/raid1/www/Hosts/bankrupt/TCR_Public/090119.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, January 19, 2009, Vol. 13, No. 18
Headlines
A21 INC: Completes Auction of Biz; Court Confirms Plan
AAR CORP: Moody's Withdraws 'Ba3' Ratings for Business Reasons
ACCURIDE CORP: Reduced Auto Demand Cues Moody's Junk Rating
APEX SILVER: Wants to Hire Epiq Bankruptcy as Claims Agent
APEX SILVER: Wants to Hire Cleary Gottlieb as Counsel
APEX SILVER: Gets Initial OK to Access $15 Mil. Somitomo Facility
ARG ENTERPRISES: Files for Chapter 11 Bankruptcy in Delaware
ARG ENTERPRISES: Files for Bankruptcy to Sell All Assets
ARG ENTERPRISES: Case Summary & 30 Largest Unsecured Creditors
ARMADA SHIPPING: New York Court Signs Chapter 15 Petition
ARTHROCARE CORP: Obtains Waiver of Default under Credit Agreement
ASARCO LLC: Settles Rosemont Copper Mine Dispute with Augusta
BA ENERGY: Fears Lender Will Recall Loan; Files for Bankruptcy
BALTIMORE OPERA: May Launch Opera; Orchestra Lays Off 5 Workers
BANK OF AMERICA: Gets Aid $138 Billion of Aid from U.S. Govt.
BANK OF CLARK COUNTY: Insured Deposits Acquired by Umpqua Bank
BIOHEART INC: Failure to Pay Loan May Lead to Bankruptcy Filing
BRAZOS STUDENT: Fitch Downgrades Education Loan Bonds to 'BB'
CANADIAN TRUST: C$32-Bil. Debt Swap Plan to Close Jan. 21
CANTERBURY WOODS: Files for Chapter 11 Bankruptcy Protection
BURLINGTON COAT: Moody's Downgrades Corporate Family Rating 'B3'
CALPINE CORP: Files Registration Statement as Required Under Plan
CANWEST LIMITED: S&P Cuts Sr. Sec. Debt Rating to 'B-'
CANWEST MEDIA: S&P Junks Corp. Credit Rating on Likely Profit Drop
CHARTER COMMS: Hires Advisors for Potential Bankruptcy Filing
CHARTER COMMS: Interest Payment Failure May Lead to Bankruptcy
CHARTER COMMUNICATIONS: Fitch Downgrades Issuer Rating to 'C'
CHARTER COMMUNICATIONS: S&P Downgrades Corp. Credit Rating to 'D'
CHECKER MOTORS: In Ch. 11, Needs Union Cuts to Avert Liquidation
CHECKER MOTORS: Seeks to Fast Track Labor Cost Reductions
CHECKER MOTORS: Case Summary & 20 Largest Unsecured Creditors
CHRYSLER FINANCIAL: Obtains Access to $1.5 Billion Federal Aid
CHRYSLER LLC: Lending Unit Gets Access to $1.5-Bil. Federal Aid
CIRCUIT CITY: InterTAN Remains Open, Not Part of Liquidation
CIRCUIT CITY: To Liquidate; Equity Holders Out of the Money
CITIGROUP INC: Enters Into Definitive Agreements With Gov't
CITIGROUP INC: Posts $8.29 Bil. Net Loss in Fourth Quarter 2008
CITIGROUP INC: Will Reorganize Into Two Operating Units
CITIGROUP INC: Whalen Says Bankruptcy is End Game
CLEAR CHANNEL: Will Lay Off 7% of U.S. Staff
COMMERCE BANK: Deposits Acquired by Republic Bank of Chicago
COMMUNITY TRUST: Forgoes $68,000,000 Treasury Funding Commitment
DELTA AIR: Technicians Seniority Agreement Approved
DOUGLAS JOHNSON: Approves Fixed Tag Sale of Household Items
DOUGLAS JOHNSON: Files Schedules of Assets and Liabilities
ESTATE FINANCIAL: May Employ Beall & Burkhardt as Counsel
ESTATE FINANCIAL: May Employ FTI Consulting as Financial Advisors
FARMINGTON CENTER: Files for Chapter 11 Bankruptcy Protection
FEDERAL FAMILY: Fitch Downgrades Rating on Two Classes to 'BB'
FIRST ALLMERICA: Moody's Lifts Insurance Rating to A2 From Ba1
FORD MOTOR: Unit Starts Talks With Treasury
GANNETT CO: Sells Tucson Citizen Assets; May Close Newspaper
GAINEY CORP: May Use Cash Collateral Until May 29
GOODY'S LLC: Going-Out-of-Business Sale is Underway
INDEPENDENT BANK: Fitch Assigns 'BB' Rating on $78.2 Mil. Stocks
INTERTAN CANADA: To Continue Operations, Not Part of Liquidation
JFK INTERNATIONAL: Moody's Affirms Ratings on Air Terminal Bonds
JIM PALMER: ActionView Seeks Disapproval of Disc. Statement
JOEL KRON: Files Chapter 11 Plan of Reorganization
JOHN GANTES: Lists $2.7 Mil. in Assets & $345.3 Mil. in Debts
KRONOS INTERNATIONAL: Moody's Downgrades Corporate Rating to 'B2'
LANDAMERICA FINANCIAL: Sec. 341 Meeting Slated for January 23
LEE ENTERPRISES: Receives Jan. 30 Extension of Covenant Waiver
LEHMAN BROTHERS: CEO Marsal Sees Bankruptcy Exit in 2 Years
LEHMAN BROTHERS: Court Directs Appointment of Examiner
LEHMAN BROTHERS: Panel Slams NY Controllers' Bid for Trustee
LEHMAN BROTHERS: Court Extends Exclusive Periods to July 13
MASONITE INTL: Lenders Extend Forbearance Until Month's End
MEADE INSTRUMENTS: In Talks with BofA to Relax Loan Covenants
MEADWESTVACO CORP: Will Lay Off 10% of Workforce
METROPCS WIRELESS: S&P Retains 'B' Corporate Credit Rating
MIDWAY GAMES: Reaches Waiver & Forbearance Pacts with Noteholders
MILLENIUM TRANSIT: Asks Court's Ok of 3rd DIP Loan form J. Ludvik
NEW ENGLAND PELLET: Files for Chapter 11 Bankruptcy Protection
NEW YORK TIMES: In Investment Talks With Carlos Slim
NEXCEN BRANDS: Appeals Listing Council's Delisting Determination
NEXCEN BRANDS: Appoints Mark Stanko as Chief Financial Officer
NEXCEN BRANDS: Completes Bill Blass Business Sale for $10MM Cash
NEXCEN BRANDS: Financial Reports Restatement Delays 10-Q Filing
NEXCEN BRANDS: Marvin Traub Resigns from Board of Directors
NORTEL NETWORKS: Chapter 11 Filing Cues Moody's Junk Rating
NORTEL NETWORKS: Enters Administration; Ernst & Young Appointed
NORTEL NETWORKS: Obtains U.S. Court Approval of First Day Motions
NORTHEAST BIOFUELS: Moody's Cuts Ratings to 'C' on Ch. 11 Filing
PECUS ARG: Files for Chapter 11 Bankruptcy Protection
QUIKSILVER INC: Moody's Downgrades Corp. Family Rating to 'B3'
RAYMOR INDUSTRIES: Receives Default Notice; Commences BIA Case
ROUGE INDUSTRIES: Plan Filing Period Extended to March 30, 2009
SEAGATE TECHNOLOGY: Moody's Downgrades Corp. Ratings to 'Ba2'
SMURFIT-STONE CONTAINER: Fitch Junks Issuer Rating from 'B'
SMURFIT-STONE CONTAINER: High Debt Levels Cue Moody's Junk Rating
SMURFIT-STONE CONTAINER: S&P Junks Corporate Credit Rating
SPANSION INC: Fitch Downgrades Ratings on Interest Payment Delays
SPANSION INC: Moody's Downgrades Corporate Family Rating to 'Ca'
SPANSION INC: S&P Downgrades Corporate Credit Rating to 'D'
SPANSION LLC: S&P's Rating on 11.25% Sr. Unsec. Notes Tumble to D
STERLING FINANCIAL: Fitch Downgrades Individual Rating to 'C'
STEVE MCKENZIE: Will Meet With Creditors in Court on January 27
STRATEGIC RESOURCE: Files for Chapter 11 Bankruptcy Protection
TRIBUNE CO: CFO Says 2007 Opinions Say Company Was Solvent
TRIBUNE CO: Wilmington Trust Named as Successor Indenture Trustee
UNI-MART LLC: Closes College Avenue & Pugh Street Store
VALASSIS COMMUNICATIONS: S&P Junks Issue-Level Rating on Sub. Debt
VALUE FAMILY: Case Summary & 11 Largest Unsecured Creditors
VAREL FUNDING: S&P Downgrades Corporate Credit Rating to 'B-'
WATERFORD WEDGWOOD: Business as Usual for U.S. Operations
YOUNG BROADCASTING: Hires Advisors After Missing Bond Payment
YRC WORLDWIDE: Gets Waivers Until Talks Conclude in Mid-February
* DebtX to Sell $252 Million in Loans From Failed Banks
* Cadwalader's London Office to Focus on Financial Restructuring
* Paul Hastings Boosts London Practice with 7 New Partners
* Gary Graves Joins Restructuring Firm Huntley Mullaney
* Greenberg Glusker Forms Unit to Advise Investors on Madoff Scam
* Greenberg Traurig Lures Nathan Haynes from Cadwalader
* Hahn & Hessen Makes Edward Schnitzer Partner in Firm
* BOND PRICING: For the Week of Jan. 12 - Jan. 16, 2009
*********
A21 INC: Completes Auction of Biz; Court Confirms Plan
------------------------------------------------------
a21, Inc. (ATWOE.OB) said Friday that the U.S. assets of its
subsidiaries, SuperStock, Inc., and ArtSelect, Inc., and the stock
of its U.K. subsidiary, SuperStock, Limited, were sold at auction
at the United States Bankruptcy Court for the Middle District of
Florida, Jacksonville Division, which was previously announced as
part of its plan of bankruptcy:
-- RGB Venture Partners, a joint venture comprised of
Rubberball Productions LLC, Glow Images LLC, and Blend
Images LLC, was the winning bidder for the U.S. assets of
SuperStock, Inc. RGB Venture Partners will pay $2,825,000
for the U.S. assets of SuperStock, Inc.
-- Ingram Image Limited, a company incorporated in England
and Wales, was the winning bidder for the shares of
SuperStock, Ltd. Ingram Image Limited will pay $50,000
for the shares of SuperStock, Ltd.
-- Art.com, Inc., a Delaware corporation, was the winning
bidder for the assets of ArtSelect, Inc. Art.com, Inc.
will pay $1,625,000 for the assets of ArtSelect, Inc.
The Court also confirmed the Combined Plan of Liquidation. No
distributions will be available for shareholders. Unsecured
creditors will receive $125,000. The remaining proceeds will be
shared by the various secured creditors as described in the
Combined Plan of Liquidation.
About a21
a21, Inc. -- http://www.a21group.com/-- is an online digital
content company. Through SuperStock -- http://www.superstock.com;
http://www.mediamagnet.com;http://www.superstock.co.uk;and
http://www.purestockx.com-- and ArtSelect --
http://www.artselect.com;http://www.postersetc.com-- a21
delivers high quality images, art framing, and exceptional
customer service. a21 and its companies, with offices in Florida,
Iowa, and London, provide
valuable and viable choices to key business partners and customers
in the stock image, art and wall decor industries.
AAR CORP: Moody's Withdraws 'Ba3' Ratings for Business Reasons
--------------------------------------------------------------
Moody's Investors Service has withdrawn all the ratings and the
rating outlook of AAR Corp. The ratings and outlook that have
been withdrawn:
-- Corporate family rating of Ba3 - withdrawn
-- Probability of default rating of Ba3 - withdrawn
-- Stable outlook - withdrawn
Moody's has withdrawn the ratings for business reasons.
Moody's last rating action on AAR occurred on November 11, 2008
when the ratings were affirmed.
AAR Corporation, headquartered in Wood Dale, Illinois, is a
diversified provider of parts and services to the worldwide
aviation and aerospace and defense industry. Last twelve months
ended November 30, 2008 revenues were approximately $1.4 billion.
ACCURIDE CORP: Reduced Auto Demand Cues Moody's Junk Rating
-----------------------------------------------------------
Moody's Investors Service lowered Accuride Corporation's Corporate
Family and Probability of Default Rating to Caa1 from B2. In a
related action the ratings of the company's bank credit facility
were lowered to B2 from Ba3, and the rating for the senior
subordinated bonds were lowered to Caa2 from Caa1. The ratings
remain on review for further downgrade.
The downgrade of Accuride's Corporate Family Rating to Caa1
reflects reduced demand for commercial vehicles resulting from
dramatic declines in the North American general economy and
challenges in the credit markets. The company's operating
performance has deteriorated under these conditions and combined
with the expectation of continued weakness in commercial vehicle
demand, the company's credit metrics are no longer indicative of
ratings in the B category. Further, there is a high likelihood of
covenant violation.
Accuride has announced that it is seeking additional covenant
relief under its credit agreement and an extension of its
revolving credit facility. For the LTM period ending September
30, 2008, the company's EBIT/interest was approximately 0.6x
(including Moody's Standard Adjustments) and debt/EBITDA was
approximately 7.5x. Free cash flow was marginally positive for
the period. However, with industry reports of December commercial
vehicle orders being the lowest in several years, the company has
reduced its full year 2008 EBITDA and free cash flow guidance,
from levels just announced in November, to a range of $75 -80
million, and negative $30 -35 million, respectively.
The review will focus on the company's ability to achieve adequate
adjustments to the financial covenants under the bank credit
facilities in order to operate through the expected difficult
environment over the near term and maintain adequate liquidity
levels throughout this period. As part of the proposed amendment,
approximately $70 million of the senior secured term loan owned by
an affiliate of Sun Capital Securities Group, LLC would become
"last out" as to payment. Upon successful completion of the
amendment, the remaining senior secured lenders should benefit
from a higher payout priority. The review will also focus on
additional restructuring initiatives the company may take in order
to adjust its cost base to the near term environment while
preserving the ability to capitalize on the potential of industry
growth in the future. The inability to achieve sufficient
covenant relief or adequate liquidity levels may result in further
downgrades.
Demand in the commercial vehicle industry is expected to
moderately benefit over the near term from some level of pre-buy
activity in the North American heavy-duty truck market ahead of
stricter 2010 emission control standards and the increased average
age of the commercial vehicle fleet. These benefits may be muted
by continuing depressed economic conditions in North America.
Accuride maintains a leadership position in the commercial vehicle
industry with a range of products and a longstanding diversified
customer base. Previously announced restructuring actions, which
included headcount reductions, are expected to help mitigate weak
industry conditions.
Ratings lowered and under review for further downgrade:
Accuride Corporation
-- Corporate Family, Caa1 from B2
-- Probability of Default, Caa1 from B2
-- Senior secured bank credit facilities, to B2 (LGD3 30%) from
Ba3 (LGD3, 29%)
-- Senior subordinated notes, to Caa2 (LGD5, 82%) from Caa1
(LGD5, 81%)
Accuride Canada Inc.
-- Senior secured bank credit facility, to B2 (LGD3 30%) from
Ba3 (LGD3, 29%)
The last rating action was on August 5, 2008 when the Corporate
Family Rating was lowered to B2.
Accuride Corporation, headquartered in Evansville, Indiana, is a
diversified North American manufacturer and supplier of commercial
vehicle components. Principal products include wheels, wheel-end
components and assemblies, truck body and chassis parts, and
seating assemblies. Revenues in 2007 were approximately $1.0
billion.
APEX SILVER: Wants to Hire Epiq Bankruptcy as Claims Agent
----------------------------------------------------------
Apex Silver Mines Limited and affiliates Apex Silver Mines
Corporation ask the United States Bankruptcy Court for the
Southern District of New York for permission to employ Epiq
Bankruptcy solutions LLC as their notice, claims and balloting
agent.
The firm is expected to:
a) prepare and serve required notices in the chapter 11 cases,
including:
i) a notice of the commencement of the chapter 11 cases and
the initial meeting of creditors under Section 341(a) of
the Bankruptcy Code;
ii) notices of objections to claims, if necessary;
iii) notices of any hearings on a disclosure statement and
confirmation of a plan or plans of reorganization; and
iv) other miscellaneous notices as the Debtors or the Court
may deem necessary or appropriate for an orderly
administration of the chapter 11 cases.
b. Within three business days after the service of a
particular notice, prepare for filing with the Clerk's
Office a certificate or affidavit of service that includes:
i) an alphabetical list of persons on whom the notice was
served, along with their addresses; and
ii) the date and manner of service.
c) maintain copies of all proofs of claim and proofs of
interest filed in these chapter 11 cases, if necessary.
d) maintain official claims registers in the chapter 11 cases,
if necessary, by docketing all proofs of claim and proofs of
interest in a claims database that includes these
information for each claim or interest asserted:
i) the name and address of the claimant or interest holder
and any agent thereof, if the proof of claim or proof
of interest was filed by an agent;
ii) the date that the proof of claim or proof of interest
was received by Epiq and the Court;
iii) the claim number assigned to the proof of claim or
proof of interest; and
iv) the asserted amount and classification of the claim.
e) implement necessary security measures to ensure the
completeness and integrity of the claims registers, if
necessary.
f) transmit to the Clerk's Office a copy of the claims
registers on a weekly basis unless requested more or less
frequently by the Clerk's Office, if necessary.
g) maintain an up-to-date mailing list for all entities that
have filed proofs of claim or proofs of interest and make
such list available upon request to the Clerk's Office or
any party in interest, if necessary.
h) provide access to the public for examination of copies of
the proofs of claim or proofs of interest filed in the
chapter 11 cases without charge during regular business
hours, if necessary.
i) record all transfers of claims pursuant to Rule 3001(e) of
the Federal Rules of Bankruptcy Procedure and, if directed
to do so by the Court, provide notice of the transfers as
required by Bankruptcy Rule 3001(e).
j) comply with applicable federal, state, municipal, and
local statutes, ordinances, rules, regulations, orders,
and other requirements.
k) provide temporary employees to process claims.
l) comply with further conditions and requirements as the
Clerk's Office or the Court may at any time prescribe.
m) provide other claims processing, noticing, balloting, and
related administrative services as may be requested from
time to time by the Debtors.
n) act as balloting agent, which may include some or all of
these services:
i) printing of ballots including the printing of creditor
and shareholder specific ballots;
ii) preparing voting reports by plan class, creditor, or
shareholder and amount for review and approval by the
client and its counsel;
iii) coordinating the mailing of ballots, disclosure
statement and plan of reorganization to all voting and
non-voting parties and provide affidavit of service;
iv) establishing a toll-free "800" number to receive
questions regarding voting on the plan; and
v) receiving ballots at firm's headquarters, inspecting
ballots for conformity to voting procedures, date
stamping and numbering ballots consecutively, and
tabulating and certifying the results.
The Debtors have paid firm $10,000 as retainer.
The firm's professionals and their compensation rates are:
Designation Hourly Rate
----------- -----------
Senior Consultant $295
Senior Case Manager $247
Case Manager (Level 2) $202
IT Programming Consultant $165
Case Manager (Level 1) $142
Clerk
Daniel C. McElhinney, executive director of the firm, assures the
Court that the firm does not hold any interest adverse to the
Debtors' estate and is a "disinterested person" as defined in
Section 101(14) of the United States Bankruptcy Code.
Headquartered in Denver, Colorado, Apex Silver Mines Limited --
http://www.apexsilver.com-- explores and develops silver and
other mineral properties in Central and South America. The
company is based in George Town, Cayman Islands. The company and
its affiliate, Apex Silver Mines Corporation, filed for Chapter 11
protection on January 12, 2009 (Bankr. S.D. N.Y. Lead Case No.
09-10182). James L. Bromley, Esq., and Sean A. O'Neal, Esq., at
Cleary Gottlieb Steen & Hamilton LLP, represent the Debtors in
their restructuring efforts. The proposed Davis Graham & Stubbs
LLP as special purpose counsel; Jefferies & Co, Inc. as financial
advisor; and Epiq Bankruptcy Solutions LLC as claims agent. When
the Debtors filed for protection from their creditors, they listed
assets and debts between $500 million to $1 billion each.
APEX SILVER: Wants to Hire Cleary Gottlieb as Counsel
-----------------------------------------------------
Apex Silver Mines Limited and affiliates Apex Silver Mines
Corporation ask the United States Bankruptcy Court for the
Southern District of New York for permission to employ Cleary
Gottlieb Steen & Hamilton LLP as their counsel.
The firm is expected to:
a) provide advice to the Debtors with respect to their powers
and duties as debtors-in-possession in the continued
operation of their businesses and the management of their
properties;
b) take necessary or appropriate action to protect and
preserve the Debtors' estates, including prosecuting
actions on the their behalf, defending any actions
commenced against the Debtors, conducting negotiations
concerning litigation or other disputes in which they are
involved, and filing and prosecuting objections to claims
filed against the their estates;
c) prepare, on behalf of the Debtors, applications, motions,
answers, orders, reports, memoranda of law and other papers
in connection with administration of their estates;
d) represent the Debtors in negotiations with creditors, equity
holders, and parties-in-interest, including governmental
agencies and authorities;
e) represent the Debtors in negotiations regarding possible
dispositions of assets;
f) negotiate and prepare on behalf of the Debtors one or more
plans of reorganization and all related documents; and
g) perform other necessary or appropriate legal services in
connection with the bankruptcy cases.
The firm's professionals will be paid at these rates:
Designation Hourly Rate
----------- -----------
Partners $725-$980
Counsel $645-$800
Senior Attorney $630-$740
Associates $375-$670
International Lawyers $325
Law Clerks $325
Summer Associates $320
Paralegals $230-$320
The firm has received a $500,000 as a retainer in connection with
the potential restructuring of the Debtors' capital structure and
financial obligations, commencement and prosecution of the
Bankruptcy Cases, and reimbursement of reasonable and necessary
expenses incurred in connection therewith.
James L. Bromley, Esq., a member of Cleary Gottlieb, assures the
Court that his firm does not hold any interest adverse to the
Debtors' estate and is a "disinterested person" as defined in
Section 101(14) of the United States Bankruptcy Code.
Headquartered in Denver, Colorado, Apex Silver Mines Limited --
http://www.apexsilver.com-- explores and develops silver and
other mineral properties in Central and South America. The
company and its affiliate, Apex Silver Mines Corporation, filed
for Chapter 11 protection on January 12, 2009 (Bankr. S.D. N.Y.
Lead Case No. 09-10182). James L. Bromley, Esq., and Sean A.
O'Neal, Esq., at Cleary Gottlieb Steen & Hamilton LLP, represent
the Debtors in their restructuring efforts. The proposed Davis
Graham & Stubbs LLP as special purpose counsel; Jefferies & Co,
Inc. as financial advisor; and Epiq Bankruptcy Solutions LLC as
claims agent. When the Debtors filed for protection from their
creditors, they listed assets and debts between $500 million to $1
billion each.
APEX SILVER: Gets Initial OK to Access $15 Mil. Somitomo Facility
-----------------------------------------------------------------
The Hon. James M. Peck of the the United States Bankruptcy Court
for the Southern District of New York authorized Apex Silver Mines
Limited and affiliate Apex Silver Mines to obtain, on an interim
basis, up to $15 million in postpetition under the debtor-in-
possession credit and security agreement with Somitomo
Corporation.
A hearing is set for Jan. 29, 2009, at 2:00 p.m., to consider
final approval. Objections, if any, are due Jan. 26, 2009.
Troubled Company Reporter said on Jan. 16, 2009, the Debtors
wanted to access up to $35 million in financing from Somitomo on a
final basis.
The Debtors entered on Jan. 12, 2009, into a purchase and sale
agreement with Sumitomo and one of its wholly-owned subsidiaries
under which Sumitomo has agreed to purchase all of the company's
direct and indirect interests in the San Cristobal mine in Positi,
Bolivia, for US$27.5 million in cash. The sale is subject to
approval by the Bankruptcy Court.
The DIP facility will be used to fund working capital at the San
Cristobal Mine, to preserve value for the Debtors' estates, and to
enable them to sell their Bolivia mine facility and certain
related assets to Sumitomo. As part of the deal, if the Debtors
consummate the Sumitomo purchase transaction, the Debtors will
neither repay the obligations under the DIP facility nor pay a
break-up fee and reimbursement amount.
The Debtors tell the Court that they need to access at least
$15 million in financing on the interim. Under the DIP agreement,
the facility will terminate on the earliest of:
i) March 31, 2009;
ii) the date of a termination in case of an event of default;
iii) 30 days after the Debtors' bankruptcy filing if the final
order has not been entered by the Court;
iv) the date of entry of an order of the Court confirming a
plan of reorganization consented to by the DIP Lender
consistent with the plan support agreement under which the
DIP Lender consummates the purchase of the purchased
properties in accordance with the purchase agreement; or
v) the Debtors' entry into definitive documentation to
consummate an alternative transaction.
The facility will accrue interest at 15% per annum.
All obligations will constitute administrative expenses of the
Debtors in the Chapter 11 case, with administrative priority and
senior secured status under sections 364(c) and 364(d)(1) of the
United States Bankruptcy Code. In addition, the DIP lender will
be granted security interests and liens on the collateral which
will have the priority and senior secured status, as security for
the Debtors' obligations.
The DIP facility is subject to a $1 million carve-out to pay any
unpaid fees to the bankruptcy clerk and the actual fees and
expenses incurred by professionals retained by the Debtors. The
Debtors are allowed to use up to $250,000 carve-out to pursue any
rights or remedies under the purchase agreement.
The DIP agreement contains customary and appropriate events of
default. The Debtors wants to present the request before the
Court on Jan. 27, 2009, for final approval.
A full-text copy of the debtor-in-possession credit and security
agreement with the Debtors and Sumitomo is available for free at:
http://ResearchArchives.com/t/s?3806
A full-text copy of Asset Purchase Agreement between the company
and Sumitomo is available for free at
http://ResearchArchives.com/t/s?37f3
Headquartered in Denver, Colorado, Apex Silver Mines Limited --
http://www.apexsilver.com-- explores and develops silver and
other mineral properties in Central and South America. The company
is based in George Town, Cayman Islands. The company and its
affiliate, Apex Silver Mines Corporation, filed for Chapter 11
protection on January 12, 2009 (Bankr. S.D. N.Y. Lead Case No.
09-10182). James L. Bromley, Esq., and Sean A. O'Neal, Esq., at
Cleary Gottlieb Steen & Hamilton LLP, represent the Debtors in
their restructuring efforts. The proposed Davis Graham & Stubbs
LLP as special purpose counsel; Jefferies & Co, Inc. as financial
advisor; and Epiq Bankruptcy Solutions LLC as claims agent. When
the Debtors filed for protection from their creditors, they listed
assets and debts between $500 million to $1 billion each.
ARG ENTERPRISES: Files for Chapter 11 Bankruptcy in Delaware
------------------------------------------------------------
ARG Enterprises Inc. together with two of its affiliates made a
voluntary filing under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware and plan to sell substantially all of the operational
assets.
The company said its profitability declined due to the
recessionary economic environment coupled by the mortgage crisis
causing consumers to cut back spending. The company generated
about $244 million in sales and $11 million EBITDA in 2006. The
company's sales had declined to $181 million by 2008.
The company further said that it has closed 13 unprofitable
restaurants since April 2008 including one that was closed at the
end of the lease term.
The company wants to access about $71.1 million in postpetition
financing, of which $4.8 million will be used to fund the approved
budget expenses in excess of cash flows; (ii) $2.1 million to fund
DIP facility expenses and prepetition term and revolver interest.
In 2004, the company filed for Chapter 11 protection before the
United States Bankruptcy Court for the Central District of
California. The company's first amended joint plan of
reorganization dated April 1, 2005, was confirmed by the Court on
June 23, 2005. The case was closed on Dec. 15, 2006. Wells Fargo
Foothill provided $25.5 million in exit financing to the company
to fund its business plan as it emerged from Chapter 11, wherein
$7.1 million was used to implement new point of sale and financial
systems.
The company and Wells Fargo are parties to a certain credit
agreement dated July 11, 2005, secured by substantially all of the
company's assets. The company said at least $53.1 million was
outstanding under the agreement comprised of:
i) a $17.9 million revolving credit facility;
ii) a $20 million term B loan;
iii) a $10 million overadvances; and
iv) $4.7 million accrued, unpaid and capitalized interest and
fees.
The company said it has assets and debts between $100 million and
$500 million each. The company owes $2,154,745 to SYSCO Food
Services; $211,750 to Macerish Oaks Adjacent LLC; and $135,766 to
Route 140 School Street LLC.
According to the company, it has $37.4 million in unsecured debt
based on its unaudited, consolidated balance sheet as of Dec. 1,
2008.
About ARG Enterprises
Headquartered in Philadelphia, Pennsylvania, ARG Enterprises Inc.
-- http://www.argenterprises.com-- owns and operates the Black
Angus Steakhouse chain of casual steakhouse restaurants, which
specialize in 100% all-natural Black Angus steak and prime rib.
The Debtors have 69 restaurants located in seven western states:
Alaska, Arizona, California, Hawaii, New Mexico, Nevada and
Washington.
ARG ENTERPRISES: Files for Bankruptcy to Sell All Assets
--------------------------------------------------------
ARG Enterprises Inc. sought bankruptcy protection from creditors
under Chapter 11 of the U.S. Bankruptcy Code on Jan. 15, 2009,
presenting its plan to sell substantially all of its assets.
According to Bloomberg News, the U.S. Bankruptcy Court for the
District of Delaware granted interim approval of ARG's plan to
continue operating and auction its assets. The report says that
Judge Kevin J. Carey approved, on an interim basis, ARG's request
to obtain debtor-in-possession financing of $70 million from ARG's
pre-bankruptcy lender Versa Capital Management Inc., a private
equity firm in Philadelphia. The money is to help the company
operate normally while in bankruptcy.
Bob Van Voris of Bloomberg reports that a Versa affiliate also has
made a stalking-horse bid to buy the company's assets, according
to papers the company filed in bankruptcy court. Absent competing
bids for the assets, or higher and better bids at an auction, ARG
will seek approval the sale of its assets to the Versa unit.
The company, according to the report, said it has $53.1 million in
secured debt and $13.2 million reserved for outstanding letters of
credit.
About ARG Enterprises
With headquarters in Los Altos, California, ARG Enterprises Inc.
operates 69 Black Angus Steakhouse restaurants. It operates in
seven states in the western U.S. and employs more than 3,600.
ARG filed for bankruptcy protection on Jan. 15 (Bankr. D. Del,
Case No. 09-10171). In its bankruptcy petition, it estimated
assets and debts each in the range of $100 million to $500
million.
ARG ENTERPRISES: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: ARG Enterprises, Inc.
dba Black Angus Steakhouse
Cattle Company Steakhouse
Stuart Anderson's Restaurants
Stuart Anderson's Cattle Company
2929 Arch Street
Philadelphia, PA 19104-2868
Bankruptcy Case No.: 09-10171
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Pecus ARG Holding, Inc. 09-10170
ARG Property Management Corporation 09-10172
Type of Business: The Debtors own and operate the Black Angus
Steakhouse chain of casual steakhouse
restaurants, which specialize in 100% all-
natural Black Angus steak and prime rib. The
Debtors have 69 restaurants located in seven
western states: Alaska, Arizona, California,
Hawaii, New Mexico, Nevada and Washington.
See: http://www.argenterprises.com/
Chapter 11 Petition Date: January 15, 2009
Court: District of Delaware (Delaware)
Debtor's Counsel: Adam G. Landis, Esq.
landis@lrclaw.com
Kerri K. Mumford, Esq.
mumford@lrclaw.com
Landon Ellis, Esq.
ellis@lrclaw.com
Landis Rath & Cobb LLP
919 Market Street, Suite 1800
Wilmington, DE 19801
Tel: (302) 467-4400
Fax: (302) 467-4450
Restructuring Advisor: CRG Partners Group LLC
Claims and Noticing Agent: Kurtzman Carson Consultants LLC
Special Real Estate Advisors: KPMG Corporate Finance LLC and KPMG
CF Realty LLC
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
SYSCO Food Services food vendor $2,154,745
1390 Enclave Parkway
Houston, TX 77077
Tel: (281) 584-1390
Fax: (281) 584-1744
Macerish Oaks Adjacent LLC landlord $211,750
The Macerich Company
401 Wilshire Boulevard
Suite 700
Santa Monica, CA 90401
Tel: (805) 495-4628
Fax: (310) 395-2791
Route 140 School Street LLC landlord $135,766
S.R. Weiner & Associates Inc.
1330 Boylston Street
Chestnut Hill, MA 02467
Tel: (617) 232-8900
Fax: (617) 574-4100
World Wide Produce produce vendor $97,212
DDR Family Centers landlord $95,627
CBS Radio advertising $84,162
Sottsdale 101 Associates LLC landlord $76,707
Teardrop Partners LP landlord $65,547
Ernst Trust Washington LLC landlord $63,192
Hansen Sales food vendor $62,150
General Produce Co. produce vendor $50,992
Pacific Gas & Electric Co. utility $40,293
Jeffco Credit Union landlord $40,000
Macerich St. Marketplace LP landlord $38,376
Tricor Print Communications supplies vendor $37,627
West Valley Partnership landlord $37,238
Southern Wine & Spirits alcohol vendor $37,218
Charlie's Produce Inc. produce vendor $36,074
Mission Linen supplies vendor $35,504
American Fish & Seafood - LA food vendor $32,674
The Calhoun Family Truste landlord $32,000
Arthur Blank & Co. Inc. marketing $31,314
San Diego Gas & Electric utility $30,157
The Commonwealth Real Estate landlord $29,850
DirecTV cable vendor $27,360
Buder Eangel & Friends Inc. marketing $27,333
The Waserstrom Company supplies vendor $26,062
Walnut Plaza PAO Family landlord $25,542
Partnership
Grand Avenue Produce Co. Inc. produce vendor $25,415
Ernest Communications Inc. telephone vendor $24,505
The petition was signed chief restructuring officer Lisa M.
Poulin.
ARMADA SHIPPING: New York Court Signs Chapter 15 Petition
---------------------------------------------------------
Judge James Peck of the U.S. Bankruptcy Court for the Southern
District of New York has signed Singapore-based Armada (Shipping)
Pte. Ltd., petition for protection from creditors under Chapter
15.
Bloomberg News reports that the Court granted interim approval to
the petition for creditor protection. The procedure allows the
business to reorganize in Singapore and protects it from U.S.
lawsuits.
Armada announced January 6 that it has been granted leave to
convene a creditors' meeting to vote on a proposed Scheme of
Arrangement pursuant to Section 210 of the Companies Act of the
Republic of Singapore that will protect its assets and maximize
funds available to creditors as it restructures its business
operations.
Armada (Shipping) Pte. Ltd. -- http://www.armadagroup.com/-- is a
privately owned holding company incorporated and based in
Singapore. It is one of the world's leading dry bulk shipping
companies. It provides ocean transportation services to a variety
of major raw material and commodity shippers and consumers located
throughout the globe.
Armada filed for bankruptcy protection under Chapter 15 of the
U.S. Bankruptcy Code on January 7, 2009, to seek recognition of
its bankruptcy proceedings in Singapore and imposition of the
automatic stay to protect its assets while it restructures (Bankr.
S.D. N.Y. Case No. 09-10105). The petitioner's counsel is Barbra
R. Parlin, Esq., at Holland & Knight, LLP, in New York. In its
bankruptcy petition, Armada estimated assets and debts of $100
million to $500 million.
ARTHROCARE CORP: Obtains Waiver of Default under Credit Agreement
-----------------------------------------------------------------
ArthroCare Corp. (OTC: ARTC.PK) received a waiver Friday from the
lenders and the administrative agent under its Credit Agreement of
the event of default relating to the delisting of the Company's
stock. Under the terms of the waiver, the Company has prepaid $10
million of the principal amount (plus accrued and unpaid interest)
outstanding under the Credit Agreement. The other terms of the
waiver are substantially identical to the waiver granted on
November 26, 2008. Management believes that, following the
partial repayment under the Credit Agreement, based on the
Company's current operating and capital expenditure forecasts, the
combination of funds currently available and funds to be generated
from operations will be adequate to finance the Company's ongoing
operations for the short and long-term.
The Company received notice on January 15, 2009, that the Nasdaq
Listing and Hearing Review Council has rejected the Company's
request for a review. As a result the Nasdaq Listing
Qualifications Panel's decision to suspend trading of and delist
the Company's common stock on The Nasdaq Stock Market became
effective at the open of trading January 16, 2009.
The Company noted that in excess of 15 market makers are making a
market in its common stock on the "Pink Sheets" Friday, under the
symbol ARTC.PK.
Michael Baker, ArthroCare's CEO, said, "We are gratified by the
continuing support of our banks as evidenced by their waiver.
While we are disappointed by the delisting, we are pleased to see
such a large number of market makers continue to trade our common
stock. This provides liquidity for our shareholders as we
complete the restatement process required to bring our SEC filings
up to date."
About ArthroCare
Founded in 1993, ArthroCare Corp. -- http://www.arthrocare.com/--
is a multi-business medical device company that develops,
manufactures and markets minimally invasive surgical products.
With these products, ArthroCare targets a multi-billion dollar
market opportunity across several medical specialties,
significantly improving existing surgical procedures and enabling
new, minimally invasive procedures. Many of ArthroCare's products
are based on its patented Coblation technology, which uses low-
temperature radiofrequency energy to gently and precisely dissolve
rather than burn soft tissue -- minimizing damage to healthy
tissue. Used in more than four million surgeries worldwide,
Coblation-based devices have been developed and marketed for
sports medicine; spine/neurologic; ear, nose and throat (ENT);
cosmetic; urologic and gynecologic procedures. ArthroCare also
has added a number of novel technologies to its portfolio,
including Opus Medical sports medicine, Parallax spine and Applied
Therapeutics ENT products, to complement Coblation within key
indications.
ASARCO LLC: Settles Rosemont Copper Mine Dispute with Augusta
-------------------------------------------------------------
Augusta Resource Corporation has reached an agreement with ASARCO
LLC that fully and finally resolves the lawsuit ASARCO filed
against Augusta and other defendants on August 8, 2007, in the
ASARCO Chapter 11 bankruptcy proceeding pending in the Southern
District of Texas, Corpus Christi Division. The proceeding sought
the return of the Rosemont property, located approximately 50
kilometers southeast of Tucson, Arizona, which Augusta acquired in
2006 from a real-estate development company that had purchased the
property from ASARCO in 2004.
"This settlement removes significant uncertainty in our efforts to
develop the Rosemont copper mine as a cornerstone asset of
Augusta," said Gil Clausen, President and CEO of Augusta. "We
believe ASARCO's complaint was completely unfounded. Augusta
purchased the property in good faith, and we are confident the
court ultimately would have vindicated Augusta's position.
Resolving this matter through continued litigation could have
taken months or years, however, and potentially cost the Company
several millions of dollars in court fees, experts, and other
expenses. We are extremely pleased to resolve this distraction
and turn all of our attention to developing the Rosemont mine.
Permitting, site work, and engineering remain on schedule."
The resolution currently is reflected in a binding Terms of
Settlement, and will be formalized in a comprehensive Settlement
Agreement to be approved by the Bankruptcy Court presiding over
ASARCO's bankruptcy proceeding. In the settlement, ASARCO will
receive from Augusta the sum of US$250,000 cash within 14 days of
court approval, in addition to sums the other defendants will pay.
Also, once commercial mine operations commence at the Rosemont
property, Augusta will pay ASARCO certain specified annual
production payments, without interest, over the course of eight
years. These payments will come solely out of the net profits of
mine operations and will not, in any year, exceed 25% of net
profits. In the settlement, Augusta has the right of a pre-
production, pre-payment option for these annual payments at the
net present value of the aggregate annual payments, using an
agreed 18% discount rate. Should Augusta elect this option during
the calendar year 2009, it will pay ASARCO US$2.6 million. It may
elect to exercise this option at any time up to and during mine
production.
About Augusta
Augusta Resource Corporation -- http://www.augustaresource.com/--
is a base metals company focused on advancing the Rosemont Copper
deposit near Tucson, Arizona. Rosemont currently hosts a large
copper/molybdenum reserve that may account for about 10% of US
copper output once in production in 2012. The Company is traded
on the Toronto Stock Exchange and the NYSE Alternext under the
symbol AZC, and on the Frankfurt Stock Exchange under the symbol
A5R.
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.
ASARCO LLC 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 ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.
ASARCO LLC 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.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
BA ENERGY: Fears Lender Will Recall Loan; Files for Bankruptcy
--------------------------------------------------------------
Fearing that its parent's major lender, Credit Suisse, will recall
A $507 million loan, BA Energy Inc. has filed for bankruptcy
protection under the Companies' Creditors Arrangement Act in
Alberta's Court of Queen's Bench, The Windsor Star reports.
According to The Windsor Star, Value Creation Inc. CEO Columba
Yeung said that the company could default on its multimillion-
dollar bank loan after BA Energy failed to repay it a $50 million
loan. Citing Mr. Yeung, The Windsor Star states that BA Energy's
failure to make good on this debt lets Value Creation's lenders to
demand immediate payment of the $507 million loan.
The Windsor Star quoted Mr. Yeung as saying, "BA is suffering from
a cash flow shortage and as such will be unable to repay a loan
... of approximately $50 million-plus interest to VCI due Dec. 31,
2008." Ernst & Young Inc. acts as the monitor for BA Energy's
restructuring under CCAA, says the report.
Mr. Yeung, according to The Windsor Star, said that failure to
repay the loan might place VCI in default of its main credit
facility. It would let the lenders accelerate repayment and
immediately demand the full amount of the loan, The Windsor Star
relates. Mr. Yeung blames BA Energy's bankruptcy on the credit
crisis, says the report.
The Windsor Star reports that Mr. Yeung said that he still hopes a
solution can be found before the Hon. Barbara Romaine holds a
hearing on the bankruptcy petition.
BA Energy Inc. is the developer of the $4-billion Heartland
Upgrader near Edmonton.
BALTIMORE OPERA: May Launch Opera; Orchestra Lays Off 5 Workers
---------------------------------------------------------------
Tim Smith at Baltimore Sun reports that M. Kevin Wixted, the
general director of the board of the Baltimore Opera Company, said
that the company is considering "putting on an opera in the fall,"
depending on the fundraising while the company has suspended
operations.
"A lot of small checks came in" in response to a fundraising
appeal made before Baltimore Sun filed for Chapter 11 bankruptcy
protection, Baltimore Sun relates, citing Mr. Wixted. According
to the report, Mr. Wixted said that former general director and
current artistic director Michael Harrison is the company's
primary fundraiser.
Baltimore Sun states that Baltimore Opera has kept seven
employees, while almost 200 others -- including production
personnel, staffers, choristers and orchestra members -- lost all
or a significant portion of their livelihood when the company
canceled the spring season.
Baltimore Symphony Lays Off Administrative Workers
According to Baltimore Sun, the Baltimore Symphony Orchestra has
laid off five of its 67 administrative employees. Baltimore Sun
relates that the orchestra also changed one full-time employee to
part-time to reduce expenditures. Baltimore Symphony, says the
report, seeks to save about $500,000 by also not hiring people to
fill certain open staff positions.
Baltimore Opera -- http://www.baltimoreopera.com-- held opera
shows in Baltimore, Maryland. Michael Harrison is the company's
artistic director.
The Baltimore Opera Co. filed for Chapter 11 protection before the
U.S. Bankruptcy Court for the District of Maryland on December 10,
2008.
BANK OF AMERICA: Gets Aid $138 Billion of Aid from U.S. Govt.
-------------------------------------------------------------
The U.S. government said it entered into an agreement Jan. 16 with
Bank of America to provide a package of guarantees, liquidity
access and capital as part of its commitment to support financial
market stability.
According to Bloomberg News, Bank of America Corp., which is the
largest U.S. bank by assets, received a $138 billion emergency
lifeline from the government to support its acquisition of Merrill
Lynch & Co. and prevent the global financial crisis from
deepening.
The Treasury and the Federal Deposit Insurance Corporation will
provide protection against the possibility of unusually large
losses on an asset pool of approximately $118 billion of loans,
securities backed by residential and commercial real estate loans,
and other such assets, all of which have been marked to current
market value. The large majority of these assets were assumed by
Bank of America as a result of its acquisition of Merrill Lynch.
The assets will remain on Bank of America's balance sheet. As a
fee for this arrangement, Bank of America will issue preferred
shares to the Treasury and FDIC. In addition and if necessary, the
Federal Reserve stands ready to backstop residual risk in the
asset pool through a non-recourse loan.
In addition, Treasury will invest $20 billion in Bank of America
from the Troubled Assets Relief Program in exchange for preferred
stock with an 8 percent dividend to the Treasury. Bank of America
will comply with enhanced executive compensation restrictions and
implement a mortgage loan modification program.
Treasury exercised this funding authority under the Emergency
Economic Stabilization Act's Troubled Asset Relief Program (TARP).
The investment was made under the Targeted Investment Program. The
objective of this program is to foster financial market stability
and thereby to strengthen the economy and protect American jobs,
savings, and retirement security.
Separately, the FDIC board announced that it will soon propose
rule changes to its Temporary Liquidity Guarantee Program to
extend the maturity of the guarantee from three to up to 10 years
where the debt is supported by collateral and the issuance
supports new consumer lending.
With these transactions, the U.S. government is taking the actions
necessary to strengthen the financial system and protect U.S.
taxpayers and the U.S. economy. As was stated in November when the
first transaction under the Targeted Investment Program was
announced, the U.S. government will continue to use all of our
resources to preserve the strength of our banking institutions and
promote the process of repair and recovery and to manage risks.
4Q Net Loss of $1.79 Billion
Bank of America Corporation on Jan. 16 reported full-year 2008
profit of $4.01 billion compared with net income of $14.98 billion
a year earlier. Earnings after preferred dividends and available
to common shareholders were $2.56 billion, or $0.55 per diluted
share, down from $14.80 billion, or $3.30 per share.
In the fourth quarter of 2008, the company had a net loss of $1.79
billion compared with net income of $268 million a year earlier.
The net loss applicable to common shareholders was $2.39 billion,
or $0.48 per diluted share, down from net income of $215 million,
or $0.05 per share, in the same period in 2007. Results include
Countrywide Financial, which Bank of America purchased on July 1,
but not Merrill Lynch & Co., Inc., which was acquired on January
1, 2009.
Fourth quarter results were driven by escalating credit costs,
including additions to reserves, and significant writedowns and
trading losses in the capital markets businesses. These actions
reflect the deepening economic recession and extremely challenging
financial environment, both of which significantly intensified in
the last three months of 2008.
About Bank of America
Bank of America is one of the world's largest financial
institutions, serving individual consumers, small and middle
market businesses and large corporations with a full range of
banking, investing, asset management and other financial and risk-
management products and services. The company provides unmatched
convenience in the United States, serving more than 59 million
consumer and small business relationships with more than 6,100
retail banking offices, nearly 18,700 ATMs and award-winning
online banking with nearly 29 million active users. Following the
acquisition of Merrill Lynch on January 1, 2009, Bank of America
is among the world's leading wealth management companies and is a
global leader in corporate and investment banking and trading
across a broad range of asset classes serving corporations,
governments, institutions and individuals around the world. Bank
of America offers industry-leading support to more than 4 million
small business owners through a suite of innovative, easy-to-use
online products and services. The company serves clients in more
than 40 countries. Bank of America Corporation stock is a
component of the Dow Jones Industrial Average and is listed on the
New York Stock Exchange.
BANK OF CLARK COUNTY: Insured Deposits Acquired by Umpqua Bank
--------------------------------------------------------------
Bank of Clark County, Vancouver, Washington, was closed Friday by
the Washington Department of Financial Institutions, and the
Federal Deposit Insurance Corporation was named receiver. To
protect the depositors, the FDIC entered into a purchase and
assumption agreement with Umpqua Bank, Roseburg, Oregon, to assume
the insured deposits of the Bank of Clark County.
Bank of Clark County will reopen on Tuesday, due to the Martin
Luther King, Jr. holiday, as branches of Umpqua Bank. Depositors
of the failed bank will automatically become depositors of Umpqua
Bank. Deposits will continue to be insured by the FDIC, so there
is no need for customers to change their banking relationship to
retain their deposit insurance coverage.
