth path for Mirant because its coal- fired plants are old and running at full capacity," Ms. Storyzynski said. "Any expansion of Mirant's plants in California would happen only if the company secures long-term contracts with PG&E for additional output. Many power companies are competing for these contracts." According to Bloomberg, Mr. Muller told investors that Mirant expects an initial response from PG&E on its plant-expansion proposals in October. In an article dated August 11, Bloomberg said the six biggest U.S. independent power producers, which include Mirant, will have profit gains as high as 29% in 2008 and 79% next year, based on average estimates of analysts surveyed by the news agency. Mr. Muller emphasized during the Merrill Lynch 2008 Power & Gas Leaders Conference held on September 24, 2008, his forecast of continued growth in electric demand. During the presentation where he spoke as a part of a panel, he said peak demand continues to grow nationally at 1.5% per annum and that Mirant has opportunities for brownfield and repowering growth over time. As of September 30, 2008, Mirant's common stock trades at $18.29 per share. About Mirant Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant's investments in the Caribbean include three integrated utilities and assets in Jamaica, Grand Bahama, Trinidad and Tobago and Curacao. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included. On Feb. 15, 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and on Feb. 22 filed a Disclosure Statement explaining that Plan. The Court approved the adequacy of Mirant NY-Gen's Disclosure Statement on March 22, 2007, and confirmed the Amended Plan on May 7, 2007. Mirant NY-Gen emerged from Chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan of Reorganization. The Court confirmed Mirant Lovett's Plan on Sept. 19, 2007. Mirant Lovett emerged from bankruptcy on Oct. 2, 2007. (Mirant Bankruptcy News, Issue No. 140; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) MOUNTAIN ADVENTURE: Objects to Conversion of Case to Chapter 7 -------------------------------------------------------------- Mountain Adventure Property Investments, LLC told the U.S. Bankruptcy Court for the District of Colorado that it objects to Vectra Bank Colorado, N.A.'s motion to have its Chapter 11 case converted to a Chapter 7, asserting that the best interests of the creditors are best served by this case remaining in Chapter 11 and permitting Debtors to sell properties via an auction and file a liquidating plan of reorganization. On Sept. 8, 2008, Vectra asked the Bankruptcy Court to convert the Debtor's case to a Chapter 7, "to stop [the] ongoing waste". Vectra told the Court that the Debtor's bankruptcy case was filed in large part because of internal disputes among various member and management factions. In addition, Vectra told the Court that during the seven months that the Debtor has been in Chapter 11 bankruptcy, it has sold no assets and earned no revenue, and that: a) Debtor has made no adequate protection payments to its secured creditors; b) Debtor has not filed a disclosure statement or plan of reorganization; c) Debtor's management and member factions have engaged in litigation, which has resolved nothing; d) Debtor has been confronted with aggressive attempts to seize control of management of Debtor by its different member factions; e) Debtor now has two managers, at least one of whom is hopelessly conflicted from pursuing the best interests of Debtor's bankruptcy estate and creditors; f) Debtor's warring factions stayed most of the pending litigation in this bankruptcy case twice. Since the first stay was obtained almost three months ago, there still has been no discernible progress to benefit Debtor's creditors; g) Debtor's professionals have charged the bankruptcy estate approximately $500,000.00 in professional fees and costs; h) Debtor does not have funds to hire a turnaround professional; i) Debtor has no funds to pay its professionals; Vectra has an Undisputed Claim of $3,325,555 Vectra told the Court that it is a secured creditor of the Debtor with an undisputed claim in the amount of $3,325,555.98 as of the Petition Date (including default interest and attorneys fees and costs). Vectra said it has a security interest in substantially all of the Debtors' personal and real property and asserts that its security interest in those assets is a first priority security interest. Certain parties, including Robinson Construction Company, an affiliate of one of the Debtor's members, Robinson & Sons LLC, have asserted mechanics liens against certain of Debtor's real property. Robinson has asserted that its lien has priority over Vectra's secured claim. According to documents filed in Court, the Debtor's real properties have a total value of $16,641,000 most of which is encumbered by liens. Arguments in Support for Conversion Vectra told the Court that the conversion of the Debtor's case to a Chapter 7 is in the best interests of the creditors and the estate. Vetra submitted the following arguments in support of this motion: 1) There is a substantial and continuing loss to the estate, and no prospects for rehabilitation. Vectra told the Court that the Debtor concedes that it cannot be rehabilitated and that it intends to sell its assets. A chapter 7 trustee can sell real estate and pursue litigation as effectively as the Debtor. 2) There has been gross mismanagement of the estate. Earlier in this bankruptcy case, certain members of Debtor and insiders filed motions to appoint a Chapter 11 trustee based on, among other things, gross mismanagement. In addition, the Debtor's bankruptcy case has been dominated by litigation among Debtor's warring factions. The Debtor has not generated any revenue and has sold none of its assets. 3) Kirk Moisan's conflict of interest is cause to convert this bankruptcy case to Chapter 7. Kirk Moisan, one of the Debtor's two managers, is an officer of Robinson. Arguments Against Conversion Mountain Adventure presents the following arguments in support of its staying in Chapter 11: 1) On Vectra's argument that there is continuing loss or diminution of the estate and an absence of a reasonable likelihood of rehabilitation, the Debtor tells the Court that Vectra ignores the progress that Debtor has made since July 14, 2008, and that conversion to chapter 7 will only result in increased costs and further delays. 2) On Vectra's argument that conversion is in the best interest of creditors, the Debtor tells the Court that this is hard to fathom since Vectra is aware that Debtor has been working toward the sale of its real property assets via auction, which require time. The Debtor's managers have determined that the best qualified auctioneer is Sheldon Good & Company and that it gas been in discussions with Sheldon Good who has indicated its willingness to serve as auctioneer. 3) On Vectra's argument that "a chapter 7 trustee can sell the real estate and pursue litigation as effective as Debtor," the Debtor tells the Court that Vectra omits mention of any costs or delays that will be associated with conversion and the appointment of a Chapter 7 trustee. Such costs may be significant and the likely delays may cause further harm to creditors. In addition, the Chapter 7 trustee will need to go over the Debtor's voluminous accounting records and that this process will take time. Further, a Chapter 7 trustee will likely need to hire counsel to assist with administration of the estate and asset recovery, and this will cost the estate further legal fees. If a chapter 7 trustee is appointed, any sale of assets will likely be delayed. If a sale is delayed beyond December, the Debtor anticipates that the proceeds will be insufficient to pay secured creditors in full, and leaving nothing for administrative claims and unsecured creditors. 4) On Vectra's assertion that it has not hired a turnaround professional nor has it filed a motion to proceed with an auction, the Debtor told the Court that it cannot hire a turnaround professional due to its inability to pay. That Debtor's managers notified the Court and creditors of its inability to pay and refrained from committing to another administrative expense is indicative of sound judgment, not gross mismanagement. Further, the Debtor told the Court that its managers have taken the necessary initial steps to proceed with an auction. 5) On Mr. Moisan's alleged conflict of interest because he "is an officer of Robinson," the Debtor tells the Court that Mr. Moisan is not an officer of Robinson, he is an executive manager. Further, Vectra attempts to blur the legal distinction between Debtor's member entity, Robinson, and the entity that performed construction on Debtor's properties, Robinson Construction Company ("Robcon"). Robinson and Robcon appear to be legal separate entities. Mr. Moisan has agreed that he will not participate in any analysis of any claim that Debtor may hold against Robinson. In view of the foregoing, the Debtor asks the Court to deny Vectra's motion to convert its Chapter 11 case to a Chapter 7. About Mountain Adventure Based in Hayden, Colorado, Mountain Adventure Property Investments, LLC is a real estate developer and the owner of an approximately 41 acre real property located in Routt County, Colorado, known as Lake Village, Phase, Filing 1, the Villages at Hayden. The Debtor was founded on May 19, 2006, by 4S Development, Ltd., LLLP; Grassy Creek Holding Company, LLC; Oasis Development, LLC; and Robinson & Sons, LLC. The Debtor filed for Chapter 11 relief on Jan. 23, 2008 (D. Colo. Case No. 08-10744). Douglas W. Jessop, Esq., J. Brian Fletcher, Esq., and K. Lane Cutler, Esq., at Jessop & Company, P.C. represent the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets and debts of $10 million to $50 million, each. NEPTUNE INDUSTRIES: Files Complaint Over Stock Price Manipulation -------------------------------------------------------------- Neptune Industries, Inc., disclosed in a Securities and Exchange Commission filing that it has filed a complaint with the Financial Industry Regulatory Authority regarding the actions of several South Florida individuals and brokerage firms alleging misconduct and other violations, including manipulation of the Company's stock price. "On a number of occasions, it has been brought to our attention that certain individuals and firms may be working together to drive the price of the Company's common stock below the conversion price of a convertible debenture note issued in a placement conducted on behalf of the Company by the placement agent," Neptune Industries said. The Company has been informed that certain shareholders have been advised that unspecified rumors have been circulating regarding Neptune, and that information communicated to debenture holders by the same parties, without Neptune's knowledge, during the debenture offering may not have been accurate, when in fact the information contained in the Company's offering documents and distributed as part of the offering, was accurate. There are also indications that members of the firms involved may be shorting the common stock of the Company, contrary to the interests of, and disclosures to, their own customers, who are now Neptune shareholders. The Company has no knowledge of the status or course of any pending FINRA investigation, which is handled on a confidential basis by FINRA. About Neptune Industries Headquartered in Boca Raton, Fla., Neptune Industries Inc. (OTC BB: NPDI.OB) -- http://www.neptuneindustries.net/-- through its subsidiaries, provides aquaculture technology primarily in the United States. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 19, 2007, Berman Hopkins Wright & Laham, CPAs and Associates, LLP, expressed substantial doubt about Neptune Industries Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2007. The auditing firm pointed to the company's recurring losses from operations and recurring deficiencies in working capital. Neptune Industries' consolidated balance sheet at June 30, 2008, showed $1,653,588 in total assets and $3,466,245 in total liabilities, resulting in a $1,634,654 total stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $969,550 in total current assets available to pay $1,481,953 in total current liabilities. The company reported a net loss of $465,388, on sales of $158,493, in the third quarter ended March 31, 2008, compared with a net loss of $853,431, on sales of $203,379, in the same period in 2007. NEUMANN HOMES: To Mail Claim Forms and Bar Date Notice on Nov. 13 ----------------------------------------------------------------- Neumann Homes, Inc., and its debtor-affiliates ask the United States Bankruptcy Court for the Northern District of Illinois to fix the deadline for filing proofs of claim against their estates on a date that is 30 days after they mail a bar date notice to their creditors. The Debtors further ask the Court to fix the later of (i) the Bar Date, or (ii) another date as the deadline for the filing of claims arising from the rejection of an executory contract or unexpired lease. Creditors are advised to follow this set of protocol for filing their proofs of claims: * Proofs of claim must conform substantially to Form No. 10 of the Official Bankruptcy Forms. * Proofs of claim must be filed either by: (i) mailing the original proof of claim to: Neumann Homes, Inc. Claims Processing c/o Epiq Bankruptcy Solutions, LLC P.O. Box 5011, FDR Station New York, 10150-5011 (ii) delivering the original proof of claim by hand or overnight courier to: Neumann Homes, Inc. Claims Processing c/o Epiq Bankruptcy Solutions, LLC 757 Third Avenue, 3rd Floor New York, 10017 * Proofs of claim will be deemed filed only when received by Epiq on or before the Bar Date. * Proofs of claim must be signed; must include supporting documentation or an explanation as to why documentation is not available; must be in the English language; and must be denominated in U.S. currency. The Debtors inform the Court that they intend to mail the proofs of claim forms and the notice of the Bar Date no later than November 13, 2008. They also intend to have the notice published in the national edition of The Chicago Tribune, The Detroit Free Press and The Milwaukee Journal Sentinel or The State Capitol Times not later than two weeks before the Bar Date. The Debtors also intend to give notice of the Bar Date by first class U.S. mail, to, among others, the office of the U.S. Trustee, the Internal Revenue Service, certain taxing authorities, the Official Committee of Unsecured Creditors and all known creditors. Any holder of a claim against any Debtor who is required, but fails, to file a proof of claim for that claim by the Bar Date is forever barred, estopped and permanently enjoined from asserting that claim against the Debtors. Creditors that need not file a proof of claim by the Bar Date are those whose: (1) claims are already filed against the Debtors with the Clerk of the Bankruptcy Court for the Northern District of Illinois; (2) claims are listed in the Debtors' schedules of liabilities provided that (i) the claims are not scheduled as disputed, contingent or not liquidated; and (ii) the claimants do not disagree with the amount, nature and priority of their claims as provided in the Schedules; (3) claims have previously been allowed by the Court; (4) claims have been paid in full; and (5) claims has been set a specific deadline by the Court. About Neumann Homes Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The company has built more than 11,000 homes in some 150 residential communities. The company offers formal business training to employees through classes, seminars, and computer- based training. The company filed for Chapter 11 protection on Nov. 