Over the weekend, customers of Bank of Clark County can access
their insured deposits by writing checks or using ATM or debit
cards. Checks drawn on the bank will continue to be processed.
Loan customers should continue to make their payments as usual.
As of January 13, 2009, Bank of Clark County had total assets of
$446.5 million and total deposits of $366.5 million. At the time
of closing, there were approximately $39.3 million in uninsured
deposits held in approximately 138 accounts that potentially
exceeded the insurance limits. This amount is an estimate that is
likely to change once the FDIC obtains additional information from
these customers.
Umpqua will not assume the approximately $117.8 million in
brokered deposits. The FDIC will pay the brokers directly for the
amount of their insured funds.
Customers with accounts in excess of $250,000 should contact the
FDIC toll free at 1-800-822-9247 to set up an appointment to
discuss their deposits. This phone number will be operational
this evening until 9:00 p.m., PST; on Saturday from 9:00 a.m. to 6
p.m., PST; and on Sunday from noon to 6:00 p.m., PST; and
thereafter from 8:00 a.m. to 8:00 p.m., PST.
Customers who would like more information on the acquisition
should visit the FDIC's Web site at:
http://www.fdic.gov/bank/individual/failed/clark.html
Beginning Monday, depositors of Bank of Clark County with more
than $250,000 at the bank may visit the FDIC's Web page, "Is My
Account Fully Insured?" at http://www2.fdic.gov/dip/Index.aspto
determine their insurance coverage.
In addition to assuming the failed bank's insured deposits, Umpqua
Bank will purchase $30.4 million of assets comprised of cash, cash
equivalents, marketable securities and loans secured by deposits.
The FDIC will retain the remaining assets for later disposition.
The transaction is the least costly resolution option, and the
FDIC estimates the cost to its Deposit Insurance Fund will be
between $120 and $145 million. Bank of Clark County is the second
FDIC-insured institution to be closed this year. Bank of Clark
County is the first bank to fail in Washington since Emerald City
Bank, Seattle, on July 2, 1993.
Congress created the Federal Deposit Insurance Corporation in 1933
to restore public confidence in the nation's banking system. The
FDIC insures deposits at the nation's 8,384 banks and savings
associations and it promotes the safety and soundness of these
institutions by identifying, monitoring and addressing risks to
which they are exposed. The FDIC receives no federal tax dollars
-- insured financial institutions fund its operations.
BIOHEART INC: Failure to Pay Loan May Lead to Bankruptcy Filing
---------------------------------------------------------------
Brian Bandell at South Florida Business Journal reports that
Bioheart, Inc., said that after it missed a loan payment, it might
have to file for bankruptcy protection.
According to South Florida Business, Bioheart also said that it
might have to lay off workers or close down.
Bioheart said in a filing with the U.S. Securities and Exchange
Commission on January 2, 2009, that it failed to make the monthly
payment of principal and interest due on that date in accordance
with the terms of its senior, three-year term loan from BlueCrest
Venture Finance Master Fund Limited. The amount of the Delinquent
Payment is approximately $180,000. The company does not currently
have the necessary cash resources to make the Delinquent Payment.
Bioheart originally borrowed $5.0 million from BlueCrest pursuant
to the terms and conditions of a Loan and Security Agreement dated
May 31, 2007. As of December 31, 2008, the outstanding principal
balance of the Loan was approximately $2.94 million. The Loan
bears interest at the annual rate of 12.85%. During the first
three months of the Loan, the company was required to make monthly
payments of interest only. Starting in the fourth month of the
Loan, Bioheart became obligated to make equal monthly payments of
principal and interest over the remaining 33 months of the term.
As collateral to secure its repayment obligations under the Loan,
the company granted BlueCrest Capital a first priority security
interest in all of the company's assets, excluding intellectual
property but including the proceeds from any sale of any of the
company's intellectual property.
Pursuant to the Loan Agreement, the failure to make a monthly
payment of principal and interest when due is an event of default.
Under the Loan Agreement, upon such a default, among other things,
BlueCrest may:
(i) accelerate all amounts of principal and interest
outstanding under the Loan; and
(ii) enforce its security interest in the assets securing the
Loan.
During the continuance of the event of default, all outstanding
amounts under the Loan will bear interest (payable on demand) at a
rate that is 2% in excess of the Interest Rate. In addition,
under the Loan Agreement, the Delinquent Payment is subject, until
paid, to a service charge in an amount equal to 2% of the amount
of the Delinquent Payment.
Bioheart is communicating in good faith with BlueCrest in an
effort to obtain a waiver for the event of default and arrange a
schedule for payment of the Delinquent Payment and future monthly
installment payments. There can be no assurance that BlueCrest
will provide this waiver or cooperate with the company in
establishing a revised payment schedule.
In an effort to preserve Bioheart's very limited cash resources,
the company has implemented a 20% salary reduction program for all
employees. If we are unable to obtain the waiver and/or revised
payment schedule noted above and secure at least $100,000 in
additional capital in the next several days, the Company may be
forced to:
-- curtail or abandon our existing business plan;
-- reduce headcount;
-- face the consequence of a default on our debt obligations
under the BlueCrest Loan;
-- file for bankruptcy;
-- seek to sell some or all of our assets; and/or
-- cease operations.
Citing Bioheart CEO Howard Leonhardt, South Florida Business
relates that the company is working on a loan extension with
BlueCrest and could sign this week. According to the report, Mr.
Leonhardt said that Bioheart had about $2.5 million in financing
due to come in on Dec. 15 from a Canadian company, but the head of
that fund died the same day, which delayed that transaction.
South Florida Business reports that David J. Gury resigned from
Bioheart's board on Jan. 7, 2009, over a disagreement with
Mr. Leonhardt. Bioheart said in a filing with the SEC that
Messrs. Gury and Leonhardt couldn't agree on the requirements of a
public reporting company.
According to South Florida Business, Nicholas Burke said on
Jan. 5, 2009, that he would resign as BioHeart's vice president of
financial operations, effective Jan. 16, 2009. The report says
that Mr. Burke would continue consulting with Bioheart.
Bioheart Chief Financial Officer and Principal Financial Officer
William H. Kline also resigned on Jan. 2, 2009, and Bioheart
hasn't disclosed replacements, South Florida Business reports.
Bioheart, Inc.
Bioheart, Inc. (Nasdaq: BHRT) -- http://www.bioheartinc.com/--
delivers intelligent devices and biologics that help monitor,
diagnose and treat heart failure and cardiovascular diseases. Its
goals are to improve a patient's quality of life and reduce health
care costs and hospitalizations. Specific to biotechnology, the
company is focused on the discovery, development and, subject to
regulatory approval, commercialization of autologous cell
therapies for the treatment of chronic and acute heart damage.
BRAZOS STUDENT: Fitch Downgrades Education Loan Bonds to 'BB'
-------------------------------------------------------------
Fitch Ratings has affirmed five senior classes and downgraded two
subordinate classes from the student loan revenue bonds issued by
Brazos Student Finance Corp., 2001 Indenture of Trust.
Fitch affirms these Education Loan Revenue Bonds at 'AAA':
-- 2004 A-4
-- 2004 A-5
-- 2004 A-6
-- 2004 A-7
-- 2004 A-8
Fitch downgrades these Education Loan Revenue Bonds to 'BB' from
'A', and removes the ratings from Rating Watch Negative:
-- 2004 B-1
-- 2004 B-2
The downgrades reflect the effect of increased funding costs on
the transaction due to failed auctions. The actions follow a
review of all auction-rate transactions to determine the ability
of each to withstand increased funding costs going forward and pay
timely interest and full principal by legal maturity. Classes
downgraded to 'BB' could experience principal losses but are
expected to receive timely interest payments for a number of years
depending on the transaction structure and interest rate
environment.
The collateral supporting the bonds consists of approximately
86.24% Federal Family Education Loan Program, 1.03% Health
Education Assistance Loans, and 12.73% private student loans.
FFELP loans are guaranteed by an eligible guarantor to at least
97% of principal and accrued interest, depending on loan
origination date. The FFELP loans are also reinsured by the U.S.
Department of Education up to the same amounts. The HEAL loans
are guaranteed at 100% by the Secretary of the United States of
Health and Human Services. The private student loans are self
insured and do not benefit from any third party insurance.
The notes are 100% taxable auction-rate securities which are
currently earning interest at the maximum rate. The trust
documents define the taxable maximum rate as the lesser of the
auction rate for that period, the maximum auction rate, and 15%.
The maximum auction rate is equal to the lesser of one-month LIBOR
plus a spread, and the net loan rate, equal to the weighted
average of the student loan rate less program operating expenses.
Although the trust continues to experience failed auctions causing
the bonds to pay interest at the maximum rate, the senior and
total parity ratio, or the ratio of assets to liabilities, are at
134.4% and 98%, respectively, as of Sept. 30, 2008.
Credit enhancement consists of a debt service reserve fund for the
trust. Additionally, the senior notes benefit from subordination
provided by the lower priority notes. As the trust's total parity
ratio is less than 100% and the net loan rate is structured as a
student loan rate cap, the trust is unable to generate credit
enhancement in the form of excess spread.
The master servicer for the student loan portfolio is Brazos
Higher Education Service Corporation, Inc. which is not rated by
Fitch.
CANADIAN TRUST: C$32-Bil. Debt Swap Plan to Close Jan. 21
---------------------------------------------------------
Bloomberg News reports that an investor group that includes Caisse
de Depot et Placement du Quebec and National Bank of Canada said a
C$32 billion ($25.6 billion) debt-swap plan will close Jan. 21.
The Pan-Canadian Investors Committee for Third-Party Structured
Asset-Backed Commercial Paper said, according to the report, that
legal documents are being signed and "final reconciliations and
verifications" are under way. Bloomberg notes that the agreement
to swap insolvent Canadian commercial paper for longer-term notes
was reached after 17 months of negotiations.
As reported by the Troubled Company Reporter on Jan. 12, Ernst &
Young, Inc., as monitor of the proceedings commenced by the Pan-
Canadian Investors Committee for Third-Party Structured Asset-
Backed Commercial Paper under Canada's Companies' Creditors
Arrangement Act, has recommended to the Honorable Justice Colin
Campbell of the Ontario Superior Court of Justice that he approve
that the third amended plan submitted by the Applicants.
Ernst & Young Inc. was appointed as Monitor of Metcalfe &
Mansfield Alternative Investments II Corp. et al., issuer trustees
of these conduit trusts:
Apollo TrustIronstone TrustSilverstone Trust
Apsley TrustMMAI-I TrustSlate Trust
Aria TrustNewshore Canadian TrustStructured Asset Trust
Aurora TrustOpus TrustStructured Investment Trust III
Comet TrustPlanet TrustSymphony Trust
Encore TrustRocket TrustWhitehall Trust
Gemini TrustSelkirk Funding Trust
The plan of compromise and arrangement proposed by the Pan-
Canadian Investors Committee for Third-Party Structured Asset-
Backed Commercial Paper pursuant to the CCAA in respect of the
outstanding third-party asset-backed commercial paper debt
obligations, including applicable floating rate notes, liquidity
notes and subordinated notes was approved by the Ontario Court on
June 5, 2008.
The Applicants, however, have sought modifications to the Plan,
and the Plan has not yet been implemented. The Plan, as thrice
amended, according to Bloomberg News, provides for the conversion
of C$32 billion ($27 billion) of insolvent Canadian commercial
paper to longer-term notes.
Ernst & Young also supports the Applicants' request for an order
extending the stay of the CCAA proceedings to the earlier of (i)
January 31, 2009, and (ii) the implementation date of the Third
Amended Plan.
Ernst & Young said that the most recent cash flow projections for
the conduits project substantial positive monthly cash flow in the
conduit trusts and the actual cash balances at Sept. 30, 2008,
which are the most recent actual cash balances that have been
fully reconciled, indicate that actual cash flows are, in the
aggregate, substantially consistent with those projections.
A copy of E&Y's 102-page report is available for free at:
http://researcharchives.com/t/s?37c2
About Canadian Trust
Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust,
Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust,
MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust,
Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate
Trust, Structured Asset Trust, Structured Investment Trust III,
Symphony Trust, Whitehall Trust are entities based in Canada that
issue securities called third-party structured finance asset-
backed commercial paper. As of Sept. 14, 2007, these 21 Canadian
Trusts had approximately C$33 billion of outstanding ABCP.
As reported by the Troubled Company Reporter on March 18, 2008,
Justice Colin Campbell of the Ontario Superior Court of Justice
granted an application filed on March 17 by The Pan-Canadian
Investors Committee for Third-Party Structured ABCP under the
provisions of the Companies' Creditors Arrangement Act. The
Committee asked the Court to call a meeting of ABCP noteholders to
vote on a plan to restructure 20 trusts affecting C$32 billion of
notes. The trusts were covered by the Montreal Accord, an
agreement entered by international banks and institutional
investors on Aug. 16, 2007 to work out a solution for the ABCP
crisis in Canada. Justice Campbell appointed Ernst & Young, Inc.,
as the Applicants' monitor, on March 17, 2008.
(Canadian ABCP Trusts Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CANTERBURY WOODS: Files for Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Bob Sanders at New Hampshire Business Review reports that the
Canterbury Woods LLC, along with the Glines Family Partnership,
has filed for Chapter 11 bankruptcy protection.
According to New Hampshire Business, a foreclosure sale on
Canterbury Woods Country Club was scheduled for Jan. 8.
Canterbury Woods' managing member George Glines filed bankruptcy
petition on Jan. 7, as well as for the Glines family partnerships
relating to claims against "real property off Intervale Road."
New Hampshire Business relates that Warren Tibbetts III, a
Hooksett equipment dealer, said that he and some other partners
had been managing Canterbury Woods Country Club for almost half a
year with a plan to buy it. According to the report, Mr. Tibbets
said that he had a purchase agreement with Glines and that he was
managing it primarily "to do due diligence," but Glines filed for
Chapter 11 the day before the sale was to go through. New
Hampshire Business quoted Mr. Tibbets as saying, "We had all the
commitments in place, but he [Mr. Glines] said he had a better
offer." Mr. Tibbets, according to the report, said that he
planned to buy the golf course at the foreclosure auction.
Court documents say that Canterbury Woods had $1 million to
$10 million in debts and $1 million to $10 million in debts.
New Hampshire Business states that Canterbury Woods owes Mr.
Tibbets some $55,000. The report says Canterbury Woods also owes:
-- more than $790,000 to Cathy Berry of Borough Road in
Canterbury;
-- $720,000 to Faith Berry of Pickard Road in Canterbury;
-- $223,000 to the Bank of New England, of which $181,000 is
unsecured;
-- almost $89,000 to Susan Glines; and
-- $73,000 to the town of Canterbury.
According to New Hampshire Business, the Glines Family Partnership
had less than $500,000 in assets and more than $1 million in
liabilities. The report states that the Glines Family listed the
Bank of New England as its sole creditor, holding $1.7 million in
debts, with some $500,000 of that being secured debt.
Creditors will have a meeting on Feb. 4, at 10:00 a.m. in the
Bankruptcy Court in Manchester.
About Canterbury Woods
Canterbury Woods LLC's Canterbury Woods Country Club is a golf
course in Canterbury. It first opened in 2003, located on a 260-
acre parcel that was formerly part of the Glines Farm. The Glines
family, which settled in Canterbury in 1730s, has owned the farm
since 1853.
BURLINGTON COAT: Moody's Downgrades Corporate Family Rating 'B3'
----------------------------------------------------------------
Moody's Investors Service downgraded Burlington Coat Factory
Warehouse, Inc.'s ratings, including its corporate family rating
to B3 from B2 and its speculative grade liquidity rating to SGL-3
from SGL-2. The rating outlook remains negative.
The downgrades reflect Burlington Coat's weaker than expected
second quarter earnings and lower than expected December
comparable store sales, as well as Moody's expectation that
earnings will remain under pressure given the weak macro-economic
environment. The downgrades also reflect the risk that this lower
earnings performance places Burlington Coat at risk for a
potential financial covenant violation.
These ratings are downgraded:
-- Corporate family rating to B3 from B2,
-- Probability of default rating to B3 from B2,
-- $900 million senior secured term loan to B3 (LGD 3, 49%)
from B2 (LGD 4, 51%), $305 million of senior unsecured
guaranteed notes to Caa1 (LGD 5,73%) from B3 (LGD 5, 74%),
Speculative grade liquidity rating to SGL-3 from SGL-2.
The rating outlook is negative.
The B3 corporate family rating primarily reflects Burlington
Coat's weak credit metrics and Moody's expectation that operating
performance will remain weak over the next year. The rating also
acknowledge that Burlington Coat's financial covenants tighten
during 2009 and, given its weaker than expected operating
performance, places the company at risk for a covenant violation.
Ratings also consider the company's second tier competitive
position, its profitability being well below the average of its
retail apparel peers, and its highly seasonal cash flow. However,
lending support to the rating is the company's national
diversification, as well as the expectation that the off-price
retail segment will likely be more resilient to the current
consumer pressures than the full price channel.
The SGL-3 reflects adequate liquidity. It also assumes that the
company will be successful in achieving an amendment or waiver to
any potential covenant violations under its $900 million term loan
(which contains cross default provisions to it revolving credit
facility). The SGL-3 also reflects Moody's belief that Burlington
Coat's internally generated cash combined with borrowings under
its revolving credit facility will be sufficient to fund its
working capital, capital expenditures, and mandatory debt
amortizations over the next twelve months. The company had about
$489 million available at November 29, 2008 under its $800 million
asset based revolving credit facility. The facility is secured by
a first lien on all the company's inventory and accounts
receivable with a second lien on all real and personal property.
The revolving credit facility contains only one financial
covenant, the maintenance of 8% excess availability of the
borrowing base. The company has limited alternative sources of
liquidity as all of its assets are pledged to the bank facilities.
The negative outlook reflects the risk that Burlington Coat's
sales and earnings may continue to decline and that the company
may need to amend its financial covenants. This could result in
higher pricing under its term loan and revolving credit
facilities, and may further weaken its interest coverage.
The last rating action on Burlington Coat was on December 20, 2007
when its rating outlook was changed to negative from positive and
its corporate family rating was affirmed at B2.
Burlington Coat Factory Warehouse Corporation, headquartered in
Burlington, New Jersey, is a nationwide off price apparel retailer
that operates approximately 427 stores in 44 states under the
nameplates of Burlington Coat Factory, Cohoes, MJM, and Baby
Depot. Revenues for the twelve month period ended
November 29, 2008 were approximately $3.5 billion.
CALPINE CORP: Files Registration Statement as Required Under Plan
-----------------------------------------------------------------
Calpine Corporation filed a Form S-3A Registration Statement with
the Securities and Exchange Commission. This filing updates the
previous Form S-3 Registration Statement originally filed on
August 13, 2008. The filing is being made to comply with
Calpine's obligation under a registration rights agreement entered
into in connection with its successful emergence from bankruptcy
in January 2008. The shares being registered were previously
issued to the stockholders named in the registration statement in
connection with Calpine's plan or reorganization. No new shares
are being issued or sold by Calpine under the registration
statement.
Harbinger Capital Partners(R) Funds, a major Calpine shareholder,
said in a statement that it remains committed to its investment.
"We are believers in Calpine's business model and like their long-
term prospects," said Harbinger Capital Partners Senior Managing
Director Philip A. Falcone. "We are a committed shareholder and
may look to add to our position over time."
Harbinger Capital Partners was founded in 2001 and is led by its
Co-Founder and Chief Investment Officer, Philip Falcone, who has
over 20 years of investment experience across an array of market
cycles.
Founded in 1984, Calpine Corporation -- http://www.calpine.com/--
is a major U.S. power company, currently capable of delivering
over 24,000 megawatts of clean, cost-effective, reliable and fuel-
efficient electricity to customers and communities in 16 states in
the United States and Canada. Calpine owns, leases, and operates
low-carbon, natural gas-fueled, and renewable geothermal power
plants. Using advanced technologies, Calpine generates
electricity in a reliable and environmentally responsible manner
for the customers and communities it serves.
Bankruptcy Creditors' Service, Inc., publishes Calpine Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Calpine Corporation and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CANWEST LIMITED: S&P Cuts Sr. Sec. Debt Rating to 'B-'
------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on Winnipeg, Manitoba-based Canwest Media
Inc. to 'CCC+' from 'B'. At the same time, S&P lowered the senior
secured debt rating on wholly owned subsidiary Canwest Limited
Partnership to 'B-' from 'BB-'. In addition, S&P lowered the
senior subordinated debt ratings on Canwest Media and Canwest LP
to 'CCC-' from 'CCC+'. S&P removed all ratings from CreditWatch
with negative implications, where they were placed Oct. 31, 2008.
The outlook is negative.
The recovery ratings on Canwest Media's and Canwest LP's senior
subordinated debt are unchanged at '6', indicating S&P's opinion
as to an expected negligible (0%-10%) recovery in a default
scenario. S&P revised the recovery rating on Canwest LP's secured
debt to '2' from '1'. The '2' recovery rating indicates S&P's
opinion as to an expected substantial (70%-90%) recovery in the
event of a default, in contrast to a '1' recovery rating, which
indicates the expectation of very high (90%-100%) recovery.
Standard & Poor's revised the recovery rating due to S&P's use of
a lower EBITDA amount and EBITDA multiple in the event of default.
"The downgrade reflects our expectation that Canwest Media's
revenue and operating profit are likely to decline materially this
year, reflecting a weakened advertising industry in the company's
key markets, Canada and Australia, resulting from what S&P views
as a challenging global economic environment," said Standard &
Poor's credit analyst Lori Harris. "We believe the impact of
lower profitability on the company's credit protection measures,
which S&P currently view as weak, is likely to result in higher
debt leverage and the tightening of financial covenants, which in
turn could materially weaken the company's financial flexibility
and liquidity," Ms. Harris added.
Canwest Media received an amendment to its credit agreement to
loosen financial covenants in November 2008. Notwithstanding this
amendment, the company disclosed in its first-quarter 2009
financial statements that it could be in violation of certain
covenants in fiscal 2009 (ending Aug. 31) based on its financial
projections. Canwest Media also disclosed that it is reviewing
strategies to ensure compliance with its covenants. However,
should the company not be in compliance and an amendment request
or waiver not be successful, S&P believes the company would
consider taking action to avoid an event of default that would
trigger cross-default provisions in the senior subordinated notes,
possibly by repaying senior lenders.
The ratings on Canwest Media reflect what S&P views as its highly
leveraged financial risk profile, weak credit protection measures,
and tight liquidity. Furthermore, Standard & Poor's believes the
company's performance in fiscal 2009 (ending Aug. 31) is likely to
weaken materially from fiscal 2008 because of the expectation of
lower advertising revenues in most of Canwest Media's key
operating segments, including its Canadian conventional television
broadcasting business, Canadian publishing business, and partially
owned Australian conventional television broadcasting business.
However, S&P expects CW Media Holdings Inc. (B/Stable/--), the
company's partially owned Canadian specialty television
broadcaster, to report improved results in fiscal 2009, which S&P
believes might help mitigate the effect of weakness in the other
divisions.
The negative outlook reflects Standard & Poor's expectation that
Canwest Media's operating performance, credit ratios, and
financial flexibility are likely to remain weak in fiscal 2009,
driven by expected soft EBITDA and elevated debt levels. S&P
could consider lowering the ratings if the company's operating
performance or liquidity weakens further or if the company is not
in compliance with its financial covenants and is unable to obtain
an amendment or waiver to rectify the situation. S&P could
consider revising the outlook to stable if Canwest Media
meaningfully reduces leverage and resolves its covenant concerns.
CANWEST MEDIA: S&P Junks Corp. Credit Rating on Likely Profit Drop
------------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on Winnipeg, Manitoba-based Canwest Media
Inc. to 'CCC+' from 'B'. At the same time, S&P lowered the senior
secured debt rating on wholly owned subsidiary Canwest Limited
Partnership to 'B-' from 'BB-'. In addition, S&P lowered the
senior subordinated debt ratings on Canwest Media and Canwest LP
to 'CCC-' from 'CCC+'. S&P removed all ratings from CreditWatch
with negative implications, where they were placed Oct. 31, 2008.
The outlook is negative.
The recovery ratings on Canwest Media's and Canwest LP's senior
subordinated debt are unchanged at '6', indicating S&P's opinion
as to an expected negligible (0%-10%) recovery in a default
scenario. S&P revised the recovery rating on Canwest LP's secured
debt to '2' from '1'. The '2' recovery rating indicates S&P's
opinion as to an expected substantial (70%-90%) recovery in the
event of a default, in contrast to a '1' recovery rating, which
indicates the expectation of very high (90%-100%) recovery.
Standard & Poor's revised the recovery rating due to S&P's use of
a lower EBITDA amount and EBITDA multiple in the event of default.
"The downgrade reflects our expectation that Canwest Media's
revenue and operating profit are likely to decline materially this
year, reflecting a weakened advertising industry in the company's
key markets, Canada and Australia, resulting from what S&P views
as a challenging global economic environment," said Standard &
Poor's credit analyst Lori Harris. "We believe the impact of
lower profitability on the company's credit protection measures,
which S&P currently view as weak, is likely to result in higher
debt leverage and the tightening of financial covenants, which in
turn could materially weaken the company's financial flexibility
and liquidity," Ms. Harris added.
Canwest Media received an amendment to its credit agreement to
loosen financial covenants in November 2008. Notwithstanding this
amendment, the company disclosed in its first-quarter 2009
financial statements that it could be in violation of certain
covenants in fiscal 2009 (ending Aug. 31) based on its financial
projections. Canwest Media also disclosed that it is reviewing
strategies to ensure compliance with its covenants. However,
should the company not be in compliance and an amendment request
or waiver not be successful, S&P believes the company would
consider taking action to avoid an event of default that would
trigger cross-default provisions in the senior subordinated notes,
possibly by repaying senior lenders.
The ratings on Canwest Media reflect what S&P views as its highly
leveraged financial risk profile, weak credit protection measures,
and tight liquidity. Furthermore, Standard & Poor's believes the
company's performance in fiscal 2009 (ending Aug. 31) is likely to
weaken materially from fiscal 2008 because of the expectation of
lower advertising revenues in most of Canwest Media's key
operating segments, including its Canadian conventional television
broadcasting business, Canadian publishing business, and partially
owned Australian conventional television broadcasting business.
However, S&P expects CW Media Holdings Inc. (B/Stable/--), the
company's partially owned Canadian specialty television
broadcaster, to report improved results in fiscal 2009, which S&P
believes might help mitigate the effect of weakness in the other
divisions.
The negative outlook reflects Standard & Poor's expectation that
Canwest Media's operating performance, credit ratios, and
financial flexibility are likely to remain weak in fiscal 2009,
driven by expected soft EBITDA and elevated debt levels. S&P
could consider lowering the ratings if the company's operating
performance or liquidity weakens further or if the company is not
in compliance with its financial covenants and is unable to obtain
an amendment or waiver to rectify the situation. S&P could
consider revising the outlook to stable if Canwest Media
meaningfully reduces leverage and resolves its covenant concerns.
CHARTER COMMS: Hires Advisors for Potential Bankruptcy Filing
-------------------------------------------------------------
Bloomberg News reports that Charter Communications Inc., hired law
firm Kirkland & Ellis and investment bank Lazard Ltd. to advise on
a possible bankruptcy, according to people familiar with the
matter.
According to the report, citing two people involved in the talks,
Kirkland's Rick Cieri is providing counsel. The report adds that
owner Paul Allen has also hired lawyers and financial advisers,
people said. If the St. Louis-based company decides in favor of
bankruptcy, it may file as soon as next week, said one of the
people, who declined to be identified because the discussions are
private.
Charter Communications, Inc., said last week that two of its
subsidiaries, CCH I Holdings, LLC and Charter Communications
Holdings, LLC, did not make scheduled payments of interest due on
January 15, 2009, on certain of their outstanding senior notes.
The interest payments total $73.7 million in the aggregate.
If the interest payments are not made within the 30-day grace
period provided by each of the governing Indentures, an event of
default would occur under the indentures governing the notes,
permitting holders of at least 25% in principal amount of any
outstanding series of notes on which the interest payment was not
made to declare the full amount of the applicable notes
immediately due and payable.
An event of default on the notes, without such an acceleration of
amounts due under the notes, would not trigger cross-defaults on
any of the other debt of the subsidiaries of the Company. If
payment is not made with respect to any series of notes within the
30-day grace period, and the notes are accelerated, all amounts
due with respect to such affected notes become immediately due and
payable. If notes issued by the Company or any of its
subsidiaries accelerate, and such notes, together with the amount
of any other notes of the Company or any of its subsidiaries that
accelerate, represent $100 million or more in principal amount,
events of default would occur under other debt instruments of the
Company or certain of its subsidiaries which could lead to the
acceleration of indebtedness under such documents.
On December 12, 2008, the Company announced that it was initiating
39
discussions with its bondholders regarding financial alternatives
to improve the Company's balance sheet. As of January 13, 2009,
the Company had cash on hand and cash equivalents in excess of
$900 million, which is available to pay operating costs and
expenses.
About Charter Communications
Headquartered in St. Louis, Missouri, Charter Communications Inc.
(Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband
communications company and the third-largest publicly traded cable
operator in the United States. Charter provides a full range of
advanced broadband services, including advanced Charter Digital
Cable(R) video entertainment programming, Charter High-Speed(R)
Internet access, and Charter Telephone(R). Charter Business(TM)
similarly provides broadband communications solutions to business
organizations, such as business-to-business Internet access, data
networking, video and music entertainment services, and business
telephone. Charter's advertising sales and production services
are sold under the Charter Media(R) brand.
As reported by the Troubled Company Reporter on Nov. 11, 2008,
Charter Communications' balance sheet at Sept. 30, 2008, showed
total assets of $15.1 billion, total liabilities of
$23.9 billion, resulting in a shareholders' deficit of
$8.8 billion.
As reported by the Troubled Company Reporter on Dec. 22, 2008,
Fitch Ratings placed Charter Communications, Inc.'s 'CCC' Issuer
Default Rating and the IDRs and individual issue ratings of
Charter's subsidiaries on Rating Watch Negative. Approximately
$21.1 billion of debt outstanding as of Sept. 30, 2008 is effected
by Fitch's action.
As reported by the TCR on Dec. 16, 2008, Moody's Investors Service
lowered the Probability-of-Default Rating for Charter
Communications, Inc. to Ca from Caa2 and placed all ratings (other
than the SGL3 Speculative Grade Liquidity Rating) for the company
and its subsidiaries under review for possible downgrade.
As reported by the Troubled Company Reporter on Dec. 16, 2008,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Charter Communications Inc. to 'CC' from 'B-'. S&P said
that the rating outlook is negative.
CHARTER COMMS: Interest Payment Failure May Lead to Bankruptcy
--------------------------------------------------------------
Georg Szalai at The Hollywood reporter says that the failure of
Charter Communications' two subsidiaries to make scheduled
interest payments of $73.7 million on some of its debt by the
deadline raises the potential for a bankruptcy filing.
As reported by the Troubled Company Reporter on Jan. 16, 2009,
Charter Communications, Inc., the indirect parent company of
Charter Communications Holdings, LLC, Charter Communications
Holdings Capital Corporation, CCH II, LLC, CCH II Capital Corp.,
CCO Holdings, LLC and CCO Holdings Capital Corp., said that two of
its subsidiaries, CCH I Holdings, LLC and Charter Communications
Holdings, LLC, didn't make scheduled payments of interest due on
January 15, 2009, on certain of their outstanding senior notes.
The Hollywood Reporter relates that Charter Communications has
been in talks with its bond holders to restructure its debt since
December 2008. Charter Communications, according to The Hollywood
Reporter, said on Thursday that it has the right to make the
interest payments within a grace period that ends in the middle of
February. The report states that if the company fails to pay the
interest by then, it will be considered to have defaulted on its
obligations.
According to The Hollywood Reporter, Charter Communications said
that it and its subsidiaries had more than $900 million in cash
and cash equivalents as of Jan. 13, 2009, which it is allocating
for operating costs and expenses.
The Hollywood Reporter quoted Charter Communications President and
CEO Neil Smit as saying, "We've made significant progress over the
last several years with regard to operational improvements, and we
hope to make similar progress with regard to our capital
structure."
Citing Citi Investment Research debt analyst David Hamburger, The
Hollywood Reporter states that the delay in Charter
Communications' payment increases the likelihood of its filing for
bankruptcy protection. According to the report, Mr. Hamburger
said, "We view the probability of a Chapter 11 filling as likely
given how difficult it will be to negotiate an agreement with . .
. bond holders in order to successfully restructure the balance
sheet outside of bankruptcy."
Charter Communications faces cascading financial challenges, with
an interest payment default that would "permit at least 25% of the
holders of the notes to accelerate payment. An acceleration of
payment of $100 million in principal would trigger cross-defaults
on Charter's other debt," The Hollywood Reporter states, citing
Mr. Hamburger.
About Charter Communications
Headquartered in St. Louis, Missouri, Charter Communications Inc.
(Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband
communications company and the third-largest publicly traded cable
operator in the United States. Charter provides a full range of
advanced broadband services, including advanced Charter Digital
Cable(R) video entertainment programming, Charter High-Speed(R)
Internet access, and Charter Telephone(R). Charter Business(TM)
similarly provides broadband communications solutions to business
organizations, such as business-to-business Internet access, data
networking, video and music entertainment services, and business
telephone. Charter's advertising sales and production services
are sold under the Charter Media(R) brand.
As reported by the Troubled Company Reporter on Nov. 11, 2008,
Charter Communications' balance sheet at Sept. 30, 2008, showed
total assets of $15.1 billion, total liabilities of
$23.9 billion, resulting in a shareholders' deficit of
$8.8 billion.
As reported by the Troubled Company Reporter on Dec. 22, 2008,
Fitch Ratings placed Charter Communications, Inc.'s 'CCC' Issuer
Default Rating and the IDRs and individual issue ratings of
Charter's subsidiaries on Rating Watch Negative. Approximately
$21.1 billion of debt outstanding as of Sept. 30, 2008 is effected
by Fitch's action.
As reported by the TCR on Dec. 16, 2008, Moody's Investors Service
lowered the Probability-of-Default Rating for Charter
Communications, Inc. to Ca from Caa2 and placed all ratings (other
than the SGL3 Speculative Grade Liquidity Rating) for the company
and its subsidiaries under review for possible downgrade.
As reported by the Troubled Company Reporter on Dec. 16, 2008,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Charter Communications Inc. to 'CC' from 'B-'. S&P said
that the rating outlook is negative.
CHARTER COMMUNICATIONS: Fitch Downgrades Issuer Rating to 'C'
-------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating assigned to
Charter Communications, Inc. and its wholly owned subsidiaries to
'C' from 'CCC', and removed the ratings from Rating Watch
Negative. In addition, Fitch has downgraded the individual issue
ratings of Charter and its subsidiaries as outlined below.
Approximately $21.1 billion of debt outstanding as of Sept. 30,
2008 is affected by Fitch's action.
Fitch's action follows the company's announcement that two of its
subsidiaries, CCH I Holdings, LLC and Charter Communications
Holdings LLC, failed to make a scheduled interest payment totaling
approximately $73.7 million due on Jan. 15, 2009 on outstanding
debt totaling approximately $1.2 billion as of Dec. 31, 2008.
Fitch's ratings have long reflected Charter's highly leveraged
balance sheet, the company's substantial free cash flow deficits,
and precarious liquidity position. The 'C' IDR reflects Fitch's
opinion that a broad-based distressed debt exchange, and/or
bankruptcy filing is imminent even though the company has
sufficient liquidity to fund its operations into 2010. As of Jan.
13, 2009, Charter had in excess of $900 million of cash on hand.
Fitch has downgraded these ratings:
Charter Communications, Inc.
-- IDR to 'C' from 'CCC';
-- Convertible senior notes to 'C/RR4' from'CCC/RR4'.
Charter Communications Holdings, LLC
-- IDR to 'C' from 'CCC';
-- Senior unsecured notes to 'C/RR4' from 'CCC/RR4'.
CCH I Holdings, LLC
-- IDR to 'C' from 'CCC';
-- Senior unsecured notes to 'C/RR4' from 'CCC/RR4'.
CCH I, LLC
-- IDR to 'C' from 'CCC';
-- Senior secured notes to 'C/RR4' from 'CCC/RR4'.
CCH II, LLC
-- IDR to 'C' from 'CCC';
-- Senior unsecured notes to 'C/RR4' from 'CCC/RR4'.
CCO Holdings, LLC
-- IDR to 'C' from 'CCC';
-- Senior secured notes to 'C/RR4' from 'CCC/RR4';
-- Third lien term loan to 'CCC/RR1' from 'B/RR1'.
Charter Communications Operating, LLC
-- IDR to 'C' from 'CCC';
-- Senior secured credit facility to C/RR1' from 'B/RR1';
-- Senior secured second lien notes to 'C/RR1' from'B/RR1'.
CHARTER COMMUNICATIONS: S&P Downgrades Corp. Credit Rating to 'D'
-----------------------------------------------------------------
Standard & Poor's Rating Services said it lowered its corporate
credit rating on St. Louis-based cable operator Charter
Communications Inc. and all its related entities to 'D' from 'CC'.
S&P also lowered the rating on eight debt issues at two Charter
subsidiaries, CCH I Holdings LLC and Charter Communications
Holdings LLC, to 'D' from 'CCC', affecting almost $1.2 billion in
debt. In addition, S&P lowered all other issue-level ratings on
Charter and its subsidiaries to 'C' and removed them from
CreditWatch, where they had been placed with developing
implications on Dec. 12, 2008. The recovery ratings on all debt
have not been changed.
These rating actions follow the announcement by Charter that it
will not make the $73.7 million in aggregate interest payments
that are due on eight debt issues at CCH I Holdings LLC and
Charter Communications Holdings LLC. While all these notes allow
for a 30-day grace period in which to make the payments, S&P's
rating action indicates that S&P does not have a current
expectation the company will make the missed interest payment
within that time frame. Charter had over $21 billion of funded
debt at Sept. 30, 2008.
"While recent operational performance from its 5.1 million video
subscriber base has shown encouraging signs," said Standard &
Poor's credit analyst Richard Siderman, "Charter remains burdened
by excessive debt levels, a legacy of the significant debt
component used to finance the series of acquisitions that grew
Charter into one of nation's largest cable operators."
Consolidated debt equates to around $4,000 per basic video
subscriber, an amount that likely exceeds the market value of
those subscribers.
"For some time, S&P has indicated its belief that the company
would not have the capacity to meet upcoming debt maturities, in
particular the approximately $1.9 billion of debt maturing in
2010," added Mr. Siderman. Just last month, Charter disclosed
that it was initiating discussions with its bondholders to improve
its balance sheet. At that time, S&P lowered Charter's corporate
credit rating to 'CC' based on S&P's assessment that the
initiative would likely lead to an offer to exchange at least some
portion of the company's bonds for equity, at a steep discount to
face value.
CHECKER MOTORS: In Ch. 11, Needs Union Cuts to Avert Liquidation
-----------------------------------------------------------------
Checker Motors Corporation filed before the U.S. Bankruptcy Court
for the Western District of Michigan a Chapter 11 petition for
bankruptcy protection from creditors on Jan. 16, 2009.
Mark T. Walburn, vice-president and chief operating officer of
Checker Motors, said that the Kalamazoo, Michigan-based automotive
parts supplier's chapter 11 case has been brought about by several
factors. The Debtor has had to contend with: (a) uncompetitive
labor rates and other employee and retirement benefits and
obligations; (b) continuing decline in market share of its
customers, the auto makers, which fall off in market share has
resulted in declining sales and increased negative pricing
pressures; and (c) continuing high commodity prices and energy
costs, including dramatically increased raw material costs which
could not be fully passed on to customers.
Mr. Walburn notes that many of those factors are not unique to the
Debtor but are symptomatic of the general downturn impacting the
United States automobile industry and have already caused many
other auto industry suppliers such as Cadence, Key Plastics, Dura,
Delphi, Dana, Collins & Aikman, Tower and Meridian Automotive to
file for chapter 11 protection in recent years. The reduction of
labor costs has been the primary goal of some of these and other
recent chapter 11 filings.
According to Mr. Walburn, the Debtor has been attempting to
restructure its business to respond to the changes in the
automotive industry. It has always been the Debtor's goal to
achieve a restructuring voluntarily, and without resort to
bankruptcy. In this regard, the Debtor has already aggressively
cut non-labor expenses, has significantly reduced non-union wages
and benefits and has been seeking to negotiate a concessionary
labor agreement with the United Steelworkers Local No. 2-682,
which represents half of its employees.
Despite the Debtor's best efforts over an approximate one year
period, it has not been able to negotiate any labor concessions
from the Union. Having been forced to file for bankruptcy
relief, absent an immediate concessionary agreement with the
Union, the Debtor intends to use the provisions of chapter 11 to
reorganize its business and to bring its labor costs in-line with
other similarly situated automotive suppliers.
In acting to restructure its business, and particularly to address
the primary cause of its financial difficulties - its labor costs
disadvantage vis-a-vis other automotive suppliers -- the Debtor
does not minimize the human costs associated with the changes that
it is seeking. The Debtor understands that employees hired on and
dedicated their careers to the Debtor with an expectation of
compensation and working conditions that the Debtor can no longer
afford and that are no longer supported by the market.
"The Debtor believes that the alternative to reducing the Debtor's
labor costs, the liquidation of the company with the attendant
loss of all jobs, is unacceptable for all parties-in-interest,"
Mr. Walburn says.
The Debtor's balance sheet shows that as of, November 30, 2008, it
had had total assets of approximately $24.5 million and total
liabilities of approximately $21.8 million. The Debtor had net
sales of $63.4 million for year ended 2007 and is projecting net
sales of approximately $61.5 million for 2008.
As of Jan. 16, 2009, the Debtor employs approximately 246
employees, comprised of 52 salaried, non-union employees, 12
hourly, non-union employees and 182 hourly union employees. The
Debtor's unionized employees are members of the United
Steelworkers Local No. 2-682.
About Checker Motors
Checker Motors Corp. was established by Morris Markin in 1922
through a merger of Commonwealth Motors and Markin Automobile
Body. The Debtor, once the manufacturer of the famed Checker
automobile (the iconic American taxi cab), is a Kalamazoo,
Michigan-based automotive parts supplier that makes metal
stampings and welded assemblies for various car and truck lines.
CHECKER MOTORS: Seeks to Fast Track Labor Cost Reductions
---------------------------------------------------------
Checker Motors Corporation informed the U.S. Bankruptcy Court for
the Western District of Michigan that in order to carry out its
restructuring plan, it must immediately implement labor cost-
reductions with the United Steelworkers Local No. 2-682 and
eliminate its etiree medical benefits for existing retirees who
were members of the union.
As of Jan. 16, 2009, the Debtor employs approximately 246
employees, comprised of 52 salaried, non-union employees, 12
hourly, non-union employees and 182 hourly union employees. The
Debtor's unionized employees are members of the United
Steelworkers Local No. 2-682.
Mark T. Walburn, vice-president and chief operating officer of
Checker Motors, said that while the Debtor intends to pursue a
ratified, signed cost-reduction agreement with the Union, on a
voluntary basis, the Debtor is skeptical that such efforts will be
successful given the Union's rejection of the Debtor's past
attempts to negotiate voluntary reductions with the Union.
Citing that the proposed labor cost reductions are absolutely
necessary for the Debtor to complete a successful reorganization,
and because fairness and equity demand that all of its represented
employees participate in the financial sacrifices necessary for
its long-term success of the Debtor, absent agreement, the Debtor
says that it intends to file a motion, pursuant to Sections 1113
and 1114 of the Bankruptcy Code to:
(a) reject the collective bargaining agreement of the Union
and
(b) eliminate retiree medical benefits for the Union Retirees.
The Debtor believes that it must proceed on an expedited basis
with the processes set forth in Section 1113 and 1114 for contract
rejection and for elimination of retiree health benefits for Union
Retirees.
According to Mr. Walburn, in light of the Debtor's critical
financial situation, the cost savings that would result from
successful prosecution of the 1113/1114 Motion is necessary for a
successful reorganization because without it the Debtor will be
unable to compete in the automotive supplier marketplace and will
be forced to shut down its operations.
Accordingly, the Debtor has requested that the Court enter a
scheduling order with regard to filing, responding, and conducting
a hearing on the Debtor's contemplated 1113/1114 motion as
follows:
-- January 30, 2009: the Debtors to file the 1113/1114 Motion;
-- February 6, 2009: any opposition to the 1113/1114 Motion to
be filed and served;
-- February 11, 2009: any reply to opposition to the 1113/1114
Motion to be filed and served;
-- February 13, 2009: hearing on the Debtor's 1113/1114
Motion;
Proposal to Be Kept Confidential
The Debtor expects that, if circumstances require, it may be
forced to provide the Union with proposals for necessary
modifications to the collective bargaining agreement with the
Debtor, as well as any relevant information as is necessary to
evaluate the proposal. In addition, the Debtor expects to provide
the Union with a proposal for reduction in retiree medical
benefits, as well as any relevant information as is necessary to
evaluate the proposal.
Pursuant to Ssections 1113(d)(3) and 1114(k)(3), the Debtor
requests that the Court issue a protective order to prevent the
disclosure of any and all confidential "relevant information"
provided in connection with any proposals the Debtor may make for
modifications to the collective bargaining agreements or for
elimination of retiree medical benefits and any hearing or other
proceeding that may arise in connection with section 1113 or
section 1114. Mr. Walburn says the that a protective order is
necessary to expedite and facilitate the provision and exchange of
all necessary relevant information required by sections 1113 and
1114 in a manner consistent with the need to protect the
confidentiality of that information.
About Checker Motors
Checkers Motor Corp. was established by Morris Markin in 1922
through a merger of Commonwealth Motors and Markin Automobile
Body. The Debtor, once the manufacturer of the famed Checker
automobile (the iconic American taxi cab), is a Kalamazoo,
Michigan-based automotive parts supplier that makes metal
stampings and welded assemblies for various car and truck lines.
CHECKER MOTORS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Checker Motors Corporation
2016 N. Pitcher St.
Kalamazoo, MI 49007
Bankruptcy Case No.: 09-00358
Type of Business: The Debtor offers automotive stamping.
Chapter 11 Petition Date: January 16, 2009
Court: Western District of Michigan (Grand Rapids)
Judge: James D. Gregg
Debtor's Counsel: Christopher A. Grosman, Esq.
Carson Fischer, P.L.C.
4111 Andover Road
West - 2nd Floor
Bloomfield Hills, MI 48302
Tel: (248) 644-4840
BRCY@CarsonFischer.com
Financial Advisor: Plante & Moran
Claims, Noticing and Balloting Agent: Kurtzman Carson Consultants
LLC
Special Counsel: McCarthy Smith Law Group
The Debtor's balance sheet at Nov. 30, 2008, disclosed:
Total Assets: $24.5 million
Total Debts: $21.8 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Walker Tool and Die, Inc. trade payable $1,528,300
2411 Walker Avenue NW
Grand Rapids, MI 49544-1301
Tele: 616-453-5471
Fax: 616-453-3765
Consumers Energy trade payable $66,772
P.O. Box 30090
Lansing, MI 48909-7590
800-477-5050
ALCOA trade payable $64,623
1 Customer Place
Danville, IL 61834
Tele: 217-431-3916
Fax: 217-431-3911
The Wellnet Healthcare Plan employee benefits $48,000
Inc.
National Materials trade payable $37,773
Middleville Tool & Die Co. trade payable $21,103
Inc.
CL Mahoney trade payable $19,744
U.S. Security Associates trade payable $17,632
Delta Dental employee benefits $16,700
Professional Benefits Services employee benefits $16,000
Citizens Management employee benefits $13,402
Kalamazoo City Treasurer trade payable $10,041
Crane Pro Services trade payable $9,796
Rapid Control Service trade payable $8,704
Life Insurance Co. of North employee benefits $7,000
America
Advance Packaging trade payable $6,227
ANKARA trade payable $5,302
Amerigas trade payable $4,253
Camou Inc. trade payable $3,898
Centerline trade payable $2,382
The petition was signed by Mark T. Walburn, chief operating
officer and vice president.
CHRYSLER FINANCIAL: Obtains Access to $1.5 Billion Federal Aid
--------------------------------------------------------------
Chrysler Financial received access for up to $1.5 billion in loans
from the U.S. Department of Treasury's Troubled Asset Relief
Program. The funds, which became available under the Emergency
Economic Stabilization Act of 2008, will provide the necessary
liquidity to support Chrysler Financial's retail finance program.
"We appreciate the Treasury Department's support and their
commitment to increase the availability of financing for
consumers," said Thomas F. Gilman, Vice Chairman and CEO -
Chrysler Financial. "This funding will provide us with increased
capacity to help Chrysler LLC and our dealers make new loans
available to qualified consumers and sell more cars and trucks."
"This funding will better position us to withstand the current
economic challenges until funding becomes available through more
traditional commercial sources," added Mr.Gilman.
0% Financing for Up to 60 Mos.
With the announcement of Chrysler Financial gaining access to
$1.5 billion in TARP money, qualified new vehicle customers will
be able to apply for zero percent financing for up to 60 months
when financing a new Chrysler, Jeep(R) or Dodge vehicle through
Chrysler Financial. The affordable financing terms will be
available on select 2008 and 2009 MY vehicles, and are effective
immediately.
"From both a customer and dealer perspective, it is exciting news
that the Treasury Department is providing funding to Chrysler
Financial. Now our customers, including those with scores in the
620 range, will be able to apply for affordable loans and our
dealers will be more competitive in the marketplace," said Jim
Press, Chrysler LLC Vice-Chairman and President. "This will
provide a great economic stimulus for car buyers across the
country. We have customers who want to buy our vehicles, dealers
who want to order vehicles and employees who want to build cars.
Now with enhanced financing available in the system we can help
our customers get the credit they deserve and help drive America
forward."
Zero percent interest financing will be available on 11 Chrysler
LLC vehicles, and in many cases for up to 60 months. Vehicles
included in the program are Chrysler Town & Country, 300 and 300C,
Jeep Grand Cherokee, Commander, Wrangler, Dodge Grand Caravan,
Charger, Magnum, Challenger, Ram Pickup and Ram Heavy Duty.
"Now, with $1.5 billion to loan, more customers can get financed;
so it is a good time for them to revisit their Chrysler, Jeep and
Dodge dealers," said Steven Landry, Executive Vice President of
Chrysler LLC North American Sales, Marketing and Mopar Parts and
Service. "Now we have a special bond with the American people and
we will do our part by providing the best quality vehicles, with
the best fuel economy and now, the best financing. It has never
been a better time to buy a car or truck from Chrysler."
Chrysler LLC will highlight the new "zero percent" finance offers
through a comprehensive "Driving America" campaign that breaks
next week, and includes broadcast, radio, digital and print. The
overall campaign features the theme 'Driving America' to showcase
the product and competitive pricing being offered on Chrysler,
Jeep and Dodge vehicles.
About Chrysler Financial
Chrysler Financial -- http://corp.chryslerfinancial.com-- offers
automotive financial products and services to both dealers and
consumers of Chrysler, Jeep(R) and Dodge vehicles in the U.S.,
Canada, Mexico and Venezuela. In addition it offers vehicle
wholesale and retail financing to more than 3,600 Chrysler, Jeep
and Dodge dealers. Currently, nearly three million drivers in the
United States enjoy the benefits of financing with Chrysler
Financial. Chrysler Financial has an employee base of 4,000 and
supports a global portfolio of $60 billion.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products. The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K., Argentina,
Brazil, Venezuela, China, Japan and Australia.
* * *
As reported in the Troubled Company Reporter on Dec. 3, 2008,
Dominion Bond Rating Service downgraded the ratings of Chrysler
LLC, including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively. All trends are Negative. The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term. With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on Nov. 7, 2008.
As reported in the Troubled Company Reporter on Aug. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings on Chrysler
LLC, including the corporate credit rating, to 'CCC+' from 'B-'.
On July 31, 2008, TCR said that Fitch Ratings downgraded the
Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The
Rating Outlook is Negative. The downgrade reflects Chrysler's
restricted access to economic retail financing for its vehicles,
which is expected to result in a further step-down in retail
volumes. Lack of competitive financing is also expected to result
in more costly subvention payments and other forms of sales
incentives. Fitch is also concerned with the state of the
securitization market and the ability of the automakers to access
this market on an economic basis over the near term, given the
steep drop in residual values, higher default rates, higher loss
severity being experienced and jittery capital market.
As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating
Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC,
including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively. All trends are Negative. The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term. With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on Nov. 7, 2008.
CHRYSLER LLC: Lending Unit Gets Access to $1.5-Bil. Federal Aid
---------------------------------------------------------------
Chrysler Financial received access for up to $1.5 billion in loans
from the U.S. Department of Treasury's Troubled Asset Relief
Program. The funds, which became available under the Emergency
Economic Stabilization Act of 2008, will provide the necessary
liquidity to support Chrysler Financial's retail finance program.
"We appreciate the Treasury Department's support and their
commitment to increase the availability of financing for
consumers," said Thomas F. Gilman, Vice Chairman and CEO -
Chrysler Financial. "This funding will provide us with increased
capacity to help Chrysler LLC and our dealers make new loans
available to qualified consumers and sell more cars and trucks."
"This funding will better position us to withstand the current
economic challenges until funding becomes available through more
traditional commercial sources," added Mr.Gilman.
0% Financing for Up to 60 Mos.
With the announcement of Chrysler Financial gaining access to
$1.5 billion in TARP money, qualified new vehicle customers will
be able to apply for zero percent financing for up to 60 months
when financing a new Chrysler, Jeep(R) or Dodge vehicle through
Chrysler Financial. The affordable financing terms will be
available on select 2008 and 2009 MY vehicles, and are effective
immediately.
"From both a customer and dealer perspective, it is exciting news
that the Treasury Department is providing funding to Chrysler
Financial. Now our customers, including those with scores in the
620 range, will be able to apply for affordable loans and our
dealers will be more competitive in the marketplace," said Jim
Press, Chrysler LLC Vice-Chairman and President. "This will
provide a great economic stimulus for car buyers across the
country. We have customers who want to buy our vehicles, dealers
who want to order vehicles and employees who want to build cars.
Now with enhanced financing available in the system we can help
our customers get the credit they deserve and help drive America
forward."
Zero percent interest financing will be available on 11 Chrysler
LLC vehicles, and in many cases for up to 60 months. Vehicles
included in the program are Chrysler Town & Country, 300 and 300C,
Jeep Grand Cherokee, Commander, Wrangler, Dodge Grand Caravan,
Charger, Magnum, Challenger, Ram Pickup and Ram Heavy Duty.
"Now, with $1.5 billion to loan, more customers can get financed;
so it is a good time for them to revisit their Chrysler, Jeep and
Dodge dealers," said Steven Landry, Executive Vice President of
Chrysler LLC North American Sales, Marketing and Mopar Parts and
Service. "Now we have a special bond with the American people and
we will do our part by providing the best quality vehicles, with
the best fuel economy and now, the best financing. It has never
been a better time to buy a car or truck from Chrysler."
Chrysler LLC will highlight the new "zero percent" finance offers
through a comprehensive "Driving America" campaign that breaks
next week, and includes broadcast, radio, digital and print. The
overall campaign features the theme 'Driving America' to showcase
the product and competitive pricing being offered on Chrysler,
Jeep and Dodge vehicles.
About Chrysler Financial
Chrysler Financial -- http://corp.chryslerfinancial.com-- offers
automotive financial products and services to both dealers and
consumers of Chrysler, Jeep(R) and Dodge vehicles in the U.S.,
Canada, Mexico and Venezuela. In addition it offers vehicle
wholesale and retail financing to more than 3,600 Chrysler, Jeep
and Dodge dealers. Currently, nearly three million drivers in the
United States enjoy the benefits of financing with Chrysler
Financial. Chrysler Financial has an employee base of 4,000 and
supports a global portfolio of $60 billion.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products. The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K., Argentina,
Brazil, Venezuela, China, Japan and Australia.
* * *
As reported in the Troubled Company Reporter on Dec. 3, 2008,
Dominion Bond Rating Service downgraded the ratings of Chrysler
LLC, including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively. All trends are Negative. The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term. With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on Nov. 7, 2008.
As reported in the Troubled Company Reporter on Aug. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings on Chrysler
LLC, including the corporate credit rating, to 'CCC+' from 'B-'.
On July 31, 2008, TCR said that Fitch Ratings downgraded the
Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The
Rating Outlook is Negative. The downgrade reflects Chrysler's
restricted access to economic retail financing for its vehicles,
which is expected to result in a further step-down in retail
volumes. Lack of competitive financing is also expected to result
in more costly subvention payments and other forms of sales
incentives. Fitch is also concerned with the state of the
securitization market and the ability of the automakers to access
this market on an economic basis over the near term, given the
steep drop in residual values, higher default rates, higher loss
severity being experienced and jittery capital market.
As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating
Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC,
including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively. All trends are Negative. The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term. With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on Nov. 7, 2008.
CIRCUIT CITY: InterTAN Remains Open, Not Part of Liquidation
------------------------------------------------------------
InterTAN Canada Ltd., an indirect wholly-owned subsidiary of U.S.-
based Circuit City Stores, confirmed that The Source by Circuit
City stores across Canada remain open for business and are not
included in the liquidation process announced by Circuit City.
On November 10, 2008, InterTAN sought and obtained creditor
protection by the Ontario Superior Court of Justice under the
Companies' Creditors Arrangement Act. Since that time, the
Company has been working with NM Rothschild & Sons Canada Limited
to pursue a sale of the Canadian operations as a going concern and
has been in active discussions with a number of interested
bidders. InterTAN expects to receive formal proposals with
respect to a going concern transaction on or before January 23,
2009.
The Canadian sales process is separate and distinct from the sales
process followed by Circuit City in the U.S.
InterTAN operates or licenses 765 neighbourhood electronics stores
and dealer outlets across Canada under the trade name, The Source
by Circuit City. All of these stores are fully staffed and open
for business.
About Circuit City Stores
Circuit City Stores, Inc., is a specialty retailer of consumer
electronics and related services. At December 31, 2008, the
domestic segment operated 567 stores in 153 U.S. media markets.
At December 31, 2008, the international segment operated through
approximately 765 retail stores and dealer outlets in Canada.
Circuit City operates Web sites at http://www.circuitcity.com,
http://www.thesource.caand http://www.firedog.com.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Circuit City Stores Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
CIRCUIT CITY: To Liquidate; Equity Holders Out of the Money
-----------------------------------------------------------
Circuit City Stores, Inc. said Friday it will seek Bankruptcy
Court approval to begin the process to liquidate the assets of the
company.
"We are extremely disappointed by this outcome. The company had
been in continuous negotiations regarding a going concern
transaction. Regrettably for the more than 30,000 employees of
Circuit City and our loyal customers, we were unable to reach an
agreement with our creditors and lenders to structure a going-
concern transaction in the limited timeframe available, and so
this is the only possible path for our company," said James A.
Marcum, vice chairman and acting president and chief executive
officer for Circuit City Stores, Inc.
Circuit City will provide more details in the near term about the
plans for the liquidation of the stores and other assets, the
status of the company's Web site and firedogSM services
operations, the status of its Canadian operations and plans for
the company's bankruptcy proceedings.
The company does not anticipate any value will remain from the
bankruptcy estate for the holders of the company's common equity,
although this will be determined in the continuing bankruptcy
proceedings.
The company filed for Chapter 11 bankruptcy protection in November
2008. The case number for Circuit City's Chapter 11 filing is 08-
35653.
About Circuit City Stores
Circuit City Stores, Inc., is a specialty retailer of consumer
electronics and related services. At December 31, 2008, the
domestic segment operated 567 stores in 153 U.S. media markets.
At December 31, 2008, the international segment operated through
approximately 765 retail stores and dealer outlets in Canada.
Circuit City operates Web sites at http://www.circuitcity.com,
http://www.thesource.caand http://www.firedog.com/
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CITIGROUP INC: Enters Into Definitive Agreements With Gov't
-----------------------------------------------------------
Citigroup Inc. has entered into definitive agreements with the
U.S. Department of Treasury, The Federal Deposit Insurance
Corporation, and the Federal Reserve Bank of New York with respect
to the loss sharing program previously announced on November 23,
2008.
Summary of Terms of
USG/Citigroup Loss Sharing
Program
________________________________ ______________________________
Loss Sharing Program On November 23, 2008,
Citigroup entered into a loss
sharing program with the U.S.
Department of Treasury, The
Federal Deposit Insurance
Corporation, and the Federal
Reserve Bank of New York (the
"Federal Reserve" and,
together with Treasury and
FDIC, "USG") On January 15,
2009, Citigroup and USG
entered into definitive
agreements with respect to the
loss sharing program
_________________________________________________________________
Covered Asset Pool $301 billion of assets(1)
including loans and securities
backed by residential and
commercial real estate,
consumer loans and other
assets as agreed by Citigroup
and USG.
________________________________ ______________________________
Loss Coverage Period 5 years for non-residential
assets 10 years for
residential assets
________________________________ ______________________________
Citigroup First Loss Position $29 billion (as agreed on
November 23, 2008), plus
$1 billion in exchange for
excluding benefits from
hedges, plus $9.5 billion
existing loan loss reserve,
for a total Citigroup first
loss position of $39.5 billion
________________________________ ______________________________
Second Loss Position Absorbed 90% by Treasury, up
to its advance of $5 billion,
and 10% by Citigroup
________________________________ ______________________________
Third Loss Position Absorbed 90% by FDIC, up to
its advance of $10 billion,
and 10% by Citigroup
________________________________ ______________________________
Federal Reserve Loan If covered losses exceed
Citigroup's first loss
position plus approximately
$16.7 billion (of which
$15 billion will have been
absorbed by Treasury and
FDIC), the Federal Reserve
extends a loan to Citigroup in
an amount equal to the
aggregate value of the
remaining covered asset pool
as determined in accordance
with the loss sharing program
(i.e., after reductions for
dispositions, pay-downs,
realized losses, etc.)
Following the loan, as losses
are incurred on the remaining
covered asset pool, Citigroup
is required to immediately
repay 10% of such losses to
the Federal Reserve The
Federal Reserve loan is non-
recourse to Citigroup, other
than with respect to the
repayment obligation
referenced above and interest
on the loan. The loan is
recourse only to the remaining
covered asset pool which is
the sole collateral to secure
the loan Interest accrues at
OIS plus 300bps on the
outstanding principal amount
of the loan for the period
between the date the loan is
made through November 20, 2018
(which period may be extended
by the Federal Reserve for 1
year)
________________________________ ______________________________
Calculation of Losses Loss sharing covers realized
losses on the principal amount
of the covered assets
(e.g., charge-offs,
dispositions and failure to
pay principal, etc.) Reserves
when taken and marks when made
are not covered but losses on
those assets will be covered
when realized Loss sharing is
determined on a portfolio
basis (i.e., gains and
recoveries relating to the
covered assets are netted
against covered losses across
all assets in the portfolio)
________________________________ ______________________________
Fee for Loss Coverage $7.059 billion of 8%
cumulative perpetual preferred
stock ($4.034 billion to
Treasury and $3.025 billion to
FDIC) and a warrant to
Treasury to purchase
6,531,728 million shares of
common stock at a strike price
of $10.61 per share The
preferred stock is
substantially similar to the
preferred stock issued on
December 31, 2008.
________________________________ ______________________________
Post-Signing Confirmation Process Composition of covered asset
pool, amount of first loss
position and fee for loss
coverage subject to final
confirmation by USG of, among
other things, qualification of
assets, expected losses and
reserves
________________________________ ______________________________
Management of Covered Asset Pool The definitive agreements
Include guidelines for
governance and asset
management with respect to the
covered asset pool, including
reporting requirements and
notice and approval rights of
USG at certain thresholds. If
Covered losses exceed
$27 billion, USG parties have
the right to change the asset
manager for the covered asset
pool
Total Covered Assets: $301 billion
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. Citi had $2.0 trillion in total
assets on $1.9 trillion in total liabilities as of Sept. 30, 2008.
As reported in the Troubled Company Reporter on Nov. 25, 2008, the
U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
As part of the agreement, the U.S. Treasury and the Federal
Deposit Insurance Corporation will provide protection against the
possibility of unusually large losses on an asset pool of
approximately $306 billion of loans and securities backed by
residential and commercial real estate and other such assets,
which will remain on Citigroup's balance sheet. As a fee for this
arrangement, Citigroup will issue preferred shares to the Treasury
and FDIC. In addition and if necessary, the Federal Reserve will
backstop residual risk in the asset pool through a non-recourse
loan.
CITIGROUP INC: Posts $8.29 Bil. Net Loss in Fourth Quarter 2008
---------------------------------------------------------------
Citigroup Inc. reported a net loss for the 2008 fourth quarter of
$8.29 billion, or $1.72 per share, based on 5,347 million shares
outstanding. Revenues of $5.6 billion were affected by write-
downs and losses in Securities and Banking. Results also include
$6.1 billion in net credit losses and a $6.0 billion net loan loss
reserve build.
For the full year 2008, Citigroup reported a net loss of
$18.72 billion, or $3.88 per share.
Key Items
-- Results reflect the negative impact from $7.8 billion in
revenue marks in Securities and Banking, a $5.3 billion
downward credit value adjustment on derivative positions,
excluding monolines, $2.5 billion of losses in private
equity and equity investments, $2.0 billion of
restructuring costs, and a $6.0 billion net loan loss
reserve build.
-- Deposit base remained stable compared to the third
quarter 2008 despite the challenging environment.
-- Net interest margin increased 73 basis points versus the
fourth quarter 2007.
-- Expenses excluding restructuring and repositioning
charges were down 4% since the third quarter 2008 and 14%
since the fourth quarter 2007.
-- Headcount reduced by approximately 29,000 since the third
quarter 2008 and approximately 52,000 in the full year
2008.
-- Increased capital position by issuing $45 billion of
preferred stock and warrants to the U.S. Treasury as part
of the TARP. The Tier 1 capital ratio was approximately
11.8%.
-- Closed sales of the German retail banking operations and
Citi Global Services Limited for after-tax gains of
$3.9 billion and $192 million, respectively.
The loss sharing program with the U.S. Government, closed on
January 15, 2009, reduces risk and lowers the regulatory capital
requirement on $301 billion of covered assets. Additionally,
Citigroup closed on the issuance of $7.1 billion of liquidation
preference perpetual preferred stock and warrants to the U.S.
Treasury and FDIC.
On January 13, 2009, Citigroup announced the Morgan Stanley Smith
Barney Joint Venture. Citigroup will exchange Smith Barney for a
49% stake in the JV and a $2.7 billion cash payment. Upon
closing, expected to occur in the second half of 2009, this
transaction will result in a pre-tax gain of approximately
$9.5 billion (approximately $5.8 billion after-tax), an increase
to tangible common equity of approximately $6.5 billion and an
increase to Tier 1 capital of approximately $6.4 billion.
Management Comment
"Our results continued to be depressed by an unprecedented
dislocation in capital markets and a weak economy. However, a
number of our core customer franchises continued to perform well
as Citi's customers remain active and engaged with us. We
continued to make progress on our primary goal in 2008 -- which
was to get fit. We significantly strengthened Tier 1 and
structural liquidity, we reduced our balance sheet, expenses, and
headcount. We also made significant progress in reducing risk
from our balance sheet. Our legacy assets declined to
approximately $300 billion, over $300 billion of assets are now
covered by a loss sharing arrangement, and we added $14 billion to
our loan loss reserves. We expect reduced volatility from marks
in 2009 as a result of actions we've taken to reduce risk, and
reclassify certain securities and loans from trading and available
or hold for sale to hold to maturity or held for investment," said
Citigroup CEO Vikram Pandit.
"Today, we announced that we would separate the company, for
management purposes, into two separate businesses -- Citicorp and
Citi Holdings. We are setting out a clear roadmap to restore
profitability and enable us to focus on maximizing the value of
Citi and strengthening TCE. We are committed to helping the
financial markets recover as quickly as possible. To accelerate
that recovery Citi is putting the TARP capital it has received to
work to support the U.S. economy and consumers -- expanding the
flow of credit to U.S. households and businesses responsibly and
on competitive terms," Mr. Pandit stated.
Mr. Pandit said, "I want to recognize the hundreds of thousands of
Citi colleagues who have kept their focus on our clients and our
business throughout what has been an enormously disruptive and
distracting period in our industry. Despite unprecedented
turbulence in the global financial markets, they have conducted
themselves with the highest professionalism and integrity.
Because of their work and dedication, I have no doubt we will
emerge from the current environment stronger, smarter, and better
positioned to realize the full earnings power of this great
franchise."
Fourth Quarter
Revenues were $5.6 billion, down 13%. Revenues across all
businesses reflect the impact of a difficult economic environment
and weak capital markets.
-- Global Cards GAAP revenues declined 27%, mainly due to
Lower securitization results in North America, the
absence of a $584 million pre-tax gain on Visa and
MasterCard shares recorded in the prior-year period, and
the impact of foreign exchange. Global Cards managed
revenues declined 6%. Average managed loans declined 2%,
due to lower purchase sales in North America and the
impact of foreign exchange.
North America managed revenues increased 4%.
-- Consumer Banking revenues declined 22%, driven by a 47%
decline in investment sales, lower mortgage servicing
revenue, the impact of foreign exchange, lower volumes
and spread compression.
-- In the Institutional Clients Group, Securities and
Banking revenues were negative $10.6 billion, mainly due
to net losses and write-downs of $7.8 billion, a
$5.3 billion downward credit value adjustment on
derivative positions, excluding monolines, as well as
losses of $2.5 billion in private equity and equity
investments.
-- Transaction Services revenues were up 4% to $2.4 billion,
Reflecting double-digit revenue growth in Treasury and
Trade Solutions. Average deposits and other customer
liability balances increased 5%, driven by North America.
Assets under custody declined 18%, principally due to
declining equity markets.
-- Global Wealth Management revenues declined 18%,
reflecting the adverse impact of market conditions on
capital markets and investment revenues, particularly in
North America and Asia. Revenues also included an
$87 million write-down on auction rate securities related
to the August 7, 2008 settlement. Average loans and
deposits declined 3% and 4%, respectively, and client
assets under fee-based management declined 35%.
The decline in client assets under fee-based management was mainly
due to lower asset valuations, reflecting declining market
values.
Operating expenses were $15.3 billion, down 5%, reflecting
benefits from re-engineering efforts and the impact of foreign
exchange. Expenses included $2.0 billion in restructuring charges
and a $563 million intangible asset impairment charge related to
Nikko Asset Management. Expenses in the prior-year period
included $539 million in repositioning charges and a $306 million
Visa-related litigation reserve. Excluding all these items,
expenses declined 16%.
Credit costs of $12.7 billion, up 66%, consisted mainly of
$6.1 billion in net credit losses, a $6.0 billion net loan loss
reserve build, and $594 million of policyholder benefits and
claims. Net credit losses increased $2.6 billion, primarily
driven by Consumer Banking and Cards in North America, and
Securities and Banking. The incremental net loan loss reserve
build of $2.3 billion was mainly due to a $1.2 billion loan loss
reserve build related to LyondellBasell recorded in Securities and
Banking. The increase in policyholder benefits and claims was due
to a change in the accounting estimate for future policy benefits
in Primerica Financial Services.
Taxes
The effective tax rate on continuing operations was 44.6% versus
42.7% in the prior-year period. The current quarter's taxes
included a $994 million tax benefit related to the restructuring
of the Japan Consumer Finance operations.
Capital Position
During the quarter, Citigroup issued $45 billion of preferred
stock and warrants to the U.S. Treasury as part of the TARP. The
Tier 1 capital ratio was approximately 11.8%.
Goodwill
In light of recent market and economic events and today's
restructuring announcement, Citigroup is continuing to review
goodwill to determine whether an impairment results.
Revenues
-- Global Cards GAAP revenues declined 27%, mainly due to
Lower securitization results in North America, the
absence of a $584 million pre-tax gain on Visa and
MasterCard shares recorded in the prior-year period, and
the impact of foreign exchange. Global Cards managed
revenues declined 6%.
-- Average managed loans declined 2%, due to lower purchase
sales in North America and the impact of foreign
exchange.
-- In North America, GAAP revenues declined 28%, as lower
securitization revenues primarily reflected the impact of
higher credit losses in the securitization trusts.
Managed revenues increased 4%, driven by a 97 basis point
increase in the managed net interest margin to 11.04%,
partially offset by the absence of a prior-year gain on
the sale of MasterCard shares. The improvement in the
managed net interest margin reflects higher interest and
fee revenues due to higher revolving balances, as well as
lower cost of funds. Purchase sales declined 15%,
reflecting lower spending across nearly all portfolios.
Average managed loans declined 1%, due to lower purchase
sales and balance transfer volumes, partially offset by a
decline in payment rates across all portfolios.
-- In EMEA, revenues declined 5%, and purchase sales and
average loans were down 21% and 7%, respectively, as
growth in revenues, sales and loans was more than offset
by the impact of foreign exchange.
-- In Latin America, revenues declined 29%, due to the
absence of a gain on Visa shares recorded in the prior-
year period, as well as the impact of foreign exchange.
Purchase sales and average loans declined 15% and 13%,
respectively, also reflecting the impact of foreign
exchange.
-- In Asia, revenues declined 31%, purchase sales were down
7% and average loans were up 1%, as growth in revenues,
sales and loans was more than offset by the impact of
foreign exchange. The decline in revenues also
reflects the absence of a gain on Visa shares recorded
in the prior-year period.
Expenses
Expenses declined 14%, primarily due to the absence of a
$293 million Visa-related litigation reserve recorded in the
prior-year period, as well as the impact of foreign exchange. The
decline in expenses was also driven by lower compensation and
marketing costs, reflecting a continued slowdown in acquisition
marketing, partially offset by a $127 million restructuring
charge.
Credit Costs
In North America, credit costs increased 34%, reflecting higher
net credit losses, up 37% or $242 million, and a $172 million
incremental net loan loss reserve build. Higher credit costs
reflected a continued weakening of leading credit indicators and
trends in the macro-economic environment, including rising
unemployment, higher bankruptcy filings, and the housing market
downturn. Higher credit costs also reflected a significant
increase in the rate at which customers became delinquent, as well
as the continued acceleration in the rate at which delinquent
customers advanced to write-off. The managed net credit loss
ratio increased 268 basis points to 6.98% in the Citi branded
portfolio and 340 basis points to 9.86% in the retail partners
portfolio.
In EMEA, credit costs increased $328 million, reflecting higher
net credit losses, up $154 million, and a $174 million incremental
net loan loss reserve build. Higher credit costs reflected the
impact of purchase accounting adjustments recorded in the prior-
year period relating to the Egg acquisition, as well as continued
credit deterioration in the UK, Spain, and Greece. The net credit
loss ratio increased 445 basis points to 5.17%.
In Latin America, credit costs increased 89%, reflecting higher
net credit losses, up 37% or $115 million, and a $231 million
incremental net loan loss reserve build. Higher credit costs were
driven by continued deterioration in the credit environment in
Mexico and Brazil. The net credit loss ratio increased 517 basis
points to 14.18%.
In Asia, credit costs increased 54%, reflecting higher net credit
losses up 32% or $39 million, and a $46 million incremental net
loan loss reserve build. Higher credit costs reflected continued
deterioration, primarily in India. The net credit loss ratio
increased 96 basis points to 4.02%.
Net Income
The $610 million net loss was mainly driven by the significant
increase in credit costs.
Revenues declined 22%, driven by a 47% decline in investment
sales, lower mortgage servicing revenue, the impact of foreign
exchange, lower volumes and spread compression. The decline in
investment sales was driven by a general slowdown in global
capital market activities. Average loans and deposits were down
6% and 7%, respectively. Expenses declined 3%, as benefits from
re-engineering efforts and the impact of foreign exchange more
than offset $384 million in restructuring charges. Credit costs
increased 23% or $1.1 billion, reflecting a significant increase
in net credit losses, up $1.7 billion. Credit costs also included
a $2.3 billion net loan loss reserve build, mainly in North
America across all portfolios, including additional reserves for
increased numbers of loan modification adjustments to customer
loans across all product lines.
North America
Revenues declined 21%, mainly driven by lower mortgage servicing
revenue and the absence of gains on the sale of assets. Average
loans were down 5%, driven by a decline in residential real estate
originations and loans, and deposits were up 3%.
Credit costs increased 21% and included higher net credit losses,
up $1.6 billion, and a $2.0 billion net loan loss reserve build
across all portfolios, including additional reserves for increased
numbers of loan modification adjustments to customer loans across
all product lines. The loan loss reserve build was $766 million
lower than the prior-year period. Higher credit costs reflected a
weakening of leading credit indicators, including a continued rise
in delinquencies in first and second mortgages, personal loans and
auto loans. Credit costs also reflected trends in the macro-
economic environment, including housing market declines. The net
credit loss ratio increased 222 basis points to 3.62%. The net
loss of $2.2 billion was mainly driven by lower revenues, a $226
million restructuring charge, and higher credit costs.
Europe, Middle East and Africa
Revenues declined 27%, as average loans and deposits were down 14%
and 28%, respectively. The decline in average deposits was
primarily due to the impact of foreign exchange, as well as
customer actions to align deposits with government insurance
programs, mainly in the UK.
Investment sales and assets under management declined mainly due
to adverse market conditions.
Credit costs increased 3%, due to higher net credit losses, up 14%
or $25 million. The net loan loss reserve build of
$83 million was $16 million lower than the prior-year period.
Higher credit costs reflected continued credit deterioration,
particularly in Spain and Greece. The net credit loss ratio
increased 95 basis points to 3.75%. Lower revenues and the
increase in credit costs led to a net loss of $233 million.
Latin America
Revenues decreased 27%, reflecting the impact of foreign exchange,
the absence of a gain on Visa shares recorded in the prior-year
period, and the divestiture of the Chile Consumer Banking
operations, which closed in January 2008. Average loans and
deposits were down 3% and 13%, respectively, due to the impact of
foreign exchange.
Credit costs nearly doubled, due to an increase in net credit
losses, up 32% or $35 million, and a $94 million incremental net
loan loss reserve build. Higher credit costs reflected a
continued deterioration in Mexico Brazil, and Colombia. The net
credit loss ratio increased 108 basis points to 4.04%. Lower
revenues and a significant rise in credit costs led to a net loss
of $76 million.
Asia
Excluding Japan Consumer Finance, revenues declined 20%, mainly
driven by a significant decline in investment revenues, as
investment sales declined 83%, reflecting a continued decline in
equity markets across Asia. The declines in average loans and
deposits of 12% and 9%, respectively, were mainly due to the
impact of foreign exchange. Credit costs more than doubled,
driven by higher net credit losses, up 57% or $59 million, and a
$71 million incremental net loan loss reserve build.
Higher credit costs were mainly driven by continued deterioration
in the credit environment in India. The net credit loss ratio
increased 66 basis points to 1.48%. Net income declined 35% to
$251 million.
In Japan Consumer Finance, revenues declined 47%, reflecting a
decline in net interest revenues as the portfolio continues to be
managed down. Revenues also included a $174 million pre-tax
charge to increase reserves for estimated losses due to customer
settlements. This compares to a $188 million pre-tax charge
recorded in the prior-year period. Net income of $545 million
reflected a tax benefit of $750 million, mainly due to the
restructuring of legal vehicles.
Securities and Banking
Securities and banking revenues were negative $10.6 billion due to
substantial write-downs and losses.
Fixed income markets revenues of negative $13.4 billion reflected:
-- A $5.3 billion downward credit value adjustment on
Derivative positions, excluding monolines. The continued
disruption in the credit markets caused counterparty
credit spreads to widen, while the TARP capital injection
contributed to the tightening of Citigroup's credit
spreads. This unusual divergence led to the downward
adjustment.
-- Net write-downs of $4.6 billion on sub-prime related
direct exposures. These exposures on December 31, 2008,
were comprised of approximately $2.0 billion of gross
lending and structuring exposures and approximately
$12.0 billion of net ABS CDO super senior exposures (ABS
CDO super senior gross exposures of $ 18.9 billion). On
September 30, 2008, these exposures were comprised of
approximately $3.3 billion of gross lending and
structuring exposures and approximately $16.3 billion of
net ABS CDO super senior exposures (ABS CDO super senior
gross exposures of $25.7 billion).
-- Private equity and equity investments losses of
$2.5 billion.
-- Write-downs of $1.3 billion, net of hedges, on Alt-A
mortgages.
-- Write-downs of $1.1 billion on SIV assets.
-- Write-downs of $991 million on commercial real estate
positions.
-- Downward credit value adjustments of $897 million related
to exposure to monoline insurers.
-- Write-downs of $307 million on ARS proprietary positions
and $87 million on positions related to the August 7,
2008 settlement.
-- Negative revenues were partially offset by a $2.0 billion
gain related to the inclusion of Citigroup's credit
spreads in the determination of the market value of those
liabilities for which the fair value option was elected,
as well as strong revenues in the interest rate and
currency trading business.
-- Equity markets revenues decreased by $1.4 billion to
negative $650 million. Revenues generated in cash
trading and prime broker were offset by losses in
derivatives, convertibles, and proprietary trading.
-- Lending revenues increased $1.1 billion to $2.1 billion,
primarily driven by gains on credit default swap hedges,
partially offset by write-downs of $382 million, net of
underwriting fees, on funded and unfunded highly
leveraged finance commitments.
-- Net investment banking revenues declined 79% to
$275 million.
-- Advisory revenues were $236 million, down 57%, reflecting
continued difficult market conditions.
-- Equity underwriting revenues were $26 million, down
$435 million, reflecting continued volatility in the
equity markets and extremely low global volumes.
-- Debt underwriting revenues were $56 million, down 86%,
primarily driven by net write-downs of $213 million of
highly leveraged finance commitments and lower market
volumes overall.
-- North America results reflect write-downs on sub-prime
related direct exposures, Alt-A mortgages, and commercial
real estate positions, as well as the negative effect
from the downward credit value adjustment on
derivative positions, excluding monolines. Negative
revenues were partially offset by gains on credit default
swap hedges and a strong performance in currency trading.
EMEA revenues increased $4.8 billion, mainly because sub-
prime related direct exposures are now managed primarily
in North America after being transferred in the second
quarter 2008 from EMEA to North America. EMEA revenues
also reflected strong results in currency trading as well
as local markets sales and trading.
Latin America revenues declined 31%, reflecting
unfavorable market conditions mainly related to equities
trading and the mark-to-market impact of wider credit
spreads, partially offset by improvements in local
markets sales and trading, and lending. Asia revenues
declined $2.6 billion reflecting losses on proprietary
investments and difficult market conditions, partially
offset by strong performance in rates and currencies.
-- Expenses decreased 12%, driven by a significant decrease
in salary and incentive compensation due to headcount
reductions and cost cutting offset by a $563 million
Nikko Asset Management intangible asset impairment charge
and a $457 million restructuring charge.
-- Credit costs increased significantly, mainly driven by a
$2.1 billion incremental net loan loss reserve build.
The loan loss reserve build reflected a $1.5 billion
incremental net build to loan loss reserves for specific
counterparties, which included $1.2 billion for
LyondellBasell, as well as a $0.6 billion incremental net
build to reflect a general weakening in the corporate
credit environment.
Transaction Services
-- Transaction Services revenues were up 4% to $2.4 billion,
reflecting double-digit revenue growth in TTS. Average
deposits and other customer liability balances increased
5%, driven by North America. Assets under custody
declined 18% due to declining equity markets.
-- TTS revenues were up 15%, driven by growth in liabilities
and new deal wins. Securities Services revenues
decreased 15%, mainly driven by lower assets under
custody valuations and the impact of market disruption on
volumes and balances.
-- North America revenue growth of 26% was primarily due to
higher interest revenues from balances. In EMEA,
revenues increased 5% driven largely by increased
customer liability balances. Latin America revenues
declined by 1%. In Asia, revenues were down 8%,
mainly due to the absence of a gain on Visa shares
recorded in the prior-year period. Revenues also
reflected lower Securities Services fees due to a decline
in equity valuations and the impact of foreign exchange.
-- Expenses declined 2%, driven by headcount reduction and
reengineering benefits, as well as the impact of foreign
exchange. Net income increased 8% to $721 million with
strong growth in North America and EMEA.
Global Wealth Management
-- Global Wealth Management revenues declined 18%,
reflecting the adverse impact of market conditions on
capital markets and investment revenues, particularly in
North America and Asia. Revenues also included a
$87 million write-down related to the ARS settlement.
Average loans and deposits declined 3% and 4%,
respectively, and client assets under fee-based
management declined 35%. The decline in client assets
under fee-based management was mainly due to lower asset
valuations reflecting negative market action.
-- In North America, revenues declined 13%, as lower
investments and capital markets revenues due to difficult
market conditions were partially offset by an increase in
banking and lending revenues. Average deposits grew 7%,
driven by the re-balancing of customer portfolios into
more liquid assets. In EMEA, revenues declined 16%,
mainly due to lower management fees and transactional
revenue. In Latin America, revenues declined 36%, also
reflecting the impact of market conditions. In Asia,
revenues declined 33%, as market conditions continued to
be challenging, leading to a significant decline in
investments and capital markets revenues.
-- Expenses declined 2%, as lower compensation costs were
partially offset by a $306 million restructuring charge.
Credit costs increased $160 million, driven by a
$118 million incremental net loan loss reserve build,
mainly in North America residential mortgages. Net
income declined significantly to $29 million.
Corporate/Other
Corporate/Other revenues of $254 million were mainly driven by a
$263 million pre-tax gain on sale of Citi Global Services Limited
and effective hedging activities. The net loss of $421 million
reflected higher expenses mainly due to restructuring charges, and
higher taxes held at Corporate.
Discontinued Operations
Discontinued operations income of $3.8 billion primarily reflected
a $3.9 billion after-tax gain on the sale of Citigroup's German
retail banking operations, including the fourth quarter impact of
a benefit of a currency hedge put in place post-signing.
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. Citi had $2.0 trillion in total
assets on $1.9 trillion in total liabilities as of Sept. 30, 2008.
As reported in the Troubled Company Reporter on Nov. 25, 2008, the
U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
As part of the agreement, the U.S. Treasury and the Federal
Deposit Insurance Corporation will provide protection against the
possibility of unusually large losses on an asset pool of
approximately $306 billion of loans and securities backed by
residential and commercial real estate and other such assets,
which will remain on Citigroup's balance sheet. As a fee for this
arrangement, Citigroup will issue preferred shares to the Treasury
and FDIC. In addition and if necessary, the Federal Reserve will
backstop residual risk in the asset pool through a non-recourse
loan.
CITIGROUP INC: Will Reorganize Into Two Operating Units
-------------------------------------------------------
Citigroup will realign into two businesses -- Citicorp and Citi
Holdings -- to optimize its global businesses for future
profitable growth and opportunities. This structure will enable
Citigroup to focus on driving the performance of its core
businesses and, separately, on realizing value from non-core
assets.
The strategic restructuring creates:
-- Citicorp, which will focus on leveraging the competitive
advantages of the company's global universal bank in more
than 100 countries; and,
-- Citi Holdings, which will be made up of brokerage and
retail asset management, local consumer finance and a
special asset pool -- whose management will focus on
tightly managing risks and losses, and maximizing the
value of these assets.
Citigroup CEO Vikram Pandit said, "Given the economic and market
environment, we have decided to accelerate the implementation of
our strategy to focus on our core businesses. This will help in
our ongoing efforts to reduce our balance sheet and simplify our
organization, which will enable us to better serve our clients and
customers in both businesses without disruption. In light of the
opportunities we see in the market today, we believe this new
structure will provide a wide range of options going forward to
continue strengthening our core franchise. With lower risk and a
streamlined set of businesses, we expect Citicorp to be a high-
return and high-growth business. And with the new Citi Holdings,
we will be able to tighten our focus on risk management and credit
quality for businesses with strong market positions but that are
not central to our core franchise."
Citigroup's plan is to transition to this structure to the maximum
extent and as quickly as possible, taking into account the
interests of all stakeholders, including customers and clients,
debt holders, preferred and common stockholders, employees, and
the communities it serves. Citigroup recognizes that major legal
vehicle restructuring changes like this will require regulatory
approvals and the resolution of tax and other issues. But
Citigroup will manage the company consistent with this structure
starting immediately, and management reporting will reflect this
structure starting with the second quarter of this year.
Citicorp
Citicorp will be a relationship-focused global bank to businesses
and consumers. It will include "core" Citigroup properties and
have a presence in high-growth emerging markets around the world.
Citicorp will have worldwide deposit-taking capabilities that can
be put to work with consumer and institutional customers in a
diversified way to produce the highest returns, giving it a unique
ability to deliver global capabilities locally and serve local
clients globally.
Citicorp's Global Institutional Bank will consist of:
-- Global Transaction Services: an industry-leading business
with a global network in about 140 countries.
-- Corporate and Investment Bank: world-class relationship
banking offering full range of advisory, underwriting,
lending and market-making services; now re-focused with
a lower risk profile.
-- Citi Private Bank: global banking serving high-net-worth
individuals, including about 30 percent of the world's
billionaires.
Citicorp's Retail Bank will consist of:
-- Branded card businesses globally.
-- Regional consumer and commercial banking franchises in
the U.S., Asia, Latin America, Central and Eastern
Europe, and the Middle East.
Citigroup anticipates that Citicorp will have assets of
approximately $1.1 trillion and will be approximately 65% deposit
funded.
Citi Holdings
Citi Holdings will be a group of non-core businesses that include
attractive long-term businesses with strong market positions.
However, they do not sufficiently enhance the capabilities of
Citigroup's core business, and in many ways compete for its
resources.
The Citi Holdings management team will seek to maximize the value
of these businesses by running them well, restructuring and
managing them through this tough economic cycle, and taking
advantage of value-enhancing disposition and combination
opportunities as they emerge. These businesses and assets will
initially include:
-- Brokerage and asset management: including the 49% stake
in Morgan Stanley Smith Barney, as well as Nikko Cordial
Securities, Nikko Asset Management and Primerica
Financial Services.
-- Local consumer finance: including CitiFinancial and
CitiMortgage in the U.S., and consumer finance operations
in Western Europe, Japan, India, Mexico, Brazil, Thailand
and Hong Kong.
-- Special asset pool: will manage the assets covered by the
loss-sharing agreement with the U.S. government parties
in the ring-fenced portfolio; and other non-strategic
assets.
A search for a strong manager with operational experience and
capital markets knowledge is currently underway to head Citi
Holdings.
This plan has been discussed with Citigroup's primary regulators
at the Federal Reserve Board and the Office of the Comptroller of
the Currency. Citigroup continues to be well-capitalized on a
Tier 1 basis.
Mr. Pandit added, "The realignment will preserve what makes Citi
unique -- its global, universal banking footprint -- and is
consistent with the company's announced strategy of positioning
the company to capitalize on the best opportunities for global
growth in a rapidly changing financial environment. We will
continue to move aggressively to get Citi back on the right track
and return it to a position of sustainable financial success."
Citigroup to Sell Nikko Cordial
Alison Tudor at The Wall Street Journal reports that Citigroup
said that it has earmarked Japanese retail brokerage Nikko Cordial
Securities for sale. Nikko Cordial Securities will be categorized
as a non-core asset alongside other peripheral or ailing
businesses globally, WSJ says, citing Citigroup.
As reported by the Troubled Company Reporter on Jan. 15, 2009, a
Citigroup Inc. spokesperson said that the company would keep Nikko
Cordial, after disclosing the sale of its retail brokerage
business Smith Barney to Morgan Stanley.
According to WSJ, people familiar with the matter said that
Citigroup hadn't planned to sell Nikko Cordial until the eve of
its earnings. Nikko Cordial, says WSJ, was Citigroup's sole major
retail brokerage business and didn't fit into Citigroup's plans.
WSJ relates that Citigroup figured it might be easier to find a
buyer for its businesses in Japan, since Japanese financial
institutions are still relatively sound financially.
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. Citi had $2.0 trillion in total
assets on $1.9 trillion in total liabilities as of Sept. 30, 2008.
As reported in the Troubled Company Reporter on Nov. 25, 2008, the
U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
As part of the agreement, the U.S. Treasury and the Federal
Deposit Insurance Corporation will provide protection against the
possibility of unusually large losses on an asset pool of
approximately $306 billion of loans and securities backed by
residential and commercial real estate and other such assets,
which will remain on Citigroup's balance sheet. As a fee for this
arrangement, Citigroup will issue preferred shares to the Treasury
and FDIC. In addition and if necessary, the Federal Reserve will
backstop residual risk in the asset pool through a non-recourse
loan.
CITIGROUP INC: Whalen Says Bankruptcy is End Game
-------------------------------------------------
Christopher Whalen, managing director of Institutional Risk
Analytics, told Bloomberg's Betty Liu that seeking bankruptcy
protection will likely be the end game for Citigroup, Inc.
"Well, I think that will probably be the end game. What we have
now is open bank assistance, where the Fed and the Treasury are
supporting the publicly listed holding company that we know as
Citigroup."
Mr. Whalen, however, acknowledged that Citigroup is currently too
big to file for Chapter 11. He says that after the sale of Smith
Barney brokerage unit to Morgan Stanley, Citigroup will try to
sell its other stand-alone assets.
"But Citi is too big, obviously, to put into a filing right now.
So they're going to manage it. They're going to sell, especially
the off-shore assets. Because a lot of these banking businesses
around the world are portable, they're standalone entities."
"And then, I think by the time we get to the summer, what's left
is probably going to be resolved. So I've been telling a lot of my
clients; I don't assign any value to the common or the preferred
at this point."
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. Citi had $2.0 trillion in total
assets on $1.9 trillion in total liabilities as of Sept. 30, 2008.
As reported in the Troubled Company Reporter on Nov. 25, 2008, the
U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
As part of the agreement, the U.S. Treasury and the Federal
Deposit Insurance Corporation will provide protection against the
possibility of unusually large losses on an asset pool of
approximately $306 billion of loans and securities backed by
residential and commercial real estate and other such assets,
which will remain on Citigroup's balance sheet. As a fee for this
arrangement, Citigroup will issue preferred shares to the Treasury
and FDIC. In addition and if necessary, the Federal Reserve will
backstop residual risk in the asset pool through a non-recourse
loan.
CLEAR CHANNEL: Will Lay Off 7% of U.S. Staff
--------------------------------------------
Sarah McBride at The Wall Street Journal reports that Clear
Channel Communications Inc. will lay off about 1,500 workers, or
7% of its staff in the U.S.
According to WSJ, Clear Channel has 20,000 workers in the U.S.
Citing a person familiar with the situation, WSJ relates that the
layoffs will mostly affect employees in ad sales. The report
states that the source said that Clear Channel will implement
other cuts to save almost $400 million. The report says that the
cuts will help Clear Channel catch up with other radio companies
that have engaged in layoffs and other cost cuts since 2008.
WSJ relates that Clear Channel will also replace more local shows
with syndicated content. Clear Channel, says WSJ, would eliminate
chunks of local programming and replace it with national
programming. Clear Channel will try to syndicate a local show
faster than it might have in the past if the show would be
successful, the report states, citing a person familiar with the
situation.
Clear Channel Communications is the operating subsidiary of San
Antonio, Texas-based CC Media Holdings Inc.
As reported by the Troubled Company Reporter on Jan. 7, 2009,
participations in a syndicated loan under which Clear Channel
Communications is a borrower traded in the secondary market at
49.80 cents-on-the-dollar during the week ended January 2, 2009.
This represents a drop of 1.87 percentage points from the previous
week. Clear Channel Communications pays interest at 365 points
above LIBOR. The bank loan matures on December 30, 2015. The bank
loan carries Moody's B1 rating and Standard & Poor's B rating.
COMMERCE BANK: Deposits Acquired by Republic Bank of Chicago
------------------------------------------------------------
National Bank of Commerce, Berkeley, Illinois, was closed Friday
by the Office of the Comptroller of the Currency, and the Federal
Deposit Insurance Corporation (FDIC) was named receiver. To
protect the depositors, the FDIC entered into a purchase and
assumption agreement with Republic Bank of Chicago, Oak Brook,
Illinois, to assume all of the deposits of National Bank of
Commerce.
The two locations of National Bank of Commerce reopened Saturday
as branches of Republic Bank of Chicago. Depositors of the failed
bank will automatically become depositors of Republic Bank.