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors has selected Paul, Hastings, Janofsky & Walker LLP, as its counsel in these bankruptcy proceeding. When the Debtors filed for protection from its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) NUCRYST PHARMA: Gets Delisting Notice; Has Until March to Comply ---------------------------------------------------------------- NUCRYST Pharmaceuticals received on Oct. 2, 2008, a notice from The Nasdaq Stock Market that it no longer complies with Nasdaq Marketplace Rule 4450(a)(5) because the bid price of its common stock had closed below the $1.00 minimum per share requirement for the previous 30 consecutive business days. Receipt of this notification has no immediate effect on the Nasdaq listing of the company's common shares. The company has until March 31, 2009, to regain compliance, which requires a closing bid price of their common stock at or above $1.00 per share for a minimum of 10 consecutive business days. If it does not regain compliance within this period, the company may appeal a delisting determination by the staff to the Nasdaq Listing Qualifications Panel, and its securities would remain listed pending the Panel's decision. The company may apply to Nasdaq to transfer its common stock to The Nasdaq Capital Market if it satisfies the requirements for initial inclusion set forth in Marketplace Rule 4310(c), except the minimum bid price requirement. If its application for transfer is approved, the company would be afforded the remainder of that market's second 180 calendar day compliance period to regain compliance with the minimum bid price requirement in order to remain on The Nasdaq Capital Market. NUCRYST is evaluating its alternatives to resolve the listing deficiency. NUCRYST Pharmaceuticals (NASDAQ: NCST; TSX: NCS) develops and manufactures medical products for infection and inflammation. OPEN ENERGY: SEC Deems Marketing & Distribution Pact Classified --------------------------------------------------------------- Open Energy Corporation disclosed in a Securities and Exchange Commission filing that the SEC's Division of Corporation Finance has granted its request for confidential treatment for information it excluded from exhibits to a Form 10-K filed on Sept. 15, 2008. Patti J. Dennis, Chief of SEC's Office of Disclosure Support said the information qualified as confidential commercial or financial information under the Freedom of Information Act. Excluded information from an amendment to a Joint Marketing and Distribution Agreement will not be released to the public through July 31, 2009. About Open Energy Based in Solana Beach, Calif., Open Energy Corporation (OTC BB: OEGY) -- http://www.openenergycorp.com -- a renewable energy company, focuses on the development and commercialization of a portfolio of solar technologies for residential, commercial, and industrial applications. The company designs, manufactures, and distributes building-integrated photovoltaic roofing tiles, roofing membranes, and architectural photovoltaic glass products under the SolarSave(R) trade name. * * * As reported in the Troubled Company Reporter on Sept. 24, 2008, Squar, Milner, Peterson, Miranda & Williamson, LLP, in San Diego raised substantial doubt about the ability of Open Energy Corporation to continue as a going concern after it audited the company's financial statements for the year ended May 31, 2008. The auditing firm pointed to the company's recurring losses from operations and working capital deficit. The company posted a net loss of $34,940,000 on net revenues of $6,940,000 for the year ended May 31, 2008, as compared with a net loss of $39,550,000 on net revenues of $4,290,000 in the prior year. PAPER INTERNATIONAL: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Paper International, Inc. County Road 19 Prewitt, NM 87045 Bankruptcy Case No.: 08-13917 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Fiber Management of Texas, Inc. 08-13918 Type of Business: The Debtors manufacture paper and packaging products with operations in North America, Europe, Latin America, Russia and North Africa. The Debtors have more than 50,000 employees in in 20 countries. Corporacion Durango, S.A.B. de C.V. of Durango, Mexico, owns 100% of the Debtors' interests as of October 6, 2008. Corporacion Durango filed a voluntary Chapter 15 petition in the United States Bankruptcy Court for the District of New York, Case No. 08-13911. See: http://www.internationalpaper.com Chapter 11 Petition Date: October 6, 2008 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Debtor's Counsel: Larren M. Nashelsky, Esq. lnashelsky@mofo.com Morrison & Foerster LLP 1290 Avenue of the Americas New York, NY 10104 Tel: (212) 468-8000 Fax: (212) 468-7900 Chief Restructuring Officer: Meade Monger Restructuring Advisor: AP Services, LLC Estimated Assets Estimated Debts ---------------- --------------- Paper International $100 million to $500 million to $500 million $1 billion Fiber Management $1 million to $500 million to $10 million $1 billion The Debtors did not file a list of 20 Largest Unsecured Creditors. PATRIOT HOMES: Asks Interim Authority to Use Cash Collateral ------------------------------------------------------------ Patriot Homes Inc., et al., ask the U.S. Bankruptcy Court for the Northern District of Indiana for interim authority to use cash collateral of Wells Fargo Business Credit to meet necessary expenses, including payroll and the costs associated with their restructuring under Chapter 11. The Debtors told the Court that absent the use of cash collateral, they cannot continue operations. As of the Petition Date, the Debtors had significant cash on hand in the Debtors's bank accounts. Bankruptcy Rule 4001(b) provides that a final hearing on a motion to use cash collateral pursuant to section 363 may not be commenced earlier than fifteen (15) days after the service of such motion. The Court, however, is empowered to conduct a preliminary expedited hearing on the request for authority to use cash collateral to avoid immediate and irreparable harm to a debtor's estate, pending a final hearing. The Debtors told the Court that the interests of Wells Fargo in the Cash Collateral will be adequately protected because the inability of the Debtors to use cash collateral will result in a immediate cessation of businesss which will drastically reduce the value of Wells Fargo's total collateral value. The Court has set an Oct. 15, 2008 hearing on the Debtors' use of Wells Fargo's Cash Collateral. Headquartered in Middlebury, Indiana, Patriot Homes, Inc. -- http://www.patriothomes.com/-- makes modular houses. The Debtor and 7 of its debtor-affiliates filed separate motions for Chapter 11 relief on Sept. 28, 2008 (Lead Case No. 08-33347). Bell Boyd & Lloyd, LLP, is the Debtors' proposed bankruptcy counsel. In its filing, Patriot Homes listed between $10 million and $50 million in assets and between $10 million and $50 million in debts. PETTERS AVIATION: Files for Chapter 11 Protection ------------------------------------------------- Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota (Lead Case No. 08-45136) on Oct. 6, 2008. Dawn McCarty and Erik Larson of Bloomberg News report that Stan Gadek, chairman and chief executive officer of MN Airlines, LLC, said that the Debtors are in bankruptcy because of a $2 billion fraud probe launched by the U.S. Federal Bureau of Investigations against parent Petters that involved a Sept. 24 raid of the Lead Debtor by the bureau. The Lead Debtor is accused of duping at least 20 hedge funds and other investors with a lending scheme linked to phony electronics deals, according to the report. The conspiracy, according to the report, may have reaped more than $2 billion for the Lead Debtor over more than 10 years, according to a bureau affidavit. U.S. District Judge Ann Montgomery in Minneapolis on Oct. 6 froze assets of Petters Group, and that of its units and founder, according to the report. The debtor-affiliates, photography company Polaroid Corp. and the Fingerhut catalog-retailing unit aren't involved in the investigation, the Lead Debtor said according to the report. The debtor-affiliates, according to the report, told their workers on Sept. 29 they planned to pay only half their wages for the rest of the year, and pay the rest in 2009. The debtor-affiliates decided to seek Chapter 11 protection to avoid having their assets frozen and placed under a receiver's supervision, Mr. Gadek said according to the report. Mr. Gadek insisted that their business model is not broken, according to the report. Minnetonka, Minnesota-based Petters Aviation, LLC, owns airline company MN Airlines, LLC,-- http://www.suncountry.com-- photography company Polaroid Corp. and catalog-retailing unit Fingerhut. Brian F. Leonard, Esq., and Matthew R. Burton, Esq., at Leonard O'Brien, et al., represents the Debtors in their restructuring efforts. In its filing, the Lead Debtor listed estimated assets of between $50 million and $100 million and estimated debts of between $50 million and $100 million. As reported in the Troubled Company Reporter on Jan. 11, 2002, several creditors-- including Pegasus Aviation Inc., Riverhorse Aviation Group Inc., Pegasus Aviation Asset Securitization Trust 1997 c/o Pegasus Aviation Inc. --filed an involuntary Chapter 7 petition against Sun Country Airlines, Inc., in the United States Bankruptcy Court for the District of Delaware, Case No. 02-10060. Sun Country's case was assigned to the Hon. Mary F. Walrath. Timothy D. Moratzka served as Sun Country's Chapter 7 Trustee. Ricardo Palacio, Esq., at Ashby & Geddes, P.A., in Wilmington, Delaware, represented the Sun Country. In April 2002, a bankruptcy judge approved the assignment of the airline's four aircraft leases to the new ownership group, MN Airlines. The Department of Transportation approved a joint application by Sun Country and MN Airlines for an exemption allowing MN Airlines dba Sun Country Airlines to continue to operate under Sun Country Airline's certificates. PETTERS AVIATION: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Petters Aviation LLC 4400 Baker Road Minnetonka, MN 5543 Bankruptcy Case No.: 08-45136 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- MN Airlines, LLC 08-35197 dba Sun Country Airlines, Inc. MN Airline Holdings Inc. 08-35198 Type of Business: The Debtors operate an airline company. As reported in the Troubled Company Reporter on Jan. 11, 2002, several creditors -- including Pegasus Aviation Inc., Riverhorse Aviation Group Inc., Pegasus Aviation Asset Securitization Trust 1997 c/o Pegasus Aviation Inc. -- filed an involuntary Chapter 7 petition against Sun Country Airlines, Inc., in the United States Bankruptcy Court for the District of Delaware, Case No. 02-10060. Sun Country's case was assigned to the Hon. Mary F. Walrath. Timothy D. Moratzka served as Sun Country's Chapter 7 Trustee. Ricardo Palacio, Esq., at Ashby & Geddes, P.A., in Wilmington, Delaware, represented the Sun Country. In April 2002, a bankruptcy judge approved the assignment of the airline's four aircraft leases to the new ownership group, MN Airlines. the Department of Transportation approved a joint application by Sun Country and MN Airlines for an exemption allowing MN Airlines dba Sun Country Airlines to continue to operate under Sun Country Airline's certificates. See: http://www.suncountry.com Chapter 11 Petition Date: October 6, 2008 Court: District of Minnesota (Minneapolis) Judge: Robert J Kressel Debtor's Counsel: Brian F. Leonard, Esq. bleonard@losgs.com Matthew R. Burton, Esq. mburton@losgs.com Leonard O'Brien, et al. 100 S. 5th St., Suite 2500 Minneapolis, MN 55402 Tel: (612) 332-1030 Fax: (612) 332-2740 Estimated Assets: $50 million $100 million Estimated Debts: $50 million $100 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sun Minnesota Domestic Notes repurchase $12,500,000 Holdings, LLC & Sun of shares of MN Minnesota Foreign Holdings Airline Holdings, Attn: Andy Redleaf 3033 Excelsior Blvd., Suite 300 Minneapolis, MN 55416 Tel: (612) 253-6001 Acorn Capital Group, LLC Airbus PDPs $10,000,000 Attn: Marlon Quan, CEO 2 Greenwich Office Park Greenwich, CT 06831 Tel: (203) 