Deposits will continue to be insured by the FDIC, so there is no
need for customers to change their banking relationship to retain
their deposit insurance coverage. Customers of both banks should
continue to use their existing branches until Republic Bank can
fully integrate the deposit records of National Bank of Commerce.
Over the weekend, depositors of National Bank of Commerce can
access their money by writing checks or using ATM or debit cards.
Checks drawn on the bank will continue to be processed. Loan
customers should continue to make their payments as usual.
As of January 7, 2009, National Commerce Bank had total assets of
$430.9 million and total deposits of $402.1 million. In addition
to assuming all of the failed bank's deposits, Republic Bank
agreed to purchase approximately $366.6 million in assets at a
discount of $44.9 million. The FDIC will retain the remaining
assets for later disposition.
Customers who have questions about Republic Bank's acquisition can
call the FDIC toll free at 1-800-760-3641. This phone number will
be operational this evening until 9:00 p.m., central; on Saturday
from 9:00 a.m. to 6:00 p.m., central; and on Sunday from Noon to
6:00 p.m., central and thereafter from 8:00 a.m. to 8:00 p.m.,
central. Interested parties can also visit the FDIC's Web site
at: http://www.fdic.gov/bank/individual/failed/commerce.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $97.1 million. Republic Bank's acquisition of all
deposits was the "least costly" resolution for the FDIC's Deposit
Insurance Fund compared to alternatives. National Bank of
Commerce is the first bank to fail in the nation this year. The
last bank to be closed in the state was Meridian Bank, Eldred, on
October 10, 2008.
Congress created the Federal Deposit Insurance Corporation in 1933
to restore public confidence in the nation's banking system. The
FDIC insures deposits at the nation's 8,384 banks and savings
associations and it promotes the safety and soundness of these
institutions by identifying, monitoring and addressing risks to
which they are exposed. The FDIC receives no federal tax dollars
-- insured financial institutions fund its operations.
COMMUNITY TRUST: Forgoes $68,000,000 Treasury Funding Commitment
----------------------------------------------------------------
Community Trust Bancorp, Inc., in Pikeville, Kentucky, said it has
elected not to participate in The Treasury Department's Capital
Purchase Program. CTBI had received preliminary approval on
December 17, 2008, from the U.S. Department of Treasury to receive
$68 million by participating in the Treasury's Capital Purchase
Program. It noted that the Treasury's Capital Purchase Program is
a voluntary program designed to help healthy institutions build
capital to support the U.S. economy.
"Community Trust is honored that the Treasury had chosen CTBI as
an institution worthy of participation in the Treasury's Capital
Purchase Program," said Jean R. Hale, Chairman, President and CEO
of CTBI. "Our company currently maintains a capital level
significantly exceeding regulatory guidelines for a well-
capitalized institution and is meeting the lending needs of our
customers. Considering our current capital position and the
requirements the program would impose on our business, we believe
that our participation in the program would not be in the best
interests of our shareholders."
Community Trust Bancorp, Inc. has 71 banking locations across
eastern, central, south central, and northeast Kentucky, 6 banking
locations in southern West Virginia, and 5 trust offices across
Kentucky.
DELTA AIR: Technicians Seniority Agreement Approved
---------------------------------------------------
Delta Air Lines was notified by the Aircraft Mechanics Fraternal
Association that pre-merger Northwest technicians voted to approve
an agreement on seniority integration.
In mid-December, the Delta TechOps Seniority Integration Committee
and the Northwest Committee partnered to reach a tentative
agreement on a combined seniority list covering technicians and
other TechOps employees. The integrated seniority list covers
approximately 6,000 aircraft technicians and other TechOps
employees of the new Delta. The agreement will be effective upon
date of signing, scheduled for Jan. 21, 2009.
"I am very proud of the partnership that both committees
demonstrated throughout this process, and the speed and
professionalism with which they reached an agreement," said Delta
TechOps President Tony Charaf. "This is another significant step
toward bringing together the best professionals in the industry."
More than 25 percent of Delta Air's total workforce has now
resolved seniority integration covering pilots, flight
dispatchers, meteorologists, and technicians and other TechOps
employees of the new Delta.
About Delta Air Lines
With its acquisition of Northwest Airlines, Atlanta, Georgia-based
Delta Air Lines (NYSE: DAL) -- http://www.delta.com/or
http://www.nwa.com/-- is now the world's largest airline. From
its hubs in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St.
Paul, New York-JFK, Salt Lake City and Tokyo-Narita, Delta, its
Northwest subsidiary and Delta Connection carriers offer service
to more than 376 destinations worldwide in 66 countries and serves
more than 170 million passengers each year. Delta's marketing
alliances allow customers to earn and redeem either SkyMiles or
WorldPerks on more than 16,000 daily flights offered by SkyTeam
and other partners.
The merger closed on October 29, 2008.
Prior to the merger, Delta was the world's second-largest airline
in terms of passengers carried and Northwest was the world's
fourth largest airline.
Northwest and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R.
Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at
Cadwalader, Wickersham & Taft LLP in Washington, represented the
Northwest Debtors in their restructuring efforts. The Official
Committee of Unsecured Creditors retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel. When the Northwest Debtors filed for bankruptcy, they
listed $14.4 billion in total assets and
$17.9 billion in total debts. On May 21, 2007, the Court
confirmed the Northwest Debtors' amended plan. That amended plan
took effect May 31, 2007. (Northwest Airlines Bankruptcy News
Issue No. 114; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
Delta and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta
Debtors in their restructuring efforts. Timothy R. Coleman at The
Blackstone Group L.P. provided the Delta Debtors with financial
advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provided the Official
Committee of Unsecured Creditors with legal advice. John McKenna,
Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman
at Mesirow Financial Consulting, LLC, served as the Committee's
financial advisors. On April 25, 2007, the Court confirmed the
Delta Debtors' plan. That plan became effective on April 30,
2007. The Court entered a final decree closing 17 cases on Sept.
26, 2007. (Delta Air Lines Bankruptcy News Issue No. 114;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DOUGLAS JOHNSON: Approves Fixed Tag Sale of Household Items
-----------------------------------------------------------
The U.S. Bankruptcy Court for Southern District of Texas approved
the emergency motion of Melanie Johnson, the ex-spouse of Douglas
Johnson, for the fixed tag sale of several significant items of
household goods and furnishings for $10,730 and distribution to
her of the net sales proceeds of $6,692, after sales commission
and expenses, provided that she pays the private school tuition of
Nathan and Justice Johnson from that amount.
As reported in the Troubled Company Reporter on Dec 3, 2008, the
Court, Melanie Johnson said that she been paid part of the
children's child support since the filing of the bankruptcy
petition, but has received no alimony since June 2008.
Based in Houston, Douglas R. Johnson owns 100% of Johnson
Broadcasting, Inc. and roughly 85% of Johnson Broadcasting of
Dallas, Inc. He is the sole director of JB and JBDallas. Mr.
Johnson filed for Chapter 11 relief on Oct. 13, 2008 (Bankr. S.D.
Tex. Case No. 08-36584). Craig Harwyn Cavalier, Esq., at the Law
Offices of Craig Cavalier, represents the Debtor as counsel. The
Debtor continues to manage and operate his affairs as a debtor-in-
possession. No creditors' committee has yet been appointed in the
case by the United States Trustee. In his schedules, the Debtor
listed total assets of $62,134,923 and total debts of $32,392,497.
Based in Houston, Texas, Johnson Broadcasting Inc. and Johnson
Broadcasting of Dallas Inc. own and operate television stations in
Texas. Johnson Broadcasting Inc. and Johnson Broadcasting of
Dallas Inc. filed separate petitions for Chapter 11 relief on
Oct. 13, 2008 (Bankr. S.D. Texas Case No. 08-36583 and 08-36585,
respectively). John James Sparacino, Esq., and Timothy Alvin
Davidson, II, Esq., at Andrews and Kurth, represent the Debtors
as counsel. When Johnson Broadcasting Inc. filed for protection
from its creditors, it listed assets and debts of between
$10 million and $50 million each.
DOUGLAS JOHNSON: Files Schedules of Assets and Liabilities
----------------------------------------------------------
Douglas R. Johnson filed with the U.S. Bankruptcy Court for the
Southern District of Texas, his schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- ------------
A. Real Property $20,600,000
B. Personal Property $41,534,923
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $19,413,397
E. Creditors Holding
Unsecured Priority
Claims $1,000,000
F. Creditors Holding
Unsecured Non-priority
Claims $11,979,099
----------- -----------
TOTAL $62,134,923 $32,392,497
Based in Houston, Douglas R. Johnson owns 100% of Johnson
Broadcasting, Inc. and roughly 85% of Johnson Broadcasting of
Dallas, Inc. He is the sole director of JB and JBDallas. Mr.
Johnson filed for Chapter 11 relief on Oct. 13, 2008 (Bankr. S.D.
Tex. Case No. 08-36584). Craig Harwyn Cavalier, Esq., at the Law
Offices of Craig Cavalier, represents the Debtor as counsel. The
Debtor continues to manage and operate his affairs as a debtor-in-
possession. No creditors' committee has yet been appointed in the
case by the United States Trustee.
Based in Houston, Texas, Johnson Broadcasting Inc. and Johnson
Broadcasting of Dallas Inc. own and operate television stations in
Texas. Johnson Broadcasting Inc. and Johnson Broadcasting of
Dallas Inc. filed separate petitions for Chapter 11 relief on
Oct. 13, 2008 (Bankr. S.D. Texas Case No. 08-36583 and 08-36585,
respectively). John James Sparacino, Esq., and Timothy Alvin
Davidson, II, Esq., at Andrews and Kurth, represent the Debtors
as counsel. When Johnson Broadcasting Inc. filed for protection
from its creditors, it listed assets and debts of between
$10 million and $50 million each.
ESTATE FINANCIAL: May Employ Beall & Burkhardt as Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
granted Estate Financial Inc. authority to employ Beall &
Burkhardt, of Santa Barbara, California as counsel, retroactive to
June 25, 2008. The employment shall cover the period through the
appointment of the Chapter 11 Trustee, and services necessary to
help the transition to control by the Trustee. Compensation will
be fixed by the Court after notice and hearing. The Court has not
approved specific hourly rates for the firm's personnel.
As counsel for the Debtor, Beall & Burkhardt will, among others,
advise the Debtor generally concerning the rights, duties, and
obligations of a debtor-in possession under the Bankruptcy Code,
the Federal Rules of Bankruptcy Procedure, and the requirements of
the United States Trustee; prosecute any claim objections; and
represent the Debtor in all hearings and meetings before the
Court.
William C. Beall, Esq., a partner at Beall & Burkhardt, assured
the Court that the firm has no interest adverse to the estate, and
that the firm is a "disinterested person" as that term is defined
in Sec. 101(14) of the Bankruptcy Code.
About Estate Financial
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. Robert B.
Orgel, Esq., at Pachulski Stang Ziehl & Jones LLP, and William C.
Beall, Esq., at Beall and Burkhardt, represent the Debtor as
counsel. A Chapter 11 trustee, Thomas P. Jeremiassen, was
appointed by the Court on July 23, 2008. Brian D. Fittipaldi,
Esq., at the U.S. DOJ/Office of the U.S. Trustee, represents the
Chapter 11 trustee as counsel. Robyn B. Sokol, Esq., and Steven
T. Gubner, Esq., at Ezra Brutzkus & Gubner, represent the Official
Committee of Unsecured Creditors as counsel. In its schedules,
Estate Financial listed total assets of $27,428,550, and total
debts of $7,316,755.
ESTATE FINANCIAL: May Employ FTI Consulting as Financial Advisors
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
granted Estate Financial Inc. authority to employ FTI Consulting,
Inc. as financial advisors and forensic accountants, retroactive
to June 25, 2008. The employment will cover the period through
the appointment of the Chapter 11 Trustee, and services necessary
to help the transition to control by the Trustee. Compensation
shall be fixed by the Court after notice and hearing. No specific
hourly rates are approved.
As the Debtor's financial advisors and forensic accountants, FTI
Consulting, Inc. will:
a) assist with cash management procedures;
b) assist and advise with respect to the preservation and
disposition of assets; and
c) analyze trust accounts.
Tamara D. McGrath, a managing director at FTI Consulting, Inc.,
assured the Court that the firm has no interest adverse to the
estate, and the firm is a "disinterested person" as that term is
defined in Sec. 101(14) of the Bankruptcy Code.
About Estate Financial
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. Robert B.
Orgel, Esq., at Pachulski Stang Ziehl & Jones LLP, and William C.
Beall, Esq., at Beall and Burkhardt, represent the Debtor as
counsel. A Chapter 11 trustee, Thomas P. Jeremiassen, was
appointed by the Court on July 23, 2008. Brian D. Fittipaldi,
Esq., at the U.S. DOJ/Office of the U.S. Trustee, represents the
Chapter 11 trustee as counsel. Robyn B. Sokol, Esq., and Steven
T. Gubner, Esq., at Ezra Brutzkus & Gubner, represent the Official
Committee of Unsecured Creditors as counsel. In its schedules,
Estate Financial listed total assets of $27,428,550, and total
debts of $7,316,755.
FARMINGTON CENTER: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------------
Portland Business Journal reports that Farmington Center Salem,
operating as Farmington Square Salem, has filed for Chapter
bankruptcy protection in the U.S. Bankruptcy Court for the
District of Oregon.
According to Portland Business, Farmington Center called it a
reorganization step to secure new financing.
Portland Business relates that Farmington Center CEO Peary Wood
predicted a turnaround for the company three months ago. The
report says that Farmington Center has faced financial and
regulatory trouble and executive upheaval.
Farmington Center, Portland Business states, runs 16 senior
housing projects and has $40 million to $50 million annual
revenue. Court documents say that Farmington Center has up to 49
workers.
Farmington Centers said in a statement that it filed to give have
time to refinance an existing mortgage. The company also said in
the statement that it would continue to operate normally and will
continue accepting new residents.
Portland, Oregon-based Farmington Center Salem, dba Farmington
Square Salem, filed for Chapter 11 bankruptcy protection on
Jan. 14, 2009 (Bankr. D. Ore. Case No. 09-60095). Douglas P.
Cushing, Esq., at Jordan Schrader Ramis, PC, assists the company
in its restructuring effort. The company listed $10 million to
$50 million in assets and $1 million to $10 million in debts.
FEDERAL FAMILY: Fitch Downgrades Rating on Two Classes to 'BB'
--------------------------------------------------------------
Fitch Ratings has affirmed three and downgraded two classes from
the Federal Family Education Loan Program student loan revenue
bonds issued by Mississippi Higher Education Assistance
Corporation 2004 Indenture. The downgrades reflect the effect of
increased funding costs on the transaction due to failed auctions.
The actions follow a review of all auction-rate transactions to
determine the ability of each to withstand increased funding costs
going forward and pay timely interest and full principal by legal
maturity.
Classes downgraded to 'BB' and 'B' could experience principal
losses but are expected to receive timely interest payments for a
number of years depending on the transaction structure and
interest rate environment.
The rating actions are:
Mississippi Higher Education Assistance Corporation 2004
Indenture:
-- 2004 A-1 affirmed at 'AAA';
-- 2004 B-1 downgraded from 'A' to 'BB' and removed from Rating
Watch Negative;
-- 2007 A-1 affirmed at 'AAA';
-- 2007 A-2 affirmed at 'AAA';
-- 2007 B-1 downgraded from 'A' to 'BB' and removed from Rating
Watch Negative.
All of the bonds are tax-exempt auction-rate securities currently
paying interest at the maximum rate. The trust documents define
the maximum rate as the lesser of 175% for bonds rated 'AAA' to
'A-', 200% for bonds rated 'BBB+' to 'BBB-' and 265% for bonds
rated lower than 'BBB-' multiplied by the SIFMA index or 14%. The
maximum rate definition determines the amount of interest the
trust can pay on the auction-rate notes.
Parity ratios, or the ratio of assets to liabilities, have
decreased due to auction failures causing bonds to pay interest at
the maximum rate. The total parity ratio for the trust as of
Sept. 30, 2008 was 96.62%; senior parity was approximately 107%.
Credit enhancement consists of a reserve account; in addition,
senior bonds benefit from subordination provided by lower priority
notes.
The collateral supporting the bonds consists of federally
guaranteed loans originated under the FFELP. FFELP loans are
guaranteed by an eligible guarantor to at least 97% of principal
and accrued interest, depending on loan origination date.
The student loan portfolio is serviced by Education Services
Foundation, Pennsylvania Higher Education Assistance Agency and
Chase Student Loan Servicing. None of the servicers carry a Fitch
servicer rating.
FIRST ALLMERICA: Moody's Lifts Insurance Rating to A2 From Ba1
--------------------------------------------------------------
Moody's Investors Service announced that it upgraded the insurance
financial strength rating of First Allmerica Financial Life
Insurance Company to A2 (negative outlook) from Ba1, as well as
its short term IFS rating to P-1 from Not Prime. The rating
action, which resolves a review for upgrade initiated on July 31,
2008, follows the close of the purchase of FAFLIC from The Hanover
Insurance Group, Inc. (THG, senior debt at Baa3), by Commonwealth
Annuity and Life Insurance Company, an operating company of the
Goldman Sachs Insurance Group (GS Insurance Group; operating
companies at A2 IFS rating). In a related action, Moody's also
changed the rating outlook for the other operating companies of
the GS Insurance Group (CALIC, Columbia Capital Life Reinsurance
Company, Charleston Capital Reinsurance, LLC and Arrow Reinsurance
Company) to negative from stable.
In the purchase transaction, CALIC acquired the common stock of
FAFLIC from THG for approximately $94 million, subject to post-
closing adjustments. Similar to the arrangement between Goldman
Sachs and the other entities in the GS Insurance Group, a Keepwell
was put in place.
Moody's commented that FAFLIC's A2 IFS rating is aligned with the
ratings of the other member companies of the GS Insurance Group,
all of whose operations are expected to be integrated, with
continued strong financial and operational support from their
parent. Prior to the close of this transaction, Goldman Sachs
Group Inc (Goldman Sachs, senior debt at A1), the parent company
of GS Insurance Group, contributed $50 million of capital to
CALIC.
According to Scott Robinson, Vice President & Senior Credit
Officer at Moody's, "The negative outlook on the GS Insurance
Group entities largely reflects the negative outlook on the senior
debt of Goldman Sachs, which provides implicit and explicit
support to the GS Insurance Group." Please see the December 16
press release on Goldman Sachs for more information on the rating
action.
Robinson added, "The Baa1 standalone IFS rating of the GS
Insurance Group entities--ratings ignoring the explicit and
implicit support provided by Goldman Sachs--are lifted by two
notches owing to the Keepwell Agreements and implicit support by
Goldman Sachs." As a result of the downgrade of Goldman Sach's
senior debt rating, the notching between this rating and the IFS
rating of GS Insurance Group has been narrowed to one notch from
two. The narrower notching reflects the demonstrated operational
and financial support provided by Goldman Sachs to its insurance
subsidiaries as well as the benefit of the Keepwell agreements.
According to Moody's, the following could lead to a return of the
rating outlook on the GS Insurance Group entities back to stable:
a return of the rating outlook on Goldman Sachs back to stable.
It is unlikely that the IFS rating of the GS Insurance Group would
be raised to the same level of the senior debt rating of Goldman
Sachs, as long as the rating of Goldman Sachs is greater than the
standalone rating of the GS Insurance Group. Moody's added that
the following would place downward pressure on the ratings of the
GS Insurance Group entities: a downgrade of the parent, Goldman
Sachs; a reduction in the level of parental support; a material
change in the business plan; or a drawdown on any of the Keepwell
Agreements.
The last rating action on The GS Insurance Group entities occurred
on July 11, 2008, when Moody's harmonized the ratings of the group
to an A2 IFS rating level.
This rating was upgraded with a negative outlook:
First Allmerica Financial Life Insurance Co. -- insurance
financial strength to A2 from Ba1.
This rating was upgraded and is expected to be withdrawn for
business reasons over the near-term.
* First Allmerica Financial Life Insurance Co. -- short term
insurance financial strength to P-1 from Not Prime.
These rating outlooks were changed to negative from stable:
* Commonwealth Annuity and Life Insurance Company -- insurance
financial strength rating at A2;
* Columbia Capital Life Reinsurance Company -- insurance
financial strength rating at A2;
* Charleston Capital Reinsurance, LLC -- insurance financial
strength rating at A2;
* Arrow Reinsurance Company Ltd. -- insurance financial
strength rating at A2.
FAFLIC was the run-off life insurance subsidiary of THG. For the
first nine months of 2008, FAFLIC reported statutory net income of
$4.4 million, down from $27 million in the year ago period.
FAFLIC had statutory capital and surplus of $162 million as of the
third quarter 2008.
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to repay punctually senior
policyholder claims and obligations.
FORD MOTOR: Unit Starts Talks With Treasury
-------------------------------------------
Ford Motor Co.'s lending unit, Ford Motor Credit, has started
talks with the U.S. Treasury Department about its financing needs,
Josh Mitchell and Jeff Bennett at The Wall Street Journal reports,
citing a government official.
According to WSJ, the negotiations started after the Congress
failed in 2008 to pass an auto-aid package. The report states
that the official didn't say whether Ford Motor Credit is seeking
aid.
Citing Josh Mitchell and Jeff Bennett at Dow Jones Newswires, Ford
Motor spokesperson Mark Truby said, "We have been maintaining
ongoing dialogue with the government on ideas to help unfreeze the
credit markets. Ford Credit already has taken advantage of the
Federal Reserve's Commercial Paper Funding Facility."
Ford Credit has been seeking access to the Treasury's Term Asset
Backed Securities Loan Facility and the Federal Deposit Insurance
Corp.'s approval of an application to establish an industrial loan
corporation, Dow Jones relates, citing Mr. Truby.
Ford Motor, according to Dow Jones, didn't apply for low-interest
loans from the federal government, but the company had said that
it wanted similar federal help for Ford Motor Credit and any
concessions given to the auto makers by the United Auto Workers.
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 Nov. 11,
2008, Moody's Investors Service lowered the debt ratings of
Ford Motor Company, Corporate Family and Probability of
Default Ratings to Caa1 from B3. The company's Speculative
Grade Liquidity rating remains at SGL-3 and the rating outlook
is negative. In a related action Moody's also lowered the
long-term rating of Ford Motor Credit Company to B3 from B2.
The outlook for Ford Credit is negative.
As reported in the Troubled Company Reporter on Oct. 10, 2008,
Fitch Ratings downgraded the Issuer Default Rating of Ford Motor
Company and Ford Motor Credit Company by one notch to 'CCC' from
'B-'.
GANNETT CO: Sells Tucson Citizen Assets; May Close Newspaper
------------------------------------------------------------
Gannett Co., Inc., reported that it is offering to sell certain
assets of the Tucson (AZ) Citizen. If a sale is not completed by
March 21, 2009, Gannett said it will have to close the newspaper.
"The Tucson Citizen has been part of Gannett since 1976 and we
deeply regret having to take this step. But dramatic changes in
our industry combined with the difficult economy -- particularly
in this region -- mean it is no longer viable for our partnership
with Lee Enterprises Incorporated to produce two daily newspapers
in Tucson," said Bob Dickey president of the U.S. Community
Publishing division of Gannett. "We applaud the hard work and
ongoing efforts of our employees at the newspaper. Their
dedication to journalism and to the community of Tucson deserves
the highest praise. We hope for a quick and positive response to
this offer."
The Tucson Citizen is an afternoon newspaper that publishes Monday
through Saturday. It is one of the two newspapers produced by TNI
Partners as part of a joint operating arrangement (JOA) under the
Newspaper Preservation Act. The Arizona Daily Star, which is
owned by a subsidiary of Lee Enterprises Incorporated, is the
second newspaper in the JOA. TNI Partners provides the
production, distribution, sales and other non-editorial business
functions for both the Citizen and The Star.
Each newspaper maintains a separate newsroom and the editorial
operations of the newspapers are entirely independent. Average
daily circulation of the Citizen is 19,851, according to the
latest Audit Bureaus of Circulation report. Founded in 1870, the
Tucson Citizen has been part of a JOA since 1940.
Offers should be directed to Robert J. Broadwater, managing
director of Broadwater & Associates LLC, at (914) 961-5700 or
broadwater@broadwaterllc.com.
About Gannett Co. Inc.
Headquartered in McLean, Virginia, Gannett Co. Inc. (NYSE:GCI) --
http://www.gannett.com/-- is an international news and
information company. In the United States, the company publishes
85 daily newspapers, including USA TODAY, and nearly 900 non-daily
publications. Along with each of its daily newspapers, the
company operates Websites offering news, information and
advertising that is customized for the market served and
integrated with its publishing operations. Newspaper publishing
operations in the United Kingdom, operating as Newsquest, include
17 paid-for daily newspapers, almost 300 non-daily publications,
locally integrated Websites and classified business Websites with
national reach. The company has two segments: newspaper
publishing and broadcasting.
GAINEY CORP: May Use Cash Collateral Until May 29
-------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Michigan
granted, on a final basis, Gainey Corp., and its debtor-
affiliates, permission to use cash collateral of Wachovia Bank and
certain lenders, up through and including May 29, 2009, for the
purposes set forth in the cash forecast.
As additional adequate protection for the diminution in value, if
any, of the lenders' interest in the prepetition collateral as a
result of the use of the lenders' cash collateral:
-- lenders are granted, subject to a Carve-Out (for the payment
of allowed fees and disbursements of the Debtors' and the
Official Committee of Unsecured Creditors' professionals,
quarterly fees required to be paid pursuant to Title 28
U.S.C.
Sec. 1930(a)(6) and any fees payable to the Clerk of the
Bankruptcy Court), replacement liens upon all present and
after-acquired property of the Debtors;
-- lenders are also granted allowed superpriority claims pursuant
to Sec. 364(c)(1) of the Bankruptcy Code, subject to the
Carve-Out, with priority in payment over any and all
administrative expenses of the kinds specified or ordered
pursuant to the Bankruptcy Code; and
-- from and after Jan. 17, 2009, the Debtor shall make adequate
protection payments on account of such week, by 5:00 p.m., on
each Wednesday in cash in the amount of $315,000.
As additional adequate protection, the Debtors shall make weekly
supplemental adequate protection payments to the Lenders based on
the excess of the Accounts Receivable Diminution, as defined in
the order, over the cumulative supplemental adequate protection
payments paid by the Debtors, commencing the first business day
after the calculation which shall commence on Jan. 21, 2009, and
on Wednesday of each subsequent week.
As of their bankruptcy filing date, the Debtors owed Wachovia Bank
and certain other lenders, the aggregate amount of $239,437,045,
composed of $204,052,014 in principal, $12,833,451 in interest,
$5,131,059 in swap obligations, plus any then-outstanding fees and
expenses, and including contingent reimbursement obligations
relating to presently undrawn letters of credit in the aggregate
amount of $17,420,520.00.
As collateral, Wachovia Bank and the lenders hold a first
priority, senior security interests in and liens upon all or
substantially all of such Debtors' personal property assets as
described in the 2006 Collateral Agreement, and a mortgage on
certain real property owned by Lester Coggins Trucking, Inc. in
Okahumpka, Florida.
Headquartered in Grand Rapids, Michigan, Gainey Corp. --
http://www.gaineycorp.com/-- provides trucking and freight-
services in the U.S. and parts of Canada. It has 5,000 trucks and
trailers, and employs more than 2,300 workers including 1,900
truck drivers.
The company and its subsidiaries filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Mich. Lead Case No. 08-09092) on Oct. 14,
2008. Daniel F. Gosch, Esq., Geoffrey A. Fields, Esq., and John
T. Schuring, Esq., at Dickinson Wright PLLC, represent the
Debtors as counsel. Alixpartners, LLC is the Debtors'
restructuring and financial consultant. Jay L. Welford, Esq.,
Judith Greenstone Miller, Esq., Louis P. Rochkind, Esq., Paul R.
Hage, Esq., and Richard E. Kruger, Esq., at Jaffe, Raitt, Heuer &
Weiss, PC, represent the Official Committee of Unsecured Creditors
as counsel. Virchow Krause and Company, LLP is the Debtor's
financial advisor. In its schedules, Gainey Corp. listed total
assets of $32,634,336 and total debts of $226,766,249.
GOODY'S LLC: Going-Out-of-Business Sale is Underway
---------------------------------------------------
Goody's Family Clothing, Inc., a retailer of moderately-priced
family apparel, announced Friday the start of their Going-Out-of-
Business sales event. This is an outstanding opportunity for
consumers to realize unprecedented savings on a broad selection of
quality merchandise in all 282 stores across 20 states,
principally in the Southeast and Midwest, Goody's said.
Despite emerging from bankruptcy protection this past October, the
continuation of the downturn in consumer spending along with the
tightening of credit sources have left Goody's with no alternative
but to cease operations, marking the end of the 55-year-old family
business.
"In spite of our best efforts to turn around the company, in the
end, the current retail environment proved to be too challenging,"
said Paul White, Chief Executive Officer, Goody's Family Clothing,
Inc. "I'd like to thank all of our employees for their hard work
and dedication, and especially all of our customers for the
support they have given us over the years."
Mr. White added that Goody's has always been about finding great
brands at great values in convenient locations and that he hoped
each and every customer would take advantage of the incredible
values to be found on all merchandise in all stores during the
Going-Out-of-Business sales event.
Goody's has lowered prices on its entire inventory. Savings start
at 40% off regular prices. Consumers can find incredible values
on key national brands that include Adidas, Levi's, Dockers,
Chaps, Reebok, Lee and Alfred Dunner. The company also carries
private brand collections that include Ivy Crew, Mountain Lake,
Duck Head Jeans Co., and Kid Crew, as well as exclusive fashion
brands, such as Ashley Judd.
Gordon Brothers Group, a global advisory, restructuring and
investment firm specializing in the retail, consumer products,
real estate and industrial sectors, and Hilco Merchant Resources,
which provides a full suite of strategic services for retailers,
are running the Going-Out-of-Business sale on Goody's behalf.
About Gordon Brothers Group
Founded in 1903, Gordon Brothers Group --
http://www.gordonbrothers.com/-- is a global advisory,
restructuring and investment firm specializing in the retail,
consumer products, industrial and real estate sectors. Gordon
Brothers Group maximizes value for both healthy and distressed
companies by purchasing or selling all categories of assets,
appraising assets, providing debt financing, making private equity
investments, and operating businesses for extended periods. Gordon
Brothers Group conducts over $40 billion in transactions and
appraisals annually.
About Hilco Merchant Resources
Based in Northbrook, IL, Hilco Merchant Resources --
htpp://www.hilcomerchantresources.com/ -- provides a wide range of
analytical, advisory, operational, asset monetization and capital
investment services to help retailers define and execute strategic
initiatives. Hilco can acquire, co-invest in or facilitate the
merger of retail operations; purchase or otherwise dispose of
duplicative stores, underperforming divisions, unnecessary
distribution centers, inventory, owned real estate, leases, and
furniture, fixtures and equipment. Hilco also provides retail
restructuring services, interim store management, loss prevention
services, marketing and advertising management, merchandising
management, and strategic store opening programs.
About Goody's Family Clothing
Founded in 1953, privately-held Goody's Family Clothing, Inc. --
http://www.goodysonline.com-- is a retailer of moderately priced
family apparel operating in small to midsize markets primarily
throughout the Southeastern United States.
INDEPENDENT BANK: Fitch Assigns 'BB' Rating on $78.2 Mil. Stocks
----------------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB' to the $78.2 million
in preferred stock issued by Independent Bank Corp, rated 'BBB-
/F3' by Fitch, under the Treasury's Capital Purchase Program.
The CPP is one of the U.S. Government programs established to help
stabilize and restore confidence in the U.S. banking system. This
preferred issuance represents 3% of INDB's total risk-weighted
assets.
Rating Assigned:
Independent Bank Corp
-- Preferred Stock at 'BB'.
INTERTAN CANADA: To Continue Operations, Not Part of Liquidation
----------------------------------------------------------------
InterTAN Canada Ltd., an indirect wholly-owned subsidiary of U.S.-
based Circuit City Stores, confirmed that The Source by Circuit
City stores across Canada remain open for business and are not
included in the liquidation process announced by Circuit City.
On November 10, 2008, InterTAN sought and obtained creditor
protection by the Ontario Superior Court of Justice under the
Companies' Creditors Arrangement Act. Since that time, the
Company has been working with NM Rothschild & Sons Canada Limited
to pursue a sale of the Canadian operations as a going concern and
has been in active discussions with a number of interested
bidders. InterTAN expects to receive formal proposals with
respect to a going concern transaction on or before January 23,
2009.
The Canadian sales process is separate and distinct from the sales
process followed by Circuit City in the U.S.
InterTAN operates or licenses 765 neighbourhood electronics stores
and dealer outlets across Canada under the trade name, The Source
by Circuit City. All of these stores are fully staffed and open
for business.
About Circuit City Stores
Circuit City Stores, Inc., is a specialty retailer of consumer
electronics and related services. At December 31, 2008, the
domestic segment operated 567 stores in 153 U.S. media markets.
At December 31, 2008, the international segment operated through
approximately 765 retail stores and dealer outlets in Canada.
Circuit City operates Web sites at http://www.circuitcity.com,
http://www.thesource.caand http://www.firedog.com.
Bankruptcy Creditors' Service, Inc., publishes Circuit City
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Circuit City Stores Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
JFK INTERNATIONAL: Moody's Affirms Ratings on Air Terminal Bonds
----------------------------------------------------------------
Moody's Investors Service has affirmed the Baa3 rating on the
bonds of the JFK International Air Terminal LLC (JFK IAT or the
Project). The outlook is stable.
The Project has experienced strong, sustained growth in passengers
since 2004 and has increased diversity in its carrier base that
has strengthened reserves and reduced the dependency on one
airline or market segment. While the Project is exposed to volume
risk, medium term contracts are in place with the major airlines
serving the terminal. The Project also benefits from a track
record of the experienced terminal operator and the level of
service the management provides. Solid financial performance in
2008 reflects the ongoing growth in JFK IAT traffic and continued
diversification of revenues. The project's Debt Service Coverage
Ratio, one of the key financial metrics, is projected to be at
2.01 times for 2008.
Moody's has previously noted that in December 2006, JFK IAT
completed the 3rd & 4th supplements to the master lease agreement
with the Port Authority of New York and New Jersey. These
supplements contained several provisions that were favorable to
the legal and financial framework of the Terminal, including
provisions specifying reserve levels and the ability for the Port
Authority to finance shortfalls in the repayment of the Terminal's
subordinate obligation to the Port Authority.
The rating on the bonds could be upgraded if the Project continues
to experience solid debt service coverage levels. While
management is anticipating a drop-off in passenger levels given
the current economic environment, it is Moody's view that the
Terminal's current competitive position could enable it to sustain
a decline while maintaining solid finances.
The Project bonds are special limited obligations of the Port
Authority of New York and New Jersey, payable from and secured by
facility lease rental payments made by the lessee, JFK IAT, LLC,
to the Port Authority. The facility rental is payable from a
pledge of the net revenues of the project, after satisfaction of
the operating and maintenance expenses, including Base Rent to the
Port Authority.
The trust estate further consists of certain reserves, including a
cash-funded debt service reserve for maximum annual debt service,
a leasehold mortgage assigned to the trustee, as well as a
personal property interest of the lessee granted to the Port
Authority and assigned to the trustee.
The JFK IAT is one of eight unit terminals at NYC's JFK
International Airport. Its debt is secured solely by the revenues
of the terminal facility with no recourse to either the Port
Authority or the concessionaire's partners, which are Amsterdam
Schiphol Airport (rated A1), LCOR and Lehman Brothers holding.
The last rating action was on June 13, 2007 when the rating on the
Project bonds was upgraded from Ba1 to Baa3.
The Project's bond ratings were assigned by evaluating factors
believed to be relevant to the credit profile of the Project such
as i) the business risk and competitive position of the issuer
versus others within its industry or sector, ii) the capital
structure and financial risk of the issuer, iii) the projected
performance of the issuer over the near to intermediate term, and
iv) the issuer's history of achieving consistent operating
performance and meeting budget or financial plan goals. These
attributes were compared against other issuers both within and
outside of the Project's core peer group and the rating is
believed to be comparable to ratings assigned to other issuers of
similar credit risk.
JIM PALMER: ActionView Seeks Disapproval of Disc. Statement
-----------------------------------------------------------
ActionView International, Inc., has filed an objection to
disclosure statement to the Plan of Reorganization filed by Jim
Palmer Trucking, Inc., in its Chapter 11 bankruptcy case.
ActionView International provided a $250,000 loan to Jim Palmer
Trucking in May 2008 and is currently seeking repayment of the
loan.
The Plan of Reorganization filed by Jim Palmer Trucking before the
United States Bankruptcy Court, District of Montana regarding in
November 2008 calls for paying unsecured creditors 34% of the
allowed claim through 48 monthly payments commencing 180 days
after the Order of Confirmation.
Creditors had until January 12, 2009, to file objections to the
Plan of Reorganization and hearings on in the case was scheduled
to begin January 15, 2009. The objection filed by ActionView
cites several specific grounds for the company's objection to the
Disclosure statement. As a significant creditor in the case,
ActionView is acting as chairman of the unsecured creditors
committee.
"ActionView International is working closely with its legal
representatives in this matter in order to protect the interests
of the company and its shareholders," commented ActionView
International CEO Steven R. Peacock. "As stated soon after the
Plan of Reorganization was filed, we do not believe that it
adequately addresses the interests of ActionView International, as
part of a class of unsecured creditors, particularly regarding the
amount and timetable of the repayment of monies owed. We will
continue to keep our shareholders informed as the case continues
forward."
After the Jim Palmer Trucking bankruptcy case was filed,
ActionView International management expressed several issues of
concern, including its close proximity in time to Jim Palmer
Trucking's acceptance of the loan from ActionView International.
About ActionView International, Inc.
ActionView International's operating subsidiary custom-designs,
develops, and manufactures vividly illuminated motion billboards.
ActionView places its signs into high traffic locations and
markets advertising space on the signs. ActionView shares
advertising revenue generated from the billboards with advertising
agencies, the local business partner and the location owner. The
benefit to advertisers is exposure in high traffic locations at
reasonable costs due to the scrolling feature and multiple
advertisers.
About Jim Palmer
Headquartered in Missoula, Montana, Jim Palmer Trucking Inc. --
http://www.jimpalmertrucking.com/-- offers truckload
transportation of temperature-controlled cargo. The company
operates throughout the US from terminals in Missoula, Montana;
Salina, Kansas; and Tampa.
The Debtor and two of its affiliates filed for separate Chapter 11
protection on July 15, 2008, (Bankr. D. Mont. Lead Case No.: 08-
60922). James A. Patten, Esq., represents the Debtors in their
restructuring efforts. The Debtors have $11,897,554 in total
assets and $12,089,808 in total debts.
JOEL KRON: Files Chapter 11 Plan of Reorganization
--------------------------------------------------
Joel Kron filed with the U.S. Bankruptcy Court for the Southern
District of Florida on Jan. 8, 2009, a plan of reorganization
under Chapter 11 of the Bankruptcy Code.
Plan Summary
The Debtor's Plan provides that the Debtor will utilize his income
to pay the arrearages on all allowed secured claims in full over a
period of five (5) years, with the ability to prepay these amounts
prior to the conclusion of the five year period. Allowed
administrative claims and payments due to the U.S. Trustee will be
paid in full on the Plan's Effective Date.
Background on Debtor
The Debtor is an individual and a self-employed seller of vintage
Rolex watches. He operates his business out of his home. The
Debtor also holds a 50% ownership interest in a Cheeburger
Cheeburger franchise in Boca Raton, Florida.
The Debtor is currently separated from his wife and is obligated
to pay her $4,544.84 per month for the next ten years as support
for their children.
The Debtor owns a residence with his wife located at 15988 D'Alene
Drive, Delray Beach, Florida (the "Homestead Property"), valued at
approximately $2.2 million. The Homestead Property is encumbered
by a mortgage held by Chevy Chase Bank. In addition to the
Homestead Property, the Debtor owns real property located at 200
NW 8 Court, Pompano Beach, Florida (the "Investment Property")
which is currently leased. The Investment Property serves as a
homeless shelter from which the Debtor is entitled to receive
monthly lease payaments of $13,000.
In late 2004, the Debtor entered into foru $20 million investments
with Charles F. Schwab representing CGR Investments, Inc. and John
Francois Vanderschmitt refresenting De La Forge Trust, whereby the
Debtor was required to make substantiual financial investments in
exchange for a promised return of $80,000,000. Based upon the
agreements, the Debtor invested several hundred thousand dollars
from the end of 2004 through March 2008. The Debtor received only
a minimal return on his investment in 2006. As part of the
agreements, the Debtor also purchased the Investment Property
through his single memeber limited liability company, Second
Avenue Holdings, LLC.
Plan Funding
Except as otherwise provided in the Plan, on the Plan Effective
Date, all assets of the Debtor shall be vested in the Reorganized
Debtor. The Debtor shall fund the Plan using the following
sources:
1) the Debtor's profit from the sale of vintage Rolex watches,
estimated at approximately $15,000 per month;
2) the Debtor's net income from rental of the Investment
Property, estimated at $5,000 per month;
3) the Debtor's income from his 50% interest in the Cheeburger
Cheeburger franchise, estimated at approximately $10,000 per
month;
4) anticipated tax refunds in the amount of $23,664;
5) any income realized on the sale of the Debtor's Homestead
Property;
6) any funds collected from the $80 million owed by CGR
investments, Inc., De La Forge Trust, Charles F. Schwab and
Jean Francois Vanderschmitt.
Classification and Treatment of Claims
A. Unclassified Claims
Allowed administrative claims shall be paid in cash on the later
of the Plan's Effective Date and the date said administrative
claim becomes an allowed administrative claim by final order.
Professional fees and expense claims will be paid in accordance
with the procedures established by the Bankruptcy Code, the Rules
and the Court relating to the payment of interim and final
compensation for services rendered and reimbursement of expenses.
B. Classified Claims
Class Type of Claim Impairment
----- ------------------------- ----------
1 Priority Claim of Sherry Unimpaired
Kron
2 Secured Claim of Capri Unimpaired
Neighborhood Association,
Inc.
3 Secured Claim of Chevy Impaired
Chase Bank
4 Secured Claim of Cheney Impaired
Bros., Inc.
5 Allowed Secured Claim of Unimpaired
U.S. Bank N.A.
6 Allowed Secured Claim of Unimpaired
DaimlerChrysler Financial
Services Americas, LLC
7 Allowed Secured Claim of Unimpaired
VW Credit, Inc.
8 Allowed Priority Tax Impaired
Claims
9 Allowed Unsecured Claims Impaired
The Plan provides the following treatment for Classes 1, 2, 5, 6
and 7:
The Priority Claim of Sherry Kron under Class 1 will be paid
monthly in the amount of $1,382.15 for the children's tuition
through and including Sept. 10, 2014, and $2,913.56 for payment on
the Audi until said lease expires.
The disputed Secured Claim of Capri Neighborhood Association under
Class 2 in the amount of $4,650 will be paid in sixty (60) monthly
payments in the amount of $77.50.
The Allowed Secured Claim of U.S. Bank N.A. under Class 5 is based
upon its secured interest in a 2006 Land Rover leased by the
Debtor. The Debtor will abandon the 2006 Land Rover to U.S. Bank
N.A. when the lease expires by its own terms.
The Allowed Secured Claim of DaimlerChrysler Financial Services
Americas, LLC under Class 6 is based upon its security interest in
a 2007 Mercedes-Benz SL600BI leased by the Debtor. Daimler's
claim shall be reinstated.
The Allowed Secured Claim of VW Credit, Inc. under Class 7 is
based upon its security interest in a 2007 Audi leased by the
Debtor. Pursuant to the Plan, the Debtor assumes and assigns his
lease to VW Credit, Inc. to his spouse and said lease will be paid
through child support.
The Plan provides the following treatment for Classes 3, 4, 8 and
9:
The Debtor will make the $5,025 monthly mortgage payments on the
Homestead Property to the Allowed Secured Claim of Chevy Chase
Bank under Class 3 until said property is sold. Additionally, the
Debtor will make equal monthly payments to Chevy Chase Bank in
cash, at the interest rate contained in the original mortgage
note, on the outstanding arrearages under the original mortgage
note of $153,398.60, which payments will be made over a period of
sixty (60) months or until the Homestead Property is sold.
The Debtor disputes the Secured Claim of Cheney Bros., Inc. under
Class 4 which is based upon a judgment in the amount of
$26,120.75 allegedly secured by a judgment lien on the Homestead
Property. In the event this claim becomes an allowed claim, the
Debtor will make equal monthly payments to Cheney Bros in cash
through and including Sept. 10, 2013.
The Debtor objects to the Internal Revenue Service's Priority Tax
Claims under Class 8. This claim is based on the claim of the
Internal Revenue Service in the amount of $100,000 for estimated
unpaid income taxes for the period 2004-2007. All tax returns are
now filed and show that refunds are expected for the years 2004 to
2006 and that the Debtor does not owe any taxes for 2007. In the
event that there are allowed priority tax claims, each holder of
said claim shall receive deferred cash payments over a period not
to exceed six years.
The Debtor disputes the Unsecured Claims of David Rascoe, Dan
Kron, U.S. Bank N.A. and DaimlerChrysler under Class 9 and will be
filing objections to said claims. In the event that U.S. Bank
N.A. and/or Daimler's prepetition arrearage claims are allowed,
Daimler's claim will be paid in in full within 10 days of the Plan
Effective Date and U.S. Bank N.A.'s claim will be paid in sixty
(6)) monthly installments of $76.38.
Holders of claims valued at an unknown amount shall not be
entitled to vote on the Debtor's Plan. The following disputed
claim holders shall not be entitled to vote on the Debtor's Plan:
Dan Kron and David Rascoe under Class 9, Cheney Bros. Inc. under
Class 4, the Internal Revenue Service under Class 8 and the Capri
Neighborhood Association under Class 2.
A full-text copy of Joel Kron's Chapter 11 Plan of Reorganization,
dated Jan. 8, 2009, is available for free at:
http://bankrupt.com/misc/JoelKronChapter11Plan.pdf
About Joel Kron
Based in Delray Beach, Florida, Joel Kron is an individual and a
self-employed seller of vintage Rolex watches. He operates his
business out of his home. The Debtor also holds a 50% ownership
interest in a Cheeburger Cheeburger franchise in Boca Raton,
Florida. The Debtor filed for Chapter 11 protection on Sept. 10,
2008 (Bankr. S.D. Fla. Case No. 08-23147). Bradley S. Shraiberg,
Esq., and John E. Page, Esq., at Kluger Peretz Kaplan & Berlin,
When the Debtor filed for protection from his creditors, he listed
total assets of $82,203,991 and total debts of $2,717,117.
JOHN GANTES: Lists $2.7 Mil. in Assets & $345.3 Mil. in Debts
-------------------------------------------------------------
OCRegister.com reports that John Gantes has listed $2.7 million in
assets and $345.3 million in debts.
According to OCRegister.com, Mr. Gantes and his wife filed for
Chapter 7 liquidation on Dec. 12, 2008, after filing 25 separate
Chapter 11 reorganization cases for some of his firms.
OCRegister.com relates that the state and federal governments are
on top of the list of creditors in Mr. Gantes' bankruptcy case.
The report states that Mr. Gantes said that he potentially owes
millions in unpaid payroll and sales taxes for his restaurants:
-- $5 million to $7 million to the Internal Revenue Service
in unpaid payroll taxes;
-- $675,000 or so to the state Employment Development
Department;
-- an unknown amount of payroll taxes to the state Franchise
Tax Board, which collects state income taxes; and
-- an unknown amount of sales taxes to the state Board of
Equalization.
Mr. Gantes, according to OCRegister.com, said on Nov. 11, 2008,
that the "Board of Equalization" had forced two of his firms --
Metro Border LP and Metro Border LLC -- to file Chapter 11. The
board threatened "that it would install a 'keeper' to collect the
revenues of the Metro debtors' restaurants and apply those
collections solely to the SBE obligation," OCRegister.com says,
citing Mr. Gantes. The report states that a keeper goes to the
business and takes everything from the cash register for up to 10
days in a row.
John Gantes is the president of Rancho Santa Margarita-based
Breckenridge Group, which controls a web of companies that in turn
operate about 110 restaurants in California, Oregon, Washington,
and Nevada.