661-0049 Chase Equipment Leasing, N227PE Loan $6,060,130 Inc. Attn: Gary Yost, Vice President 1111 Polaris Parkway, Suite 3A Columbus, OH 43240 Tel: (313) 256-2516 Petters Company, Inc. Revolving $4,000,000 Attn: Chief Legal Officer Demand - dated 4400 Baker Road Fe. 5, 2007 Minnetonka, MN 55343 Tel: (952) 932-3100 Petters Aircraft Advance $2,000,000 Leasing, LLC Attn: Chief Legal Officer 4400 Baker Road Minnetonka, MN 55343 Tel: (952) 932-3100 Petters Capital, LLC Unsecured Note $1,500,000 Attn: Chief Legal Officer 4400 Baker Road Minnetonka, MN 55343 Tel: (952) 932-3100 Minnwest Bank Metro - Line of Credit; $1,000,000 Champlin secured by N706JP Attn: James Robertson, Commercial Credit Officer 12011 Business Park Boulevard North Champlin, MN 55316 Tel: (763) 230-6900 MN Airlines, LLC MSP Facility $385,244 Attn: Stan Gadek, President Rent and 1300 Mendota Heights Road Utilities Mendota Heights, MN 55120 Tel: (651) 681-3900 Priester Aviation, LLC Management $290,156 Attn: Richard Peterson, CFO Fees re Boeing 1061 South Wolf Road 727 N706JP Wheeling, IL 60090 Tel: (847) 850-5434 SilverStone Group Aircraft, GL and $149,055 Workers's Comp Insurance Midwest Aviation Maintenance $105,959 Fees re N227PE Charter First Charter $78,067 Operations Hawthorne Corporation Consulting Fees $63,403 Petters Group Worldwide, Shared Services $57,919 LLC Fredrikson & Byron, P.A. Legal Fees $36,436 Fafinski Mark & Johnson, Legal Fees $34,480 P.A. Stanton Group Property $32,482 Insurance - MSP Facility Eastern Aviation Fuels, Inc. Aircraft Fuel $30,494 Thomas J. Petters Advance $21,074 M&A Apparel & Promotions PA Marketing $6,633 Collateral PINE RIVER: PolyOne Pays 10% of Preference, Gives Up Claim ---------------------------------------------------------- Bill Rochelle of Bloomberg News reports that PolyOne Corp. paid $50,000 or 10% of a reduced preference of $513,000 to formerly bankrupt Pine River Plastics, Inc., and agreed to have its $311,000 claim in the former debtor that was entitled to full payment treated as an unsecured claim. The unsecured claim is likely to receive nothing, the report says. Before Pine River emerged from bankruptcy, it sent PolyOne a letter demanding repayment of an alleged $1.1 million preference received before the bankruptcy filing, according to the report. After discussion, the Chapter 11 liquidation trustee conceded that valid defenses reduced the preference to $513,000. About Pine River Based in Saint Clair, Michigan, Pine River Plastics, Inc. -- http://www.prplastics.com/-- manufactures plastic injection moldings. The company filed for Chapter 11 protection Feb. 1, 2007 (Bankr. E.D. Mich. Case No. 07-42051). Brendan G. Best, Esq. and Ronald L. Rose, Esq., at Dykema Gossett PLLC, represent the Debtor in its restructuring efforts. The Debtor have selected Kurtzman Karson Consultants LLC as its claim, notice and balloting agent. The U.S. Trustee for Region 9 has appointed creditors to serve on an Official Committee of Unsecured Creditors in the Debtor's case. Judith Greenstone Miller, Esq., and Jay L. Welford, Esq., Jaffe, Raitt, Heuer and Weiss, represent the Committee. When the Debtor filed for protection from its creditors, it listed estimated assets and liabilities of $1 million to $100 million. The Court confirmed the Debtor's Chapter 11 Plan of Liquidation in January 2008. POWER EFFICIENCY: Files Amendment to Share Registration Statement ----------------------------------------------------------------- Power Efficiency Corporation has filed a fourth amendment to its Registration Statement on Form S-1/A with the Securities and Exchange Commission. The company amended the registration statement to delay its effective date until the company files a further amendment to state: -- the date the Registration Statement will become effective; or -- until the Registration statement will become effective on such date as the Securities and Exchange Commission may determine. A full-text copy of the Power Efficiency's Registration Statement is available free of charge at http://researcharchives.com/t/s?3367 About Power Efficiency Corp. Based in Las Vegas, Power Efficiency Corporation (OTC BB: PEFF) -- http://www.powerefficiency.com/-- is a green energy company focused on efficiency technologies for electric motors. The company has developed a patented and patent-pending technology platform, called E-Save Technology(TM), which has been demonstrated in independent testing to improve the efficiency of electric motors by 15-35% in appropriate application Going Concern Doubt As reported in the Troubled Company Reporter on April 4, 2008, Livingston, N.J.-based Sobel & Co., LLC, expressed substantial doubt about Power Efficiency Corporation's ability to continue as a going concern after the firm audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations and deficiency of cash from operations. The company posted $1,047,175 in net losses on $164,644 in net revenues for quarter ended June 30, 2008, compared with $837,632 in net losses on $ billion in net revenues for quarter ended June 30, 2007. PRINCETON OFFICE: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Princeton Office Park LP delivered to the United States Bankruptcy Court for the District of New Jersey its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $25,000,000 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding $1,030,208 Secured Claims E. Creditors Holding $0 Unsecured Priority Claims F. Creditors Holding $1,487,162 Unsecured Nonpriority Claims ----------- ------------ TOTAL $25,000,000 $2,517,370 Headquartered Trenton, New Jersey, Princeton Office Park LP operates a real estate business. The company filed for Chapter 11 protection on Sept. 9, 2008 (Bankr. D. N.J. Case No. 08-27149). Morris S. Bauer, at Norris McLaughlin & Marcus PA, in Somerville, New Jersey, represents the Debtor. RANDLE HEIGHTS: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Randle Heights Tenants Association, Inc. 1917 Minnesota Avenue, SE Washington, DC 20020-5453 Bankruptcy Case No.: 08-00655 Type of Business: The Debtor is a single real estate asset debtor. Chapter 11 Petition Date: October 3, 2008 Court: District of Columbia (Washington, D.C.) Judge: S. Martin Teel, Jr. Debtor's Counsel: Jeffrey M. Sherman, Esq. jsherman@semmes.com SEMMES, BOWEN & SEMMES 1001 Connecticut Avenue, Suite 1100 Washington, DC 20036 Tel: (202) 822-8250 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Charlene Sydner $3,000 2951 Nash Place SE Suite 204 Washington, DC 20019 Charles Anderson $4,000 1912 T Street SE Washington, DC 20002 DC Water & Sewer Authority $6,003 P.O. Box 97200 Washington, DC 20090 Henderson Walker $8,930 7600 Georgia Avenue NW Suite 100 Washington, DC 20012 Jerri Davey $750 Kenneth Lowinger Unknown 471 H Street NW Washington, DC 20001 Latashia Lynch $3,000 643 Hamlin Street NE Washington, DC 20017 Lawerence Harris Unknown Laynia Gwenmore $4,500 214 Kenilworth Avenue Washington, DC 20019 Russell Webster $450 RAFAELLA APPAREL: Moody's Reviews Low-B Ratings for Likely Cut -------------------------------------------------------------- Moody's Investors Service placed the debt ratings of Rafaella Apparel Group, Inc. on review for possible downgrade. The company's LGD assessment is also subject to change. While acknowledging that Rafaella has significantly reduced debt and maintains adequate liquidity, the review for possible downgrade was prompted by the recent announcement that fiscal 2008 revenue and earnings declined significantly due to lower volume and selling prices, increased customer allowances and markdowns, and a mix shift to lower margined private label business. Moody's review for downgrade will focus on the company's ability to stabilize revenue and earnings declines over the near-to- intermediate-term in light of the currently-difficult economic environment. Moody's will also focus on the company's ability to generate additional free cash flow for debt reduction, and maintain adequate debt protection measures and liquidity. These ratings were placed on review for possible downgrade: -- Corporate Family Rating at B2 -- Probability of Default Rating at B2 -- Senior secured notes due June 2011 at B3 The previous rating action on May 22, 2008 downgraded the long term ratings to the current levels with a negative outlook. Rafaella Apparel Group, Inc., based in New York, NY, is a designer, sourcer, and marketer of a full line of women's career and casual sportswear separates under the Rafaella brand and private label brands of its customers. For the fiscal year ended June 30, 2008, the company reported net sales of approximately $178 million. REHRIG INT'L: Gets Final OK to Access $12MM LaSalle DIP Loan ------------------------------------------------------------ Bill Rochelle of Bloomberg News reports that the U.S. Bankruptcy Court of the District of Delaware gave final approval to Rehrig International, Inc., and its debtor-affiliates to borrow $12 million from the pre-bankruptcy senior secured lender LaSalle Business Credit, LLC. The DIP facility includes a $9.5 million revolving loan facility and $2.5 million term loan facility, according to papers the Debtors filed in Court. The facility provided for initial access of up to $6 million. The DIP facility will terminate on the earliest of March 31, 2009, the occurence of an event of default, or a sale, lease or disposition of estate property, in which LaSalle has a lien, without the Lender's prior written consent. The Debtors will also use the cash collateral securing prepetition loan obligations to their lenders. As of September 4, 2008, the Debtors had outstanding debt in the aggregate of $36.62 million, consisting of $11.62 million under a senior secured credit facility with LaSalle; $16 million due under a junior secured credit facility with Woodside Agency Services, LLC, as agent; and $9 million to $11 million due to trade creditors. The Debtors will provide adequate protection liens to LaSalle, including a lien on avoidance actions for the diminution in value of their collateral. The Debtors will also provide replacement liens to the Junior Lenders, including on the avoidance actions for the diminution in value of their collateral. The DIP Financing documents provide for the rollover of the LaSalle prepetition revolver into the postpetition revolver. As of September 3, 2008, the Debtors owed $6.6 under the prepetition revolving loans and $3.9 million under the Term Loan A facility. Woodside Capital Partners V, LLC and Woodside Capital Partners V QP, LLC, have electd to purchase an undivided interest consisting of an 80% share of the DIP facility. An affiliate of the Woodside entities owns roughly 85% of the equity interests of Debtor Woodside RU Holdings, Inc., which in turn owns all the equity interests in Debtors Rehrig International Inc. and Woodside-United Acquisition, LLC. About Rehrig International Headquartered in Richmond, Virginia, Rehrig International Incorporated -- http://www.rehrig.org-- manufactures wire products, plastic processed plastics, industrial trucks & tractors, conveyors & conveying equipment, laminated plasticsand sheet metal fabricator. The company and its two affiliates filed for Chapter 11 protection on September 5, 2008 (Bankr. D. Del. Case No. 08-12064). Richard W. Riley, Esq., at Duane Morris LLP represents the Debtors in their restructuring efforts. Kurtzman Carson Consulting, LLC, serves as the Debtors' Claims, Noticing and Balloting Agent. When the Debtors filed for protection from their creditors they listed estimated assets between $10 million and $50 million and estimated debts between $10 million and $50 million. REHRIG INT'L: Gets Final OK to Access $12MM LaSalle DIP Loan ------------------------------------------------------------ Pursuant to Section 1102(a)(1) of the Bankruptcy Code, ROBERTA A. DeANGELIS, the Acting United States Trustee for Region 3, named five creditors to serve on the official committee of unsecured creditors in the bankruptcy cases of Rehrig International Incorporated and its two affiliates: -- Roadway Express, Inc. Attn: Allen H. Motter 1077 George Blvd. Akron, OH 44309 Tel: 330-384-1717 -- Enspire Energy, LLC Attn: James E. Lukas 99 Cathedral Street, 2nd Floor Annapolis, MD 21401 Tel: 410-216-6068 Fax: 480-216-6069/757-961-0841 -- H. Muehlstein & Co., Inc. Attn: John Myers 800 Connecticut Avenue Norwalk, CT 06854 Tel: 203-855-6000 Fax: 203-855-6031 -- Ningbo Jiu Long Hardware Ltd. Attn: Enjing Jin No. 8 Technology Park Ningbo, Zhejiang, China 315600 Tel: 0574-65190189 Fax: 0574-65535999 -- James River Logistics, Inc. Attn: Jerry C. Ferguson, Jr. 5104 W. Village Green Drive, Suite 105 Midlothian, VA 23112 Tel: 804-763-4644 Fax: 800-344-5249 About Rehrig International Headquartered in Richmond, Virginia, Rehrig International Incorporated -- http://www.rehrig.org-- manufactures wire products, plastic processed plastics, industrial trucks & tractors, conveyors & conveying equipment, laminated plasticsand sheet metal fabricator. The company and its two affiliates filed for Chapter 11 protection on September 5, 2008 (Bankr. D. Del. Case No. 08-12064). Richard W. Riley, Esq., at Duane Morris LLP represents the Debtors in their restructuring efforts. Kurtzman Carson Consulting, LLC, serves as the Debtors' Claims, Noticing and Balloting Agent. When the Debtors filed for protection from their creditors they listed estimated assets between $10 million and $50 million and estimated debts between $10 million and $50 million. REHRIG INT'L: Sec. 341 Meeting Slated for October 30 ---------------------------------------------------- ROBERTA A. DeANGELIS, the Acting United States Trustee for Region 3, will convene a meeting of creditors on October 30, 2008, at 10:30 a.m. in the bankruptcy cases of Rehrig International Incorporated and its two affiliates. 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. About Rehrig International Headquartered in Richmond, Virginia, Rehrig International Incorporated -- http://www.rehrig.org-- manufactures wire products, plastic processed plastics, industrial trucks & tractors, conveyors & conveying equipment, laminated plasticsand sheet metal fabricator. The company and its two affiliates filed for Chapter 11 protection on September 5, 2008 (Bankr. D. Del. Case No. 08-12064). Richard W. Riley, Esq., at Duane Morris LLP represents the Debtors in their restructuring efforts. Kurtzman Carson Consulting, LLC, serves as the Debtors' Claims, Noticing and Balloting Agent. When the Debtors filed for protection from their creditors they listed estimated assets between $10 million and $50 million and estimated debts between $10 million and $50 million. ROBERT ZELLMER: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Robert F. Zellmer 900 E. Silver Spring Whitefish Bay, WI 53217 Bankruptcy Case No.: 08-30851 Chapter 11 Petition Date: October 3, 2008 Court: Eastern District of Wisconsin (Milwaukee) Judge: Susan V. Kelley Debtor's Counsel: Jonathan V. Goodman, Esq. jgoodman@ameritech.net Law Offices of Jonathan V. Goodman 135 West Wells Street, Suite 340 Milwaukee, WI 53203 Tel: (414) 276-6760 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ M&I Marshall & Ilsey Bank judgment $10,600,130 c/o Russel Long 770 N. Water Street Milwaukee, WI 53202 Houseman & Feind LLP fees $10,000 c/o Steve Cain 1650 9th Avenue Grafton, WI 53024-0104 Pepe's Rockin' Taco Shack deposit $5,511 2012-2014 N. Farwell Avenue Milwaukee, WI 53202 Farci, LLC deposit $3,626 Donald Taylor deposit $1,655 Medhat Ismail deposit $1,433 Daniel T. Boom deposit $1,310 Linne H. Petri deposit $1,230 Enterpises LLC deposit $1,130 Debra Wagner deposit $1,085 Mahler Enterprises deposit $1,080 Classical Strings deposit $1,000 Debora Voith deposit $975 Edwin DeLuisa deposit $930 Samuel Ross deposit $875 SAGEMARK COMPANIES: Negotiates Deals to Cut Debt, Avoid Bankruptcy ------------------------------------------------------------------ The Sagemark Companies Ltd. disclosed in a Securities and Exchange Commission filing that as of Sept. 25, 2008, the Company and its subsidiaries have secured and unsecured creditors that are owed approximately $7,100,000 -- none of which the Company has the financial resources to satisfy. The Company is striving to avoid bankruptcy by extinguishing as many of its debts and obligations as possible through negotiated settlement. With its limited cash resources, the Company said those creditors unwilling to settle will most likely not recover any payment, as the Company's remaining funds will be absorbed by the cost of any bankruptcy. Should the Company be forced to file for bankruptcy protection, bankruptcy counsel has advised that it is most likely that its remaining premise leases will be disavowed by the trustee in any such bankruptcy. Therefore, although there can be no assurances, the Company is continuing its efforts to negotiate lease termination agreements with its few remaining landlords and settle it's outstanding creditor issues in an amicable and timely fashion. The Company has terminated all of its PET and PET/CT imaging center operations. This is consistent with the Company's divestiture plan unveiled in February 2008 and implemented as a consequence of the Company's inability to pay its operating expenses, service its substantial outstanding indebtedness to its equipment lenders, and to satisfy its equipment service contracts, premise lease obligations and other financial commitments. In addition to the sale or repossession by the Company's equipment lenders of all of the PET and PET/CT imaging equipment at all of such imaging centers, the Company has terminated virtually all of its premise lease agreements with various landlords for the imaging facilities leased by it for the operation of such centers and is seeking to terminate its remaining leases in an effort to avoid bankruptcy. The Company does not have the financial resources necessary to meet its financial obligations under any of such remaining lease agreements. The Company terminated the operations of its Parsippany, New Jersey PET imaging center on March 31, 2008, vacated the premises and discontinued rent payments as of such date. Following the commencement of an action by the landlord of such premises against the Company for an alleged breach by the Company of the premise lease, the Company and the landlord concluded an agreement on Sept. 22, 2008, pursuant to which the parties agreed to mutually terminate the premise lease in consideration of the payment by the Company of $7,074.81, representing one month's rent, together with the landlord's retention of the security deposit previously paid by the Company under the lease. As a result of the mutual termination of the premises lease, the Company was relieved of its obligations to pay an aggregate of approximately $361,000 in rent during the unexpired portion of the 10-year term of the lease. About Sagemark Companies Based in New York, The Sagemark Companies Ltd. (OTC BB: SKCO) does not have significant operations. For the past six years the company has been engaged in the development and operation of out-patient medical diagnostic imaging centers that feature PET and PET/CT imaging systems which is used in the performance of medical diagnostic imaging procedures used by physicians in the diagnosis, staging and treatment of certain cancers, coronary disease and neurological disorders. Going Concern Doubt Moore Stephens, P.C., in Cranford, N.J., expressed substantial doubt about The Sagemark Companies Ltd.'s ability to continue as agoing concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the company continues to generate operating losses and has a significant working capital deficiency as of Dec. 31, 2007. The Sagemark Companies Ltd.'s consolidated balance sheet at June 30, 2008, showed $2,091,000 in total assets, $7,473,000 in total current liabilities, and and $85,000 in minority interest, resulting in a $5,467,000 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $2,037,000 in total current assets available to pay $7,473,000 in total current liabilities. The company reported a net loss of $1,387,000 on total revenues of $53,000, for the second quarter ended June 30, 2008. SPACEHAB INC: Posts $25.5 Million Loss for Year Ended June 30 ------------------------------------------------------------- SPACEHAB Inc. posted $36 million in net losses on $25.5 million in net revenues for fiscal year ended June 30, 2008, compared with $16.3 million in net losses on $53.8 million in net revenues for fiscal year ended June 30, 2007. SPACEHABS's balance sheet as of June 30 showed $58.2 million in total assets, $23.3 million in total liabilities, and $34.9 million in shareholders' equity. The company has incurred net losses in the years ended June 30, 2008 and 2007. Historically, the Company has financed its capital expenditures, research and development and working capital requirements with progress payments under its various contracts, as well as with proceeds received from both public and private debt and equity offerings and borrowings under credit facilities. As of June 30, 2008, the company had cash and restricted cash-on- hand of $11.0 million and our working capital was approximately $1.0 million. Restricted cash, which consists of advance payments on a government contract to modify certain spacecraft processing facilities and restricted deposit relating to bank covenants, totaled $8.4 million at June 30, 2008. The company carries a liability of $4.9 million for obligations under this construction contract. For fiscal year 2008, the company used $8.6 million of cash in our operating activities. In February 2008, the company consummated a financing facility with a commercial bank. This facility provides for a three-year $4.0 million term loan, payable in monthly installments of principal in the amount of $22,222 plus interest and a $2.0 million revolving credit facility. The term loan is secured by the assets of our Astrotech subsidiary and the one-year revolving credit facility is secured by Astrotech's accounts receivable. As of June 30, 2008, the company has no outstanding balance under the revolving credit facility. As reported by the Troubled Company Reporter, PMB Helin Donovan LLP in Houston, Texas, expressed substantial doubt about Spacehab Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2007. The auditing firm reported that the company has sustained recurring losses and negative cash flow from operations. In its annual report for fiscal year ended June 2008, the company said it believes it has sufficient liquidity and backlog to fund ongoing operations for at least the next fiscal year and expect to utilize existing cash and proceeds from operations to support strategies for new business initiatives. A full-text copy of SPACEHAB's annual report on Form 10K is available for free at http://researcharchives.com/t/s?336a Headquartered in Webster, Texas, SPACEHAB Inc. (Nasdaq: SPAB) -- http://www.spacehab.com/-- offers space access and payload integration services, production of valuable commercial products in space, spacecraft pre-launch processing facilities and services, development and extension of space-based products to the consumer market, and program and engineering support ranging from development and manufacturing of flight hardware to large scale government project management. SPRINT NEXTEL: Gets Offers for Nextel, Faces Hurdles on Sale ------------------------------------------------------------ Sprint Nextel Corp. has received an offer from NII Holdings Inc. and several private-equity firms to buy its Nextel business, Amol Sharma at The Wall Street Journal reports, citing sources familiar with the matter. Sprint acquired Nextel Communications Inc. for $35 billion in 2005. Nextel has struggled to keep subscribers and has shed millions of subscribers in recent years, WSJ relates. Sources told the Journal that Sprint has held discussions with prospective buyers -- including Cerberus Capital Management LP -- in recent months and is within days of receiving a second round of bids. NII, once the international division of Nextel but now runs as a separate firm, is seen by many as the most logical buyer, the report says. WSJ relates that some factors are complicating any deal for Nextel, including the cost of separating the Nextel unit to the $5.4 billion in debt Sprint wants to unload on the buyer. The report states that potential buyers have expressed resistance to taking on so much debt but have indicated they may be willing to if the equity part of the deal were negligible. Sprint and Nextel, according to WSJ, have been integrating back- end systems like billing and customer service that would be costly to separate again. WSJ says that legal concerns also stop Sprint from walking away from guaranteeing the $5.4 billion in debt under the contracts it signed at the time of the Nextel merger. Sources say that major Nextel bondholders would strongly oppose lifting Sprint's guarantee, WSJ relates. WSJ reports that the credit crunch has also made it even more difficult for buyers to arrange financing. Buyers would need significant cash to run Nextel and its network of 30,000 cellphone towers, the report states. Citing a person close to Sprint, WSJ relates that Sprint will hold out for a high valuation. WSJ states that Sprint has acknowledged that Nextel is worth much less than it once was. Sprint took an almost $30 billion write-down on the Nextel acquisition earlier this year, according to the report. About Sprint Nextel Sprint Nextel Corp. -- http://www.sprint.com/-- offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks serving about 54 million customers at the end of the fourth quarter 2007; industry-leading mobile data services; instant national and international walkie- talkie capabilities; and a global Tier 1 Internet backbone. * * * The Troubled Company Reporter reported on Aug. 13, 2008, that DBRS assigned the Sprint Nextel Corporation proposed issuance of $3.0 billion of Cumulative Perpetual Convertible Preferred Shares a rating of BB. The trend is negative. SUN COUNTRY: Asks Workers to Defer Half of Wages ------------------------------------------------ Sun Country Airlines, Inc., is asking its workers to defer half their pay, according to the Star Tribune from Minneapolis-St. Paul. On the week ended Sept. 26, 2008, the U.S. Federal Bureau of Investigation searched the offices of Petters Group Worldwide, Sun Country's owner, according to the report. The chief executive officer, Thomas Petters, resigned at the end of the week, according to the report. A sworn statement by a Bureau agent said Mr. Peters used investors' money "for his other business ventures and to support his extravagant lifestyle," according to the report. The scheme could have involved up to $2 billion, according to a tape-recorded conversation with someone involved, according to the report. Petters Aviation, an investor group including Petters and his Petters Group Worldwide, along with Whitebox Advisors, acquired Sun Country in November 2006, according to the report. The terms weren't disclosed at the time, according to the report. Sun Country Airlines is a low-fare, low-cost passenger airline that provides high quality customer service on point-to-point routes. The company serves leisure travel markets with a fleet of seven new Boeing 737-800 aircrafts. After racking up $90 million in operating losses over two years, the Company, according to the report, ultimately discontinued all but two charter flights a week before creditors filed an involuntary Chapter 7 petition against it on January 9, 2002, before the U.S. Bankruptcy Court for the District of Delaware. Knight Ridder/Tribune Business News reports that the Delaware Court ordered the Chapter 7 case moved to the Bankruptcy Court for the District of Minnesota. As reported by the Troubled Company Reporter, the Minnesota Court converted the Debtor's case to Chapter 11 on March 12, 2002. The Minnesota Court authorized a sale of the