KRONOS INTERNATIONAL: Moody's Downgrades Corporate Rating to 'B2'
-----------------------------------------------------------------
Moody's Investors Service lowered Kronos International, Inc.'s
Corporate Family Rating to B2 from B1, and the rating on
EUR400 million senior secured notes due 2013 to B3. The downgrade
primarily reflects the anticipated significant impact of general
economic and housing slowdown in Europe (and around the globe) on
KII's reported performance for fourth quarter of 2008 and in 2009,
and its declining liquidity position. The outlook was changed to
negative. These summarizes the ratings changes:
Kronos International Inc.
* Corporate family rating -- B2 from B1
* Probability of default rating -- B2 from B1
* EUR400 million 6.5% Sr Sec Notes due 2013 -- B3 (LGD5, 72%)
from B2 (LGD%, 75%)
The downgrade reflects further softness in KII's main market
(European TiO2); anticipated year over year volume declines due to
housing and auto downturns globally and in Europe; potential
pressure on selling prices; and unfavorable industry dynamics due
to reduced utilization rates. Given the overall industrial
weakness in the fourth quarter of 2008 and significant declines in
chemical industry volumes that may continue into 2009, Moody's
expects that KII will have lower liquidity and that the amount
available under the revolver will be smaller than at the end of
third quarter 2008. Moody's notes that KII's borrowing ability
under the revolver is restricted by its two financial covenants
(Net Secured Debt/EBITDA not greater than 0.70:1.00 and Net
Financial Debt / Equity not greater than 0.50:1.00) that are
tested quarterly. Weak EBITDA in late 2008 and early 2009 is
expected to limit the amount available under the facility below
the commitment level.
The negative outlook primarily reflects the continuing uncertainty
regarding 2009 performance and industry conditions, and potential
for a decline in liquidity. The ratings could be further
downgraded if the company experiences a tightening of liquidity or
if it seems likely that overall 2009 performance would be weaker
than in 2008 due to material declines in volumes, TiO2 prices, or
profit margins. The outlook could be changed to stable if a
rebound in Europe bolsters TiO2 demand and KII's 2009 financial
performance comes in line with at least that in 2008.
Moody's most recent announcement concerning the ratings for KII
was on April 5, 2006 when KII"s then new EUR400 million senior
secured notes due 2013 were assigned a B2 rating, and its B1 CFR
and stable outlook were affirmed.
Kronos International, Inc. is a wholly owned subsidiary of Kronos
Worldwide, Inc., headquartered in Dallas, Texas and produces TiO2
pigments in Europe. For the LTM ended September 30, 2008 the
company reported sales of $1.0 billion.
LANDAMERICA FINANCIAL: Sec. 341 Meeting Slated for January 23
-------------------------------------------------------------
The United States Trustee for Region 4 will convene a meeting of
the creditors of LandAmerica Financial Group, Inc. and
LandAmerica 1031 Exchange Services, Inc., at 10:00 a.m. Eastern
Time, on January 23, 2009, at the Office of the United States
Trustee, Suite 4300, at 701 E. Broad Street, in Richmond,
Virginia.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases.
Attendance by the Debtors' creditors at the meeting is welcome,
but not required. The Sec. 341(a) meeting offers the creditors a
one-time opportunity to examine the Debtors' representative under
oath about the Debtors' financial affairs and operations that
would be of interest to the general body of creditors.
The meeting may be continued or adjourned from time to time by
notice at the meeting, without further written notice to the
creditors.
About LandAmerica Financial
LandAmerica Financial Group, Inc. is a leading provider of real
estate transaction services with offices nationwide and a vast
network of active agents. LandAmerica serves its agent,
residential, commercial and lender customers throughout the
United States, Mexico, Canada, the Caribbean, Latin America,
Europe and Asia.
LandAmerica Financial Group and its affiliate LandAmerica 1031
Exchange Services, Inc. filed for Chapter 11 protection Nov. 26,
2008 (Bankr. E. D. Virginia, Lead Case No. 08-35994).
Dion W. Hayes, Esq., and John H. Maddock III, Esq., at
McGuireWoods LLP, are the Debtors' bankruptcy counsel.
In its bankruptcy petition, LFG listed total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of Sept. 30,
2008.
Bankruptcy Creditors' Service, Inc., publishes LandAmerica
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by LandAmerica Financial and its affiliate LandAmerica
1031 Exchange Services, Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
LEE ENTERPRISES: Receives Jan. 30 Extension of Covenant Waiver
--------------------------------------------------------------
Lee Enterprises, Incorporated, said Friday that a waiver of
covenant conditions related to its $306 million Pulitzer Notes
debt of its subsidiary St. Louis Post-Dispatch LLC has been
extended until Jan. 30, 2009. The waiver had been scheduled to
expire Jan. 16.
The Pulitzer Notes mature in April 2009. Carl Schmidt, Lee vice
president, chief financial officer and treasurer, said, "Lee and
its lenders continue to work diligently to effect an extension of
the Pulitzer Notes, and to make longer term changes to our bank
credit agreement to maintain the company's liquidity."
Without such a waiver extension by the holders of the Pulitzer
Notes, Lee would be in technical default of several provisions
under its applicable debt agreements. An event of default would
allow the Pulitzer Noteholders, with notice, to exercise certain
remedies granted by the various debt agreements, including
acceleration of the maturity of Lee's debt. The waiver contains a
provision that will allow it to be withdrawn with 48 hours notice.
Lee Enterprises -- http://www.lee.net/-- is a premier provider of
local news, information and advertising in primarily midsize
markets, with 49 daily newspapers and a joint interest in four
others, online sites and more than 300 weekly newspapers and
specialty publications in 23 states. Lee's markets include St.
Louis, Mo.; Lincoln, Neb.; Madison, Wis.; Davenport, Iowa;
Billings, Mont.; Bloomington, Ill.; and Tucson, Ariz. Lee stock is
traded on the New York Stock Exchange under the symbol LEE.
LEHMAN BROTHERS: CEO Marsal Sees Bankruptcy Exit in 2 Years
-----------------------------------------------------------
Turnaround chief of Alvarez & Marsal and current chief executive
officer of Lehman Brothers Holdings, Inc., Bryan Marsal, said the
bankrupt financial firm hopes to exit from bankruptcy in 18 to 24
months, Reuters reported on January 15, 2009.
Lehman stated in a regulatory filing dated January 14 with the
U.S. Securities and Exchange Commission that, from a business
perspective, the administration of its bankruptcy case has
"progressed to stability and control of assets. Mr. Marsal said
a conceptual framework for a plan of distribution to creditors is
in process.
However, Reuters said, Judge James Peck of the U.S. Bankruptcy
Court for the Southern District of New York, the judge overseeing
Lehman's Chapter 11 case, believes more international
coordination was necessary to do so. Judge Peck stated that in
the situation, when there were many insolvency proceedings
pending around the world, the case of Lehman was "undoubtedly the
most massive cross-border insolvency in the history of the
world," Reuters related.
Judge Peck, according to Reuters, told lawyers involved in
Lehman's bankruptcy case to work out protocols for global issues
and creditor claims to be resolved efficiently.
Mr. Marsal stated that the biggest impediments to a timely
completion of the administration are the timetables of the other
insolvency fiduciaries administering related assets. The Wall
Street Journal said there are more than 70 foreign proceedings in
15 countries involving Lehman affiliates. Lehman's lawyers, the
Journal added, have had trouble working with the foreign entities
and obtaining information from them.
Lehman filed the largest bankruptcy in U.S. history on
September 15, 2008, following the financial meltdown brought
about by the collapse of the subprime mortgage market. Lehman
listed roughly $691 billion dollars in assets when it filed for
bankruptcy.
Judge Peck has directed the U.S. Trustee to appoint an examiner
in Lehman's bankruptcy case to investigate, among others, the
extent of its foreign subsidiaries' transactions and claims.
Judge Peck also gave Lehman and its debtor affiliates until
July 13, 2009, to file a plan of reorganization.
Lehman's Cash Position
Lehman, in a report titled The State of the Estate filed with the
SEC, said it had $5.971 billion total cash balance as of
January 2, 2009, compared to $3.306 billion on September 14,
2008. Lehman's cash position in millions of dollars:
09/14/08 01/02/09
-------- --------
Debtor Entities:
Lehman Brothers Holdings Inc. $913 $1,912
LB Derivative Products 297 347
LB OTC Derivatives 132 132
LB Commodity Services 30 212
Lehman Commercial Paper 461 928
LB Commercial Corporation 8 87
LB Special Financing 7 925
LB Financial Products 7 117
Other Debtor Entities (7 entities) 2 2
-------- --------
1,856 4,663
Non-Debtor Entities:
Neuberger Berman 1,316 1,166
Other Non-Debtor Entities (83 entities) 134 142
-------- --------
1,450 1,308
Total Cash Balance $3,306 $5,971
========
Funds were setoff by JP Morgan and
applied to Derivatives claim 484
Post Chapter 11 setoff (11/14/08) by
Bank of America subject to Debtors'
counterclaim in pending adversary
proceeding 509
--------
Pro Forma Cash Balance Before Impact of Seizures $6,964
========
From the Petition Date through January 2, 2009, Lehman Brothers
received $1.667 billion from the sale of some of its assets,
including the sale of substantially all of its assets to Barclays
Capital Inc. for $1.3 billion.
Lehman said it has 702 open loan trades in the United States and
353 in the United Kingdom. Estimated net proceeds in the U.S.
open loan trades range from $319 to $369 million, while the U.K.
open loan trades is estimated to bring in $230 to 280 million.
A full-text copy of Lehman's State of the Estate Report is
available for free at http://ResearchArchives.com/t/s?3827
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers led in the global financial
markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offered a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16
(Case No. 08-13600). Several other affiliates followed
thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on Sept. 22 reached an agreement
to purchased Lehman Brothers Holdings, Inc.'s operations in Europe
and the Middle East less than 24 hours after it reached a deal to
buy Lehman's operations in the Asia Pacific for US$225 million.
Nomura paid only $2 dollars for Lehman's investment banking and
equities businesses in Europe, but agreed to retain most of
Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on
Sept. 16. The two units of Lehman Brothers Holdings, Inc., which
has filed for bankruptcy protection in the U.S. Bankruptcy Court
for the Southern District of New York, have combined liabilities
of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion ($33 billion) in liabilities in its
petition. Akio Katsuragi, a former Morgan Stanley executive, runs
Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Court Directs Appointment of Examiner
------------------------------------------------------
After hearing arguments raised by parties-in-interest in Lehman
Brothers Holdings, Inc.'s bankruptcy case, Judge James Peck of the
U.S. Bankruptcy Court for the Southern District of New York
directs the United States Trustee to appoint an examiner in LBHI's
Chapter 11 case.
Appointment of an examiner will instill "confidence and trust"
among those involved in Lehman's bankruptcy case, the Wall Street
Journal said quoting Judge Peck as saying during the January 14,
2009, hearing on the appointment request.
The Examiner's duties will include an investigation as to:
(1) Whether Lehman Brothers Commercial Corporation or any
other entity that currently is an LBHI Chapter 11 debtor
subsidiary or affiliate has any administrative claims
against LBHI resulting from LBHI's cash sweeps of cash
balances, if any, from September 15, 2008, through the
date that that LBHI affiliate commenced its Chapter 11
case.
(2) All voluntary and involuntary transfers to, and
transactions with, affiliates, insiders and creditors of
LBCC or its affiliates, in respect of foreign exchange
transactions and other assets that were in the possession
or control of LBHI Affiliates at any time commencing on
September 15, 2008, through the day that each LBHI
Affiliate commenced its Chapter 11 case.
(3) Whether any LBHI Affiliate has colorable claims against
LBHI for potentially insider preferences arising under the
Bankruptcy Code or state law.
(4) Whether any LBHI Affiliate has colorable claims against
LBHI or any other entities for potentially voidable
transfers or incurrences of debt, under the Bankruptcy
Code or otherwise applicable law.
(5) Whether there are more colorable claims for breach of
fiduciary duties and aiding or abetting any breaches
against the officers and directors of LBCC and other
Debtors arising in connection with the financial condition
of the Lehman enterprise prior to LBHI's Petition Date.
(6) Whether assets of any LBHI Affiliates, other than Lehman
Brothers, Inc., were transferred to Barclays Capital Inc.
as a result of the sale to Barclays Capital Inc. that was
approved by a Court order, and whether consequences to
any LBHI Affiliate as a result of the consummation of the
transaction created colorable causes of action that inure
to the benefit of the creditors of that LBHI subsidiary or
affiliate.
(7) The inter-company accounts and transfers among LBHI and
its direct and indirect subsidiaries, including but not
limited to LBI, LBIE, Lehman Brothers Special Finance and
LBCC, during the 30-day period preceding the commencement
of the Chapter 11 cases by each debtor on September 15,
2008, or thereafter as the Examiner deems relevant to the
Investigation.
(8) The transactions and transfers, including but not limited
to the pledging or granting of collateral security
interest among the debtors and the prepetition lenders and
financial participants including but not limited to,
JPMorgan Chase, Citigroup, Inc., Bank of America, the
Federal Reserve Bank of New York and others.
(9) The transfer of the capital stock of certain subsidiaries
of LBI on or about September 19, 2008, to Lehman ALI Inc.
(10) The events that occurred from September 4, 2008, through
September 15, 2008 or prior thereto that may have resulted
in commencement of the LBHI chapter 11 case.
Judge Peck directs the Debtors, their affiliates and
subsidiaries, and the Official Committee of Unsecured Creditors
and their representatives to cooperate with the Examiner in
conjunction with the performance of any of its duties and the
Investigation. The SIPA Trustee and his representatives and the
Examiner and his or her representatives is also directed to
cooperate with one another and coordinate their respective
Investigations.
Until the Examiner has filed his or her report, neither the
Examiner nor the Examiner's representatives or agents will make
any public disclosures concerning the performance of the
Investigation or the Examiner's duties except that the Examiner,
in the exercise of his or her discretion may file public reports
as to completed phases of the Investigation or the progress of
the Investigation.
The Examiner may retain attorneys and any professional persons,
if he or she determines that that retention is necessary to
discharge his or her duties, with that retention to be subject to
Court approval under standards equivalent to those set forth in
Section 327 of the Bankruptcy Code.
The Examiner and his or her Court-approved professional persons
will be compensated and reimbursed for their expenses pursuant to
the Interim Compensation Order. Compensation and reimbursement
of the Examiner and its retained professional will be determined
pursuant to Section 330.
The Examiner will cooperate fully with any governmental agencies
including any Federal, state or local government agency that
currently or in the future may be investigating the Debtors,
their management or their financial condition, and the Examiner
will use best efforts to coordinate with those agencies to avoid
unnecessary interference with, or duplication of, any
investigations conducted by those agencies. The Examiner will
follow a protocol to be established with the governmental
agencies for the sharing of information to the extent that that
sharing benefits the Debtors' estates, and that sharing of
information will be subject to appropriate conditions to protect
the Debtors' estates.
The Examiner, when appointed, is directed to promptly meet and
confer with the representatives of the Debtors, the Creditors'
Committee, The Walt Disney Company, Barclays, the New York State
Comptroller, Harbinger Funds, Bank of America, the Lead
Plaintiffs, the U.S. Trustee, and the United States Attorney for
the Southern District of New York to develop a work plan and plan
to coordinate the Investigation to avoid replication of efforts
and duplication of services and other matters pertinent to the
Examiner's Investigation.
The work plan must be completed within 20 days from the date that
the Court approves the appointment of the individual selected by
the U.S. Trustee to serve as Examiner. If the work plan is not
completed within the 20-day period, a hearing will be held on the
next scheduled omnibus hearing date to determine the cause of the
delay.
Walt Disney proposed the appointment of an examiner to find out if
the funds belonging to LBCC might have been swept to Lehman
Brothers Holdings and its other units through their centralized
cash management system. TWDC is allegedly owed about $92 million
by LBCC and $107 million by Lehman Brothers Holdings.
LBHI Backs Examiner's Appointment
While it stands firm in opposing the proposed appointment of a
trustee, LBHI expressed support for the appointment of an
examiner proposed by Walt Disney. In court papers, Lehman
Brothers Holdings asked the Court to appoint an examiner to
investigate certain issues particularly the transfer of assets of
Lehman Brothers Commercial Corporation.
Committee: Limit Scope of Examiner's Investigation
The Creditors' Committee asserted that the Court must set a limit
to the scope of the examiner's investigation in light of the many
ongoing investigations on LBHI and its units. The Creditors'
Committee expressed concern that the examiner's investigation
might duplicate, in particular, the effort of the panel and the
trustee of LBI, both of which have been conducting its own
investigation.
"If the examiner duplicates those efforts, the targets of the
Committee's investigations may become less willing to cooperate
with the Committee," said Dennis Dunne, Esq., at Milbank Tweed
Hadley & McCloy LLP, in New York. He cited in particular how the
Creditors' Committee's effort to investigate JPMorgan Chase Bank,
N.A. would be thwarted by the appointment of the examiner.
The Creditors' Committee and JPMorgan signed a stipulation in
connection with the investigation, which gives the bank relief
from its obligations to provide documents to the panel in case an
examiner gets appointed to review the bank's transactions with
Lehman Brothers Holdings.
To avoid duplication, Mr. Dunne suggested that the examiner be
required to prepare a work plan, subject to court approval,
before conducting an investigation. The examiner must also
consult Lehman Brothers Holdings, the Creditors' Committee and
LBI's trustee to formulate the terms of the work plan, he added.
Meanwhile, Barclays Capital urged the Court to limit the scope of
the examiner's duties by not allowing the examiner to investigate
on what happened to LBCC's business after Sept. 20, 2008, and on
the issue of whether the U.K. bank is operating and benefiting
from LBCC's business or not.
To address the responses, Walt Disney's counsel, Martin J.
Bienenstock, Esq., at Dewey & LeBoeuf LLP, in New York, for Walt
Disney, asked the Court to overrule the objections raised by
Barclays and the Creditors' Committee. He asserted that both
objections would undermine the fairness, and appearance of
fairness, of the Debtors' Chapter 11 cases, would illegally
impair Walt Disney's statutory right to an examiner to conduct
and appropriate investigation.
Mr. Bienenstock pointed out that Barclays is not a party-in-
interest entitled to interfere with the rights of creditors in
the Debtors' bankruptcy cases, nor is it asserting that it is a
creditor. Rather, he said, Barclays is only seeking to
participate in the matter as a buyer, regardless of whether it
took assets beyond those approved in the Sale Order, at the
expense of the Debtors' creditors.
Regarding the Committee, Mr. Bienenstock argued that the panel's
attempt to censor the examiner's report in advance is
substantially equivalent to depriving Walt Disney and all
creditors of their statutory right to an examiner.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers led in the global financial
markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offered a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16
(Case No. 08-13600). Several other affiliates followed
thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on Sept. 22 reached an agreement
to purchased Lehman Brothers Holdings, Inc.'s operations in Europe
and the Middle East less than 24 hours after it reached a deal to
buy Lehman's operations in the Asia Pacific for US$225 million.
Nomura paid only $2 dollars for Lehman's investment banking and
equities businesses in Europe, but agreed to retain most of
Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on
Sept. 16. The two units of Lehman Brothers Holdings, Inc., which
has filed for bankruptcy protection in the U.S. Bankruptcy Court
for the Southern District of New York, have combined liabilities
of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion ($33 billion) in liabilities in its
petition. Akio Katsuragi, a former Morgan Stanley executive, runs
Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Panel Slams NY Controllers' Bid for Trustee
------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
bankruptcy cases of Lehman Brothers Holdings, Inc., and its
affiliates slams the proposed appointment of a trustee to oversee
Lehman Brothers Holdings, arguing that it is the request is
baseless and without evidence.
"While alleging that the circumstances in these cases are
sufficiently extraordinary to warrant the appointment of a
trustee for cause, the comptroller fails to substantiate this
conclusory assertion," Dennis Dunne, Esq., at Milbank Tweed
Hadley & McCloy LLP, in New York, argues for the Creditors'
Committee.
New York State Comptroller Thomas DiNapoli calls for the
replacement of Lehman Brothers Holdings' board of directors and
Richard Fuld Jr., chairman and former chief executive officer, by
a trustee due to their alleged inability to administer the
company.
Mr. Dunne asserts that the resignation of Mr. Fuld Jr. as head of
Lehman Brothers Holdings late last year and the replacement of
most of the company's senior management by Bryan Marsal and his
reorganization team from Alvarez & Marsal North America LLC
renders the proposed appointment unnecessary.
"The Comptroller does not dispute that Mr. Marsal has the
necessary skills and experience to perform those tasks identified
by the Comptroller as requiring the appointment of a trustee and
is focused on maximizing recovery for the benefit of all
stakeholders," Mr. Dunne points out. "In short, no cause exists
to warrant the appointment of a trustee."
Lehman Brothers Holdings previously stated its opposition to the
proposed appointment for lack of evidence. The Debtor, however,
expressed support for the appointment of an examiner to
investigate its affairs.
NY Comptroller Talks Back
The NY Comptroller tells the U.S. Bankruptcy Court for the
Southern District of New York that it defers the portion of
his Motion seeking appointment of a Chapter 11 trustee under
Section 1104(a) until he has received and reviewed the Lehman
Examiner's report or until other circumstances may indicate that
it is appropriate to place the trustee motion back on the Court's
calendar. The deferral of the portion of the Motion seeking
appointment of a trustee is without waiver of any of the
Comptroller's rights, Andrew J. Entwistle, Esq., at Entwistle &
Cappucci LLP, in New York, tells the Court.
A public report by the Lehman Examiner reflecting the broad
investigation that the Bankruptcy Code envisions will benefit all
interested parties by adding transparency, integrity, and
flexibility to the proceedings, Mr. Entwistle contends.
The investigative scope advocated by the Debtors and the
Creditors' Committee, according to Mr. Entwistle, excludes any
mention of an investigation into allegations of fraud, misconduct
or mismanagement by Lehman's former senior management -- all
areas of inquiry the Bankruptcy Code explicitly delineates. The
Comptroller maintains that the Court should appoint an examiner
to investigate these allegations.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers led in the global financial
markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offered a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16
(Case No. 08-13600). Several other affiliates followed
thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on Sept. 22 reached an agreement
to purchased Lehman Brothers Holdings, Inc.'s operations in Europe
and the Middle East less than 24 hours after it reached a deal to
buy Lehman's operations in the Asia Pacific for US$225 million.
Nomura paid only $2 dollars for Lehman's investment banking and
equities businesses in Europe, but agreed to retain most of
Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on
Sept. 16. The two units of Lehman Brothers Holdings, Inc., which
has filed for bankruptcy protection in the U.S. Bankruptcy Court
for the Southern District of New York, have combined liabilities
of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion ($33 billion) in liabilities in its
petition. Akio Katsuragi, a former Morgan Stanley executive, runs
Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Court Extends Exclusive Periods to July 13
-----------------------------------------------------------
Lehman Brothers Holdings Inc. obtains permission from the U.S.
Bankruptcy Court for the Southern District of New York to file
its Chapter 11 plan of reorganization until July 13, 2009, and
solicit votes for that plan until September 16.
LBHI explained in court papers that it needs additional time to
review its assets and liabilities comprising its consolidated
balance sheet of more than $600 billion. Reviewing the assets,
the Debtor pointed out, was made harder and more complicated by
the departure of almost 10,000 employees, their transfer to
Barclays Capital, Inc., and the insolvencies of its foreign units
particularly in the United Kingdom, which resulted in the
breakdown in information sharing.
Lehman Brothers Holdings said that it also needs to review about
1.5 million derivative contracts, dissect billions of dollars of
intercompany transactions, and coordinate with the administrators
of foreign insolvency proceedings involving its units, before a
Chapter 11 plan can be proposed.
Schedules Due March 16
The Court also extended deadline for the Debtors to file their
schedules of assets and liabilities and statements of financial
affairs until March 16, 2009.
The Debtors previously explained that they would not be able
to complete the financial documents until the Jan. 13 deadline
since they are still consolidating the information needed to
prepare the documents. The Debtors cited instances that
prevented the completion of the documents including the sales of
their business, and the insolvency of their foreign units, among
other things.
Committee Wants Monthly Reports Filed
The Official Committee of Unsecured Creditors has urged the
Debtors to resolve, as soon as possible, what causes the delay in
filing the financial documents. In a statement filed with the
Court, the Creditors' Committee said it does not oppose the
Debtors' request for additional time to file the documents. The
panel, however, expressed concern over the need for prompt
disclosure of information in the Debtors' bankruptcy cases.
"While it may be impossible to achieve complete informational
transparency at this point in time, greater transparency is
possible. Any impediment to the flow of information, which is
vital to a basic understanding of the Debtors' condition, such as
the [statements of financial affairs] and schedules, must be
eliminated," the Creditors' Committee said.
The Creditors' Committee also urged the Debtors to start filing
their monthly operating reports to provide more public
information about their financial status.
Meanwhile, the proposed extension drew flak from Harbinger
Capital Partners Special Situations Fund L.P. and Harbinger
Capital Partners Master Fund I Ltd. The Harbinger Entities argue
that an extension of the deadline would deprive the creditors the
information they need to assess their rights and claims.
The Harbinger Entities are allegedly owed more than $250 million
by Lehman Brothers Special Financing Inc. under their swap
agreements, which are guaranteed by Lehman Brothers Holdings.
Lehman Gets More Time to Review Leases
The Court also gave Lehman Brothers until April 13, 2009, to
assume or reject its leases for nonresidential real properties.
Lehman Brothers currently has unexpired leases for nonresidential
real properties, one co-location agreement and one service
agreement with these counterparties:
Lessor Address
------ -------
Historic TW Inc. 111 West 50th Street
New York, New York,
Rockefeller Center North Inc. 111 West 50th Street
New York, New York
600 Partners Co., L.P. 600 Madison Avenue
New York, New York
85 Tenth Avenue Associates 85 Tenth Avenue
New York, New York
DBSI Housing, Inc. 6666 East 75th Street
Indianapolis, Indiana
101 Hudson Leasing Associates 101 Hudson Street
Jersey City, New Jersey
AIG Technologies, Inc. 2 Peachtree Hill Road
Livingston, New Jersey
Texas Tower Limited 600 Travis Street
Houston, Texas
The Irvine Company LLC 680 Newport Center Dr.
Suite 150, Newport Beach
California
Hanover Moving & Storage Co. 50 Dey Street
Jersey City, New Jersey
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers led in the global financial
markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide. Through its team of more than 25,000 employees, Lehman
Brothers offered a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity. Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region. The firm, through predecessor
entities, was founded in 1850.
Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.
Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16
(Case No. 08-13600). Several other affiliates followed
thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL). James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI
Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion. Nomura Holdings Inc., the
largest brokerage house in Japan, on Sept. 22 reached an agreement
to purchased Lehman Brothers Holdings, Inc.'s operations in Europe
and the Middle East less than 24 hours after it reached a deal to
buy Lehman's operations in the Asia Pacific for US$225 million.
Nomura paid only $2 dollars for Lehman's investment banking and
equities businesses in Europe, but agreed to retain most of
Lehman's employees.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration. Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on
Sept. 16. The two units of Lehman Brothers Holdings, Inc., which
has filed for bankruptcy protection in the U.S. Bankruptcy Court
for the Southern District of New York, have combined liabilities
of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc.
reported about JPY3.4 trillion ($33 billion) in liabilities in its
petition. Akio Katsuragi, a former Morgan Stanley executive, runs
Lehman's Japan units.
Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice. The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis. A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
MASONITE INTL: Lenders Extend Forbearance Until Month's End
-----------------------------------------------------------
Mississauga, Ontario-based Masonite International Inc. said Friday
it has entered into a further extension, to January 30, 2009, of
the forbearance agreement dated September 16, 2008, with its bank
lenders.
As a result of its financial performance for the quarters ended
June 30, and September 30, 2008, Masonite was not in compliance as
of such dates with certain financial covenants contained in its
credit facility, which constituted an event of default under the
credit facility. The financial covenants relate to EBITDA metrics
and reflect the challenging conditions in the U.S. housing
industry. Masonite is engaged in ongoing negotiations with
lenders that are party to the credit facility regarding a
potential amendment to the terms of the credit facility. There is
no assurance that the negotiations with lenders will result in an
amendment acceptable to Masonite and to its lenders.
Masonite has also entered into a separate forbearance agreement
with holders of a majority of the senior subordinated notes due
2015 issued by two of the Company's subsidiaries. That
forbearance agreement is effective through January 31, 2009.
Masonite International -- http://www.masonite.com/-- is a global
manufacturer of residential and commercial doors, serving
customers in more than 70 countries around the world.
MEADE INSTRUMENTS: In Talks with BofA to Relax Loan Covenants
-------------------------------------------------------------
Meade Instruments Corp. in Irvine, California, reports that as of
November 30, 2008, it was not in compliance with the minimum
EBITDA covenant as set forth in its credit agreement with Bank of
America. The Company is working with its lender to obtain a
waiver or amendment; however, there can be no assurance that such
waiver will be obtained. If no amendment or waiver is obtained,
the Company will be in default under the provisions of the credit
facility and the Company's lender may accelerate repayment. In
this event, the Company may need to raise funds to repay its
lender, and there can be no assurance that such funds will be
available.
On Friday, Meade Instruments reported net sales of $23.4 million
for the third quarter of fiscal 2009 ended November 30, 2008,
compared with $51.4 million for the third quarter of fiscal 2008.
The Company reported a net loss of $2.8 million for the third
quarter of fiscal 2009, compared with a net loss of $1.6 million
in the third quarter of fiscal 2008. The net loss for the current
quarter was impacted by $1.5 million in restructuring costs.
The Company's third quarter net revenues of $23.4 million were
down approximately 54% from the prior year quarter, due in part to
a very challenging macroeconomic environment, Meade said in a news
statement. Reduced distribution outlets, increased competition
and weak demand all contributed to the decrease in net revenue.
Net revenue was also impacted by the divestiture earlier in the
year of the Company's Simmons(r), Weaver(r) and Redfield(r) sports
optics brands. Further, the sales decline was also due to lower
sales of the Company's high-end telescopes and related accessories
due to the continued ramp-up of the Company's manufacturing
facility in Mexico, which is still not producing high-end
telescopes at levels that meet customer demand, resulting in a
backlog for certain high-end telescopes. Revenues also decreased
46% in Europe.
Gross profit for the third quarter of fiscal year 2009 was $5.5
million, or 24% of net sales, compared with $8.7 million or 17% of
net sales in the comparable quarter of fiscal year 2008. The
improvement in gross profit margin was primarily due to the non-
recurrence of inventory write-downs that occurred during the third
quarter of the prior year, as well as lower indirect manufacturing
costs as a result of the closure of the Company's U.S.
manufacturing operations and transition of high-end telescope
production to our Mexico facilities. These cost improvements
substantially offset the lower sales volume and enabled the
Company to maintain its gross margins.
Selling, general and administrative expenses for the third quarter
of fiscal 2009 were $5.5 million, compared with
$7.4 million for the same quarter of the prior year. The decrease
was primarily due to decreased sales volumes, lower headcount and
reduced discretionary spending.
Subsequent to quarter end, the Company entered into two letters of
intent with its lessor for an early termination to its lease
agreement at its Irvine facility and a transition into a more
cost-effective building for its ongoing U.S. operations. As a
consequence, the Company recorded a restructuring charge in the
third quarter of fiscal year 2009 of $1.2 million for the
contingent liability associated with the lease termination. With
the significant reduction in facility size, the Company expects to
realize annual facility cost savings of $1.4 million on an ongoing
basis. The Company expects to finalize these arrangements during
the fourth quarter of fiscal 2009. The Company also recorded a
$300,000 restructuring charge for severance related to headcount
reductions during the quarter.
"Our third quarter results reflect the extremely challenging
macroeconomic conditions, which continue to deteriorate, combined
with the unprecedented weakness in the credit markets," said Steve
Muellner, President and Chief Executive Officer of Meade. "Still,
we performed reasonably well considering the extent of negative
conditions in the marketplace and the impact on manufacturers and
retailers globally, especially for sales of discretionary goods
such as telescopes. We improved gross margins and continued to
realize cost savings from the Company's restructuring efforts. To
further reduce our overhead costs, we expect to terminate our
Irvine lease and move to less expensive real estate by the end of
the fiscal year, with significant cost savings to be realized in
fiscal 2010. In short, management has been working diligently to
remove significant operating expense from the Company's overhead
costs, in order to better align our cost base with the lower
activity levels."
Mr. Muellner concluded, "The overall turnaround of the Company is
a continuing effort, and we will continue to look for
opportunities to further reduce our cost structure, navigate
through the economic malaise and better position the Company for
profitability."
About Meade Instruments
Meade Instruments -- http://www.meade.com/-- designs and
manufactures optical products including telescopes and accessories
for the beginning to serious amateur astronomer. Meade offers a
complete line of binoculars that address the needs of everyone
from the casual observer to the serious sporting or birding
observer. The Company distributes its products worldwide through
a network of specialty retailers, mass merchandisers and domestic
and foreign distributors.
MEADWESTVACO CORP: Will Lay Off 10% of Workforce
------------------------------------------------
Reuters reports that MeadWestvaco Corp. said that it will lay off
2,000 employees, or about 10% of its workforce, to lower costs.
According to Reuters, MeadWestvaco said that it would complete 800
of the layoffs by the end of the first quarter. Reuters states
that MeadWestvaco also disclosed plans to close or restructure 12
to 14 of its manufacturing locations. Reuters states that
MeadWestvaco has suffered from a sharp drop in consumer spending
on electronics, personal-care products, and other goods.
Citing MeadWestvaco, Reuters says that the planned layoff
accelerated its longer-term plan started in 2008 to lessen
overhead and streamline manufacturing. According to the report,
MeadWestvaco said it won't provide pay raises for salaried workers
this year.
Reuters quoted Soleil analyst Anna Torma as saying, "We continue
to believe MWV has a strong balance sheet to weather the downturn,
with good cash flows and a secure dividend."
MeadWestvaco will cut corporate and business unit overhead
expenses, generating about $100 million in cost savings for this
year, Reuters relates. According to Reuters, the closing and
restructuring of manufacturing facilities would generate
$25 million in savings. MeadWestvaco, says the report, expects
the planned layoffs, along with actions taken in 2008, to help it
generate annualized pretax savings of $250 million to $300 million
by the middle of 2010. The report states that MeadWestvaco
expects to incur noncash pretax restructuring and other charges of
$200 million to $225 million related to its restructuring actions.
Headquartered in Richmond, Virginia, MWV is a global packaging
company that delivers products to companies in the food and
beverage, media and entertainment, personal care, home and garden,
cosmetic and healthcare industries. The company also operates a
consumer and office products business, a specialty chemicals
business and a land management business. Operations are located in
more than 30 countries.
As reported by the Troubled Company Reporter on July 30, 2008,
Moody's Investors Service affirmed MeadWestvaco Corporation's
(MWV) corporate family rating and senior unsecured debt rating at
Ba1, and the speculative grade liquidity rating at SGL-1. The
affirmation follows MWV's release of second quarter 2008 results
that were in line with Moody's expectations. Sales across all four
of MWV's business segments improved year over year as a result of
price increases and product mix, however, operating income and
margins were adversely impacted by higher energy, raw material and
freight costs. The rating outlook is stable.
METROPCS WIRELESS: S&P Retains 'B' Corporate Credit Rating
----------------------------------------------------------
This media release, originally published earlier, contained the
wrong corporate credit rating on the issuer. A corrected version
follows.
Standard & Poor's Ratings Services said it revised the recovery
rating on MetroPCS Wireless Inc.'s unsecured debt to '4' from '3'.
The '4' recovery rating represents S&P's expectation of average
(30%-50%) recovery in the event of payment default. This revision
follows the company's upsizing in its new unsecured debt issue
from $300 million to $550 million. The issue rating of the
unsecured debt remains a 'B', as does the corporate credit rating
on parent MetroPCS Communications Inc.
Ratings List
MetroPCS Communications Inc.
Corporate Credit Rating B/Stable/--
Recovery Rating Revised
MetroPCS Wireless Inc.
To From
-- ----
Senior Unsecured Debt B B
Recovery Rating 4 3
MIDWAY GAMES: Reaches Waiver & Forbearance Pacts with Noteholders
-----------------------------------------------------------------
Midway Games Inc. on Friday reached a waiver and forbearance
agreements with the holders of $150 million principal amount of
its convertible senior notes. With the agreements, Midway now has
negotiated with holders of the $75 million principal amount of 6%
Convertible Senior Notes due 2025 and $75 million principal amount
of 7.125% Convertible Senior Notes due 2026 to extend the date
upon which the holders have the right to exercise their option to
require Midway to repurchase the notes to February 12, 2009. The
accelerated repurchase date was triggered by a change of control
that occurred on November 28, 2008.
On December 30, 2008, Midway entered into a Waiver and Forbearance
Agreement with the holders of all of its 7.125% Convertible Senior
Notes due 2026.
On January 15, 2009, it entered into (i) the First Amended and
Restated Waiver and Forbearance Agreement dated January 14, 2009,
with the Holders of the 7.125% Notes and (ii) a Waiver and
Forbearance Agreement with the Holders of the 6.0% Notes. All of
the Holders of the 7.125% Notes entered into the 7.125% Agreement
and Holders representing approximately 98% of the 6.0% Notes
entered into the 6.0% Agreement.
Pursuant to the Agreements, the Signing Holders have deferred
their rights under the 6.0% and 7.125% Indentures, respectively to
require Midway to repurchase the 6.0% and 7.125% Notes and forbear
from taking any action under such Indentures through the close of
business on February 12, 2009, and to not take any action as a
result of the failure to pay the Fundamental Repurchase Price on
January 16, 2009, to any Holder of the 6% Notes who has timely and
validly exercised its Fundamental Change Repurchase Right.
As a condition to the effectiveness of the Agreements, Midway, by
no later than 11:00 a.m., Eastern Standard Time, on January 15,
2009, was required to enter into an agreement with National
Amusements Inc. and Acquisition Holdings Subsidiary I LLC, in form
and substance reasonably satisfactory to Milbank, Tweed, Hadley &
McCloy, LLP, as counsel to Signing Holder, pursuant to which the
Lenders -- including NAI and AHS -- agreed to:
(i) suspend, until and including February 12, 2009, the cash
sweep features under Midway's Unsecured Loan Agreement
dated February 29, 2008, and Midway's Subordinated
Unsecured Loan Agreement, dated February 29, 2008, and
(ii) forbear, until and including February 12, 2009, from
exercising any rights they may have with repect to any
default or event of default under Midway's Loan and
Security Agreement dated February 29, 2008, and the Loan
Agreements and the Factoring Agreement, dated
September 15, 2008, that may arise as a result of the
failure of Midway to pay on January 16, 2009, the
Fundamental Change Repurchase Price to Tendering Holder.
The Agreements are subject to termination upon:
(i) the failure of Midway to comply with any condition, term,
covenant or other obligation set forth in the Agreements,
(ii) the occurrence of an Event of Default that has not
otherwise been waived or deferred by the requisite
Holders under the 7.125% Indenture,
(iii) the occurrence of an event of default under the 6%
Indenture that has not otherwise been deferred by Holders
that own at least $70 million in principal amount of the
6% notes;
(iv) the termination of the Lender Forbearance Agreement, or
the amendment or modification of such Lender Forbearance
Agreement in a manner adverse to the rights of the
Signing Holders without the prior express written consent
of Milbank;
(v) the exercise of any right or remedy by the Lender under
any of the Loan and Security Agreement, the Loan
Agreements (including, without limitation, the liquidation
of any deposit account or securities account of Midway or
any of its subsidiaries or affiliates, or related
investment property maintained or held by any such
account, for the benefit of the Lender) ) or the
Factoring Agreement or the receipt by Midway of notice
from the Lender or Factor that it intends to exercise
such right or remedy based upon any purported default
or event of default thereunder;
(vi) Midway's payment of the Fundamental Change Repurchase
Price, or any portion thereof, to any Tendering Holder,
the repurchase of any 7.125% Securities, or the payment
of any Tendering Holder's Claim, or
(vii) the expiration of three Business Days following the
commencement of a Tendering Holder Claim,
The Amended Fundamental Change Repurchase Date will be void ab
initio, and if such event has occurred after January 16, 2009,
then the Fundamental Change Repurchase Date will be deemed to have
occurred on such date, and, in each case, Signing Holder will be
deemed to have timely exercised the Fundamental Change Repurchase
Right, irrespective of whether Signing Holder has delivered a
Repurchase Notice to Midway.
To the extent Midway fails to pay a Tendering Holder on January
16, 2009, it is a default under the 7.125% Indenture, the 6.0%
Indenture, the Loan and Security Agreement, the Loan Agreements
and the Factoring Agreement, but all parties have agreed not to
exercise until February 12, 2009, any rights they might have due
to such a nonpayment. If the Agreements terminate and Midway is
required to immediately repurchase the 6.0% and 7.125% Notes,
Midway does not believe, on the basis of its current liquidity,
that it would have the ability to satisfy such obligations.
Midway also agreed to pay the fees and expenses of Milbank
incurred by the Signing Holders in connection with the negotiation
and execution of the Agreements.
Lender Forbearance Agreement
On January 15, 2009, as required as a condition to effectiveness
of the Agreements, Midway and NAI and AHS entered into the Lender
Forbearance Agreement dated January 14, 2009, pusuant to which NAI
and AHS have agreed to suspend, until February 12, 2009, Midway's
obligations under the "Cash Sweep" and to defer from exercising
any rights they may have under the Loan and Security Agreement,
the Loan Agreements or the Factoring Agreement as a result of the
non-payment of the Fundamental Repurchase Price on January 16,
2009, to any Tendering Holder or the Change of Control of Midway
occurring November 28, 2008.
Under the terms of the Lender Forbearance Agreement, Midway also
consented to an assignment by NAI to AHS of all of its rights,
duties, obligations and interests under the Loan and Security
Agreement and the Unsecured Loan Agreement.
Midway also agreed to pay the fees and expenses of counsel to NAI
and AHS in connection with the negotiation and execution of the
Lender Forbearance Agreement
About Midway Games
Midway Games Inc. (MWY) -- http://www.midway.com/-- headquartered
in Chicago, Illinois, with offices throughout the world, is a
leading developer and publisher of interactive entertainment
software for major videogame systems and personal computers.
MILLENIUM TRANSIT: Asks Court's Ok of 3rd DIP Loan form J. Ludvik
-----------------------------------------------------------------
The United States Bankruptcy Court for the District of New Mexico
granted Millennium Transit Services, LLC authority to obtain
credit and incur postpetition financing from James A. Ludvik in
the amount of $186,728, on the same terms as the previous debtor-
in-possession loans made by Mr. Ludvik in the amount of $354,832
and $395,023, approved by the Court on Oct. 16, 2008, and Nov. 25,
2008, respectively. The Third DIP Loan would cover the Debtor's
expenses for January, 2009, in accordance with a budget.
As security for the payment of the indebtedness, Mr. Ludvik is
granted a second lien on all estate property, except for avoidance
actions.
The Debtor told the Court that it is unable to obtain unsecured
credit with an administrative priority only, or with a junior lien
on any of the Debtor's assets, or secured by a lien on property of
the estate that is not otherwise subject to a lien.
Pursuant to the Third DIP Loan terms, interest on the principal
shall accrue at 10% p.a. The loan shall mature at the earlier to
occur of confirmation of a plan of reorganization; conversion or
dismissal of the bankruptcy case; or entry of an order approving
the sale of a substantial portion of the Debtor's assets.
Roswel, New Mexico-based Millennium Transit Services LLC is a bus
manufacturer. The company filed for Chapter 11 relief on Aug. 29,
2008 (Bankr. D. N.M. Case No. 08-12848). Judge Mark B.
McFeeley presides over the case. David T. Thuma, Esq., at
Jacobvitz, Thuma & Walker, represents the Debtor as counsel.
George M. Moore, Esq., at Moore, Berkson & Gandarilla, P.C.,
represents the Official Committee of Unsecured Creditors as
counsel. When the Debtor filed for protection from its creditors,
it listed assets of between $10 million and
$50 million and the same range in debts.
NEW ENGLAND PELLET: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
NBCConnecticut.com reports that New England Pellet, LLC, has filed
for Chapter 11 bankruptcy protection.
NBCConnecticut.com relates that Bonnie Wood, one of New England
Pellet's customers said, "This is not a case for bankruptcy.
Criminal charges should be brought against them. They knowingly
sold pellets to people and did not deliver." According to the
report, New England Pellet only delivered one ton and not the rest
of Ms. Wood's order.
Connecticut Attorney General Richard Blumenthal,
NBCConnecticut.com states, sued New England Pellet and its owners,
Stephen Zaczynski and Jason Tynan, in a state court in December
2008. Mr. Blumenthal isn't giving up the fight against New
England Pellet, the report says, citing Ms. Wood.
"They can file for bankruptcy. I've had people call and want to
picket in front of their homes. I've driven by their homes. Many
people have. They're nice houses. They're living well,"
NBCConnecticut.com quoted Ms. Wood as saying.
New England Pellett, LLC, filed for Chapter 11 bankruptcy
protection on Jan. 8, 2009 (Bankr. D. Conn. Case No. 09-20030).
NEW YORK TIMES: In Investment Talks With Carlos Slim
----------------------------------------------------
The New York Times Co. is negotiating with Mexican billionaire
Carlos Slim about investing in the newspaper publisher to help
ease its financial problems, Matthew Karnitschnig and Russell
Adams at The Wall Street Journal reports, citing people familiar
with the matter.
According to WSJ, one of the options being discussed is a
preferred-stock issue, where in the Times Co. would issue Mr. Slim
preferred stock that carries no voting right but pays an annual
dividend, in return for his investment. The report says that the
investment would be similar to a loan. After a defined period,
preferred shares are often convertible into common stock, the
report states.
WSJ relates that an infusion from Mr. Slim would at least give the
Times Co. more time as the dropping newspaper ad market challenges
its ability to service its debt.
The Times Co., according to WSJ, has $46 million in cash and
$1.1 billion in debt as of September 2008. WSJ states that the
Times Co. has:
-- $400 million credit facility that expires in May 2009,
-- $250 million in notes due in 2010, and
-- $400 million credit facility due in 2011.
WSJ reports that the Times Co. executives said in December 2008
that the firm is in talks with lenders on long-term debt and
wouldn't replace the facility expiring in May, as it won't need to
borrow as much. The executives, WSJ relates, said that they are
seeking to raise up to $225 million from a sale-leaseback of its
share of its headquarters building, and are considering other
financing options including revolvers, public offerings, or
private placements.
Another investor, like hedge fund Harbinger Capital Partners,
could provide the Times Co. with a capital, WSJ states. According
to the report, Harbinger Capital has 28.5 million Class A shares,
or about a 20% stake, in the Times Co.
Harbinger Capital waged a proxy battle in 2008, which it sought
four seats on Times Co.'s board and strategic changes at the
company including the sale of Boston Globe, which is a non-core
asset, WSJ relates. The Times Co., says WSJ, granted Harbinger
Capital two board seats.
WSJ states that Times Co. will reportedly hold a special board
meeting next week.
About New York Times
The New York Times Co. operates as a diversified media company in
the United States. It operates in two segments, News Media and
About Group. The company was founded in 1896.
As reported in the Troubled Company Reporter on Dec. 4, 2008, The
NY Times cut its quarterly dividend by 74%, as part of an effort
to conserve cash. The NY Times said that it took steps to lower
debt and increase liquidity, including reevaluating its assets.
The NY Times has laid off employees, merged sections of the NY
Times and Globe to reduce printing costs, and consolidated New
York area printing plants this year.
NEXCEN BRANDS: Appeals Listing Council's Delisting Determination
----------------------------------------------------------------
NexCen Brands, Inc. disclosed in a regulatory filing that it
requested the Nasdaq board of directors to reconsider the Nasdaq
Listing and Hearing Review Council's decision and reinstate the
stay of delisting, so that the company's common stock would
continue to be traded on The Nasdaq Stock Market.
The Listing Council has withdrawn its call for review and stay of
delisting associated with the Sept. 2, 2008, decision of the
Nasdaq Listing Qualifications Panel. As a result, Nasdaq has
notified the company that its common stock will be suspended from
trading on The Nasdaq Stock Market effective Jan. 13, 2009.
However, there can be no assurances that the company's request
will be granted within a specified time or at all.
The company anticipates that its common stock will be eligible for
quotation on Pink OTC Markets, fka the Pink Sheets. Accordingly,
if the Nasdaq board does not reconsider the Listing Council's
decision and permit the company's common stock to continue to be
traded on The Nasdaq Stock Market, the company expects that its
common stock will become eligible for quotation on the Pink OTC
Markets on Jan. 13, 2009, under the trading symbol NEXC.pk.
Separately, the company also received an additional Staff
Determination notice on Jan. 6, 2009, from Nasdaq that the company
no longer complies with Nasdaq Marketplace Rules 4350(e) and
4350(g) due to its inability to solicit proxy statements and hold
an annual meeting of stockholders for the fiscal year ended
Dec. 31, 2007 by Dec. 31, 2008.
Nasdaq's delisting decision relates to the ongoing delays in the
company's filing of its periodic reports. The company has issued
several statements and filed several reports with the Securities
and Exchange Commission including Current Reports on Form 8-K
regarding these matters, and investors are encouraged to read
these in their entirety for a discussion of these matters.
The company remains committed to regaining compliance with all
filing requirements and obtaining relisting of its common stock
with The Nasdaq Stock Market soon as possible, and continues to
work diligently toward completing and filing all required periodic
reports. At this time, the company continues to anticipate that
it will complete these filings with the SEC by the end of the
first quarter of 2009.
About NexCen Brands
NexCen Brands Inc. (NASDAQ: NEXC) -- http://www.nexcenbrands.com/
-- acquires and manages global brands, generating revenue through
licensing and franchising. The company own and license the Bill
Blass and Waverly brands, well as seven franchised brands. Two
franchised brands -- The Athlete's Foot and Shoebox New York --
sell retail footwear and accessories. Five are quick-service
restaurants -- Marble Slab Creamery, MaggieMoo's, Pretzel Time,
Pretzelmaker, and Great American Cookies.
The company licenses and franchises its brands to a network of
leading retailers, manufacturers and franchisees that generate
$1.3 billion in retail sales in more than 50 countries around the
world. The franchisees operate approximately 1,900 franchised
stores. Franchisee support and training is provided at NexCen
University, a state-of-the-art facility located in Atlanta.
* * *
The company believes that there is substantial doubt about its
ability to continue as a going concern, and pending completion of
an independent review, that this substantial doubt also may have
existed at the time the company filed its 2007 10-K. The audit
committee of the company's Board of Directors has retained
independent counsel to conduct an independent review of the
situation.
The company has concluded that its 2007 financial statements
should no longer be relied upon and no reliance should be placed
upon KPMG's audit report dated March 20, 2008, or its report dated
March 20, 2008 on the effectiveness of internal control over
financial reporting as of Dec. 31, 2007, as contained in the
company's 2007 10-K.
NexCen also announced that it is actively exploring all strategic
alternatives to enhance its liquidity, including potential capital
market transactions, the possible sale of one or more of its
businesses, and discussions with the company's lender. In
addition, the company will take immediate steps to reduce
operating expenses.
NEXCEN BRANDS: Appoints Mark Stanko as Chief Financial Officer
--------------------------------------------------------------
NexCen Brands, Inc., appointed a new chief financial officer well
as several other key executive management promotions and
appointments. These management changes, which backfill open
positions, will be critical to the organization as the company
continues to focus on strengthening and growing its core franchise
business.
Mark Stanko has been appointed chief financial officer for the
company. Mr. Stanko serves as chief financial officer of NexCen's
subsidiary, NexCen Franchise Management, Inc., a position he has
been in since joining the company in April 2008. Mr. Stanko has
more than 20 years of demonstrated financial and operations
leadership across a broad range of industries. He has extensive
experience in financial and strategic planning, audit and
compliance, multi-location operations and cross-functional team
leadership.
Mr. Stanko served as regional controller of Levitt Corporation.
He is a CPA and began his career at Ernst & Young LLP where he
held positions of increasing responsibility over 16 years. In his
new role, Stanko will be responsible for financial reporting and
planning, and managing SEC compliance. He will also maintain his
responsibilities for NexCen Franchise Management.
"I am very excited that [Mr. Stanko] will be taking on additional
responsibilities as [CFO] of NexCen Brands," Kenneth J. Hall,
chief executive officer of NexCen Brands, stated. "He has made an
immediate positive impact on our franchising business since
joining earlier this year and has quickly immersed himself across
all areas of the organization. In doing so, he has proven that he
is a strong financial leader with the proper skill set to assist
the company in improving its financial management and reporting."
Other Key Exec. Mgt. Promotions and Appointments
William Dolan was appointed to the new position of assistant
controller of NexCen Brands, Inc. Mr. Dolan is a CPA and has more
than 25 years of financial experience. He served as vice
president of finance and controller for Achim Importing Co., Inc.
Mr. Dolan held the positions of Treasurer and Secretary, also at
Achim Importing Co. At NexCen, Dolan will be responsible for
assisting in the corporate accounting operations and SEC
reporting.
Martin Amschler was promoted to chief development officer for
NexCen Franchise Management. Mr. Amschler has more than 17 years
of sales and development experience, including the last nine years
in the franchise industry. Recently at NexCen Franchise
Management, Mr. Amschler held the position of executive vice
president of international development and prior to that was
senior vice president of development. Mr. Amschler joined the
company upon the company's acquisition of The Athlete's Foot in
November 2006. He joined The Athlete's Foot in 1998 and held
several senior leadership positions, including overseeing new
business development, which contributed to the significant growth
of this franchise brand. As chief development officer for NexCen
Franchise Management, Mr. Amschler will oversee worldwide sales
and domestic development efforts in addition to continuing to be
responsible for international development efforts.
Pam Price was appointed vice president of domestic development for
NexCen Franchise Management. Ms. Price has more than 15 years of
experience in franchising. She has held a number of executive
positions with national franchisors, including Krystal
Restaurants, LaSalsa Mexican Grill and AFC Enterprises, Inc.,
where she was responsible for franchise development. In addition,
she founded ProPel Franchising in 2003, a consulting company that
works with prospective franchise partners. Ms. Price will be
responsible for domestic franchise sales and identifying new
domestic business opportunities for NexCen Franchise Management.
"We are delighted to have [the] high caliber of talent at NexCen,"
Mr. Hall concluded. "We have significantly enhanced our
management team through these promotions and appointments. Each
of these individuals has demonstrated their leadership
capabilities and has a proven track record of accomplishments."
A full-text copy of the Employment Agreement is available for free
at: http://ResearchArchives.com/t/s?380e
About NexCen Brands
NexCen Brands Inc. (NASDAQ: NEXC) -- http://www.nexcenbrands.com/
-- acquires and manages global brands, generating revenue through
licensing and franchising. The company own and license the Bill
Blass and Waverly brands, well as seven franchised brands. Two
franchised brands -- The Athlete's Foot and Shoebox New York --
sell retail footwear and accessories. Five are quick-service
restaurants -- Marble Slab Creamery, MaggieMoo's, Pretzel Time,
Pretzelmaker, and Great American Cookies.
The company licenses and franchises its brands to a network of
leading retailers, manufacturers and franchisees that generate
$1.3 billion in retail sales in more than 50 countries around the
world. The franchisees operate approximately 1,900 franchised
stores. Franchisee support and training is provided at NexCen
University, a state-of-the-art facility located in Atlanta.
* * *
The company believes that there is substantial doubt about its
ability to continue as a going concern, and pending completion of
an independent review, that this substantial doubt also may have
existed at the time the company filed its 2007 10-K. The audit
committee of the company's Board of Directors has retained
independent counsel to conduct an independent review of the
situation.
The company has concluded that its 2007 financial statements
should no longer be relied upon and no reliance should be placed
upon KPMG's audit report dated March 20, 2008, or its report dated
March 20, 2008, on the effectiveness of internal control over
financial reporting as of Dec. 31, 2007.
NexCen also announced that it is actively exploring all strategic
alternatives to enhance its liquidity, including potential capital
market transactions, the possible sale of one or more of its
businesses, and discussions with the company's lender. In
addition, the company will take immediate steps to reduce
operating expenses.
NEXCEN BRANDS: Completes Bill Blass Business Sale for $10MM Cash
----------------------------------------------------------------
NexCen Brands, Inc., disclosed in a filing with the Securities and
Exchange Commission that the company and its subsidiaries sold
substantially all of the assets of its Bill Blass licensing
business to Peacock International Holdings, LLC, a New York
limited liability company.
The disposition was completed pursuant to the terms of an Asset
Purchase Agreement dated Dec. 24, 2008, by and among the company,
its direct or indirect subsidiaries, NexCen Fixed Asset Company,
LLC, NexCen Brand Management, Inc., Bill Blass Holding Co., Inc.,
Bill Blass Licensing Co., Inc., Bill Blass Jeans, LLC and Bill
Blass International LLC and Peacock International. The move was
in connection with the restructuring plan which is centered on the
company's franchising business.
A full-text copy of the Purchase Agreement is available for free
at http://ResearchArchives.com/t/s?36fd
Pursuant to the Purchase Agreement, Peacock International agreed
to purchase substantially all of the assets associated with the
company's Bill Blass licensing business. The purchase price was
approximately $10 million in cash.
The Purchase Agreement contains customary representations,
warranties and covenants. Subject to limited exceptions for
specified representations that are subject to extended survival,
the representations and warranties of the company, the Sellers and
Peacock International will survive the closing for one year.
Indemnification claims are generally capped at $2.25 million and
are subject to a minimum claim amount of $25,000 and a $200,000
aggregate threshold. The foregoing limits do not apply to claims
based on fraud.
Amendment to Existing Credit Facility
In connection with the sale of the assets related to the Bill
Blass licensing business, the company amended its existing bank
credit facility by and among NexCen Holding Corp., a subsidiary of
the company, certain of the company's subsidiaries and BTMU
Capital Corporation.
The Amendment modifies certain provisions of the Facility that
would have otherwise been applicable because the net proceeds from
the sale of the Bill Blass licensing business are not sufficient
to fully redeem the original note issued under the Facility and
related to the Bill Blass licensing assets. After application of
the net proceeds from this sale to the partial redemption of
principal and the payment of accrued and unpaid interest on the
original note related to the Bill Blass licensing assets, the
remaining principal balance of such original note will be
approximately $14.2 million. Under the terms of the Facility,
this remaining note converted into a deficiency note that bears
interest at an annual rate of 15% and matures on Jan. 1, 2010.
This amendment modifies the terms of the deficiency note and
addresses certain related matters.
The key provisions of the amendment include these:
-- the maturity date of the deficiency note has been extended
from Jan. 1, 2010 to July 31, 2013;
-- scheduled principal payment obligations related to the
deficiency note have been deferred until maturity of the
note and a payment-in-kind interest feature was added to
defer interest payments during the term of the deficiency
note; and
-- BTMUCC's contingent right to receive warrants to purchase
2.8 million shares of common stock of the company has been
amended so that the existence of the deficiency note on and
after March 31, 2009, will not be trigger the issuance of
these warrants to BTMUCC.
$14.2 Million Deficiency Note
As a result of the net proceeds from the sale of the Bill Blass
licensing business being insufficient to repay in full all amounts
owed under the original note issued under the Facility and related
to the Bill Blass licensing assets, the original note
automatically converts into a deficiency note with a principal
amount equal to the unpaid principal amount of the original note
of approximately $14.2 million. The annual interest rate on the
original note was LIBOR (the one-month rate as in effect from time
to time) plus 7% per year, and that rate automatically increased
to 15% upon conversion to a deficiency note, although interest
payments are deferred and payment-in-kind is permitted under the
terms of the deficiency note.
About NexCen Brands
NexCen Brands Inc. (NASDAQ: NEXC) -- http://www.nexcenbrands.com/
-- acquires and manages global brands, generating revenue through
licensing and franchising. The company own and license the Bill
Blass and Waverly brands, well as seven franchised brands. Two
franchised brands -- The Athlete's Foot and Shoebox New York --
sell retail footwear and accessories. Five are quick-service
restaurants -- Marble Slab Creamery, MaggieMoo's, Pretzel Time,
Pretzelmaker, and Great American Cookies.
The company licenses and franchises its brands to a network of
leading retailers, manufacturers and franchisees that generate
$1.3 billion in retail sales in more than 50 countries around the
world. The franchisees operate approximately 1,900 franchised
stores. Franchisee support and training is provided at NexCen
University, a state-of-the-art facility located in Atlanta.
* * *
The company believes that there is substantial doubt about its
ability to continue as a going concern, and pending completion of
an independent review, that this substantial doubt also may have
existed at the time the company filed its 2007 10-K. The audit
committee of the company's Board of Directors has retained
independent counsel to conduct an independent review of the
situation.
The company has concluded that its 2007 financial statements
should no longer be relied upon and no reliance should be placed
upon KPMG's audit report dated March 20, 2008, or its report dated
March 20, 2008 on the effectiveness of internal control over
financial reporting as of Dec. 31, 2007, as contained in the
company's 2007 10-K.
NexCen also announced that it is actively exploring all strategic
alternatives to enhance its liquidity, including potential capital
market transactions, the possible sale of one or more of its
businesses, and discussions with the company's lender. In
addition, the company will take immediate steps to reduce
operating expenses.
NEXCEN BRANDS: Financial Reports Restatement Delays 10-Q Filing
---------------------------------------------------------------
NexCen Brands, Inc., disclosed in a filing with the Securities and
Exchange Commission that it will not file its Quarterly Report on
Form 10-Q for the period ended Sept. 30, 2008, by the required
filing date and will not file the report within the five-day grace
period provided in Rule 12b-25.
The company related that the authorized officers of the company
concluded that the company's audited financial statements for the
fiscal year ended Dec. 31, 2007, must no longer be relied upon.
Additionally, KPMG LLP, the company's independent accountant,
determined that no reliance must be placed on its audit report
dated March 20, 2008, on the company's consolidated financial
statements as of Dec. 31, 2007, and 2006 and each of the years in
the three-year period ended Dec. 31, 2007, or its report dated
March 20, 2008, on the effectiveness of internal control over
financial reporting as of Dec. 31, 2007.
The company expects to file its Quarterly Report on Form 10-Q for
the period ended Sept. 30, 2008, soon as practicable after the
company files an amendment to the Annual Report and its Quarterly
Reports on Form 10-Q for the periods ended March 31, 2008, and
June 30, 2008.
Although the company is not yet able to estimate when it will be
able to complete these filings, the company has made changes to
its management team, made additions and changes to its accounting
and financial staff, engaged the firm of BDO Seidman, LLP for
consulting services on accounting and reporting issues, and is
otherwise working to put itself in the position to meet its filing
obligations.
NasDaq Delisting
NexCen Brands received additional notification from The Nasdaq
Stock Market that the company is not in compliance with the
continued listing requirement of Nasdaq Marketplace Rule
4310(c)(14) due to its failure to file its Quarterly Report on
Form 10-Q for the period ended Sept. 30, 2008.
The company has received two Nasdaq Staff Determination letters
indicating that its common stock is subject to delisting pursuant
to Nasdaq Marketplace Rule 4310(c)(14) due to its failure to file
its Quarterly Reports on Form 10-Q for the periods ended
March 31, 2008, and June 30, 2008. After the company's receipt of
the initial letter for the first quarter of 2008, the company
requested and was granted a hearing before the Nasdaq Listing
Qualifications Panel. At the hearing, held on July 10, 2008, the
company requested continued listing and presented to the Panel its
plan to regain compliance with Nasdaq's filing requirements. On
Sept. 2, 2008, the Panel issued its decision granting the
company's request, subject to the condition that, on or before
Nov. 17, 2008, the company file its Quarterly Reports on Form 10-Q
for the periods ended March 31, 2008, and June 30, 2008.
The company cannot provide any assurance that the Listing Council
will allow continued listing through the time that the company
will be able to file its Quarterly Reports on Form 10-Q for the
periods ended March 31, 2008, June 30, 2008 and Sept. 30, 2008, or
that the company will meet the minimum bid price requirement by
the revised April 13, 2009, deadline for compliance.
In a separate filing, NexCen Brands reported selected preliminary
third quarter results for the third quarter ended Sept. 30, 2008.
The preliminary financial results for the third quarter of 2008
from continuing operations include:
-- Royalty and other revenue of approximately $7.1 million
versus $5.0 million in the third quarter of last year, an
increase of approximately $2.1 million or 42%.
-- Manufacturing revenue of approximately $4.5 million from
Great American Cookies, which was acquired at the end of
January 2008.
-- Franchisee fee revenue of approximately $0.4 million versus
$1.5 million in the third quarter of last year, a decrease
of approximately $1.1 million or 73%. Although the company
executed franchise agreements totaling approximately
$2.2 million in new initial franchise fees in the third
quarter of 2008, franchise fee income is recognized when
all initial required services are performed, which is
generally considered to be upon the opening of a
franchisee's store. Until recognized, the franchise fees
are accounted for as deferred revenue. Deferred revenue
related to the pipeline of Letters of Intent and Franchise
Agreements for franchise stores to be opened were
approximately $5.5 million and $4.7 million as of Sept. 30,
2008, and June 30, 2008, an increase of approximately
$0.8 million or 17%.
-- The company's pipeline of Letters of Intent and Franchise
Agreements for franchised stores to be opened both
domestically and internationally increased to 394 stores at
the end of the third quarter of 2008 versus 225 stores at
the end of the second quarter of 2008, an increase of 169
stores or 75%.
-- Total franchised locations at the end of the third quarter
of 1,862 stores versus 1,562 stores at the end of the third
quarter last year, an increase of 300 stores or 19%.
The company is continuing to assess and quantify the impact on its
financial results related to the costs associated with the
restructuring of its credit facility, the special investigation by
the Audit Committee, the planned disposition of the Bill Blass
business, the completed sale of the Waverly business and possible
asset impairment charges, any and all of which may materially
impact the third quarter of 2008 operating results. Accordingly,
the full financial results for the third quarter of 2008 have not
yet been determined.
About NexCen Brands
NexCen Brands Inc. (NASDAQ: NEXC) -- http://www.nexcenbrands.com/
-- acquires and manages global brands, generating revenue through
licensing and franchising. The company own and license the Bill
Blass and Waverly brands, well as seven franchised brands. Two
franchised brands -- The Athlete's Foot and Shoebox New York --
sell retail footwear and accessories. Five are quick-service
restaurants -- Marble Slab Creamery, MaggieMoo's, Pretzel Time,
Pretzelmaker, and Great American Cookies.
The company licenses and franchises its brands to a network of
leading retailers, manufacturers and franchisees that generate
$1.3 billion in retail sales in more than 50 countries around the
world. The franchisees operate approximately 1,900 franchised
stores. Franchisee support and training is provided at NexCen
University, a state-of-the-art facility located in Atlanta.
* * *
As reported by the Troubled company Reporter on May 21, 2008, the
company believes that there is substantial doubt about its ability
to continue as a going concern, and pending completion of an
independent review, that this substantial doubt also may have
existed at the time the company filed its 2007 10-K. The audit
committee of the company's Board of Directors has retained
independent counsel to conduct an independent review of the
situation.
The company has concluded that its 2007 financial statements
should no longer be relied upon and no reliance should be placed
upon KPMG's audit report dated March 20, 2008, or its report dated
March 20, 2008, on the effectiveness of internal control over
financial reporting as of Dec. 31, 2007, as contained in the
company's 2007 10-K.
NexCen also announced that it is actively exploring all strategic
alternatives to enhance its liquidity, including potential capital
market transactions, the possible sale of one or more of its
businesses, and discussions with the company's lender. In
addition, the company will take immediate steps to reduce
operating expenses.
NEXCEN BRANDS: Marvin Traub Resigns from Board of Directors
-----------------------------------------------------------
NexCen Brands, Inc., disclosed in a regulatory filing with the
Securities and Exchange Commission that Marvin Traub has resigned
from its board of directors, effective Dec. 4, 2008. Mr. Traub
was elected director of NexCen Brands, Inc. on May 2, 2007.
David S. Oros, chairman of NexCen Brands stated, "[Mr. Traub]
brought to the company's board a wealth of experience and insight,
especially with respect to the retail and consumer goods sector.
We are grateful for his sage counsel throughout his tenure and in
connection with the company's exit from its retail licensing
businesses. On behalf of the board, our shareholders and
employees, I thank [Mr. Traub] and wish him the best."
NexCen Brands Inc. (NASDAQ: NEXC) -- http://www.nexcenbrands.com/
-- acquires and manages global brands, generating revenue through
licensing and franchising. The company own and license the Bill
Blass and Waverly brands, well as seven franchised brands. Two
franchised brands -- The Athlete's Foot and Shoebox New York --
sell retail footwear and accessories. Five are quick-service
restaurants -- Marble Slab Creamery, MaggieMoo's, Pretzel Time,
Pretzelmaker, and Great American Cookies.
The company licenses and franchises its brands to a network of
leading retailers, manufacturers and franchisees that generate
$1.3 billion in retail sales in more than 50 countries around the
world. The franchisees operate approximately 1,900 franchised
stores. Franchisee support and training is provided at NexCen
University, a state-of-the-art facility located in Atlanta.
* * *
The company believes that there is substantial doubt about its
ability to continue as a going concern, and pending completion of
an independent review, that this substantial doubt also may have
existed at the time the company filed its 2007 10-K. The audit
committee of the company's Board of Directors has retained
independent counsel to conduct an independent review of the
situation.
The company has concluded that its 2007 financial statements
should no longer be relied upon and no reliance should be placed
upon KPMG's audit report dated March 20, 2008, or its report dated
March 20, 2008, on the effectiveness of internal control over
financial reporting as of Dec. 31, 2007, as contained in the
company's 2007 10-K.
NexCen also announced that it is actively exploring all strategic
alternatives to enhance its liquidity, including potential capital
market transactions, the possible sale of one or more of its
businesses, and discussions with the company's lender. In
addition, the company will take immediate steps to reduce
operating expenses.
NORTEL NETWORKS: Chapter 11 Filing Cues Moody's Junk Rating
-----------------------------------------------------------
Moody's Investors Service downgraded Nortel Networks Corporation's
corporate family rating to Ca and its probability-of-default
rating to D. The company's debt instruments and those of its
wholly-owned subsidiaries (Nortel Networks Limited and Nortel
Networks Capital Corporation) were also downgraded to Ca.
All rating actions are in response to Nortel's January 14, 2009
announcement that the company has applied for creditor protection
under the Companies' Creditors Arrangement Act in Canada and
Chapter 11 of the United States Bankruptcy Code in the United
States.
Downgrades:
Issuer: Nortel Networks Corporation
-- Probability of Default Rating, Downgraded to D from Caa3
-- Corporate Family Rating, Downgraded to Ca from Caa2
-- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to
Ca (LGD4, 52%) from Caa2 (LGD3, 37%)
Issuer: Nortel Networks Capital Corporation
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Ca
(LGD4, 52%) from Caa2 (LGD3, 37%)
Issuer: Nortel Networks Limited
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Ca
(LGD4, 52%) from Caa2 (LGD3, 37%)
-- Preferred Stock Preferred Stock, Downgraded to C from Ca
Moody's most recent rating action concerning Nortel was taken on
December 15, 2008. The principal rating actions involved the
downgrade of company's CFR, PDR and instrument ratings.
Headquartered in Toronto, Ontario, Canada, Nortel Networks
Corporation designs and supplies telecommunications networking
systems to a variety of business and governmental customers around
the globe.
NORTEL NETWORKS: Enters Administration; Ernst & Young Appointed
---------------------------------------------------------------
Alan Bloom, Stephen Harris, Chris Hill, and Alan Hudson of Ernst &
Young LLP were appointed Joint Administrators of Nortel Networks
UK Ltd and 18 other EMEA entities on January 15, 2009.
Nortel Networks Inc. is a multinational telecommunications
equipment manufacturer headquartered in Toronto, Ontario, Canada
with a workforce of approximately 30,000 employees globally.
Nortel Networks UK Ltd is the Company's European headquarters and
is based in Maidenhead, Berkshire.
On a global basis, adverse economic conditions have made the
current capital structure of Nortel Networks Inc. unsustainable
and it is imperative that the Group addresses its financial
position and the legacy costs burdening its balance sheet, to
overcome current challenges and reposition itself for the future.
The Group concluded that the best way to effect this
transformation was to undertake a restructuring process.
The Administration Orders for Nortel Networks UK Ltd and certain
EMEA entities were sought by the Company after full consideration
of all other alternatives, and in light of actions being taken in
Canada and the USA. The Board of Nortel Networks Inc. has
concluded that these steps are in the best long-term interests of
Nortel and its stakeholders. The process of Administration is
expected to have no immediate impact on the company's day-to-day
operations including employee pay and benefits, or on customer
obligations.
The filing of an Administration Order for Nortel companies across
EMEA has brought together a number of legal entities under a
common reorganization process, covering selected European
companies which have their centers of main interests in England
and therefore fall under the jurisdiction of the Order. The
Administration Order will allow these companies to continue to
operate while a restructuring plan is completed.
The Administrators will be working closely with Nortel to review
the options available to EMEA Companies covered by the
Administration Order in the context of the wider Group
restructuring process.
Alan Bloom and David Hughes of Ernst & Young LLP were appointed as
Joint Administrators of Nortel (Ireland) Limited.
Nortel Group, the ultimate parent company of Nortel based in
Canada, filed an application for creditor protection under the
Companies' Creditors Arrangement Act ("CCAA") in Canada to
facilitate a comprehensive business and financial reorganization.
Certain U.S. subsidiaries have filed in the United States a
concurrent voluntary petition under Chapter 11 of the U.S.
Bankruptcy Code as part of the proactive reorganization process.
EMEA entities in the following jurisdictions are included in the
Administration Order, and therefore will form part of a common
reorganization process, although subject to employment and other
legislation in local markets: Austria, Belgium, Czech Republic,
Finland, France, Germany, Hungary, Ireland, Italy, Netherlands,
Poland, Portugal, Romania, Slovenia, Spain and Sweden.
NORTEL NETWORKS: Obtains U.S. Court Approval of First Day Motions
-----------------------------------------------------------------
Nortel Networks Corporation (CA: NT) (NYSE: NT) said that at the
first day hearing held on January 15, 2009 at the United States
Bankruptcy Court for the District of Delaware, the Company's U.S.
subsidiaries that filed voluntary petitions under Chapter 11 of
the U.S. Bankruptcy Code received approval from the court for a
number of motions requesting certain relief. Those first day
motions included, among other things:
(1) a motion for authorization to continue making payments
relating to employees' wages, salaries, commissions and
benefit programs in the ordinary course;
(2) a motion for authorization to continue the U.S. Debtors'
current cash management system and related relief; and
(3) a motion to impose certain restrictions on trading in
common shares of NNC and preferred shares of NNL.
The U.S. Court also approved other first day motions to enable the
U.S. filed companies to continue to operate their businesses in
the ordinary course.
On January 14, 2009, the Company received notice from NYSE
Regulation, Inc. that it has decided to suspend the listing of the
Company's common shares on the New York Stock Exchange. NYSE
Regulation stated that its decision was based on the Company and
certain of its subsidiaries voluntarily filing for creditor
protection under the Companies' Creditors Arrangement Act in
Canada as well as under Chapter 11 in the United States. The
securities of a company filing for creditor protection are subject
to suspension and delisting pursuant to Section 802.01D of the
NYSE's Listed Company Manual.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next-
generation technologies, for both service provider and enterprise
networks, support multimedia and business-critical applications.
Nortel's technologies are designed to help eliminate today's
barriers to efficiency, speed and performance by simplifying
networks and connecting people to the information they need, when
they need it. Nortel does business in more than 150 countries
around the world. Nortel Networks Limited is the principal direct
operating subsidiary of Nortel Networks Corporation.
Nortel Networks Corp., Nortel Networks Inc. and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group. The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.
The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.
Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection. The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986. The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.
Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.
As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion. The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies. As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.
Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
NORTHEAST BIOFUELS: Moody's Cuts Ratings to 'C' on Ch. 11 Filing
----------------------------------------------------------------
Moody's Investors Service downgraded Northeast Biofuels, LP to C
from Caa1. The company filed for bankruptcy under chapter 11 on
January 14, 2008 due to a failure to service debt in a timely
manner. The Northeast Biofuels ethanol plant had been unable to
reach completion due to recurring construction difficulties and
the failure to meet certain performance thresholds. Moody's will
continue to monitor the situation.
Northeast Biofuels, LP is an ethanol production facility located
in Fulton, New York The plant was designed for a productive
capacity of 114 million gallons of ethanol, 367 thousand tons of
distiller's grains. The plant has failed to meet substantial
completion due to a series of design flaws.
The last rating action was on November 4, 2008 when the rating of
Northeast Biofuels, LP was downgraded to Caa1 with a negative
outlook.
Northeast Biofuels, LP's rating was assigned by evaluating factors
Moody's believe are relevant to the credit profile of the issuer,
such as; i) the business risk and competitive position of the
company versus others within its industry, ii) the capital
structure and financial risk of the company, iii) the projected
performance of the company over the near to intermediate term, and
iv) management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside of Northeast Biofuel's core industry and Northeast
Biofuel's rating is believed to be comparable to those of other
issuers of similar credit risk.
PECUS ARG: Files for Chapter 11 Bankruptcy Protection
-----------------------------------------------------
Reuters reports that Pecus ARG Holding Inc. filed for Chapter 11
bankruptcy protection in the U.S. Bankruptcy Court for the
District of Delaware on Thursday, due to poor economy and lower
consumer spending.
Court documents say that Pecus ARG's Black Angus Steakhouse
restaurant chain has 69 restaurants in seven western U.S. states
and has more than 3,600 employees.
According to court documents, Pecus' Chief Restructuring Officer
Lisa Poulin said that "the recessionary economic environment"
caused lower sales, which fell about 26% from 2006 to 2008.
Making matters worse, the debtors' restaurants primarily are
located in some of the areas hardest hit by the mortgage crisis,
causing consumers in those markets to cut back on discretionary
spending, such as dining out."
Pecus ARG Holding Inc. is based in Los Altos, California.
QUIKSILVER INC: Moody's Downgrades Corp. Family Rating to 'B3'
--------------------------------------------------------------
Moody's Investors Service lowered Quiksilver, Inc.'s Corporate
Family and Probability of Default ratings to B3 from B2 and
lowered the company's Senior Unsecured Note rating to Caa1 from
B3. The company's Speculative Grade Liquidity Rating was affirmed
at SGL-4. The rating outlook is negative.
The downgrade reflects the company's weaker fourth quarter
performance as well as Moody's expectations of a continued
challenging operating environment given weakness in discretionary
consumer spending. As a result Moody's believe Quiksilver's
credit metrics are likely to weaken from their current levels. A
majority of the company's sales are outside the United States,
however the benefits of international diversification are limited
in the current environment as Moody's expect challenging
conditions to persist in many of the company's largest markets.
The rating also reflects vulnerability in the company's capital
structure, resulting from the high reliance on short term and
uncommitted funding, with approximately 25% of consolidated debt
coming due in its current fiscal year.
The negative outlook reflects Moody's concerns with the company's
high reliance on short term and uncommitted funding, as an
inability to maintain access to adequate levels of funding
arrangements could result in an adverse impact on liquidity.
These ratings were lowered and LGD assessments adjusted:
-- Corporate Family Rating to B3 from B2
-- Probability of Default Rating to B3 from B2
-- $400 million senior unsecured notes due 2013 to Caa1 (LGD 4,
66%) from B3 (LGD 4, 67%)
This rating was affirmed
-- Speculative Grade Liquidity Rating at SGL-4
Moody's last rating action on Quiksilver, Inc., was on
November 19, 2008 when the company's Corporate Family Rating was
lowered to B2, with ratings remaining under review for possible
downgrade.
Quiksilver, Inc., is a diversified designer and distributor of
branded apparel, footwear, accessories, and related products under
brands including Quiksilver, Roxy, and DC. The company reported
fiscal-year 2008 total revenue from continuing operations of
approximately $2.26 billion.
RAYMOR INDUSTRIES: Receives Default Notice; Commences BIA Case
--------------------------------------------------------------
Raymor Industries Inc. and some of its subsidiaries filed on
Friday with the official receiver a notice of intention to make a
proposal under the Bankruptcy and Insolvency Act. The filing is
intended to facilitate the Company's ability to successfully
implement a restructuring plan.
As a result of the filing, any actions against Raymor and some of
its subsidiaries will be automatically stayed, pending the outcome
of the proposal process. The Company is required to file its
proposal within 30 days unless an extension is granted by the
courts. Raymor will continue to operate in the normal course of
business and continue delivering orders to its client as it
prepares its proposal to creditors.
Also on Friday, Raymor said it has received from its principal
financial institution a Notice to Enforce a Security under the
article 244(1) of the Bankruptcy and Insolvency Act. A second
Notice to Enforce a Security was received by SE Techno Plus Inc.,
a subsidiary of Raymor Aerospace, from its financial institution
requesting the full repayment of its obligation.
The Company is taking the notifications seriously and is presently
discussing with both financial institutions in order to resolve
the situation. Since the third quarter 2008, the corporation was
going through difficult times and was attempting to refinance its
operations via different sources of financing. Having failed to
comply with payment obligations under both lending agreements, the
Company and SE Techno Plus Inc. were considered being in default.
"Clearly, while not our preferred course of action, a Notice of
Intention filing is necessary to allow Raymor Industries to make
the required changes to operate effectively and profitably in a
difficult financial environment. We are negotiating with two
financial groups that have declared their interests in providing
us with Debtor-in-Possession (DIP) financing allowing us to
restructure. The company is also reviewing a potential sale of
one its division", said Stephane Robert, President of Raymor.
"Considering the 2008 difficult market conditions, Raymor was able
to continue the qualification of its products and acquired several
accreditations. Since its third reporting quarter, Raymor was
actively searching different sources of financing against existing
purchase orders, which will be possible to complete in a
restructuring plan. We must add that, since 2006, the pending
litigation related to its technology of single-walled carbon
nanotubes intended by Raymor had a significant impact on the
company." added Mr. Robert.
The management intends to provide regular updates with respect to
both its financial position and its creditor obligations.
About Raymor Industries
Raymor Industries, Inc. (CA:RAR) develops single-walled carbon
nanotubes, nanomaterials and other advanced materials for high
value-added applications. Raymor Industries operates three
wholly-owned, industrial subsidiaries, Raymor Nanotech, Raymor
Aerospace and AP&C Advanced Powders and Coatings, specializing in
nanotechnology and advanced materials, and comprising four
divisions: (1) nanotechnology products, including nano-powders,
nano-coatings, and single-walled carbon nanotubes (C-SWNT) for
"the applications of tomorrow"; (2) thermal spray coatings, which
largely targets military, aeronautical, aerospace, specialized
industrial, and mining applications; (3) spherical metallic
powders, primarily used for biomedical and aerospace applications;
and (4) net-shape forming, a component manufacturing technique
used for ballistic protection and other aerospace and military
applications. Raymor holds the exclusive rights to more than 20
patents throughout the world, with other patents pending.
ROUGE INDUSTRIES: Plan Filing Period Extended to March 30, 2009
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended
Rouge Industries, Inc., and its debtor-affiliates' exclusive
periods to:
a) file a plan through the later of confirmation of a plan or
March 30, 2009, and
b) solicit acceptances of to the later of confirmation of a
plan or April 30, 2009.
The Debtors intend to use the requested extension to obtain the
Court's approval of the disclosure statement, solicit votes on the
Joint Plan and confirm the Joint Plan.
Pursuant to the Joint Plan of Liquidation, on the Plan Effective
Date, the Liquidation Trust Agreement shall be executed, and all
other necessary steps shall be taken to establish the Liquidation
Trust. The Liquidation Trust shall be established for the sole
purpose of liquidating its assets, with no objective to continue
or engage in the conduct of a trade or business.
About Rouge Industries
Based in Dearborn, Michigan, Rouge Industries, Inc., is an
integrated producer of flat-rolled steel. Rouge Industries,
together with Rouge Steel Company, QS Steel Inc., and Eveleth
Taconite Company, filed for chapter 11 protection on Oct. 23, 2003
(Bankr. D. Del. Case No. 03-13272 through 03-13275).
Adam G. Landis, Esq., Kerri K. Mumford, Esq., Rebecca L. Butcher,
Esq., at Landis, Rath & Cobb, LLP, Alicia Beth Davis, Esq., Daniel
B. Butz, Esq., Donna L. Culver, Esq., Donna L. Harris, Esq., Eric
D. Schwartz, Esq., Gregory Thomas Donilon, Esq., Gregory W.
Werkheiser, Esq., Robert J. Dehney, Esq., Thomas F. Driscoll,
Esq., William H. Sudell, Jr., at Morris, Nichols, Arsht & Tunnell
LLP, and Joanna Flynn, Esq., at Akin Gump Strauss Hauer & Feld
LLP, represent the Debtors. The U.S. Trustee for Region 3
appointed creditors to serve on an Official Committee of Unsecured
Creditors. Gaston Plantiff Loomis, II, Esq., Kurt F. Gwynne,
Esq., Richard Allen Keuler, Jr., Esq., at Reed Smith LLP, and
Thomas Joseph Francella, Jr., Esq., at Whiteford Taylor Preston
LLC, serve as counsel to the Official Committee of Unsecured
Creditors. When the Debtors filed for protection from their
creditors, they listed $558,131,000 in total assets and
$558,131,000 in total debts.
SEAGATE TECHNOLOGY: Moody's Downgrades Corp. Ratings to 'Ba2'
-------------------------------------------------------------
Moody's Investors Service downgraded Seagate Technology HDD
Holdings' corporate family, senior unsecured notes, and
convertible senior notes ratings to Ba2 from Ba1, its subordinated
debentures to B1 from Ba2, and its speculative grade liquidity
rating to SGL-3 from SGL-1. In addition, Moody's kept the ratings
under review for further possible downgrade.
The downgrade of the corporate family rating was prompted by
Moody's concerns of a wider-than-expected deterioration in the
company's operating performance and liquidity position. Moody's
rating has historically factored in the inherent volatility of the
hard disk drive sector, which is characterized by capital
intensity, short product life cycles, commoditized nature, and
maturation-linked average selling price declines. However,
Moody's believe the current effects of the unusually weak macro
economic environment are exacerbated by poor management execution
as the company has been slow to rationalize production capacity.
Furthermore, while the company retains the dominant position in
the overall HDD market, it has lost market share to Western
Digital (the second largest competitor), especially in the faster-
growing notebook segment.
While in the past, the company has been able to maintain large
cash balances (in excess of $1 billion), Moody's expect Seagate's
liquidity to tighten significantly during 2009 as a result of cash
outlays associated with restructuring actions, lower operating
margins due to steep unit volume declines and severe pricing
erosion, and a $300 million unsecured senior notes maturity in
October 2009. With the possibility of negative free cash flow
during calendar year 2009, Moody's believe that cash and
equivalents will dip to levels significantly lower than the past
several years, which could pressure the minimum liquidity covenant
of $500 million under its $500 million unsecured bank revolver.
The credit facility also requires a maximum net leverage of 1.5x
and a minimum fixed charge coverage of 1.5x, which could also come
under pressure. These are the key factors that drove the
downgrade in the liquidity rating to SGL-3. Moody's believes the
company may need to seek an amendment of its financial covenants.
Alternatively, it could pay any outstanding amounts under the
revolver with balance sheet cash.
The review for further possible downgrade will focus primarily on
the company's plans to reduce production capacity and its overall
cost structure (note: earlier this week, the company announced a
6% global workforce reduction which is expected to result in
pretax charges of $90 million), volume and pricing trends for each
of its product segments (including shifts in market share), its
liquidity position, which could be affected by access to capital
markets and the ability to obtain waivers on the covenant
requirements, capital expenditure requirements, investments
related to the emerging solid state (flash) drive technology, and
the strategic vision of the new management team (also this week,
the company announced the departure of the Chief Executive Officer
and Chief Operating Officer).
Ratings downgraded / assessments revised:
-- Corporate Family Rating to Ba2 from Ba1
-- Probability of Default Rating to Ba2 from Ba1
-- $300 million floating rate senior notes due October 2009 to
Ba2 (LGD4, 56%) from Ba1 (LGD4, 57%)
-- $600 million of 6.375% senior unsecured notes due 2011 to Ba2
(LGD4, 56%) from Ba1 (LGD4, 57%)
-- $600 million of 6.8% senior unsecured notes due 2016 to Ba2
(LGD4, 56%) from Ba1 (LGD4, 57%)
-- $230 million of 6.8% convertible senior notes due 2010 to
Ba2(LGD4, 56%) from Ba1 (LGD4, 57%)
-- $60 million of 5.75% subordinated debentures due 2012 to B1
(LGD6, 96%) from Ba2 (LGD6, 96%)
-- Speculative Grade Liquidity (SGL) rating to SGL-3 from SGL-1
The last rating action was on September 12, 2006 when Moody's
affirmed the ratings of Seagate and assigned ratings to a new debt
issuance.
Seagate, with revenues of $12.5 billion for the twelve months
ended October 3, 2008, is the worldwide leader in the design,
manufacture and marketing of disk drive products used as the
primary medium for storing electronic information in systems
ranging from personal computers and consumer electronics to data
centers.
SMURFIT-STONE CONTAINER: Fitch Junks Issuer Rating from 'B'
-----------------------------------------------------------
Fitch Ratings has downgraded Smurfit-Stone Container Corporation's
Issuer Default Rating and debt ratings:
-- IDR to 'C' from 'B';
-- Secured bank debt to 'CCC/RR1' from 'BB/RR1';
-- Senior unsecured debt to 'C/RR4' from 'B/RR4';
-- Preferred stock to 'C/RR6' from 'CCC+/RR6'.
The Ratings have been placed on Watch Negative.
The ratings downgrades have been prompted by concerns that SSCC
may seek bankruptcy protection imminently, precipitated by a
sudden decline in business conditions in the fourth quarter of
2008, yet to be reported. Industry-wide containerboard mill
operating rates and production have fallen rapidly while
inventories have grown, and SSCC's liquidity was low at the start
of the quarter, $178 million in unused bank credit plus cash.
SSCC is highly leveraged, and its principal credit facilities come
up for renewal in November of 2009.
SSCC is a key North American producer in the corrugated box
markets with 16 paper mills and approximately 118 corrugated
container plants in North America. The company produces
7 million tons annually of containerboard and sells more than
70 billion square feet of boxes to home appliance, beverage, food,
pharmaceutical, computer, machinery and furniture manufacturers.
SMURFIT-STONE CONTAINER: High Debt Levels Cue Moody's Junk Rating
-----------------------------------------------------------------
Moody's Investors Service downgraded Smurfit-Stone Container
Enterprises, Inc.'s corporate family rating to Caa2 from B3. The
company's other existing debt ratings were also downgraded --
refer to the list below. All ratings remain on review for
possible further downgrade as the ratings had been on review
following the downgrade to B3 on December 23, 2008.
The rating action was prompted by a continued weak operating
environment and an increased potential for default or distressed
restructuring, including a bankruptcy filing.
The corporate family rating reflects the company's high debt
levels (including pension and lease obligations) and its weakened
cash flow and liquidity position. The rating incorporates the
company's weak credit protection measures due to the declining
demand for containerboard and high costs of energy, chemicals, and
fiber. The review will examine whether the company's credit
profile going forward will remain supportive of its current Caa2
corporate family rating. In order to fully consider these
matters, Moody's will look to clarify and review the company's
liquidity position and its ability to avert a distressed
restructuring.
Moody's last rating action was on December 23, 2008 when SSCE's
CFR rating was lowered to B3 from B2 and placed under review for
possible further downgrade. The principal methodology used in
rating SSCE was the Moody's Global Paper and Forest Products
Industry Rating Methodology, which can be found at www.moodys.com
in the Credit Policy & Methodologies directory, in the Ratings
Methodologies subdirectory. Other methodologies and factors that
may have been considered in the process of rating this issuer can
also be found in the Credit Policy & Methodologies directory.
Downgrades and Review for Possible Downgrade:
Issuer: Smurfit-Stone Container Enterprises, Inc.
-- Corporate family rating, downgraded to Caa2 from B3
-- Senior secured term loan B, downgraded to B1 (LGD2, 14%)
from Ba3
-- Senior secured term loan C, downgraded to B1 (LGD2, 14%)
from Ba3
-- Senior secured bank credit facility, downgraded to B1 (LGD2,
14%) from Ba3
-- Senior unsecured notes, downgraded to Caa3 (LGD4, 68%) from
Caa1
Issuer: Smurfit-Stone Container Canada, Inc.:
-- Backed senior secured term loan C, downgraded to B1 (LGD2,
14%) from Ba3
Issuer: Stone Container Finance Company of Canada:
-- Backed senior unsecured, downgraded to Caa3 (LGD4, 68%) from
Caa1
Headquartered in Chicago, Illinois, Smurfit-Stone Container
Corporation is a publicly traded holding company that operates
through a wholly-owned subsidiary company, Smurfit-Stone Container
Enterprises, Inc. The company is an integrated producer of
containerboard and corrugated containers (paper-based industrial
packaging) and is a large collector, marketer, and exporter of
recycled fiber. The company also produces market pulp, kraft
paper and boxboard.
SMURFIT-STONE CONTAINER: S&P Junks Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
ratings on Smurfit-Stone Container Corp. and its subsidiaries,
including its corporate credit rating to 'CCC' from 'B'. S&P
removed all of its ratings, except for the ratings on the
company's senior secured credit facilities, from CreditWatch with
negative implications where they were placed on Dec. 19, 2008.
The outlook is negative.
To resolve the CreditWatch listing on the company's senior secured
credit facilities, S&P will review S&P's recovery analysis shortly
to consider how the weakened demand environment may affect
recovery prospects. S&P will publish a new recovery report when
S&P complete the review.
"The downgrade reflects our increasing concerns about the
company's ability to meet its financial obligations because of
continuing poor demand and the still frozen credit markets," said
Standard & Poor's credit analyst Pamela Rice.
S&P believes Smurfit-Stone faces prospects for continuing poor
demand in 2009 because of weak economic conditions, thereby making
it challenging for the company to continue to meet its financial
covenants. In addition, Smurfit-Stone needs to refinance its
$800 million revolving credit facility that is due in November
2009, and the credit environment remains very difficult.
The ratings on Smurfit-Stone reflect the company's high debt
levels, tightening financial covenants, refinancing risk, narrow
product focus, declining demand, and industry cyclicality.
Smurfit-Stone is the second-largest containerboard producer in
North America and is a leading maker of corrugated containers.
The slowdown in the U.S. economy dramatically dampened box demand
in the fourth quarter of 2008, and S&P expects volumes to remain
weak in 2009.
SPANSION INC: Fitch Downgrades Ratings on Interest Payment Delays
-----------------------------------------------------------------
Fitch Ratings has downgraded the ratings for Spansion Inc.
following the company's announcement that, in connection with an
ongoing exploration of its strategic alternatives, Spansion will
delay the interest payment due Jan. 15, 2009, on its senior
unsecured notes as it looks to restructure its balance sheet. The
indenture associated with the senior unsecured notes provides for
a 30-day cure period for the interest payment. Fitch has
downgraded Spansion's ratings:
-- Issuer Default Rating to 'C' from 'CCC';
-- $175 million senior secured revolving credit facility (RCF)
due 2010 to 'CC/RR3' from 'CCC+/RR3';
-- $625 million senior secured floating rating notes due 2013
to 'CC/RR3' from 'CCC+/RR3';
-- $225 million of 11.25% senior unsecured notes due 2016 to
'C/RR6' from 'CC/RR6';
-- $207 million of 2.25% convertible senior subordinated
debentures due 2016 to 'C/RR6' from 'CC/RR6'.
Approximately $1.3 billion of debt securities are affected by
Fitch's actions.
The 'C' IDR reflects Fitch's belief that Spansion's default is
imminent. Fitch believes Spansion's strategic alternatives center
on the consummation of a complete or partial sale of the company
to another flash memory provider, which Fitch expects would be to
a larger and more strongly capitalized flash memory maker.
However, the existence of such a strategic buyer over the cure
period remains uncertain, given current macroeconomic and credit
conditions, as well as the competitive landscape of the already
fairly consolidated and gradually shrinking NOR flash memory
market.