assets in March 2002 as an operating airline to an investor group whose bid was less than the bank debt. SYNTAX-BRILLIAN: Ch. 11 Examiner Wants Potter Anderson as Counsel ----------------------------------------------------------------- BankruptcyData.com reports that James S. Feltman, the Chapter 11 examiner in the bankruptcy cases of Syntax-Brillian Corp. and its debtor-affiliates, seeks authority from the U.S. Bankruptcy Court for the District of Delaware to retain Potter Anderson & Corroon as counsel. According to the report, the Firm will be paid according to these hourly rates.: Professional Hourly Rate ------------ ----------- Partner $395-$550 Associate $255-$360 Paralegal $160 Case Management Assistant $60 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. THAYER POWER: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Thayer Power and Communication Line Construction Company, Inc. 7400 Market Road P.O. Box 915 Fairview, PA 16415 Bankruptcy Case No.: 08-11904 Type of Business: The Debtor provides non-residential construction services. See: http://www.thayerpc.com/ Chapter 11 Petition Date: October 4, 2008 Court: Western District of Pennsylvania (Erie) Debtor's Counsel: Lawrence C. Bolla, Esq. lbolla@quinnfirm.com Quinn Buseck Leemhuis Toohey & Kroto Inc. 2222 West Grandview Boulevard Erie, PA 16506-4508 Tel: (814) 833-2222 Estimated Assets: Less than $50,000 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/pawb08-11904.pdf THOMAS INDUSTRIES: Milliken Withdraws $24,000,000 Offer ------------------------------------------------------- Terry Brennan of The Deal.com reports that the $24 million sale of TI Acquisition, LLC, to Milliken & Co. collapsed when the stalking-horse bidder pulled its offer. Milliken had offered to acquire the Debtor's assets for $24 million. Milliken and the Debtor negotiated the sale prior to the bankruptcy filing. The asset purchase agreement, according to the report, was pulled by the prospective buyer when certain required covenants weren't met, said Christopher Phillips, Esq., at Lambert, Cifelli, Stokes, Ellis & Nason, who represents the Official Committee of Unsecured Creditors. As reported by the Troubled Company Reporter on August 20, 2008, the Debtor obtained permission from the U.S. Bankruptcy Court for the Northern District of Georgia in Rome to sell its assets at a Sept. 26 auction. According to court documents, the Debtor owes secured creditor Bank of America NA at least $27.8 million. About TI Acquisition Dalton, Georgia-based TI Acquisition, LLC, does business as Thomas Industries, Monticello Floors, Mattel, Superior Yarn Technology, Mattel Carpet & Rug, Thomas Industries, and Templeton Carpet Mills. It manufactures carpets and textiles. It filed its chapter 11 petition on July 27, 2008 (Bankr. N.D. Ga. Case No. 08- 42370). Richard T. Klingler, Esq., at Kennedy, Koontz & Farinash, represents the Debtor in its restructuring efforts. An official committee of unsecured creditors has been appointed in the case. Michael E. Baum, Esq., and Brendan G. Best, Esq., at Schafer and Weiner, Pllc, in Bloomfield Hills, Michigan, represent the panel. When the Debtor filed for bankruptcy, it listed assets of $10 million to $50 million and debts of $50 million to $100 million. The Debtor listed $3,213,604 in unsecured debt owed to Honeywell Nylon, LLC and $1,326,415 owed to Southern Polymer, Inc. William Rochelle at Bloomberg News reports that the Debtor partly blamed its financial demise on Propex Inc.'s chapter 11 bankruptcy filing in January. Propex is one of the Debtor's largest clients. THOMAS INDUSTRIES: Committee Taps Hays Financial as Advisors ------------------------------------------------------------ The Unsecured Creditors Committee in the bankruptcy case of TI Acquisition LLC tapped Hays Financial Consulting as its financial advisors. The Committee wants to retain the firm, nunc pro tunc to August 21, 2008. The Committee filed its application on October 1. The U.S. Bankruptcy Court for the Northern District of Georgia granted the Committee's request. In its order, the Court indicated that "Order and Notice GRANTING Application to Employ Hays Financial Consulting, LLC as Financial Advisors for Creditors Committee giving 20 days for objections." The Committee needs a financial advisor to perform these services: -- financial and operational analyses regarding the Debtor; -- regular reports on key Debtor financial and operational indices and updates on the Sec. 363 sales processes; -- valuation and corporate finance expertise regarding sale of the Debtor's assets or operating units; -- analysis of preferences, claims, avoidance actions, fraudulent conveyances, etc.; -- forensic investigations, accounting and litigation support; -- electronic discovery services; and -- asset recovery and disposition services. The firm's professionals will bill at these hourly rates: Professional Hourly Rate ------------ ----------- Managing principal/director $300 - $350 Director $200 - $300 Manager $100 - $250 Senior Associate/Associate $100 - $150 Administrative staff $50 - $75 Christopher Tierney, managing director at the firm, attests that the firm is disinterested and holds or represents no interests adverse to the Committee. About TI Acquisition Dalton, Georgia-based TI Acquisition, LLC, does business as Thomas Industries, Monticello Floors, Mattel, Superior Yarn Technology, Mattel Carpet & Rug, Thomas Industries, and Templeton Carpet Mills. It manufactures carpets and textiles. It filed its chapter 11 petition on July 27, 2008 (Bankr. N.D. Ga. Case No. 08- 42370). Richard T. Klingler, Esq., at Kennedy, Koontz & Farinash, represents the Debtor in its restructuring efforts. An official committee of unsecured creditors has been appointed in the case. Michael E. Baum, Esq., and Brendan G. Best, Esq., at Schafer and Weiner, Pllc, in Bloomfield Hills, Michigan, represent the panel. When the Debtor filed for bankruptcy, it listed assets of $10 million to $50 million and debts of $50 million to $100 million. The Debtor listed $3,213,604 in unsecured debt owed to Honeywell Nylon, LLC and $1,326,415 owed to Southern Polymer, Inc. William Rochelle at Bloomberg News reports that the Debtor partly blamed its financial demise on Propex Inc.'s chapter 11 bankruptcy filing in January. Propex is one of the Debtor's largest clients. THORNBURG MORTGAGE: Moody's Affirms Preferred Stock Rating at 'Ca' ------------------------------------------------------------------ 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 following further deterioration in the broad credit and specifically mortgage-backed securities markets, as well as disagreements over the interpretation of the Override agreement, Thornburg's repo counterparties made additional margin calls on the REIT and failed to advance funds severely constraining Thornburg's liquidity. As a result, under Maryland law the REIT is prohibited from offering the cash portion of consideration to its preferred shareholders since, given its liquidity position, such payment would cause the company not to be able to pay its debts as they become due in the usual course of business or the company's total assets would be less than the sum of its total liabilities. Therefore, Thornburg further amended its exchange offer and consent solicitation and extended it until October 31, 2008. The revised consideration includes no cash component and 3 shares of Thornburg's common stock (after giving effect to a 1:10 reverse stock split announced on September 26, 2008). In addition, since the REIT failed to complete the exchange offer by September 30, 2008, the holders of Senior Subordinated Secured notes became entitled to receive additional warrants, and the $188.6 million in escrow funds were returned to investors. The interest rate on Senior Subordinated Secured notes remained at 18% subject to Thornburg completing the exchange offer and consent solicitation by October 31, 2008, at which point it would be reduced to 12%. In addition, PPA investors agreed to accept their September 30, 2008 interest payment in additional Senior Subordinated Secured notes in lieu of cash due to Thornburg's cash-strapped position. Thornburg's Ca senior debt rating reflects heightened likelihood of default and the potential for above average loss severity in the event of default. Positively, the senior debt has a senior lien on the equity of certain subsidiaries, the MSR assets and a claim on the interest payments on the securities subject to the override agreement. The review for downgrade reflects the uncertainty of the impact of Thornburg's efforts to restructure its balance sheet on its ultimate capital structure and cash flows available to service interest on senior debt. An upgrade of Thornburg's senior debt is unlikely in the near term due to its highly levered balance sheet, uncertainty about the size and the quality of the REIT's unencumbered asset base going forward, as well as doubts about the REIT's ability to continue to be a going concern. A rating downgrade of Thornburg's senior debt to C in the near term would most likely occur should the REIT be unable to comply with its senior debt covenants. These ratings were affirmed: * Thornburg Mortgage, Inc. -- senior unsecured debt at Ca under review for possible downgrade, senior unsecured shelf at (P)Ca under review for possible downgrade, preferred stock at C, preferred shelf at C. Thornburg Mortgage, Inc. (NYSE: TMA) based in Santa Fe, New Mexico, USA, is a single-family mortgage portfolio lender and originator organized as a REIT. As of June 30, 2008, Thornburg Mortgage reported assets of approximately $28.8 billion. TOSHA RESTAURANTS: Says Queensbury Franchise to Remain Open ---------------------------------------------------------- Robert Gonzalez, a spokesman for Denny's Corp., the Spartanburg, S.C., chain of restaurants, said that Denny's -- Tosha Restaurants LLC's restaurant franchise at 248 Quaker Road in Queensbury -- will remain open while Tosha Restaurants restructures, The Business Review (Albany) reported Friday. Tosha Restaurants LLC filed for Chapter 11 reorganization on Sept. 17. Tosha Restaurants LLC listed assets of $817,850 and liabilities of $1,149,000. Its major creditor is Rynik Properties Queensbury LLC, to which it owes $310,000. About Tosha Restaurants Based in Queensbury, New York, Tosha Restaurants LLC operates the Denny's Corp.'s franchise at 248 Quaker Road in Queensury. The company filed for Chapter 11 relief on Sept. 17, 2008 (Bankr. N.D. N.Y. Case No. 08-13069). Robert J. Rock, Esq. represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of $100,000 to $1 million, and debts of $1 million to $100 million. TRIARC COS: Completes Merger With Wendy's International ------------------------------------------------------- Triarc Companies, Inc., and Wendy's International, Inc., have completed their merger transaction. Effective immediately, the combined company will be named Wendy's/Arby's Group, Inc. Wendy's/Arby's Group's President and CEO Roland C. Smith, said, "I am delighted to announce the completion of this merger, which creates a world-class company with the strength, scale and expertise necessary to thrive in a competitive restaurant environment. As one company, we are well-positioned to deliver long-term value to our stockholders through enhanced operational efficiencies, improved product offerings, shared services and strong human capital. We have worked together diligently to close this transaction over the past several months, and will push forward with that same intensity." Under the merger agreement, Wendy's shareholders received 4.25 shares of Triarc's Class A common stock for each common share of Wendy's. In addition, each outstanding share of Triarc Class B common stock, Series 1, was converted into one share of Triarc Class A common stock, resulting in a post-merger company with a single class of common stock. Commencing on Sept. 30, 2008, the combined company traded under the symbol "WEN" on the New York Stock Exchange. In addition, the company launched a new corporate web site at http://www.wendysarbys.comconcurrently with the opening of the stock market on that date. The company's Board of Directors was expanded from 11 to 12 members. As previously announced, Russell V. Umphenour, Jr. has resigned and two former Wendy's directors, Janet Hill and J. Randolph Lewis, have been appointed to the Board of Directors. Additionally, Roland C. Smith has assumed the position of President and Chief Executive Officer of Wendy's/Arby's Group and CEO of Wendy's, Thomas A. Garrett has assumed the role of President and Chief Executive Officer of Arby's, Michael I. Lippert has assumed the role of Chief Operating Officer of Arby's, J. David Karam has assumed the position of President of Wendy's, Stephen D. Farrar has assumed the position of Chief Operating Officer of Wendy's and Kenneth C. Calwell has assumed the position of Chief Marketing Officer of Wendy's. Nelson Peltz, non-executive Chairperson of the Board of Directors of Wendy's/Arby's Group, said, "Our Board is very pleased to welcome Janet Hill and Randy Lewis and we look forward to working with them as we build our new restaurant company. We would also like to thank Russ Umphenour for his valuable contributions to the Triarc Board over the years. We wish him all the best in his future endeavors." Wendy's/Arby's Group will hold a conference call for analysts and investors in early November to discuss third quarter financial results, as well as to provide an update on the progress of the combined company's merger integration activities. About Wendy's/Arby's Group, Inc. Wendy's/Arby's Group, Inc. -- http://www.wendysarbys.com-- is a quick-service restaurant company in the United States and is the franchisor of the Wendy's(R) and Arby's(R) restaurant systems. The combined restaurant systems include more than 10,000 restaurants in 50 states and 21 countries worldwide. About Triarc Companies Inc. Triarc Companies Inc. (NYSE: TRY.B or TRY) -- http://www.triarc.com/-- is a holding company and, through its subsidiaries, is the franchisor of the Arby's restaurant system and the owner of approximately 94% of the voting interests, 64% of the capital interests and at least 52% of the profits interests in Deerfield & Company LLC, an asset management firm. The Arby's restaurant system is comprised of approximately 3,600 restaurants, of which, as of Dec. 31, 2006, 1,061 were owned and operated by the company's subsidiaries. Deerfield & Company LLC, through its wholly-owned subsidiary, Deerfield Capital Management LLC, is a Chicago-based asset manager offering a diverse range of fixed income and credit-related strategies to institutional investors with about $13.2 billion under management as of Dec. 31, 2006. About Wendy's International Based in Dublin, Ohio, Wendy's International Inc. (NYSE: WEN) -- http://www.wendysintl.com/-- is one of the world's largest and most successful restaurant operating and franchising companies, with more than 6,300 Wendy's Old Fashioned Hamburgers restaurants in North America and more than 300 international Wendy's restaurants. * * * As reported in the Troubled Company Reporter on Aug. 13, 2008, Moody's Investors Service stated that the ratings of Wendy's International Inc. remain on review for possible downgrade after the company's disclosure in its most recent 10-Q filing that it does not intend to renew its $200 million revolving credit facility that expires on Sept. 1, 2008. Ratings on review for further possible downgrade are: (i) corporate family rating at Ba3; (ii) probability of default rating at Ba3; (iii) senior unsecured notes rating at Ba3; (iv) senior unsecured shelf rating at (P)Ba3; (v) subordinated shelf at (P)B2; and (vi) preferred stock shelf at (P)B2. TROPICANA ENT: Wants to Assume Control of Atlantic City Casino -------------------------------------------------------------- Tropicana Entertainment, LLC intends to submit an application to the New Jersey Casino Control Commission for permission to assume operational control over its Atlantic City Casino & Resort. The company stated that the application is a key component in a reorganization framework that contemplates a minimum acceptable sale price for the casino of $950 million in cash. The framework is supported by the official creditors committee in Tropicana's Chapter 11 cases. In the Delaware filing, Tropicana said that if it were to assume control of the casino it would petition to have the property integrated with its other holdings and placed under the jurisdiction of the Delaware Bankruptcy Court. That move would give Tropicana's new management the ability to tap financing and other resources to make needed capital improvements to the oceanfront gaming facility. "Our creditors, our employees and our neighbors in Atlantic City cannot afford to have this marquee Atlantic City property purchased at a severely depressed price," Scott C. Butera, Tropicana CEO, said. "Instead of engaging in a forced sale in the midst of an unprecedented financial crisis, we want to reinvigorate the management of the property, make significant investments in needed upgrades, and assess the options. It just seems like the prudent thing to do for everyone involved." The Court filing provided a timeline for addressing concerns of regulators, creditors, taxpayers and other stakeholders. Tropicana said that within 45 days of regaining control, it would submit a detailed work plan for upgrading casino operations and performance. No later than 60 days after that plan is submitted, the company said it would deliver its assessment on how to achieve the highest value for the casino. If the best option is a sale, then Tropicana pledged to conduct an auction and would contemplate asking the bankruptcy court to authorize a sale of the casino at a price of at least $950 million, subject to Tropicana's exercise of its fiduciary duty to maximize value for creditors. On the other hand, if the best value alternative is to defer the sale option and continue operating the casino, then Tropicana will include the property in its Chapter 11 reorganization plan. Tropicana's reorganization plan will reconfirm the company's prior termination of all agreements and relationships with William J. Yung and any and all of his business entities. The emergent Tropicana will have entirely new ownership and expects to have the necessary capital to support the company's longer range business plan. Tropicana also says that its plan will provide that Mr. Yung's existing ownership interests be eliminated such that he will have no ownership role, involvement or any other interest whatsoever in the reorganized company. The new management team is headed by CEO Scott C. Butera. Since taking over he has brought in top level casino executives to help revitalize the Tropicana brand and bring a new level of management excitement to Atlantic City. Robert G. Yee, a veteran gaming executive, leads Mr. Butera's operating team and oversees casino operations. He has more than 30 years of gaming experience, nearly half of it gained at Atlantic City-based companies. He is the former president of Paris/ Bally's Hotels & Casino Resorts in Las Vegas, where he was responsible for gaming, hotel, food and beverage, retail, entertainment and marketing. "[Mr. Yee] brings our organization precisely the kind of operating know-how that we need to sharpen our brand offerings and to guide the development of the management and control systems we need to achieve operating excellence," Mr. Butera said. "What impresses us most about him is his deep working knowledge of the casino business and his hands-on style." >From 1996-2003, Mr. Yee held senior management positions with Casino Windsor (CEO) and Casino Rama (CEO) in Canada. From 1981 to 1995, he was in casino operations management with Playboy, Pratt, and Trump International, all in Atlantic City, and with Carnival Hotels and Casinos in Miami and Nassau. Mr. Yee joins a group of recently named company officers who have an average experience level in excess of 20 years. Bob Kocienski, former head of finance for the Mirage and Golden Nugget in Las Vegas, heads the finance team. Marc Rubinstein, the new chief legal officer, served in similar roles for Wynn and Caesars Palace. Cass Palmer, formerly with Boyd Gaming, now leads the company's human resources group. The Tropicana management team also includes newly appointed and experienced vice presidents: Charles H. Barry is the new head of security and surveillance; Joseph M. Long is the company's chief information officer; and Elizabeth Guth is the new head of risk management. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The Court has extended the Debtors' exclusive period to file a plan through and including January 12, 2009, and to solicit votes on the plan through and including March 13, 2009. (Tropicana Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) US DATANET: Case Summary & 48 Largest Unsecured Creditors --------------------------------------------------------- Debtor: US Datanet Corporation aka USA Datanet 318 South Clinton Street, Suite 502 Syracuse, NY 13202 Bankruptcy Case No.: 08-32560 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- USD CLEC, Inc. 08-32561 USD Management and Network Services, Inc. 08-32562 Type of Business: The Debtors provide telecommunication services. http://www.usadatanet.com Chapter 11 Petition Date: October 3, 2008 Court: Northern District of New York (Syracuse) Judge: Margaret M. Cangilos-Ruiz Debtor's Counsel: John R. Weider, Esq. jweider@hselaw.com Harter, Secrest & Emery LLP 1600 Bausch & Lomb Place Rochester, NY 14604 Tel: (585)232-6500 Fax: (585)232-2152 Estimated Assets Estimated Debts ---------------- --------------- US Datanet Less than $50,000 $1 million to $10 million USD CLEC $1 million to $1 million to $10 million $10 million USD Management $1 million to $1 million to $10 million $10 million A. US Datanet's list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/califnb08-32560.pdf B. USD CLEC's list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/califnb08-32561.pdf C. USD Management's list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/califnb08-32562.pdf US ENERGY: Says Well Problem Requires Exclusivity Extension ----------------------------------------------------------- Bill Rochelle of Bloomberg News reports that the U.S. Energy Systems, Inc., and its debtor-affiliates asked the U.S. Bankruptcy Court for the Southern District of New York for an extension of their exclusive right to solicit votes for two Chapter 11 plans because of unexpected technical problems with a natural gas well in the U.K. The disclosure statement to the Plans have not been yet filed, according to the report. The Debtors, according to the report, disclosed in a court filing on Oct. 1 that they shut down the electric generating plant in the U.K. for maintenance and in the process was required to shut down the gas well that supplied most of the energy for the plant. Unexpectedly, the gas well couldn't be restarted, probably because of the penetration of water into the well, according to the report. New wells, according to the report, must be drilled early next year before the generating plant can be returned to full production. The Debtors say the problems changed "short term economics" and will require amending the proposed plans, according to the report. The Debtors say they're not aware of anyone else "interested in promulgating a plan," according to the report. The Court has set a hearing on Oct. 14, 2008, to consider extending the exclusive period as requested, according to the report. About U.S. Energy Based in Avon, Connecticut, U.S. Energy Systems Inc. (Pink Sheets: USEY) -- http://www.usenergysystems.com/-- owns green power and clean energy and resources. USEY owns and operates energy projects in the United States and United Kingdom that generate electricity, thermal energy and gas production. The company filed for Chapter 11 protection on Jan. 9, 2008 (Bank. S.D.N.Y. Case No. 08-10054). There are 34 affiliates who filed for separate Chapter 11 petitions. Peter S. Partee, Esq., at Hunton & Williams LLP, represents the Debtor in its restructuring efforts. Jefferies & Company, Inc. serves as the company's financial advisor. The Debtor also selected Epiq Bankruptcy Solutions LLC as noticing, claims and balloting agent. The Official Committee of Unsecured Creditors has yet to be appointed in these cases by the U.S. Trustee for Region 2. When the Debtors filed for protection from their creditors, they listed total assets of US$258,200,000 and total debts of US$175,300,000. VERENIUM CORP: Amends Employment Agreement with CEO Carlos Riva --------------------------------------------------------------- Verenium Corporation disclosed in a Securities and Exchange Commission filing that it entered into an amended and restated employment agreement with Carlos A. Riva, the Company's President, Chief Executive Officer, and a member of the Board of Directors of the Company. The Amended Employment Agreement amends and restates the employment agreement entered into between the Company and Mr. Riva on June 20, 2007. Mr. Riva will be paid a monthly base salary of $41,250, and will be eligible to receive an annual performance-based incentive bonus of up to a maximum of 60% of his base salary earned during the period. The Company also has entered into new employment agreements with each of William H. Baum, Gerald M. Haines II, Mary Ellen Jones, John R. Malloy, Jr., and Janet Roemer. The Executives will be paid base salaries at the semi-monthly rates of $15,309.25, $11,666.66, $9,843.75, $12,016.66, and $11,666.66, respectively, and each will be eligible to receive an annual performance-based incentive bonus up to a maximum of 50% of his or her base salary earned in that period. The Amended Employment Agreement with Mr. Riva amends the terms of the option to purchase 1,000,000 shares of Company common stock Mr. Riva received pursuant to the Original Agreement. The Company said 624,146 of the Options will remain time-based options and will vest as originally intended over a 4-year period, with 1/12 of the Time Based Options vesting on Sept. 30, 2008, and an additional 1/12 of the Time Based Options vesting on the final day of each quarter of each calendar year thereafter until all Time Based Options have vested. The Company said 375,854 of the Options will be performance-based options and will vest seven years from the date of grant of the Options, provided that Mr. Riva remains employed by the Company until such time. The Performance Based Options are also subject to accelerated vesting upon the achievement of specific performance goals to be set by the Compensation Committee of the Board of Directors, the achievement of which would cause a portion of the Performance Based Options to be converted to options that will vest in equal monthly installments over a four year period from the date of initial grant. During the term of the Amended Employment Agreement and the Employment Agreements, Mr. Riva and the Executives shall be entitled to receive benefits similar to those that the Company makes available to other similarly situated employees. In the event that Mr. Riva or an Executive is terminated without cause or resigns for good reason, the Company will pay the affected individual's severance pay in the amount of his or her then-current annual base salary, plus a pro rated Bonus Amount equal to the higher of (i) the individual's Bonus Amount for the year in which the termination occurs, or (ii) the average Bonus Amount paid to the terminated individual in the two fiscal years prior to his or her termination date. The Severance Payment will be paid in equal installments over a period of 12 months and the terminated individual will also be eligible to receive 12 months of COBRA payments for health and dental benefits. Additionally, the vesting of the terminated