Fitch believes there is value associated with the equipment the
company has purchased for its 300-millimeter manufacturing
facility, SP1, as well as the company's 300mm research and
development center and 200mm fab in the U.S. Nonetheless, from a
recovery perspective, Fitch expects the majority if not all of
this value would go to the secured lenders, leaving limited
recovery prospects on hard assets for unsecured and subordinated
creditors. In addition, Fitch believes there is intangible value
in Spansion's industry leading technology platforms that have
enabled customers' migration to higher density products, which
have resulted in ongoing share gains and leading market positions
in the NOR flash memory market.
The Recovery Ratings and notching reflect Fitch's continued
expectation that Spansion's enterprise value, and hence recovery
rates for its creditors, will be maximized as a going concern
rather than as in liquidation, although the difference between the
two continues to shrink as profitability has declined further.
Fitch reduced the discount to operating EBITDA (in estimating
distressed operating EBITDA) to 0% from 25% due to Fitch's
expectations that Spansion's profitability declined meaningfully
in the fourth quarter, resulting in an already distressed
operating EBITDA level.
Fitch believes $670 million of rated senior secured debt,
including $625 million of senior secured floating-rate notes and
the assumption of a fully drawn $45 million U.S. revolving bank
credit facility, will recover 51%-70% in a reorganization
scenario, resulting in an 'RR3' recovery rating. A waterfall
analysis provides 0% recovery for the approximately $225 million
of rated senior unsecured debt and $207 million of senior
subordinated notes, both resulting in an 'RR6' recovery rating.
SPANSION INC: Moody's Downgrades Corporate Family Rating to 'Ca'
----------------------------------------------------------------
Moody's Investors Service has downgraded Spansion's corporate
family rating and probability of default rating to Ca from Caa2,
senior secured floating rate notes to Caa2 from B3 and senior
unsecured notes to Ca from Caa3. At the same time, Moody's
affirmed the SGL-4 speculative grade liquidity rating. On
December 1, 2008, Moody's placed Spansion's ratings under review
for further possible downgrade. The ratings outlook is now
negative.
These ratings were downgraded:
-- Corporate Family Rating to Ca from Caa2
-- Probability of Default Rating to Ca from Caa2
-- $625 Million Senior Secured Floating Rate Notes to Caa2 (LGD-
2, 25%) from B3 (LGD-2, 25%)
-- $250 Million 11.25% Senior Unsecured Notes to Ca (LGD-5, 71%)
from Caa3 (LGD-5, 71%)
This rating was affirmed:
-- Speculative Grade Liquidity Rating - SGL-4
The rating actions are in response to Spansion's recent
announcement that it intends to delay the semi-annual interest
payment due January 15, 2009 on its $250 million 11.25% senior
unsecured notes maturing 2016, which have a 30-day cure period.
The company also announced its intention to initiate a
restructuring of its balance sheet, which would likely lead to a
distressed exchange for some or all of its debt instruments.
Finally, Spansion disclosed that it is exploring the possible sale
or merger of the company in view of the challenging conditions in
the flash memory market and its weakened liquidity profile.
The negative outlook reflects the likelihood of default on the
senior unsecured notes. It also reflects the company's very weak
liquidity profile, the tight credit environment and uncertainty
surrounding Spansion's ability to successfully arrange external
financing and/or a sale of the company's assets to facilitate
servicing its outsized debt obligations and funding the gap
between internal cash generation and expected capex requirements.
The last rating action was on December 1, 2008, when Moody's
lowered Spansion's CFR to Caa2 and placed the ratings under review
for further possible downgrade.
Spansion's ratings were assigned by evaluating factors Moody's
believe are relevant to the credit profile of the issuer, such as:
(i) the business risk and competitive position of the company
versus others within the industry; (ii) the capital structure and
financial risk of the company; (iii) the projected performance of
the company over the near-to-intermediate term; and (iv)
management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside of Spansion's core industry and Spansion's ratings are
believed to be comparable to those of other issuers of similar
credit risk.
Spansion Inc., headquartered in Sunnyvale, California, and parent
of Spansion, LLC, is a leading provider of flash memory
semiconductors, with $2.5 billion of revenue for the last twelve
months ended September 28, 2008.
SPANSION INC: S&P Downgrades Corporate Credit Rating to 'D'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Spansion Inc. to 'D' from 'CCC', and the issue-level
rating on Spansion LLC's 11.25% senior unsecured notes due 2016 to
'D' from 'CC'.
In addition, S&P lowered the issue-level rating on Spansion LLC's
floating-rate senior secured notes to 'C' from 'CCC', and the
issue-level rating on the company's 2.25% exchangeable senior
subordinated debentures to 'C' from 'CC'. Recovery ratings on the
company's debt issues remain unchanged.
The action reflects the announcement that the company will not
make the Jan. 15, 2009 scheduled interest payment on its 11.25%
senior notes, which mature on Jan. 15, 2016.
"Although the indenture on the 2016 notes permits a 30-day cure
period, S&P's rating action indicates that S&P does not currently
expect the company to make the interest payment within this time
frame," said Standard & Poor's credit analyst Bruce Hyman.
Spansion also announced that it has been exploring strategic
alternatives, including, but not limited to, merging with or
selling itself to a similar business. The company has also begun
investigations into restructuring its balance sheet.
Notwithstanding the company's leading share in the "NOR Flash"
sector, market conditions have been severe across the entire
memory industry. Spansion's free cash flows have been
substantially negative for an extended time, with little potential
for a near-term reversal.
SPANSION LLC: S&P's Rating on 11.25% Sr. Unsec. Notes Tumble to D
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Spansion Inc. to 'D' from 'CCC', and the issue-level
rating on Spansion LLC's 11.25% senior unsecured notes due 2016 to
'D' from 'CC'.
In addition, S&P lowered the issue-level rating on Spansion LLC's
floating-rate senior secured notes to 'C' from 'CCC', and the
issue-level rating on the company's 2.25% exchangeable senior
subordinated debentures to 'C' from 'CC'. Recovery ratings on the
company's debt issues remain unchanged.
The action reflects the announcement that the company will not
make the Jan. 15, 2009 scheduled interest payment on its 11.25%
senior notes, which mature on Jan. 15, 2016.
"Although the indenture on the 2016 notes permits a 30-day cure
period, S&P's rating action indicates that S&P does not currently
expect the company to make the interest payment within this time
frame," said Standard & Poor's credit analyst Bruce Hyman.
Spansion also announced that it has been exploring strategic
alternatives, including, but not limited to, merging with or
selling itself to a similar business. The company has also begun
investigations into restructuring its balance sheet.
Notwithstanding the company's leading share in the "NOR Flash"
sector, market conditions have been severe across the entire
memory industry. Spansion's free cash flows have been
substantially negative for an extended time, with little potential
for a near-term reversal.
STERLING FINANCIAL: Fitch Downgrades Individual Rating to 'C'
-------------------------------------------------------------
Fitch Ratings placed the ratings of Sterling Financial Corporation
and subsidiary Sterling Savings Bank on Watch Negative in response
to the company's announcement of increased non-performing assets
and higher net-charge offs. Additionally, Fitch downgraded the
Individual rating to 'C', reflecting continued pressure on
operating performance in 2009 largely due to increased credit
costs.
The significant increase of the loan loss provision to about
$230 million in the fourth quarter from $37 million in the third
quarter of 2008 is illustrative of an acceleration of the
deterioration of asset quality metrics. STSA is expected to
report a loss for 2008, driven by increased credit costs as well
as a goodwill write-down. Mitigating some of the risk of
increased credit costs is the company's participation in the U.S.
Treasury's Capital Purchase Program, in which STSA received $303
million of proceeds from the sale of preferred stock. In a
further effort to preserve capital, STSA announced its decision to
suspend its dividend on the common stock, which Fitch views
favorably. The company anticipates that total regulatory capital
will exceed 12% at Dec. 31, 2008, placing it within the total
capital range of its similarly rated peers.
The Negative Watch will be resolved following the company's fourth
quarter earnings release on Jan. 27, 2009.
Information to be reviewed includes:
-- The company's residential construction portfolio including
migration into and out of non-performing status;
-- Evaluation of exposures in its commercial real estate and
commercial and industrial portfolios;
-- Fitch's expectations in 2009 for earnings and asset quality,
specifically relating to migration into nonperforming and
charge-offs; and
-- An assessment of the company's workout strategy for problem
loans.
These ratings have been placed on Watch Negative:
Sterling Financial Corporation
-- Long-Term IDR at 'BBB-'
-- Short-Term IDR at 'F3';
-- Individual Rating at 'C';
-- Preferred Stock at 'BB+'.
Sterling Savings Bank
-- Long-Term IDR at 'BBB-';
-- Short-Term IDR at 'F3';
-- Individual Rating at 'C' ;
-- Long-Term Deposits at 'BBB';
-- Short-Term Deposits at 'F3'.
These ratings actions also occurred:
Sterling Financial Corporation
Sterling Savings Bank
-- Individual Rating downgraded to 'C';
-- Support affirmed at '5';
-- Support floor affirmed at 'NF'.
STEVE MCKENZIE: Will Meet With Creditors in Court on January 27
---------------------------------------------------------------
Monica Mercer at Chattanooga Times Free Press reports that
creditors will meet with Steve McKenzie in the U.S. Bankruptcy
Court for the Eastern District of Tennessee on Jan. 27, 2009.
According to Chattanooga Times, the creditors hold more than
$150 million in claims against Mr. McKenzie. Mr. McKenzie
admitted that he couldn't pay back the amount he owed mostly to
banks.
Mr. McKenzie, says Chattanooga Times, first made a fortune in the
check cashing business and now has ownership in 118 limited
liability companies that deal from construction to real estate.
Steve "Toby" McKenzie is a businessman in Cleveland.
As reported by the Troubled Company Reporter on Jan. 8, 2009, Mr.
McKenzie filed for a Chapter 11 bankruptcy in the U.S. Bankruptcy
Court for the Eastern District of Tennessee, listing over
$151 million in liabilities and $100 million to $150 million in
assets. Kyle Weems is assisting Mr. McKenzie in his restructuring
effort.
STRATEGIC RESOURCE: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
Tiffany Kary at Bloomberg News reports that Strategic Resource
Acquisition Corp. has filed for Chapter 11 bankruptcy protection
in the U.S. Bankruptcy Court for the Middle District of Tennessee.
Court documents say that Strategic Resource listed $1 million in
assets and $100 million in liabilities. Strategic Resource's
Gordonsville unit, Mid-Tennessee Zinc Corp., listed assets of
$50,000 and liabilities of $50 million, Bloomberg states.
Strategic Resource said in a statement that it is applying for
bankruptcy protection in Canada.
Strategic Resource said that it and Mid-Tennessee Zinc don't have
sufficient cash to meet current obligations, Bloomberg relates.
According to the report, Strategic Resource said that it failed to
make a Dec. 31, 2008 interest payment.
Strategic Resource said in a statement, "The implications for SRA
shareholders are uncertain and will not be determined until the
end of the restructuring process."
Strategic Resource Acquisition Corp. is a Toronto-based mining
company focused on zinc projects in Tennessee.
TRIBUNE CO: CFO Says 2007 Opinions Say Company Was Solvent
----------------------------------------------------------
Tribune Company Chief Financial Officer Chandler Bigelow on Friday
issued a statement regarding the solvency opinions the company
received as part of its 2007 going-private transaction.
Tribune said the statement was issued to clear up any confusion
resulting from media coverage of the Sec. 341 meeting in
connection with Tribune's Chapter 11 filing.
According to Mr. Bigelow, "Tribune received two solvency opinions
from an independent valuation firm with regard to this
transaction. The first was obtained in May 2007, during the
first-step tender offer portion of the transaction. The second
opinion was received in December 2007, and addressed the solvency
of the company immediately after giving effect to the closing of
the transaction. Completion of the transaction was contingent on
the receipt of this December 2007 opinion confirming the company's
solvency. Both opinions reached the same conclusion, that Tribune
was solvent."
"The first opinion was filed publicly in connection with the
company's tender offer which closed in June 2007; federal
securities laws governing tender offers required this filing.
Because no similar filing requirement applied to the December 2007
solvency opinion, the company did not publicly file this second
opinion.
TRIBUNE is America's largest employee-owned media company,
operating businesses in publishing, interactive and broadcasting.
In publishing, Tribune's leading daily newspapers include the Los
Angeles Times, Chicago Tribune, The Baltimore Sun, Sun Sentinel
(South Florida), Orlando Sentinel, Hartford Courant, Morning Call
and Daily Press. The company's broadcasting group operates 23
television stations, WGN America on national cable, Chicago's WGN-
AM and the Chicago Cubs baseball team. Popular news and
information Web sites complement Tribune's print and broadcast
properties and extend the company's nationwide audience.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Wilmington Trust Named as Successor Indenture Trustee
-----------------------------------------------------------------
Wilmington Trust said Friday that it has been named as successor
indenture trustee for holders of approximately $1.25 billion of
debt issued by Tribune Company, which filed for Chapter 11
protection on December 8, 2008, in the United States Bankruptcy
Court for the District of Delaware, and that it has been appointed
by the United States Trustee to serve as a member of the unsecured
creditors' committee.
In this role, Wilmington Trust provides trustee and administrative
services for creditors who hold Tribune Company's exchangeable
subordinated debentures due in 2029. Wilmington Trust is paid a
fee for these services, which are specified in documents that
govern the trust. Tribune Company's bankruptcy filing poses no
credit or investment risk to Wilmington Trust, nor does it affect
Wilmington Trust's balance sheet or bottom line.
"Being named as successor trustee and appointed to the unsecured
creditors' committee in Tribune Company's bankruptcy filing
reflects our position as a premier provider of trustee and
administrative services for corporate clients," said Ted T.
Cecala, Wilmington Trust's chairman and chief executive officer.
Wilmington Trust's Corporate Client Services (CCS) business offers
institutional trustee, agency, asset management, retirement plan
services, and administrative services for clients worldwide who
use capital market financing structures, as well as those who seek
to establish and maintain nexus, or legal residency, for special
purpose entities. Because Wilmington Trust does not underwrite
securities offerings or provide investment banking services, it is
able to deliver corporate trust services that are conflict-free.
About Wilmington Trust
Wilmington Trust Corporation is a financial services holding
company that provides Regional Banking services throughout the
mid-Atlantic region, Wealth Advisory Services for high-net-worth
clients in 36 countries, and Corporate Client Services for
institutional clients in 86 countries. Its wholly owned bank
subsidiary, Wilmington Trust Company, which was founded in 1903,
is one of the largest personal trust providers in the United
States and the leading retail and commercial bank in Delaware.
Wilmington Trust Corporation and its affiliates have offices in
Arizona, California, Connecticut, Delaware, Florida, Georgia,
Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York,
Pennsylvania, South Carolina, Vermont, the Cayman Islands, the
Channel Islands, London, Dublin, Frankfurt, Luxembourg, and
Amsterdam.
About Tribune Co.
TRIBUNE is America's largest employee-owned media company,
operating businesses in publishing, interactive and broadcasting.
In publishing, Tribune's leading daily newspapers include the Los
Angeles Times, Chicago Tribune, The Baltimore Sun, Sun Sentinel
(South Florida), Orlando Sentinel, Hartford Courant, Morning Call
and Daily Press. The company's broadcasting group operates 23
television stations, WGN America on national cable, Chicago's WGN-
AM and the Chicago Cubs baseball team. Popular news and
information Web sites complement Tribune's print and broadcast
properties and extend the company's nationwide audience.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
UNI-MART LLC: Closes College Avenue & Pugh Street Store
-------------------------------------------------------
Jim Warkulwiz at The Daily Collegian Online reports that Uni-
Marts, LLC, has closed its store on the corner of College Avenue
and Pugh Street.
Uni-Mart, LLC, opted out of its lease for the store on Dec. 31,
2008, The Daily Collegian relates, citing Ed Friedman, the
property owner for Uni-Mart, 200 East College Avenue. The report
quoted Mr. Friedman as saying, "Under the bankruptcy law, they
have the right to continue the lease or give it up. And they
elected to give it up." Mr. Friedman, according to the report,
said that this particular unit is owned by Uni-Marts and isn't one
of the several Uni-Mart franchises in State College.
The vacated storefront has several prospective renters, The Daily
Collegian states, citing Mr. Friedman. The Daily Collegian
reports that Mr. Friedman said that Uni-Marts expects to fill the
space within the next 30 days.
About Uni-Marts
Headquartered in State College, Pennsylvania, Uni-Marts LLC sells
consumer goods. The company and six of its affiliates filed for
Chapter 11 protection on May 29, 2008 (Bankr. D. Del. Lead Case
No.08-11037). Michael Gregory Wilson, Esq., at Hunton & Williams
LLP represents the Debtors in their restructuring efforts. The
Debtor selected Epiq Bankruptcy Solutions LLC as its claims,
notice and balloting agent. The U.S. Trustee for Region 3
appointed seven creditors to serve on an Official Committee of
Unsecured Creditors. The Committee selected Blank Rome LLP as its
counsel.
VALASSIS COMMUNICATIONS: S&P Junks Issue-Level Rating on Sub. Debt
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Livonia, Michigan-based Valassis Communications Inc. to
'B' from 'B+'. This rating, as well as all issue-level ratings on
Valassis, was removed from CreditWatch, where it was placed with
negative implications on Nov. 6, 2008. The rating outlook is
negative.
At the same time, S&P revised the recovery rating on the company's
senior secured credit facilities to '2', indicating S&P's
expectation of substantial (70% to 90%) recovery for lenders in
the event of a payment default, from '1'. The issue-level rating
on the credit facilities was lowered to 'B+' (one notch higher
than the 'B' corporate credit rating) from 'BB', reflecting both
the revised recovery rating and the lower corporate credit rating.
The issue-level rating on the company's subordinated debt was
lowered to 'CCC+' (two notches lower than the corporate credit
rating) from 'B-', in conjunction with the lowering of the
corporate credit rating. The recovery rating on this debt remains
at '6', indicating that lenders can expect negligible (0% to 10%)
recovery in the event of a payment default.
"The downgrade of the corporate credit rating reflects our
expectation for a very challenging operating environment in 2009,"
said Standard & Poor's credit analyst Liz Fairbanks. "The current
rating incorporates our expectation that EBITDA could decline
around 20% in 2009 due to cyclical pressures in the company's
shared mail segment (formerly known as ADVO), as well as both
cyclical and secular pressures in the freestanding insert and
neighborhood targeted segments. While the one-notch downgrade of
the corporate credit rating incorporates our expectation for weak
2009 operating performance, S&P believes that the company will
maintain adequate liquidity, provided by free operating cash flow
generation, excess cash on the balance sheet, and revolver
availability."
The downgrade also reflects S&P's concern around what S&P expects
to be a thinning cushion relative to the company's financial
maintenance covenants. S&P believes that the company used cash
and revolver borrowings to repay the 2009 senior notes that were
due and, therefore, reduced its outstanding senior secured debt.
Even though S&P expects debt balances to decline in 2009, the
cushion relative to covenants could deteriorate to about 10% by
the end of the year, which incorporates S&P's expectation that
free operating cash flow and excess cash balances will be used to
reduce debt. (The senior secured debt to EBITDA covenant is the
most restrictive covenant.) If the company were to use what S&P
believes will be about $70 million of excess cash at the end of
2009 to repay debt balances, EBITDA could decline by as much as
30% before the company would violate covenants. S&P's 'B' rating,
therefore, does not incorporate an expectation that the company
will violate covenants over the intermediate term.
VALUE FAMILY: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Value Family Properties - Holiday City, LLC
c/o Managing Member, LLC
3600 Minnesota Dr Suite 665
Edina, MN 55435
Bankruptcy Case No.: 09-00392
Type of Business: The company builds residential houses.
See: http://www.valuefamilyproperties.com/
Chapter 11 Petition Date: January 16, 2009
Court: Eastern District of North Carolina (Wilson)
Judge: Randy D. Doub
Debtor's Counsel: George M. Oliver, Esq.
Trawick H Stubbs, Jr., Esq.
Stubbs & Perdue, P.A.
P.O. Box 1654
New Bern, NC 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
http://www.stubbsperdue.com
Total Assets: $10,877,507
Total Debts: $7,984,259
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Onslow County Tax Collector 2007-2008 real $169,890
Attn: Manager or Agent estate taxes
39 Tallman Street
Jacksonville, NC 28540
Waste Management trash service $4,996
Attn: Managing Agent
PO Box 105430
Atlanta, GA 30348-5430
Lowe's Home Center legal fees $3,197
Attn: Managing Agent
1255 Western Blvd
Jacksonville, NC 28546
Meacham, Earley & Fowler legal fees $2,887
D & L Parts Company $991
Resident Data, Inc. background checks $863
Coastal Carolina Supply pool maintenance $780
Conservice Utility Mgmt. utility billing $201
Billing
Panini North America $114
Henderson & Ramsey, PC tax preparation $100
Buffalo Tire and Car Care $9
The petition was signed by David Stewart, managing member of
Managing Member LLC.
VAREL FUNDING: S&P Downgrades Corporate Credit Rating to 'B-'
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Varel Funding Co. to 'B-' from 'B'.
The outlook is negative.
S&P removed the ratings from CreditWatch where they were placed
with negative implications on Sept. 19, 2008, because of S&P's
concerns about the company's liquidity following Lehman Brothers
Holdings Inc.'s bankruptcy filing. Lehman was the sole lender on
Varel's $20 million revolving credit facility.
S&P lowered the senior secured debt rating on Varel to 'B' from
'B+' and kept the recovery rating at '2', indicating substantial
(70% to 90%) recovery in the event of a payment default.
"The downgrade primarily reflects the company's limited liquidity
and S&P's concern that, in light of difficult credit markets, it
may not be able to replace the $20 million facility," said
Standard & Poor's credit analyst Kenneth Cox.
Varel has been unable to fully access or secure a replacement
lender for its $20 million revolving credit facility.
S&P expects that the company's financial performance will likely
deteriorate in 2009 as a result of reduced capital spending by
exploration and production companies due to the lower commodity
price environment and bleak economic outlook. An upcoming
interest payment of $5.8 million in May and a principal payment of
$5 million in July could put added pressure on the company's
already thin cash balance, given limited access to the revolver.
WATERFORD WEDGWOOD: Business as Usual for U.S. Operations
---------------------------------------------------------
Waterford Wedgwood's operations in the United States, including
Waterford Crystal, Wedgwood and Royal Doulton are not encumbered
by the receivership and administration processes in Ireland and
the United Kingdom which were announced on Monday, January 5,
2009.
Waterford Wedgwood's affiliates in the U.K. and Ireland were
placed in Administration and Receivership proceedings,
respectively, to enable the global business to be preserved while
it is restructured and offered for sale. Waterford Wedgwood said
the appointees are planning to continue doing business while
seeking a sale to interested parties well advanced in this
process.
Peter Cheyney, Director of Corporate Communications for Waterford
Wedgwood USA, said, "Our business continues uninterrupted and we
wish to recognize and acknowledge the support we have received
from our consumers, customers, retail partners and brides
throughout the US. We assure them that all our suppliers continue
to cooperate; that we are busy fulfilling orders and that we are
confident that we will maintain the business into the future.
"Our brands are some of the finest in the world and we have no
doubt that they will entrance and attract customers for many years
to come. We have noted the increase in market share, which is
being garnered by all our brands; however, we also acknowledge the
contracting of the overall market due to the pressures on the
economy and the financial markets."
"We also wish to salute the dedication and commitment of
management and all of our employees in the US who have continued
to serve the needs of customers, brides and retail partners across
America."
Waterford Wedgwood USA, Inc. is based in Wall, New Jersey with
showrooms in New York City, Atlanta and Dallas. It's Waterford
Crystal, Wedgwood and Royal Doulton brands are renowned worldwide
for quality and design excellence.
YOUNG BROADCASTING: Hires Advisors After Missing Bond Payment
-------------------------------------------------------------
Young Broadcasting Inc. (YBTVA) said that, as part of a strategy
to preserve liquidity, it determined to forego making the $6.125
million interest payment due Jan. 15 on the company's 8.75% Senior
Subordinated Notes due 2014. Under the indenture relating to the
Notes, a 30-day grace period will apply to the missed interest
payment.
Young Broadcasting intends to pursue discussions with its
debtholders to restructure its balance sheet, improve liquidity,
and strengthen its business operations to enhance its value for
its employees, viewers, advertisers and local communities. The
company does not anticipate that these discussions will impact the
operations of its stations or its ability to pay its trade
creditors in the ordinary course.
Young Broadcasting has retained UBS Investment Bank and
Sonnenschein Nath & Rosenthal LLP to provide advisory services in
connection with these restructuring efforts. There can be no
assurance that any agreement with respect to any restructuring
will be reached or, if any agreement is reached, as to the terms
thereof.
For Young Broadcasting Inc.:
Audrey Young
(202) 408-3932 (o)
(202) 256-4521 (c)
ayoung@sonnenschein.com
About Young Broadcasting
Young Broadcasting -- http://www.youngbroadcasting.com/-- owns 10
television stations and the national television representation
firm, Adam Young Inc. Five stations are affiliated with the ABC
Television Network (WKRN-TV - Nashville, TN, WTEN-TV - Albany, NY,
WRIC-TV - Richmond, VA, WATE-TV - Knoxville, TN, and WBAY-TV -
Green Bay, WI), three are affiliated with the CBS Television
Network (WLNS-TV - Lansing, MI, KLFY-TV - Lafayette, LA and KELO-
TV - Sioux Falls, SD), one is affiliated with the NBC Television
Network (KWQC-TV - Davenport, IA) and one is affiliated with
MyNetwork (KRON-TV - San Francisco, CA). In addition, KELO-TV-
Sioux Falls, SD is also the MyNetwork affiliate in that market
through the use of its digital channel capacity.
YRC WORLDWIDE: Gets Waivers Until Talks Conclude in Mid-February
----------------------------------------------------------------
YRC Worldwide Inc. said it has completed an important step toward
finalizing an amendment with its banking group by obtaining
waivers under its credit facilities. The company previously
announced discussions with its banking group to modify certain
terms of its credit facilities, including changes to its leverage
ratio, in addition to early renewal of its asset-backed
securitization facility. The company's banking group provided
waivers for the credit facilities until mid-February 2009 to allow
sufficient time to amend the facilities and renew the ABS without
a delay in reporting the company's 2008 results scheduled for
after market on January 29, 2009. Given that YRC canceled its
tender offer in late December and retained the $250 million of
cash drawn on the revolver in October 2008, the company expects
its total debt to exceed 3.5 times (a limit established in its
credit facilities) its trailing 12 months earnings before
interest, taxes, depreciation and amortization as of December 31,
2008.
"This is another indication that our banking group supports the
strategic actions we are taking and is working with us to provide
the flexibility we need during this economic recession," stated
Bill Zollars, Chairman, President and CEO of YRC Worldwide. "We
are pleased with the discussions so far and remain confident that
we can work out a mutual agreement that provides flexibility in
our leverage ratio while improving our liquidity position."
At December 31, 2008, the company had around $300 million of cash
and expects to generate additional cash from sale and leaseback
transactions, including its pending transaction for $150 million,
and proceeds from sales of excess facilities, while reducing its
2009 equipment purchases due to the integration of its national
companies. The company also recently announced ratification of a
ten percent reduction in union wages that is targeted to result in
annual cost savings of $220 to $250 million in addition to the $75
to $85 million in savings from non-union compensation reductions
that were effective January 1, 2009. When combining these cost
savings with the planned run rate of $200 million of operating
income from the integration of the Yellow Transportation and
Roadway networks, the company expects to improve its operating
performance by around $500 million going into 2010.
"We continue to take the appropriate steps to improve our
financial position and enhance our service to our customers," said
Mr. Zollars. "The operating environment remains challenging but
with the measures we are taking, including removing nearly half a
billion of cost, we are confident that we can come out of the
recession as a stronger organization."
The company cautioned that its expectations regarding a bank
amendment and the date of the bank amendment are only its
expectations regarding this matter. Whether the company and its
banks actually enter into an amendment is entirely dependent on
the outcome of their discussions and approval of a majority in
interest of the participating banks.
YRC Worldwide Inc., a Fortune 500 company and one of the largest
transportation service providers in the world, is the holding
company for a portfolio of successful brands including Yellow
Transportation, Roadway, Reimer Express, YRC Logistics, New Penn,
Holland, Reddaway, and Glen Moore. The enterprise provides global
transportation services, transportation management solutions and
logistics management. The portfolio of brands represents a
comprehensive array of services for the shipment of industrial,
commercial and retail goods domestically and internationally.
Headquartered in Overland Park, Kansas, YRC Worldwide employs
approximately 58,000 people.
* DebtX to Sell $252 Million in Loans From Failed Banks
-------------------------------------------------------
DebtX, the largest marketplace for loans, said Friday it will sell
more than $252 million in loans from four banks in Federal Deposit
Insurance Corporation receiverships.
On January 27, DebtX will accept bids for $65.9 million in loans
from Ameribank of Northfork, West Virginia and $24.1 million in
loans from Meridian Bank of Eldred, Illinois. On February 10,
DebtX will accept bids for $92.9 million in loans from Alpha Bank
of Alpharetta, Georgia, and $69.4 million in loans from Main
Street Bank of Northville, Michigan.
The loans for sale include a wide range of performing and non-
performing loans secured by commercial and residential real
estate, business, and other assets. Due diligence materials for
the transactions are available at http://www.debtx.com/
"DebtX's sales for the FDIC are expected to attract significant
investor interest due to increased demand for this type of loan
product," said DebtX CEO Kingsley Greenland. "The amount of
capital available to purchase both performing and non-performing
loans is escalating among investors both in the U.S. and abroad."
About DebtX
DebtX is one of the world's leading full-service loan sale
advisors for commercial, consumer and specialty finance debt.
DebtX operates the world's largest and most liquid online
marketplace for loans, with more than 4,000 registered and
approved investors and more than 300 selling institutions,
including commercial banks, insurance companies, investment banks
and government-sponsored enterprises. DebtX also offers
DXMark(R), the first objective valuation of commercial real estate
portfolios based on actual secondary market loan sales. DXOpen(R)
is a family of deal management products used by syndication and
agency services professionals. DebtX is based in Boston, with
U.S. offices in Atlanta, New York, and San Francisco, and European
offices in London and Frankfurt. For information, call 617-531-
3400 or visit http://www.debtx.com/
* Cadwalader's London Office to Focus on Financial Restructuring
----------------------------------------------------------------
Paul Hastings Janofsky & Walker LLP has confirmed in a news
statement that it has hired, as new partners, Michelle Duncan,
Justin Jowitt, Christian Parker, Charles Roberts, Karl Clowry,
Conor Downey and Tom O'Riordan. The team specializes in
restructuring and insolvency, litigation, structured finance,
investment funds, and real estate finance. All are currently
partners with the London office of Cadwalader, Wickersham & Taft
LLP.
According to Bloomberg News the decision of the head of Cadwalader
Wickersham & Taft LLP's London office and six other partners to
defect to Paul Hastings leaves one of New York's oldest law firms
with four partners in the U.K. capital.
Bloomber recounts that Cadwalader, founded in 1792, fired 96
salaried lawyers in London and New York in July 2008 after the
economic decline took hold and longtime clients such as Bear
Stearns & Co. disintegrated. The firm this week reported a 13
percent drop in
2008 revenue to $506 million from $587 million in 2007,
according to The Lawyer, a trade publication.
"These departures allow us to rebuild the London office into a
profitable operation with a focus consistent with the
firm's long-term objectives," Cadwalader Chairman Christopher
White, who replaced Link at the end of 2008, said in the e-mail,
according to Bloomberg.
According to the report, Cadwalader's London office will now focus
on financial restructuring, which gained in reputation during the
tenure of Andrew Wilkinson, Ms. Duncan's predecessor, before he
left for Goldman Sachs Group Inc. to be its co-head of European
restructuring in March 2007. He worked on the restructurings of
Eurotunnel Plc and Parmalat Capital Finance Ltd. with Cadwalader
* Paul Hastings Boosts London Practice with 7 New Partners
----------------------------------------------------------
Paul, Hastings, Janofsky & Walker LLP said Jan. 15 that seven new
partners are joining the London office, significantly
strengthening the firm's European practice and its capabilities to
serve global clients. The new partners are Michelle Duncan, Justin
Jowitt, Christian Parker, Charles Roberts, Karl Clowry, Conor
Downey and Tom O'Riordan.
The team specializes in restructuring and insolvency, litigation,
structured finance, investment funds, and real estate finance.
All are currently partners with the London office of Cadwalader,
Wickersham & Taft LLP.
"Growing our European practice is a key strategy for us. The
arrival of this new team, who represent some of the leading
lawyers in Europe, will significantly bolster our European
capabilities, another critical step toward our goal of providing
exemplary client service to our global clients," said Seth M.
Zachary, Chairman of Paul Hastings. "The new team's reputation for
practice excellence and superior client service will perfectly
complement our current offerings both in London and Europe."
Michelle Duncan
Ms. Duncan focuses her practice on international commercial
litigation, restructuring, insolvency and regulation.
Justin Jowitt
Mr. Jowitt focuses his practice on real estate finance work,
including investment and development finance, restructuring of
real estate loans and distressed real estate debt. He has
practiced in both Paris and London.
Christian Parker
Mr. Parker focuses his practice on fund formation, including
structured credit funds and similar investment structures, special
investment vehicles, restructuring through distressed workouts and
general capital markets work. He has practised in the capital
markets area in London, Bangkok and Singapore.
Charles Roberts
Mr. Roberts focuses his practice on commercial mortgage backed
securities, structured finance, loan syndication, commercial real
estate finance and the restructuring aspects of those transactions
in Europe and the United States. Mr. Roberts is recognized as a
key player in the securitization market in London and Europe.
Karl Clowry
Mr. Clowry focuses his practice on cross-border debt
restructuring, distressed investments and corporate refinancing.
He was recognized at the European IFLR Awards winning the
Restructuring Deal of the Year in 2007.
Conor Downey
Mr. Downey focuses his practice on the financing and
securitization of mortgage loans, and has a broad range of
experience in the UK and throughout Europe.
Tom O'Riordan
Mr. O'Riordan focuses his practice on all areas of international
finance and banking. He is a member of the UK Bar. Prior to
practice at the independent Bar, Mr. O'Riordan was previously
Group Counsel to Nomura, European GC and head of legal and tax at
the London branch of Republic National Bank of New York and GC at
Sumitomo Finance.
Paul, Hastings, Janofsky & Walker LLP is a leading international
law firm with offices in Asia, Europe, and the United States. We
provide innovative legal solutions to financial institutions and
Fortune 500 companies. Please visit www.paulhastings.com for more
information.
* Gary Graves Joins Restructuring Firm Huntley Mullaney
-------------------------------------------------------
Bill Sullivan, St. Charles-based partner of financial
restructuring firm Huntley, Mullaney, Spargo & Sullivan LLC (HMS),
said Gary Graves has joined Huntley, Mullaney, Spargo & Sullivan
as a principal.
Prior to joining HMS, Mr. Graves served as CEO of Michigan-based
American Laser Centers for the last two years, and previously was
CEO of Chicago-based La Petite Academy, Inc., the second largest
for-profit preschool educational center operators of 645 schools
in 36 states and the District of Columbia. Prior to that, Mr.
Graves was COO of InterPark, the world's premier owner, manager,
and developer of parking facilities. Mr. Graves has also held
senior management positions at Boston Market, PepsiCo and Yum
Brands. In addition to his strong multi-location background, Mr.
Graves spent several years with the consulting firm of McKinsey &
Co. Mr. Graves currently serves as a non-executive Chairman of
the Board for Caribou Coffee and is an independent member of
Caribou Coffee's Board of Directors.
Bill Sullivan said, "We are thrilled to have Gary join our firm.
Gary has phenomenal analytical, communication and negotiating
skills. We worked closely with Gary when he was CEO of La Petite
Academy. While Gary was at La Petite, HMS reviewed the entire
portfolio of over 700 leases and implemented an extremely
successful program of restructures and terminations across the
portfolio that was one of the key components of the turnaround of
La Petite."
Since 1993, HMS has restructured over $8 billion in client assets
and liabilities, significantly increasing cash flow at leading
companies across the country including OfficeMax, Loews Theaters,
Blockbuster, California Pizza Kitchen, and Buffets Inc. HMS has
offices in Roseville, CA, and St. Charles, IL and engages in
restructuring real estate leases, lease terminations, debt
restructuring, chapter 11 planning and implementation, as well as
other related restructuring services. Their clients typically
include senior-level executives, buyers or sellers of companies,
Chapter 11 debtors, creditors' committees and trustees, lenders,
and private equity firms.
* Greenberg Glusker Forms Unit to Advise Investors on Madoff Scam
-----------------------------------------------------------------
Greenberg Glusker has formed an investment fraud group to advise
those who have been affected by the collapse of Bernard L. Madoff
Investment Securities and other investment fraud schemes.
Comprised of attorneys from the Firm's Tax, Strategic Wealth
Planning and Litigation Groups, the Investment Fraud Group will
advise clients with regard to actions they can take now to
mitigate their losses as well as efforts to recover compensation
for their injuries.
"Whether your losses amount to thousands or millions of dollars,
there are steps you can and should take now to mitigate your
damages," said Michael A. Greene, who chairs the Firm's Investment
Fraud Group. "This new Group will serve as a resource to assist
clients in the recovery of their loss to the extent possible."
Greenberg Glusker's Investment Fraud Group can advise clients with
regard to these issues, among others:
-- Income tax treatment of fictional income and gains,
including the amendment of prior returns;
-- Estate and gift tax issues relating to the valuation of
property in a decedent's gross estate or property gifted by
an individual, and the amendment of estate and gift tax
returns; and
-- Litigation and other actions to recover losses from
investment managers, advisors, funds, the Securities
Investor Protection Corporation (SIPC) and others; to
monitor bankruptcy, class and group actions potentially
benefiting fraud victims; and to defend against claw-back
efforts of a bankruptcy trustee.
About Greenberg Glusker
Recently recognized by Chambers USA, Legal 500, and Best Lawyers
In America, Greenberg Glusker provides clients with strategic
business and legal counsel in matters involving entertainment,
real estate, land use, environmental, intellectual property,
technology, business, employment, estate planning, taxation and
litigation. http://www.GreenbergGlusker.com/
* Greenberg Traurig Lures Nathan Haynes from Cadwalader
-------------------------------------------------------
The international law firm Greenberg Traurig LLP said Nathan A.
Haynes has joined its New York office as a shareholder in the
Business Reorganization & Bankruptcy Practice group. Prior to
joining Greenberg Traurig, Haynes was with Cadwalader, Wickersham
& Taft LLP where he was recently elected to the partnership.
Haynes represents debtors in Chapter 11 cases and out-of-court
restructurings with a focus on the airline industry. He also
represents creditors in Chapter 11 cases and is experienced in
defending avoidance actions. Haynes additionally represents both
sellers and bidders in bankruptcy asset sales.
"Nathan's experience provides another valuable resource to
Greenberg Traurig's growing Business Reorganization & Bankruptcy
Practice group," said Richard A. Rosenbaum, President of Greenberg
Traurig. "I am pleased to welcome him to Greenberg Traurig.
"Haynes joins on the heels of 13 other lateral shareholders who
have joined Greenberg Traurig in the New York region during the
past few months. They include in Business Reorganization and
Bankruptcy: Bruce R. Zirinsky and John Bae; in Corporate and
Securities: Jeffrey R. Fried, Michael E. Helmer, James Yong Wang,
Stephan J. Mallenbaum, Conrad E.J. Everhard and Sean E. Hayes; in
Financial Institutions: Thomas Leslie and Thomas J. Infurna; in IP
and Technology: Beverly W. Lubit and Leonard T. Nuara; and in
Health Care: Francis J. Serbaroli. During this time, six of
counsels have also joined.
About Greenberg Traurig
Greenberg Traurig, LLP -- http://www.gtlaw.com/-- is an
international, full-service law firm with more than 1,800
attorneys and governmental affairs professionals in the United
States, Europe and Asia. The firm was selected as the 2007 USA
Law Firm of the Year by Chambers and Partners.
* Hahn & Hessen Makes Edward Schnitzer Partner in Firm
------------------------------------------------------
The New York based law firm of Hahn & Hessen LLP reported that
Daniel M. Ford and Edward L. Schnitzer have been made partners in
the Firm, effective January 1, 2009. Mr. Ford and Mr. Schnitzer
were formerly senior associates with the Firm.
"We are delighted to have Dan and Ed as members of the Firm," said
Managing Partner, Steven J. Seif. "Dan has gained an impressive
level of experience in all aspects of commercial lending
transactions. Ed, with his extensive courtroom experience, has
become a highly effective bankruptcy litigator, as well as one of
the Firm's leading experts in preference actions." Mr. Seif
added, "The addition of Ed and Dan to the partnership positions
the Firm to provide a higher level of leadership in Hahn &
Hessen's traditional areas of service to our clients."
Ford represents financial institutions and borrowers in
structuring, negotiating and closing a wide variety of domestic
and cross-border financing transactions. Prior to joining the
firm in 2004, Dan practiced as an associate in the Bank Finance
Group with White & Case LLP. A 2000 magna cum laude graduate of
Case Western Reserve University School of Law, Dan was a member of
the Law Review and was elected to the Order of the Coif.
Schnitzer represents creditors, unsecured creditor committees,
debtors and trustees, with a concentrated expertise in all levels
of bankruptcy-related litigation. Ed began his career as an
Assistant District Attorney in Bronx County, arguing cases before
the Appellate Division, New York Court of Appeals, Southern
District of New York, and the Second Circuit, and thereafter
served as a Staff Attorney with the Division of Enforcement of the
Securities and Exchange Commission. A 1997 graduate of Columbia
University School of Law, and a Harlan Fiske Stone Scholar, Ed has
been with the Firm since 2001.
About Hahn & Hessen
Founded in 1931, Hahn & Hessen LLP -- http://www.hahnhessen.com--
is a full service commercial firm serving primarily financial
institutions and creditors holding distressed debt. It has
received substantial recognition for its unique capabilities in
those situations where the creditworthiness of a client's existing
or potential borrower, counterparty or customer is of concern.