individual's stock options will accelerate in the event that he or she is terminated without cause or resigns for good reason. The vesting of the terminated individual's Time Based Options, Converted Performance Based Options and restricted stock will automatically accelerate as if the individual had been employed by the Company for an additional twenty-four months as of the date of the termination and shall no longer be subject to forfeiture or a right to repurchase by the Company as of the date of termination. Additionally, in the case of Mr. Riva, the Board or the Compensation Committee will determine, based upon certain agreed guidelines, if a portion of the Performance Based Options that, at the time of termination, have not yet become Converted Performance Based Options, should be treated as Converted Performance Based Options and be accelerated as if Mr. Riva had been employed by the Company for an additional 24 months as of the date of the termination. In the event that Mr. Riva or an Executive is terminated without cause or resigns for good reason within 15 months following the effective date of a change of control of the Company, he or she shall receive all the Severance Payments and benefits. In addition, all Time Based Options and Converted Performance Based Options that are unvested will be immediately accelerated such that they will be fully vested. Also, the vesting of any Performance Based Options that have not become Converted Performance Based Options shall be accelerated so that such options shall vest in substantially equal monthly installments, commencing from the date of the change in control until the earlier of the original vesting date of such options, or the date which is four years after the change in control. About Verenium Corp. Based in Cambridge, Massachusetts, Verenium Corporation (Nasdaq: VRNM) -- http://www.verenium.com/-- is engaged in the development and commercialization of next-generation cellulosic ethanol, an environmentally-friendly and renewable transportation fuel, as well as high-performance specialty enzymes for applications within the alternative fuels, specialty industrial processes, and animal nutrition and health markets. Going Concern/Possible Bankruptcy As reported in the Troubled Company Reporter on April 1, 2008, Ernst & Young LLP, in San diego, expressed substantial doubt about Verenium Corporation'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 operating losses and accumulated deficit of $437.1 million at Dec. 31, 2007. Based on the company's operating plan, its existing working capital is not sufficient to meet the cash requirements to fund the company's planned operating expenses, capital expenditures, and working capital requirements through Dec. 31, 2008, without additional sources of cash or the deferral, reduction or elimination of significant planned expenditures. The company's plan to address the expected shortfall of working capital is to generate additional financing through a combination of corporate partnerships and collaborations, federal and state grant funding, incremental product sales, selling or financing assets, and, if necessary and available, the sale of equity or debt securities. If the company is unsuccessful in raising additional capital from any of these sources, it will defer, reduce, or eliminate certain planned expenditures. The company said it will continue to consider other financing alternatives including but not limited to, a divesture of all or part of its business. If the company cannot obtain sufficient additional financing in the short-term, it may be forced to restructure or significantly curtail its operations, file for bankruptcy or cease operations. VIACK CORPORATION: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Viack Corporation 14811 N. Kierland Boulevard, Suite 100 Scottsdale, AZ 85254 Bankruptcy Case No.: 08-13582 Type of Business: The Debtor provides communication and encryption softwares. See: http://www.viack.com/ Chapter 11 Petition Date: October 3, 2008 Court: District of Arizona (Phoenix) Judge: George B. Nielsen Jr. Debtor's Counsel: Michael W. Carmel, Esq. michael@mcarmellaw.com Michael W. Carmel, Ltd. 80 E. Columbus Avenue Phoenix, AZ 85012-4965 Tel: (602) 264-4965 Fax: (602) 277-0144 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/azb08-13582.pdf WESTAFF INC: Has New Forbearance Deal with Wells Fargo, et al. -------------------------------------------------------------- Westaff Inc. reached a new forbearance agreement with U.S. Bank National Association and Wells Fargo Bank, National Association. Westaff CEO and chairman Michael T. Willis further outlined operational steps designed to set the stage for renewed growth. Westaff entered into a Second Amended and Restated Forbearance Agreement with U.S. Bank National Association and Wells Fargo Bank, National Association effective Sept. 30, 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 through Nov. 21, 2008, as a result of certain events of default under its credit facility which occurred on April 19, 2008. "The Banks willingness to grant an additional period of forbearance is very favorable for the company and we are committed to working diligently and cooperatively with our banking partners to agree upon a longer-term resolution," Westaff CEO and Chairman Michael T. Willis, commented. "Westaff is continuing to focus on growing our U.S. operations and achieving additional milestones toward improving our business." Mr. Willis underlined that the Forbearance Agreement has a positive effect in that it allows the Company to focus on ongoing operations. Willis added that at present, the credit facility's sole purpose is to provide collateral for Westaff's workers' compensation insurance program. "Westaff has sufficient working capital to fund our operations and strategic growth objectives. Our business remains sound, and we are continuing to accomplish our financial, sales and customer service objectives," said Willis. "The recent sale of our Australia and New Zealand subsidiaries, whereby the company expects to receive net cash proceeds of approximately $7.5 million following payment of taxes, transaction expenses and repaying subsidiary indebtedness, underscores this fact. The recently reported $3.0 million loan from Westaff's largest stockholder, DelStaff, LLC, also demonstrates the positive support that we have from our largest investor." 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. * * * The company has incurred operating losses and negative operating cash flow since the second quarter of fiscal 2007, offset by slight operating income in the fourth quarter of fiscal 2007. The company says it it expects to incur additional losses in the future, particularly because of current soft economic conditions. In addition, the company is currently in default under the primary credit facility that it uses to finance its operations. If the company is unable to obtain a waiver or continued forbearance from the U.S. Bank National Association on acceptable terms, the company may be unable to access the funds necessary for its liquidity requirements or may be unable to obtain letters of credit under the facility needed for the company to obtain workers' compensation insurance. In that case, its business and operating results would be adversely affected. WESTAFF INC: Selling Aussie and New Zealand Units to Humanis Blue ----------------------------------------------------------------- Westaff, Inc., disclosed in a Securities and Exchange Commission filing that it has entered into a definitive agreement to sell its Australia and New Zealand subsidiaries to Humanis Blue Pty Ltd., an Australian company and subsidiary of Humanis Group Limited, in a transaction valued at approximately US$15 million, consisting of a combination of cash and debt. Humanis is a Melbourne, Australia-based company involved in the accumulation of recruitment providers in select verticals and Westaff's Australia and New Zealand businesses are its first acquisition. Upon completion of the transaction, the divestiture would mark Westaff's exit from non-core international operations, and represent the culmination of several strategic steps that Westaff has taken with the objective of improving its business and its operations. "This is an extremely positive step, and one that would position Westaff to sharpen its focus on the strength of its United States operations," commented Westaff CEO and Chairman Michael T. Willis. "In addition, we expect that this sale would provide us with the opportunity to re-invest in our core business and pursue our growth objectives." Upon completion of the sale, Westaff intends to focus on establishing and executing a new strategy to leverage its core competencies, experience, and market understanding. Westaff expects to announce these new strategic goals and related operational milestones in the near future upon completion of the sale. Under the terms of the agreement, Humanis will purchase Westaff's Australia and New Zealand subsidiaries for approximately US$13.3 million in cash at closing and US$2.5 million in the form of a deferred payment promissory note due one year after closing. Westaff expects to receive net cash proceeds of approximately US$7.5 million following payment of taxes, banking and legal fees and the repayment of certain outstanding debts. The transaction is subject to customary closing conditions and is expected to close on Nov. 3, 2008. Approval by Westaff's shareholders is not a condition to the closing of the sale. 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. * * * The company has incurred operating losses and negative operating cash flow since the second quarter of fiscal 2007, offset by slight operating income in the fourth quarter of fiscal 2007. The company says it it expects to incur additional losses in the future, particularly because of current soft economic conditions. In addition, the company is currently in default under the primary credit facility that it uses to finance its operations. If the company is unable to obtain a waiver or continued forbearance from the U.S. Bank National Association on acceptable terms, the company may be unable to access the funds necessary for its liquidity requirements or may be unable to obtain letters of credit under the facility needed for the company to obtain workers' compensation insurance. In that case, its business and operating results would be adversely affected. WESTAFF INC: Names Sean Wong as Vice President Controller --------------------------------------------------------- Westaff, Inc. disclosed in a Securities and Exchange Commission filing it has appointed Sean Wong as Vice President, Controller. Mr. Wong assumes this role immediately and is responsible for financial and accounting functions of the company, including internal and SEC financial reporting, as well as ensuring compliance with company financial and accounting policies and procedures, and creating and maintaining effective internal controls in a public environment. Mr. Wong Sean, a CPA, has over 19 years of experience in the accounting arena and over a decade of experience as a Controller. He most recently served the Controller for Tiburon, Inc. where he served for more than three years prior to joining Westaff. He holds a BA in Business Economics from the University of California, Santa Barbara. "I am extremely excited to be able to join the Westaff team," Mr. Wong commented. "There have been an impressive number of very strong new hires and I feel privileged to be among them. I have very high expectations for Westaff and for the role I will play there." "Sean is an established and proven accounting professional and will certainly fit in with the strong management team that has been assembled here in recent months," noted Westaff CFO Christa Leonard. "I am confident that Sean's experience coupled with his reputation and his can-do attitude will make him an integral part of our Accounting team." 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. * * * The company has incurred operating losses and negative operating cash flow since the second quarter of fiscal 2007, offset by slight operating income in the fourth quarter of fiscal 2007. The company says it it expects to incur additional losses in the future, particularly because of current soft economic conditions. In addition, the company is currently in default under the primary credit facility that it uses to finance its operations. If the company is unable to obtain a waiver or continued forbearance from the U.S. Bank National Association on acceptable terms, the company may be unable to access the funds necessary for its liquidity requirements or may be unable to obtain letters of credit under the facility needed for the company to obtain workers' compensation insurance. In that case, its business and operating results would be adversely affected. WREN ALEXANDER: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Wren Alexander Investments, LLC 19026 Stone Oak Parkway #210B San Antonio, TX 78258 Bankruptcy Case No.: 08-52914 Chapter 11 Petition Date: October 3, 2008 Court: Western District of Texas (San Antonio) Judge: Ronald B. King Debtor's Counsel: Dean William Greer, Esq. dwgreer@sbcglobal.net 2929 Mossrock, Suite 117 San Antonio, TX 78230 Tel: (210) 342-7100 Fax: (210) 342-3633 Total Assets: $5,850,447 Total Debts: $147,690,000 Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ nternal Revenue Service 4th Lien; $144,000,000 P. O. Box 21126 Value: Philadelphia, PA 19114 $4,300,000 Cox & Smith, Inc. Legal Fees $13,000 112 E. Pecan #1800 San Antonio, TX 78205 XRITE INC: Names New Four Board Members Under Investment Deals -------------------------------------------------------------- X-Rite, Incorporated, disclosed in a Securities and Exchange Commission filing that pursuant to the terms and conditions set forth in an Investment Agreement dated Aug. 20, 2008, with OEPX, LLC, a Delaware limited liability company managed by One Equity Partners, the Company has agreed to cause three individuals nominated by OEP to be elected or appointed to the Board. In addition, pursuant to the terms and conditions of the Investment Agreement, dated Aug. 20, 2008, with Sagard Capital Partners, L.P. and Tinicum Capital Partners II, L.P., Tinicum Capital Partners II Parallel Fund, L.P. and Tinicum Capital Partners II Executive Fund L.L.C., the Company has also agreed to cause one person nominated by Sagard to be elected or appointed to the Board. On Sept. 22, 2008, Stanley W. Cheff, Mario Fontana, Massimo S. Lattmann and Paul R. Sylvester tendered their conditional resignations from the Board of Directors of the Company, effective upon and subject to the closing of the Issuances. On Sept. 22, 2008, the Board conditionally appointed David M. Cohen, David A. Eckert and Colin M. Farmer as the OEP Nominees and Daniel M. Friedberg as the Sagard Nominee, effective upon and subject to the closing of the Issuances. Pursuant to the terms and conditions in the Investment Agreements, effective upon and subject to the closing of the Issuances, the new directors will be entitled to certain rights to serve on the committees of the Board. The committees to which the new directors will be named have not yet been determined. About X-Rite X-Rite Incorporated (NASDAQ:XRIT) -- http://www.xrite.com/-- including unit Pantone Inc., develops, manufactures, markets and supports innovative color solutions through measurement systems, software, color standards and services. X-Rite serves a range of industries, including printing, packaging, photography, graphic design, video, automotive, paints, plastics, textiles, dental and medical. * * * As reported in the Troubled Company Reporter on Aug. 27, 2008, Standard & Poor's Ratings Services revised its CreditWatch on X- Rite Inc. to positive from developing. On Aug. 20, 2008, X-Rite Inc. (CCC+/Watch Pos/--) announced that it had signed a forbearance and new lender agreement and investor agreements that include a plan to substantially reduce debt, primarily through the issuance of $155 million in common equity to new and certain existing shareholders. The agreement also provides the company with access to up to $10 million on its revolving credit agreement. * George Bush Signs $700 Billion Bailout Plan Into Law ------------------------------------------------------ Greg Hitt and Deborah Solomon at The Wall Street Journal report that President George W. Bush signed into law the $700 billion bailout plan for the financial industry. As reported in the Troubled Company Reporter on Oct. 3, 2008, the Senate passed the modified $700 billion bailout package on Wednesday night, setting the stage for another vote in the House of Representatives as early as Friday. The legislation would authorize the U.S. Treasury to borrow up to $700 billion to buy illiquid mortgages, securities, and other assets that are creating instability in the nation's financial architecture. The legislation includes provisions to limit pay for executives at firms participating in the rescue and provides for tough oversight by Congress. The add-ons to the Senate bill include a 10-year, $150 billion package of business and individual tax cuts and a temporary increase in deposit-insurance limits. According to WSJ, details like who will administer the program and how are still to be worked out. The report states that the bill was passed amid new evidence from the labor market that the U.S. is heading further toward recession. House Speaker Pelosi, according to the report, said that the bailout package is the beginning of government rescue efforts. Citing a person familiar with the Treasury, WSJ states that after hiring asset managers to run the bailout program, the Treasury is likely to start with securities "where there's enough out there and the market is thick enough so the auction can be done well," and the purchases would be made through "a reverse auction," in which institutions compete to sell assets. WSJ relates that the Treasury will hire about two dozen full-time workers for the program, including lawyers, accountants and those with financial-market expertise. WSJ reports that the bailout program hasn't been successful in unfreezing credit markets so far, with short-term money markets remaining distressed. Treasury Secretary Henry Paulson will appoint Neel Kashkari to oversee the bailout program, Deborah Solomon at WSJ reports, citing people familiar with the matter. According to WSJ, the sources said that Mr. Paulson has relied heavily on Mr. Kashkari as his adviser during the financial crisis. Mr. Kashkari is the Treasury's assistant secretary for international affairs and a former Goldman Sachs Group Inc. banker. The report says that he will be appointed as interim head of Treasury's new Office of Financial Stability this week, and will leave the post after January 2009, when the George W.Bush administration ends. Mr. Kashkari's appointment is awaiting the Senate's approval, the report states. WSJ relates that Mr. Kashkari will oversee some key decisions on the bailout program's operations. According to the report, the Treasury will hire about two dozen lawyers, accountants, and other staff for the program. The report states that the Treasury is trying to determine how to handle conflicts of interest in the program, especially with regard to the asset managers it hires. * California May Ask $7BB Emergency Loan from Federal Government --------------------------------------------------------------- Randal C. Archibold of New York Times quotes Gov. Arnold Schwarzenegger of California saying on Oct. 3, 2008, that the state, in a few weeks, could run out of cash to pay for basic services. State officials have told the U.S. Treasury Department that it may need a $7 billion emergency loan from the federal government because it is running out of cash and has not been able to borrow more, according to the report. Mr. Schwarzenegger and state officials said they viewed such a loan as a last resort in the event the government recovery plan did not sufficiently unlock the credit market, according to the report. State officials, according to the report, said they hoped that the $700 billion federal bailout of the financial system approved by the House of Representatives would help open credit markets that have balked at providing the kind of short-term financing California and other states and local governments routinely rely on to keep operating. Asked what would happen if the markets or the government did not come through, Mr. Schwarzenegger replied, "This is no such thing in my vocabulary as, 'what if not.' We will," according to the report. In an interview on Friday, State Treasurer Bill Lockyer, according to the report, said the state routinely received short-term loans in the fall to cover payments until state coffers refill in the spring from tax revenue and other sources. Analysts said the credit problems in the State in part reflected years of budget problems lingering from the economic downturn after the Sept. 11, 2001, attacks, according to the report. * Massachusetts Asks About Federal Loan Amid Market Worries ----------------------------------------------------------- Beth Healy of The Boston Globe reports on Oct. 4, 2008, that Timothy Cahill, the Treasurer of the State of Massachusetts, has asked U.S. Treasury and Federal Reserve Bank of Boston about lending the state money under the same favorable terms it has given banks and firms during the financial crisis. Mr. Cahill's requests was prompted by the State's inability to borrow from the short-term debt markets, according to Ms. Healy. The financial turmoil has caused credit markets to stop lending, or to charge prohibitive rates, according to Ms. Healy. The State's borrowing problems come as it deals with a $223 million shortfall in projected tax collections during the first quarter of the state's fiscal year, according to Ms. Healy. On Oct. 2, 2008, Gov. Deval Patrick announced the first of what could be a series of cuts to programs and operations to deal with the sagging collections, according to Ms. Healy. Massachusetts has enough money to cover its expenses for the coming weeks, Mr. Cahill said according to Ms. Healy. But a low- rate loan would ease a cash shortfall if the credit problems persist, according to Ms. Healy. Federal officials have not responded to his request, Mr. Cahill said according to Ms. Healy. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 13, 2008 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference Standard Club, Chicago, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 14, 2008 TURNAROUND MANAGEMENT ASSOCIATION Annual Charity Golf Event Forest Park Golf Course, St. Louis, Missouri Contact: www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Billiards Networking Night Herbert's Billiards, Secaucus, New Jersey Contact: 908-575-7333 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Member Social Davenport Press, Mineola, New York Contact: 631-251-6296 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION View from the Bench - Bankruptcy Update Summit Club, Birmingham, Alabama Contact: www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION How to Contract with a Turnaround Manager University Club, Portland, Oregon Contact: www.turnaround.org Oct. 22, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Nevada Award Night McCormick & Schmick's, Las Vegas, Nevada Contact: www.turnaround.org Oct. 23, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Election Oriented TBD, Phoenix, Arizona Contact: www.turnaround.org Oct. 23, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds: A Panel of Professionals TBA, Rochester, New York Contact: www.turnaround.org Oct. 23-24, 2008 AMERICAN CONFERENCE INSTITUTE Distressed Assets Boot Camp TBD, London, United Kingdom Contact: www.americanconference.com Oct. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION State of the Capital Markets Citrus Club, Orlando, Florida Contact: www.turnaround.org/ Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Oct. 29-30, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Corporate Governance Meetings Marriott, New Orleans, Louisiana Contact: www.turnaround.org Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; www.renaissanceamerican.com Oct. 31, 2008 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Hilton, Frankfurt, Germany Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 6, 2008 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Coach House Diner & Restaurant, Hackensack, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 11, 2008 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference Marriott, Troy, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Case Study Summit Club, Birmingham, Alabama Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds:A View From Workout Consultants TBA, Buffalo, New York Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Social TBD, Melville, New York Contact: 631-251-6296 or www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Dinner Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Nov. 17-18, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Distressed Investing Contact: 800-726-2524; 903-595-3800; www.renaissanceamerican.com Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Special Program Tournament Players Club at Jasna Polana, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Nov. 20, 2008 TURNAROUND MANAGEMENT ASSOCIATION Senior Housing & Long Term Care Washington Athletic Club,Seattle, Washington Contact: www.turnaround.org Nov. 27, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Chris Kaup TBD, Phoenix, Arizona Contact: www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Party McCormick & Schmick's, Las Vegas, Nevada Contact: 702-952-2480 or www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function Terminal City Club, Vancouver, British Columbia Contact: 503-768-4299 or www.turnaround.org Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ Dec. 8, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Gathering TBD, Long Island, New York Contact: 631-251-6296 or www.turnaround.org Dec. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer Washington Athletic Club, Seattle, Washington Contact: 503-768-4299 or www.turnaround.org Dec. 11, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer University Club, Portland, Oregon Contact: 503-768-4299 or www.turnaround.org Dec. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer TBD, Phoenix, Arizona Contact: 623-581-3597 or www.turnaround.org Dec. 31, 2008 TURNAROUND MANAGEMENT ASSOCIATION Sponsorships - Annual Golf Outing, Various Events TBA, New Jersey Contact: 908-575-7333 or www.turnaround.org Jan. 21-22, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 5-7, 2009 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Casurina, Grand Cayman Island, AL Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 25-27, 2009 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 13, 2009 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Beverly Wilshire, Beverly Hills, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OFBANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 15-18, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ * * * Featured Conferences Renaissance American Management and Beard Conferences presents Oct. 30-31, 2008 Physician Agreements & Ventures The Millennium Knickerbocker Hotel - Chicago Brochure will be available soon! Nov. 17-18, 2008 Distressed Investing The Helmsley Park Lane - New York Brochure will be available soon! * * * Beard Audio Conferences presents Bankruptcy and Restructuring Audio Conference CDs More information and list of available titles at: http://beardaudioconferences.com/bin/topics?category_id=BAR * * * The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Julybien D. Atadero, Sheryl Joy P. Olano, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***