* BOND PRICING: For the Week of Jan. 12 - Jan. 16, 2009
-------------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
ABITIBI-CONS FIN 7.88 % 8/1/2009 71.58
ACE CASH EXPRESS 10.25 % 10/1/2014 19.14
ADVANTA CAP TR 8.99 % 12/17/2026 5.50
AHERN RENTALS 9.25 % 8/15/2013 24.00
ALABAMA POWER 5.5 % 10/1/2042 48.88
ALERIS INTL INC 10 % 12/15/2016 16.58
AMBASSADORS INTL 3.75 % 4/15/2027 29.50
AMD 5.75 % 8/15/2012 36.25
AMER AXLE & MFG 5.25 % 2/11/2014 28.25
AMER CAP STRATEG 6.85 % 8/1/2012 49.50
AMER GENL FIN 3.88 % 10/1/2009 74.89
AMER GENL FIN 4.88 % 5/15/2010 69.05
AMER GENL FIN 4.88 % 7/15/2012 54.03
AMER GENL FIN 5.63 % 8/17/2011 59.58
AMERIQUAL GROUP 9.5 % 4/1/2012 44.84
AMES TRUE TEMPER 10 % 7/15/2012 36.00
AMR CORP 10.13 % 6/15/2011 47.75
AMR CORP 10.4 % 3/10/2011 42.50
AMR CORP 10.45 % 3/10/2011 56.00
ANTHRACITE CAP 11.75 % 9/1/2027 30.38
ANTIGENICS 5.25 % 2/1/2025 24.32
APPLETON PAPERS 9.75 % 6/15/2014 22.50
ARCO CHEMICAL CO 10.25 % 11/1/2010 26.00
ASARCO INC 7.88 % 4/15/2013 36.00
ASBURY AUTO GRP 3 % 9/15/2012 33.00
ASSURED GUARANTY 6.4 % 12/15/2066 12.00
ATHEROGENICS INC 1.5 % 2/1/2012 8.00
ATHEROGENICS INC 4.5 % 9/1/2008 8.25
ATHEROGENICS INC 4.5 % 3/1/2011 8.50
AVENTINE RENEW 10 % 4/1/2017 15.00
AVIS BUDGET CAR 7.63 % 5/15/2014 31.00
BANK NEW ENGLAND 8.75 % 4/1/1999 5.13
BANK NEW ENGLAND 9.88 % 9/15/1999 3.00
BANKUNITED CAP 3.13 % 3/1/2034 8.50
BARRINGTON BROAD 10.5 % 8/15/2014 23.30
BEAZER HOMES USA 4.63 % 6/15/2024 41.20
BEAZER HOMES USA 8.38 % 4/15/2012 42.00
BEAZER HOMES USA 8.63 % 5/15/2011 52.00
BELL MICROPRODUC 3.75 % 3/5/2024 69.02
BELL MICROPRODUC 3.75 % 3/5/2024 18.00
BON-TON DEPT STR 10.25 % 3/15/2014 16.79
BON-TON DEPT STR 10.25 % 3/15/2014 20.95
BORDEN INC 8.38 % 4/15/2016 8.30
BORDEN INC 9.2 % 3/15/2021 5.00
BOWATER INC 6.5 % 6/15/2013 18.00
BOWATER INC 9 % 8/1/2009 42.77
BOWATER INC 9.38 % 12/15/2021 12.75
BOWATER INC 9.5 % 10/15/2012 15.75
BRODER BROS CO 11.25 % 10/15/2010 27.25
BUFFALO THUNDER 9.38 % 12/15/2014 11.17
BURLINGTON COAT 11.13 % 4/15/2014 34.00
CALLON PETROLEUM 9.75 % 12/8/2010 60.08
CAPMARK FINL GRP 5.88 % 5/10/2012 36.03
CARAUSTAR INDS 7.25 % 5/1/2010 49.52
CARAUSTAR INDS 7.38 % 6/1/2009 54.13
CCH I LLC 9.92 % 4/1/2014 2.00
CCH I LLC 10 % 5/15/2014 12.44
CCH I LLC 10 % 5/15/2014 3.25
CCH I LLC 11.13 % 1/15/2014 2.50
CCH I LLC 12.13 % 1/15/2015 8.68
CCH I LLC 13.5 % 1/15/2014 3.50
CCH I/CCH I CP 11 % 10/1/2015 21.34
CCH I/CCH I CP 11 % 10/1/2015 16.13
CCH I/CCH I CP 11 % 10/1/2015 16.75
CCH I/CCH I CP 11 % 10/1/2015 21.34
CCH II/CCH II CP 10.25 % 1/15/2010 42.62
CCH II/CCH II CP 10.25 % 9/15/2010 51.00
CCH II/CCH II CP 10.25 % 9/15/2010 50.50
CCH II/CCH II CP 10.25 % 10/1/2013 46.50
CCH II/CCH II CP 10.25 % 10/1/2013 39.43
CELL GENESYS INC 3.13 % 11/1/2011 40.00
CHAMPION ENTERPR 2.75 % 11/1/2037 12.75
CHAMPION ENTERPR 7.63 % 5/15/2009 84.22
CHAPARRAL ENERGY 8.5 % 12/1/2015 22.00
CHAPARRAL ENERGY 8.88 % 2/1/2017 23.00
CHARTER COMM HLD 9.63 % 11/15/2009 79.98
CHARTER COMM HLD 10 % 4/1/2009 88.84
CHARTER COMM HLD 10 % 5/15/2011 12.98
CHARTER COMM HLD 10.75 % 10/1/2009 11.93
CHARTER COMM HLD 11.13 % 1/15/2011 51.00
CHARTER COMM HLD 11.75 % 1/15/2010 43.37
CHARTER COMM HLD 11.75 % 5/15/2011 23.28
CHARTER COMM HLD 12.13 % 1/15/2012 2.25
CHARTER COMM HLD 13.5 % 1/15/2011 2.25
CHARTER COMM INC 6.5 % 10/1/2027 3.50
CHENIERE ENERGY 2.25 % 8/1/2012 16.00
CITADEL BROADCAS 4 % 2/15/2011 49.00
CLAIRE'S STORES 9.25 % 6/1/2015 23.50
CLAIRE'S STORES 10.5 % 6/1/2017 18.00
CLEAR CHANNEL 4.4 % 5/15/2011 27.50
CLEAR CHANNEL 4.5 % 1/15/2010 59.88
CLEAR CHANNEL 4.9 % 5/15/2015 17.25
CLEAR CHANNEL 5 % 3/15/2012 18.25
CLEAR CHANNEL 5.5 % 9/15/2014 18.50
CLEAR CHANNEL 5.5 % 12/15/2016 13.90
CLEAR CHANNEL 5.75 % 1/15/2013 23.00
CLEAR CHANNEL 6.25 % 3/15/2011 34.00
CLEAR CHANNEL 6.88 % 6/15/2018 12.87
CLEAR CHANNEL 7.25 % 10/15/2027 14.79
CLEAR CHANNEL 7.65 % 9/15/2010 57.90
CLEAR CHANNEL 10.75 % 8/1/2016 25.18
CMP SUSQUEHANNA 9.88 % 5/15/2014 4.13
COEUR D'ALENE 1.25 % 1/15/2024 23.50
COEUR D'ALENE 3.25 % 3/15/2028 30.00
COMPUCREDIT 3.63 % 5/30/2025 29.50
CONEXANT SYSTEMS 4 % 3/1/2026 43.03
CONSTAR INTL 11 % 12/1/2012 4.10
COOPER-STANDARD 8.38 % 12/15/2014 25.00
CREDENCE SYSTEM 3.5 % 5/15/2010 10.00
DAYTON SUPERIOR 13 % 6/15/2009 65.12
DECODE GENETICS 3.5 % 4/15/2011 5.00
DECODE GENETICS 3.5 % 4/15/2011 5.00
DELPHI CORP 6.5 % 8/15/2013 3.00
DELPHI CORP 8.25 % 10/15/2033 0.00
DEX MEDIA INC 8 % 11/15/2013 18.50
DEX MEDIA WEST 8.5 % 8/15/2010 65.20
DEX MEDIA WEST 8.5 % 8/15/2010 63.14
DEX MEDIA WEST 9.88 % 8/15/2013 29.00
DOLLAR GENERAL 8.63 % 6/15/2010 57.76
DRIVETIME AUTO 11.25 % 7/1/2013 42.37
DUANE READE INC 9.75 % 8/1/2011 56.00
DUNE ENERGY INC 10.5 % 6/1/2012 37.38
ENERGY PARTNERS 8.75 % 8/1/2010 66.08
ENERGY PARTNERS 9.75 % 4/15/2014 32.25
EOP OPERATING LP 7 % 7/15/2011 38.93
EPIX MEDICAL INC 3 % 6/15/2024 30.25
FGIC CORP 6 % 1/15/2034 8.39
FIBERTOWER CORP 9 % 11/15/2012 26.00
FINLAY FINE JWLY 8.38 % 6/1/2012 7.50
FLOTEK INDS 5.25 % 2/15/2028 28.00
FONTAINEBLEAU LA 11 % 6/15/2015 9.12
FORD HOLDINGS 9.3 % 3/1/2030 26.09
FORD HOLDINGS 9.38 % 3/1/2020 24.00
FORD MOTOR CO 7.7 % 5/15/2097 20.50
FORD MOTOR CO 7.75 % 6/15/2043 21.50
FORD MOTOR CO 8.88 % 1/15/2022 24.50
FORD MOTOR CO 8.9 % 1/15/2032 25.50
FORD MOTOR CO 9.22 % 9/15/2021 26.50
FORD MOTOR CO 9.5 % 9/15/2011 45.13
FORD MOTOR CO 9.95 % 2/15/2032 27.48
FORD MOTOR CO 9.98 % 2/15/2047 23.50
FORD MOTOR CRED 4.25 % 1/20/2009 90.95
FORD MOTOR CRED 4.3 % 3/20/2009 86.45
FORD MOTOR CRED 4.35 % 2/20/2009 91.73
FORD MOTOR CRED 4.35 % 3/20/2009 92.00
FORD MOTOR CRED 4.45 % 4/20/2009 80.13
FORD MOTOR CRED 4.5 % 2/20/2009 96.00
FORD MOTOR CRED 4.5 % 3/20/2009 80.57
FORD MOTOR CRED 4.6 % 1/20/2009 97.69
FORD MOTOR CRED 4.7 % 4/20/2009 80.10
FORD MOTOR CRED 4.75 % 4/20/2009 61.41
FORD MOTOR CRED 4.8 % 7/20/2009 93.35
FORD MOTOR CRED 5 % 8/20/2009 77.00
FORD MOTOR CRED 5 % 10/20/2009 88.28
FORD MOTOR CRED 5 % 1/20/2011 23.26
FORD MOTOR CRED 5 % 2/22/2011 30.86
FORD MOTOR CRED 5.1 % 8/20/2009 77.75
FORD MOTOR CRED 5.1 % 11/20/2009 76.00
FORD MOTOR CRED 5.1 % 2/22/2011 54.00
FORD MOTOR CRED 5.2 % 7/20/2009 80.00
FORD MOTOR CRED 5.2 % 3/21/2011 49.66
FORD MOTOR CRED 5.2 % 3/21/2011 31.78
FORD MOTOR CRED 5.25 % 2/22/2011 48.14
FORD MOTOR CRED 5.25 % 3/21/2011 52.50
FORD MOTOR CRED 5.25 % 3/21/2011 53.52
FORD MOTOR CRED 5.25 % 9/20/2011 45.59
FORD MOTOR CRED 5.3 % 4/20/2011 31.76
FORD MOTOR CRED 5.35 % 6/22/2009 84.00
FORD MOTOR CRED 5.35 % 2/22/2011 35.14
FORD MOTOR CRED 5.4 % 9/20/2011 47.50
FORD MOTOR CRED 5.4 % 10/20/2011 42.58
FORD MOTOR CRED 5.45 % 6/21/2010 39.69
FORD MOTOR CRED 5.45 % 4/20/2011 47.43
FORD MOTOR CRED 5.45 % 10/20/2011 46.50
FORD MOTOR CRED 5.5 % 6/22/2009 86.50
FORD MOTOR CRED 5.5 % 2/22/2010 64.97
FORD MOTOR CRED 5.5 % 2/22/2010 66.72
FORD MOTOR CRED 5.5 % 9/20/2011 32.50
FORD MOTOR CRED 5.55 % 6/21/2010 58.00
FORD MOTOR CRED 5.55 % 9/20/2011 43.30
FORD MOTOR CRED 5.6 % 12/20/2010 43.00
FORD MOTOR CRED 5.6 % 4/20/2011 40.00
FORD MOTOR CRED 5.6 % 8/22/2011 48.00
FORD MOTOR CRED 5.6 % 11/21/2011 41.00
FORD MOTOR CRED 5.65 % 12/20/2010 50.00
FORD MOTOR CRED 5.65 % 5/20/2011 25.00
FORD MOTOR CRED 5.65 % 7/20/2011 46.91
FORD MOTOR CRED 5.65 % 11/21/2011 26.42
FORD MOTOR CRED 5.65 % 1/21/2014 27.00
FORD MOTOR CRED 5.7 % 3/22/2010 61.35
FORD MOTOR CRED 5.7 % 12/20/2011 38.00
FORD MOTOR CRED 5.7 % 1/20/2012 41.00
FORD MOTOR CRED 5.75 % 1/20/2010 66.83
FORD MOTOR CRED 5.75 % 3/22/2010 66.00
FORD MOTOR CRED 5.75 % 8/22/2011 43.55
FORD MOTOR CRED 5.75 % 12/20/2011 37.07
FORD MOTOR CRED 5.75 % 2/21/2012 32.00
FORD MOTOR CRED 5.8 % 8/22/2011 45.75
FORD MOTOR CRED 5.85 % 5/20/2010 60.20
FORD MOTOR CRED 5.85 % 6/21/2010 29.40
FORD MOTOR CRED 5.85 % 7/20/2010 50.00
FORD MOTOR CRED 5.85 % 7/20/2011 39.20
FORD MOTOR CRED 5.85 % 1/20/2012 40.59
FORD MOTOR CRED 5.9 % 7/20/2011 45.77
FORD MOTOR CRED 6 % 6/21/2010 43.04
FORD MOTOR CRED 6 % 10/20/2010 55.00
FORD MOTOR CRED 6 % 12/20/2010 30.50
FORD MOTOR CRED 6 % 11/20/2014 24.75
FORD MOTOR CRED 6 % 2/20/2015 21.75
FORD MOTOR CRED 6.05 % 7/20/2010 55.15
FORD MOTOR CRED 6.05 % 9/20/2010 44.00
FORD MOTOR CRED 6.05 % 6/20/2011 39.00
FORD MOTOR CRED 6.05 % 12/22/2014 26.25
FORD MOTOR CRED 6.1 % 6/20/2011 32.00
FORD MOTOR CRED 6.15 % 9/20/2010 39.28
FORD MOTOR CRED 6.15 % 5/20/2011 28.34
FORD MOTOR CRED 6.2 % 6/20/2011 44.70
FORD MOTOR CRED 6.2 % 3/20/2015 23.28
FORD MOTOR CRED 6.25 % 8/20/2010 50.00
FORD MOTOR CRED 6.25 % 6/20/2011 46.55
FORD MOTOR CRED 6.25 % 6/20/2011 21.02
FORD MOTOR CRED 6.25 % 2/21/2012 43.00
FORD MOTOR CRED 6.25 % 1/20/2015 26.33
FORD MOTOR CRED 6.25 % 3/20/2015 25.00
FORD MOTOR CRED 6.3 % 5/20/2014 27.01
FORD MOTOR CRED 6.35 % 9/20/2010 46.23
FORD MOTOR CRED 6.4 % 8/20/2010 36.79
FORD MOTOR CRED 6.5 % 8/20/2010 46.30
FORD MOTOR CRED 6.5 % 3/20/2015 21.67
FORD MOTOR CRED 6.6 % 3/20/2012 17.59
FORD MOTOR CRED 6.75 % 6/20/2014 28.00
FORD MOTOR CRED 6.85 % 6/20/2014 26.60
FORD MOTOR CRED 7 % 7/1/2010 41.00
FORD MOTOR CRED 7 % 7/20/2010 57.62
FORD MOTOR CRED 7.1 % 9/20/2010 39.00
FORD MOTOR CRED 7.2 % 9/27/2010 60.50
FORD MOTOR CRED 7.3 % 4/20/2015 22.00
FORD MOTOR CRED 7.4 % 8/21/2017 20.76
FORD MOTOR CRED 7.9 % 5/18/2015 28.00
FREESCALE SEMICO 10.13 % 12/15/2016 23.50
FREESCALE SEMICO 10.13 % 12/15/2016 30.84
FREMONT GEN CORP 7.88 % 3/17/2009 50.00
FRONTIER AIRLINE 5 % 12/15/2025 17.50
GENCORP INC 4 % 1/16/2024 61.00
GENERAL MOTORS 6.75 % 5/1/2028 15.00
GENERAL MOTORS 7.13 % 7/15/2013 19.00
GENERAL MOTORS 7.2 % 1/15/2011 24.00
GENERAL MOTORS 7.38 % 5/23/2048 17.50
GENERAL MOTORS 7.4 % 9/1/2025 13.27
GENERAL MOTORS 7.7 % 4/15/2016 14.75
GENERAL MOTORS 8.1 % 6/15/2024 16.25
GENERAL MOTORS 8.25 % 7/15/2023 17.60
GENERAL MOTORS 8.38 % 7/15/2033 14.50
GENERAL MOTORS 8.8 % 3/1/2021 15.15
GENERAL MOTORS 9.4 % 7/15/2021 21.00
GENERAL MOTORS 9.45 % 11/1/2011 13.38
GENWORTH GLOBAL 5.65 % 7/15/2016 13.00
GENWORTH GLOBAL 6.1 % 4/15/2033 15.00
GEORGIA GULF CRP 7.13 % 12/15/2013 33.00
GEORGIA GULF CRP 9.5 % 10/15/2014 28.00
GEORGIA GULF CRP 10.75 % 10/15/2016 16.00
GGP LP 3.98 % 4/15/2027 11.01
GMAC LLC 4.05 % 2/15/2009 95.26
GMAC LLC 4.1 % 3/15/2009 92.50
GMAC LLC 4.25 % 2/15/2009 89.50
GMAC LLC 4.5 % 4/15/2009 88.87
GMAC LLC 4.9 % 10/15/2009 80.00
GMAC LLC 4.95 % 10/15/2009 78.70
GMAC LLC 5 % 8/15/2009 84.00
GMAC LLC 5 % 8/15/2009 84.00
GMAC LLC 5 % 9/15/2009 82.70
GMAC LLC 5 % 9/15/2009 75.89
GMAC LLC 5 % 10/15/2009 74.01
GMAC LLC 5.1 % 7/15/2009 80.18
GMAC LLC 5.1 % 8/15/2009 79.25
GMAC LLC 5.1 % 9/15/2009 81.00
GMAC LLC 5.2 % 11/15/2009 76.75
GMAC LLC 5.25 % 5/15/2009 87.39
GMAC LLC 5.25 % 7/15/2009 81.44
GMAC LLC 5.25 % 8/15/2009 77.38
GMAC LLC 5.25 % 8/15/2009 80.11
GMAC LLC 5.25 % 11/15/2009 72.00
GMAC LLC 5.25 % 1/15/2014 20.05
GMAC LLC 5.35 % 12/15/2009 75.00
GMAC LLC 5.4 % 12/15/2009 75.00
GMAC LLC 5.5 % 2/15/2009 97.90
GMAC LLC 5.5 % 6/15/2009 83.84
GMAC LLC 5.5 % 6/15/2009 84.80
GMAC LLC 5.6 % 2/15/2009 73.50
GMAC LLC 5.7 % 10/15/2013 12.14
GMAC LLC 5.7 % 12/15/2013 9.94
GMAC LLC 5.75 % 1/15/2014 14.50
GMAC LLC 5.85 % 2/15/2010 71.00
GMAC LLC 5.85 % 6/15/2013 11.44
GMAC LLC 5.85 % 6/15/2013 12.00
GMAC LLC 6 % 3/15/2009 61.10
GMAC LLC 6 % 4/15/2009 87.91
GMAC LLC 6 % 1/15/2010 61.91
GMAC LLC 6 % 4/1/2011 68.21
GMAC LLC 6 % 7/15/2013 30.83
GMAC LLC 6.05 % 3/15/2009 93.46
GMAC LLC 6.05 % 3/15/2010 62.76
GMAC LLC 6.1 % 5/15/2009 44.75
GMAC LLC 6.15 % 4/15/2009 90.50
GMAC LLC 6.15 % 3/15/2010 70.50
GMAC LLC 6.25 % 6/15/2009 54.26
GMAC LLC 6.25 % 3/15/2013 33.67
GMAC LLC 6.25 % 7/15/2013 20.87
GMAC LLC 6.3 % 6/15/2009 83.91
GMAC LLC 6.3 % 7/15/2009 84.72
GMAC LLC 6.3 % 3/15/2013 32.55
GMAC LLC 6.38 % 6/15/2010 14.86
GMAC LLC 6.4 % 3/15/2013 33.19
GMAC LLC 6.5 % 6/15/2009 71.65
GMAC LLC 6.5 % 10/15/2009 75.10
GMAC LLC 6.5 % 5/15/2012 19.50
GMAC LLC 6.5 % 6/15/2013 25.00
GMAC LLC 6.6 % 7/15/2009 36.00
GMAC LLC 6.6 % 6/15/2012 20.00
GMAC LLC 6.6 % 6/15/2019 10.87
GMAC LLC 6.63 % 10/15/2011 47.90
GMAC LLC 6.65 % 2/15/2020 15.00
GMAC LLC 6.7 % 5/15/2014 10.91
GMAC LLC 6.75 % 2/15/2009 72.60
GMAC LLC 6.75 % 9/15/2011 54.40
GMAC LLC 6.75 % 9/15/2012 41.69
GMAC LLC 6.75 % 9/15/2012 35.74
GMAC LLC 6.75 % 4/15/2013 14.00
GMAC LLC 6.75 % 4/15/2013 14.00
GMAC LLC 6.75 % 6/15/2014 13.75
GMAC LLC 6.8 % 7/15/2009 74.17
GMAC LLC 6.8 % 11/15/2009 73.31
GMAC LLC 6.8 % 12/15/2009 20.89
GMAC LLC 6.8 % 2/15/2013 34.08
GMAC LLC 6.85 % 7/15/2009 80.00
GMAC LLC 6.88 % 4/15/2013 34.48
GMAC LLC 6.9 % 6/15/2009 82.50
GMAC LLC 6.9 % 12/15/2009 73.52
GMAC LLC 6.95 % 8/15/2009 81.50
GMAC LLC 7 % 2/15/2009 69.76
GMAC LLC 7 % 2/15/2009 84.39
GMAC LLC 7 % 3/15/2009 95.36
GMAC LLC 7 % 7/15/2009 84.00
GMAC LLC 7 % 9/15/2009 81.00
GMAC LLC 7 % 9/15/2009 82.00
GMAC LLC 7 % 10/15/2009 75.00
GMAC LLC 7 % 10/15/2009 76.50
GMAC LLC 7 % 11/15/2009 75.83
GMAC LLC 7 % 11/15/2009 70.48
GMAC LLC 7 % 1/15/2010 50.53
GMAC LLC 7 % 10/15/2011 45.50
GMAC LLC 7 % 9/15/2012 34.08
GMAC LLC 7 % 12/15/2012 33.77
GMAC LLC 7 % 2/15/2018 10.61
GMAC LLC 7.1 % 9/15/2012 32.80
GMAC LLC 7.1 % 1/15/2013 36.50
GMAC LLC 7.1 % 1/15/2013 32.77
GMAC LLC 7.13 % 8/15/2009 81.03
GMAC LLC 7.13 % 8/15/2012 43.00
GMAC LLC 7.15 % 8/15/2010 27.00
GMAC LLC 7.15 % 11/15/2012 35.75
GMAC LLC 7.2 % 8/15/2009 84.00
GMAC LLC 7.25 % 1/15/2010 66.87
GMAC LLC 7.25 % 8/15/2012 35.57
GMAC LLC 7.25 % 12/15/2012 35.50
GMAC LLC 7.55 % 8/15/2010 30.00
GMAC LLC 7.63 % 11/15/2012 43.00
GMAC LLC 7.7 % 8/15/2010 54.50
GMAC LLC 7.7 % 8/15/2010 35.00
GMAC LLC 7.85 % 8/15/2010 60.00
GMAC LLC 7.88 % 11/15/2012 15.50
GMAC LLC 8 % 6/15/2010 59.90
GMAC LLC 8 % 7/15/2010 65.00
GMAC LLC 8 % 9/15/2010 30.00
GMAC LLC 8 % 8/15/2015 16.00
GMAC LLC 8.2 % 7/15/2010 60.00
GMAC LLC 8.25 % 9/15/2012 20.27
GMAC LLC 8.4 % 8/15/2015 25.10
GMAC LLC 8.4 % 8/15/2015 15.10
GMAC LLC 8.5 % 5/15/2010 70.19
GMAC LLC 8.5 % 8/15/2015 17.00
GMAC LLC 8.65 % 8/15/2015 14.00
GRAPHIC PACKAGE 8.63 % 2/15/2012 43.45
GREAT LAKES CHEM 7 % 7/15/2009 55.00
HAIGHTS CROSS OP 11.75 % 8/15/2011 35.61
HANNA (MA) CO 6.52 % 2/23/2010 70.06
HARRAHS OPER CO 5.38 % 12/15/2013 21.75
HARRAHS OPER CO 5.5 % 7/1/2010 63.00
HARRAHS OPER CO 5.63 % 6/1/2015 17.00
HARRAHS OPER CO 5.75 % 10/1/2017 16.50
HARRAHS OPER CO 6.5 % 6/1/2016 14.50
HARRAHS OPER CO 8 % 2/1/2011 37.20
HARRAHS OPER CO 10.75 % 2/1/2016 31.85
HARRY & DAVID OP 9 % 3/1/2013 30.00
HAWAIIAN TELCOM 9.75 % 5/1/2013 6.26
HAWAIIAN TELCOM 12.5 % 5/1/2015 1.63
HAWKER BEECHCRAF 9.75 % 4/1/2017 29.50
HEADWATERS INC 2.88 % 6/1/2016 38.50
HERTZ CORP 7.63 % 6/1/2012 40.90
HERTZ CORP 9 % 11/1/2009 100.00
HEXION US/NOVA 9.75 % 11/15/2014 17.00
HINES NURSERIES 10.25 % 10/1/2011 27.10
HUMAN GENOME 2.25 % 10/15/2011 36.47
HUMAN GENOME 2.25 % 8/15/2012 32.00
HUTCHINSON TECH 3.25 % 1/15/2026 31.00
IDEARC INC 8 % 11/15/2016 5.24
IDEARC INC 8 % 11/15/2016 4.63
INDALEX HOLD 11.5 % 2/1/2014 10.88
INN OF THE MOUNT 12 % 11/15/2010 27.00
INTCOMEX INC 11.75 % 1/15/2011 40.00
INTL LEASE FIN 6.38 % 3/15/2009 99.54
ISTAR FINANCIAL 5.13 % 4/1/2011 47.00
ISTAR FINANCIAL 5.13 % 4/1/2011 44.20
ISTAR FINANCIAL 5.15 % 3/1/2012 52.34
ISTAR FINANCIAL 5.38 % 4/15/2010 61.25
ISTAR FINANCIAL 5.5 % 6/15/2012 40.00
ISTAR FINANCIAL 5.65 % 9/15/2011 42.25
ISTAR FINANCIAL 5.8 % 3/15/2011 44.00
ISTAR FINANCIAL 5.95 % 10/15/2013 39.00
ISTAR FINANCIAL 6 % 12/15/2010 46.50
JAZZ TECHNOLOGIE 8 % 12/31/2011 20.50
JEFFERSON SMURFI 7.5 % 6/1/2013 12.38
JEFFERSON SMURFI 8.25 % 10/1/2012 12.25
K HOVNANIAN ENTR 6.38 % 12/15/2014 25.75
K HOVNANIAN ENTR 6.5 % 1/15/2014 26.50
K HOVNANIAN ENTR 7.5 % 5/15/2016 26.50
K HOVNANIAN ENTR 7.75 % 5/15/2013 25.50
K HOVNANIAN ENTR 8 % 4/1/2012 33.05
K HOVNANIAN ENTR 8.88 % 4/1/2012 32.00
KAISER ALUMINUM 12.75 % 2/1/2003 7.00
KELLWOOD CO 7.63 % 10/15/2017 6.26
KELLWOOD CO 7.88 % 7/15/2009 45.00
KEMET CORP 2.25 % 11/15/2026 20.13
KEMET CORP 2.25 % 11/15/2026 20.62
KNIGHT RIDDER 4.63 % 11/1/2014 15.13
KNIGHT RIDDER 5.75 % 9/1/2017 18.00
KNIGHT RIDDER 6.88 % 3/15/2029 18.75
KNIGHT RIDDER 7.13 % 6/1/2011 31.00
KNIGHT RIDDER 7.15 % 11/1/2027 20.00
KNIGHT RIDDER 9.88 % 4/15/2009 90.00
LANDAMERICA 3.13 % 11/15/2033 15.75
LANDAMERICA 3.25 % 5/15/2034 14.50
LAZYDAYS RV 11.75 % 5/15/2012 10.50
LAZYDAYS RV 11.75 % 5/15/2012 44.32
LEAR CORP 5.75 % 8/1/2014 28.38
LEAR CORP 8.5 % 12/1/2013 26.00
LEHMAN BROS HLDG 3.95 % 11/10/2009 12.50
LEHMAN BROS HLDG 4 % 4/16/2019 7.00
LEHMAN BROS HLDG 4.25 % 1/27/2010 12.85
LEHMAN BROS HLDG 4.38 % 11/30/2010 9.00
LEHMAN BROS HLDG 4.5 % 7/26/2010 11.00
LEHMAN BROS HLDG 4.5 % 8/3/2011 5.00
LEHMAN BROS HLDG 4.7 % 3/6/2013 1.05
LEHMAN BROS HLDG 4.8 % 2/27/2013 5.50
LEHMAN BROS HLDG 4.8 % 3/13/2014 12.00
LEHMAN BROS HLDG 4.8 % 6/24/2023 8.00
LEHMAN BROS HLDG 5 % 1/14/2011 10.25
LEHMAN BROS HLDG 5 % 1/22/2013 5.06
LEHMAN BROS HLDG 5 % 2/11/2013 4.56
LEHMAN BROS HLDG 5 % 3/27/2013 5.00
LEHMAN BROS HLDG 5 % 6/26/2015 4.25
LEHMAN BROS HLDG 5 % 8/5/2015 5.00
LEHMAN BROS HLDG 5 % 12/18/2015 5.00
LEHMAN BROS HLDG 5 % 5/28/2023 7.60
LEHMAN BROS HLDG 5 % 5/30/2023 6.06
LEHMAN BROS HLDG 5 % 6/10/2023 6.06
LEHMAN BROS HLDG 5 % 6/17/2023 4.35
LEHMAN BROS HLDG 5.1 % 1/28/2013 6.56
LEHMAN BROS HLDG 5.1 % 2/15/2020 2.02
LEHMAN BROS HLDG 5.2 % 5/13/2020 6.06
LEHMAN BROS HLDG 5.25 % 2/6/2012 10.00
LEHMAN BROS HLDG 5.25 % 2/11/2015 5.00
LEHMAN BROS HLDG 5.25 % 3/8/2020 6.00
LEHMAN BROS HLDG 5.25 % 5/20/2023 1.34
LEHMAN BROS HLDG 5.35 % 2/25/2018 2.00
LEHMAN BROS HLDG 5.35 % 3/13/2020 4.56
LEHMAN BROS HLDG 5.35 % 6/14/2030 5.00
LEHMAN BROS HLDG 5.38 % 5/6/2023 4.60
LEHMAN BROS HLDG 5.4 % 3/6/2020 7.10
LEHMAN BROS HLDG 5.4 % 3/20/2020 8.60
LEHMAN BROS HLDG 5.4 % 3/30/2029 4.56
LEHMAN BROS HLDG 5.4 % 6/21/2030 3.00
LEHMAN BROS HLDG 5.45 % 3/15/2025 4.50
LEHMAN BROS HLDG 5.45 % 4/6/2029 5.06
LEHMAN BROS HLDG 5.45 % 2/22/2030 5.40
LEHMAN BROS HLDG 5.45 % 7/19/2030 6.00
LEHMAN BROS HLDG 5.45 % 9/20/2030 5.97
LEHMAN BROS HLDG 5.5 % 4/4/2016 12.56
LEHMAN BROS HLDG 5.5 % 2/4/2018 2.33
LEHMAN BROS HLDG 5.5 % 2/19/2018 2.03
LEHMAN BROS HLDG 5.5 % 11/4/2018 5.00
LEHMAN BROS HLDG 5.5 % 2/27/2020 6.00
LEHMAN BROS HLDG 5.5 % 8/19/2020 7.50
LEHMAN BROS HLDG 5.5 % 3/14/2023 3.42
LEHMAN BROS HLDG 5.5 % 4/8/2023 3.00
LEHMAN BROS HLDG 5.5 % 4/15/2023 6.00
LEHMAN BROS HLDG 5.5 % 4/23/2023 1.15
LEHMAN BROS HLDG 5.5 % 8/5/2023 5.25
LEHMAN BROS HLDG 5.5 % 10/7/2023 5.10
LEHMAN BROS HLDG 5.5 % 1/27/2029 7.35
LEHMAN BROS HLDG 5.5 % 2/3/2029 2.20
LEHMAN BROS HLDG 5.5 % 8/2/2030 7.50
LEHMAN BROS HLDG 5.55 % 2/11/2018 3.00
LEHMAN BROS HLDG 5.55 % 3/9/2029 7.00
LEHMAN BROS HLDG 5.55 % 1/25/2030 7.14
LEHMAN BROS HLDG 5.55 % 9/27/2030 6.75
LEHMAN BROS HLDG 5.55 % 12/31/2034 6.06
LEHMAN BROS HLDG 5.6 % 1/22/2018 6.00
LEHMAN BROS HLDG 5.6 % 9/23/2023 10.00
LEHMAN BROS HLDG 5.6 % 2/17/2029 5.00
LEHMAN BROS HLDG 5.6 % 2/24/2029 4.09
LEHMAN BROS HLDG 5.6 % 3/2/2029 6.00
LEHMAN BROS HLDG 5.6 % 2/25/2030 6.75
LEHMAN BROS HLDG 5.6 % 5/3/2030 5.00
LEHMAN BROS HLDG 5.63 % 1/24/2013 12.75
LEHMAN BROS HLDG 5.63 % 3/15/2030 2.35
LEHMAN BROS HLDG 5.65 % 11/23/2029 5.00
LEHMAN BROS HLDG 5.65 % 8/16/2030 6.00
LEHMAN BROS HLDG 5.65 % 12/31/2034 4.76
LEHMAN BROS HLDG 5.7 % 1/28/2018 7.70
LEHMAN BROS HLDG 5.7 % 2/10/2029 2.56
LEHMAN BROS HLDG 5.7 % 4/13/2029 2.22
LEHMAN BROS HLDG 5.7 % 9/7/2029 5.28
LEHMAN BROS HLDG 5.7 % 12/14/2029 4.50
LEHMAN BROS HLDG 5.75 % 4/25/2011 9.19
LEHMAN BROS HLDG 5.75 % 7/18/2011 11.00
LEHMAN BROS HLDG 5.75 % 5/17/2013 12.50
LEHMAN BROS HLDG 5.75 % 1/3/2017 0.01
LEHMAN BROS HLDG 5.75 % 3/27/2023 8.00
LEHMAN BROS HLDG 5.75 % 10/15/2023 7.50
LEHMAN BROS HLDG 5.75 % 10/21/2023 5.00
LEHMAN BROS HLDG 5.75 % 11/12/2023 6.06
LEHMAN BROS HLDG 5.75 % 11/25/2023 5.00
LEHMAN BROS HLDG 5.75 % 12/16/2028 5.00
LEHMAN BROS HLDG 5.75 % 12/23/2028 7.50
LEHMAN BROS HLDG 5.75 % 8/24/2029 5.00
LEHMAN BROS HLDG 5.75 % 9/14/2029 6.06
LEHMAN BROS HLDG 5.75 % 10/12/2029 4.46
LEHMAN BROS HLDG 5.75 % 3/29/2030 7.20
LEHMAN BROS HLDG 5.8 % 9/3/2020 7.50
LEHMAN BROS HLDG 5.8 % 10/25/2030 6.06
LEHMAN BROS HLDG 5.85 % 11/8/2030 3.58
LEHMAN BROS HLDG 5.88 % 11/15/2017 8.17
LEHMAN BROS HLDG 5.9 % 5/4/2029 5.00
LEHMAN BROS HLDG 5.9 % 2/7/2031 2.38
LEHMAN BROS HLDG 5.95 % 12/20/2030 2.29
LEHMAN BROS HLDG 6 % 7/19/2012 12.50
LEHMAN BROS HLDG 6 % 1/22/2020 5.50
LEHMAN BROS HLDG 6 % 2/12/2020 5.00
LEHMAN BROS HLDG 6 % 1/29/2021 8.00
LEHMAN BROS HLDG 6 % 10/23/2028 2.67
LEHMAN BROS HLDG 6 % 11/18/2028 5.00
LEHMAN BROS HLDG 6 % 5/11/2029 6.06
LEHMAN BROS HLDG 6 % 7/20/2029 2.50
LEHMAN BROS HLDG 6 % 4/30/2034 7.60
LEHMAN BROS HLDG 6 % 7/30/2034 7.50
LEHMAN BROS HLDG 6 % 2/21/2036 7.35
LEHMAN BROS HLDG 6 % 2/24/2036 6.06
LEHMAN BROS HLDG 6 % 2/12/2037 4.00
LEHMAN BROS HLDG 6.05 % 6/29/2029 1.12
LEHMAN BROS HLDG 6.1 % 8/12/2023 8.50
LEHMAN BROS HLDG 6.15 % 4/11/2031 4.90
LEHMAN BROS HLDG 6.2 % 9/26/2014 12.75
LEHMAN BROS HLDG 6.2 % 6/15/2027 5.00
LEHMAN BROS HLDG 6.2 % 5/25/2029 5.00
LEHMAN BROS HLDG 6.25 % 2/5/2021 7.50
LEHMAN BROS HLDG 6.25 % 2/22/2023 6.00
LEHMAN BROS HLDG 6.3 % 3/27/2037 6.00
LEHMAN BROS HLDG 6.4 % 10/11/2022 3.00
LEHMAN BROS HLDG 6.4 % 12/19/2036 9.75
LEHMAN BROS HLDG 6.5 % 2/28/2023 7.91
LEHMAN BROS HLDG 6.5 % 3/6/2023 5.00
LEHMAN BROS HLDG 6.5 % 9/20/2027 4.00
LEHMAN BROS HLDG 6.5 % 10/18/2027 7.20
LEHMAN BROS HLDG 6.5 % 10/25/2027 4.56
LEHMAN BROS HLDG 6.5 % 11/15/2032 7.06
LEHMAN BROS HLDG 6.5 % 1/17/2033 7.50
LEHMAN BROS HLDG 6.5 % 12/22/2036 6.00
LEHMAN BROS HLDG 6.5 % 2/13/2037 6.06
LEHMAN BROS HLDG 6.5 % 6/21/2037 5.05
LEHMAN BROS HLDG 6.5 % 7/13/2037 3.00
LEHMAN BROS HLDG 6.6 % 10/3/2022 5.50
LEHMAN BROS HLDG 6.6 % 6/18/2027 6.00
LEHMAN BROS HLDG 6.63 % 1/18/2012 12.25
LEHMAN BROS HLDG 6.63 % 7/27/2027 3.50
LEHMAN BROS HLDG 6.75 % 12/28/2017 0.09
LEHMAN BROS HLDG 6.75 % 7/1/2022 7.00
LEHMAN BROS HLDG 6.75 % 11/22/2027 7.35
LEHMAN BROS HLDG 6.75 % 3/11/2033 7.50
LEHMAN BROS HLDG 6.75 % 10/26/2037 7.10
LEHMAN BROS HLDG 6.8 % 9/7/2032 2.90
LEHMAN BROS HLDG 6.85 % 8/16/2032 6.06
LEHMAN BROS HLDG 6.85 % 8/23/2032 1.90
LEHMAN BROS HLDG 6.88 % 5/2/2018 13.25
LEHMAN BROS HLDG 6.9 % 9/1/2032 5.00
LEHMAN BROS HLDG 7 % 5/12/2023 2.10
LEHMAN BROS HLDG 7 % 9/27/2027 12.25
LEHMAN BROS HLDG 7 % 10/4/2032 8.60
LEHMAN BROS HLDG 7 % 7/27/2037 4.00
LEHMAN BROS HLDG 7 % 9/28/2037 5.00
LEHMAN BROS HLDG 7 % 11/16/2037 6.00
LEHMAN BROS HLDG 7 % 12/28/2037 3.00
LEHMAN BROS HLDG 7 % 1/31/2038 7.00
LEHMAN BROS HLDG 7 % 2/1/2038 7.00
LEHMAN BROS HLDG 7 % 2/7/2038 3.55
LEHMAN BROS HLDG 7 % 2/8/2038 4.81
LEHMAN BROS HLDG 7 % 4/22/2038 4.60
LEHMAN BROS HLDG 7.05 % 2/27/2038 9.00
LEHMAN BROS HLDG 7.25 % 2/27/2038 3.00
LEHMAN BROS HLDG 7.25 % 4/29/2038 2.87
LEHMAN BROS HLDG 7.35 % 5/6/2038 5.00
LEHMAN BROS HLDG 7.73 % 10/15/2023 4.00
LEHMAN BROS HLDG 7.88 % 11/1/2009 11.50
LEHMAN BROS HLDG 7.88 % 8/15/2010 10.00
LEHMAN BROS HLDG 8 % 3/17/2023 8.63
LEHMAN BROS HLDG 8.05 % 1/15/2019 7.70
LEHMAN BROS HLDG 8.5 % 8/1/2015 10.00
LEHMAN BROS HLDG 8.5 % 6/15/2022 5.25
LEHMAN BROS HLDG 8.75 % 12/21/2021 1.12
LEHMAN BROS HLDG 8.75 % 2/6/2023 4.00
LEHMAN BROS HLDG 8.8 % 3/1/2015 12.00
LEHMAN BROS HLDG 8.92 % 2/16/2017 7.00
LEHMAN BROS HLDG 9.5 % 12/28/2022 3.25
LEHMAN BROS HLDG 9.5 % 1/30/2023 2.50
LEHMAN BROS HLDG 9.5 % 2/27/2023 5.00
LEHMAN BROS HLDG 10 % 3/13/2023 4.00
LEHMAN BROS HLDG 10.38 % 5/24/2024 2.10
LEHMAN BROS HLDG 11 % 10/25/2017 6.06
LEHMAN BROS HLDG 11 % 6/22/2022 4.15
LEHMAN BROS HLDG 11 % 3/17/2028 9.70
LEHMAN BROS HLDG 11.5 % 9/26/2022 4.75
LEHMAN BROS HLDG 12.12 % 9/11/2009 8.63
LEHMAN BROS HLDG 18 % 7/14/2023 7.13
LEHMAN BROS INC 7.5 % 8/1/2026 1.00
LITHIA MOTORS 2.88 % 5/1/2014 90.75
LOCAL INSIGHT 11 % 12/1/2017 25.00
MAGMA DESIGN 2 % 5/15/2010 57.75
MAGNA ENTERTAINM 7.25 % 12/15/2009 31.50
MAGNA ENTERTAINM 8.55 % 6/15/2010 40.13
MAJESTIC STAR 9.5 % 10/15/2010 30.00
MAJESTIC STAR 9.75 % 1/15/2011 4.50
MASONITE CORP 11 % 4/6/2015 8.50
MERISANT CO 9.5 % 7/15/2013 5.90
MERISANT CO 9.5 % 7/15/2013 13.50
MERIX CORP 4 % 5/15/2013 25.25
MERRILL LYNCH 12 % 3/26/2010 19.34
METALDYNE CORP 11 % 6/15/2012 10.50
MILLENNIUM AMER 7.63 % 11/15/2026 7.50
MOMENTIVE PERFOR 11.5 % 12/1/2016 30.00
MORRIS PUBLISH 7 % 8/1/2013 8.00
MTR GAMING GROUP 9.75 % 4/1/2010 74.00
MUZAK LLC 9.88 % 3/15/2009 87.00
MUZAK LLC/FIN 10 % 2/15/2009 79.50
NATL FINANCIAL 0.75 % 2/1/2012 23.00
NAVISTAR FINL CP 4.75 % 4/1/2009 88.00
NEFF CORP 10 % 6/1/2015 20.13
NELNET INC 5.13 % 6/1/2010 60.00
NELNET INC 7.4 % 9/29/2036 10.00
NETWORK COMMUNIC 10.75 % 12/1/2013 27.01
NEW PAGE CORP 10 % 5/1/2012 45.06
NEW PLAN EXCEL 4.5 % 2/1/2011 45.50
NEW PLAN EXCEL 5.13 % 9/15/2012 34.00
NEW PLAN EXCEL 7.4 % 9/15/2009 53.09
NEW PLAN REALTY 6.9 % 2/15/2028 10.33
NEW PLAN REALTY 6.9 % 2/15/2028 12.00
NEW PLAN REALTY 7.65 % 11/2/2026 12.00
NEW PLAN REALTY 7.68 % 11/2/2026 6.00
NEW PLAN REALTY 7.97 % 8/14/2026 18.50
NEWARK GROUP INC 9.75 % 3/15/2014 5.00
NEWPAGE CORP 10 % 5/1/2012 44.75
NEWPAGE CORP 12 % 5/1/2013 25.00
NORTEK INC 8.5 % 9/1/2014 29.00
NORTH ATL TRADNG 9.25 % 3/1/2012 33.87
NORTHERN TEL CAP 7.88 % 6/15/2026 8.25
NTK HOLDINGS INC 0 % 3/1/2014 21.38
NUVEEN INVEST 5 % 9/15/2010 59.00
NUVEEN INVESTM 10.5 % 11/15/2015 30.21
OLIN CORP 6.75 % 6/15/2016 14.66
OLIN CORP 9.13 % 12/15/2011 36.99
OSCIENT PHARM 3.5 % 4/15/2011 9.25
OSI RESTAURANT 10 % 6/15/2015 17.50
OSI RESTAURANT 10 % 6/15/2015 24.84
PALM HARBOR 3.25 % 5/15/2024 33.00
PANOLAM INDUSTRI 10.75 % 10/1/2013 38.23
PARK PLACE ENT 7.5 % 9/1/2009 60.25
PARK PLACE ENT 7.88 % 3/15/2010 66.50
PARK PLACE ENT 8.13 % 5/15/2011 52.50
PARK PLACE ENT 8.13 % 5/15/2011 50.28
PILGRIM'S PRIDE 8.38 % 5/1/2017 9.00
PILGRIMS PRIDE 9.25 % 11/15/2013 6.00
PLIANT CORP 11.13 % 9/1/2009 15.00
PLY GEM INDS 9 % 2/15/2012 22.00
POPE & TALBOT 8.38 % 6/1/2013 0.60
POWERWAVE TECH 1.88 % 11/15/2024 19.75
POWERWAVE TECH 3.88 % 10/1/2027 18.65
PREGIS CORP 12.38 % 10/15/2013 40.50
PREIT ASSOCIATES 4 % 6/1/2012 34.00
PREM ASSET 04-04 4.13 % 3/12/2009 90.92
PRESIDENTIAL LFE 7.88 % 2/15/2009 100.11
PRIMUS TELECOM 3.75 % 9/15/2010 4.00
PRIMUS TELECOM 8 % 1/15/2014 13.00
PRIMUS TELECOM 12.75 % 10/15/2009 2.00
PRIMUS TELECOMM 14.25 % 5/20/2011 29.25
PROLOGIS 7.88 % 5/15/2009 57.00
PROPEX FABRICS 10 % 12/1/2012 0.75
PROVIDENCE SERV 6.5 % 5/15/2014 11.26
QUALITY DISTRIBU 9 % 11/15/2010 32.50
QUANTUM CORP 4.38 % 8/1/2010 45.00
RADIAN GROUP 7.75 % 6/1/2011 51.72
RADIAN GROUP 7.75 % 6/1/2011 56.00
RADIO ONE INC 6.38 % 2/15/2013 30.00
RADIO ONE INC 8.88 % 7/1/2011 50.00
RAFAELLA APPAREL 11.25 % 6/15/2011 47.53
RATHGIBSON INC 11.25 % 2/15/2014 21.88
RAYOVAC CORP 8.5 % 10/1/2013 8.70
READER'S DIGEST 9 % 2/15/2017 9.00
REAL MEX RESTAUR 10 % 4/1/2010 75.50
REALOGY CORP 10.5 % 4/15/2014 22.75
REALOGY CORP 10.5 % 4/15/2014 24.54
REALOGY CORP 12.38 % 4/15/2015 12.50
REALOGY CORP 12.38 % 4/15/2015 12.00
REEBOK INTL LTD 2 % 5/1/2024 67.00
RENTECH INC 4 % 4/15/2013 26.00
RESIDENTIAL CAP 8 % 2/22/2011 40.00
RESIDENTIAL CAP 8.38 % 6/30/2010 51.46
RESIDENTIAL CAP 8.5 % 6/1/2012 34.88
RESIDENTIAL CAP 8.5 % 4/17/2013 37.00
RESIDENTIAL CAP 8.88 % 6/30/2015 36.00
RESIDENTIAL CAP 8.38 % 6/30/2010 45.85
RESIDENTIAL CAP 8.5 % 5/15/2010 67.09
REXNORD CORP 10.13 % 12/15/2012 11.50
RH DONNELLEY 6.88 % 1/15/2013 13.00
RH DONNELLEY 6.88 % 1/15/2013 13.25
RH DONNELLEY 6.88 % 1/15/2013 15.00
RH DONNELLEY 8.88 % 1/15/2016 13.50
RH DONNELLEY 8.88 % 10/15/2017 16.96
RH DONNELLEY 8.88 % 10/15/2017 15.98
RH DONNELLEY INC 11.75 % 5/15/2015 32.13
RITE AID CORP 6.88 % 8/15/2013 32.90
RITE AID CORP 8.13 % 5/1/2010 90.00
RITE AID CORP 9.25 % 6/1/2013 31.30
RJ TOWER CORP 12 % 6/1/2013 2.50
ROTECH HEALTHCA 9.5 % 4/1/2012 21.00
ROUSE CO LP/TRC 6.75 % 5/1/2013 32.71
ROUSE COMPANY 3.63 % 3/15/2009 40.00
ROUSE COMPANY 7.2 % 9/15/2012 37.25
ROUSE COMPANY 8 % 4/30/2009 46.75
SABRE HOLDINGS 8.35 % 3/15/2016 25.00
SABRE HOLDINGS 7.35 % 8/1/2011 40.00
SALEM COMM HLDG 7.75 % 12/15/2010 61.08
SCOTIA PAC CO 7.11 % 1/20/2014 28.50
SEITEL INC 9.75 % 2/15/2014 36.00
SERVICEMASTER CO 7.25 % 3/1/2038 19.00
SIMMONS CO 7.88 % 1/15/2014 20.50
SINCLAIR BROAD 3 % 5/15/2027 60.00
SIRIUS SATELLITE 2.5 % 2/15/2009 81.13
SIRIUS SATELLITE 2.5 % 2/15/2009 84.50
SIRIUS SATELLITE 3.25 % 10/15/2011 17.91
SIRIUS SATELLITE 9.63 % 8/1/2013 23.00
SIX FLAGS INC 4.5 % 5/15/2015 9.00
SIX FLAGS INC 8.88 % 2/1/2010 24.00
SIX FLAGS INC 9.63 % 6/1/2014 35.41
SIX FLAGS INC 9.63 % 6/1/2014 21.12
SIX FLAGS INC 9.75 % 4/15/2013 20.96
SMURFIT-STONE 8 % 3/15/2017 12.38
SONIC AUTOMOTIVE 5.25 % 5/7/2009 95.50
SPACEHAB INC 5.5 % 10/15/2010 52.00
SPANSION LLC 2.25 % 6/15/2016 1.94
SPANSION LLC 11.25 % 1/15/2016 7.81
SPECTRUM BRANDS 7.38 % 2/1/2015 19.00
SPHERIS INC 11 % 12/15/2012 30.50
STALLION OILFIEL 9.75 % 2/1/2015 17.76
STANLEY-MARTIN 9.75 % 8/15/2015 28.00
STATION CASINOS 6 % 4/1/2012 21.50
STATION CASINOS 6.5 % 2/1/2014 2.75
STATION CASINOS 6.63 % 3/15/2018 3.00
STATION CASINOS 6.88 % 3/1/2016 2.94
STATION CASINOS 7.75 % 8/15/2016 20.00
STONE CONTAINER 8.38 % 7/1/2012 11.87
SWIFT TRANS CO 12.5 % 5/15/2017 13.61
TEKNI-PLEX INC 12.75 % 6/15/2010 73.25
TERPHANE HLDING 12.5 % 6/15/2009 80.51
TERPHANE HLDING 12.5 % 6/15/2009 80.51
TETON ENERGY COR 10.75 % 6/18/2013 36.05
THORNBURG MTG 8 % 5/15/2013 18.00
TIMES MIRROR CO 6.61 % 9/15/2027 1.50
TIMES MIRROR CO 7.25 % 3/1/2013 5.50
TIMES MIRROR CO 7.25 % 11/15/2096 4.25
TIMES MIRROR CO 7.5 % 7/1/2023 1.50
TOUSA INC 9 % 7/1/2010 3.90
TOUSA INC 9 % 7/1/2010 4.75
TOYS R US 7.63 % 8/1/2011 50.12
TOYS R US 7.88 % 4/15/2013 41.00
TRANS-LUX CORP 8.25 % 3/1/2012 35.00
TRANSMERIDIAN EX 12 % 12/15/2010 10.00
TRAVELPORT LLC 11.88 % 9/1/2016 32.00
TRAVELPORT LLC 11.88 % 9/1/2016 32.26
TRIBUNE CO 4.88 % 8/15/2010 5.35
TRIBUNE CO 5.25 % 8/15/2015 4.50
TRIBUNE CO 5.67 % 12/8/2008 2.50
TRONOX WORLDWIDE 9.5 % 12/1/2012 16.00
TRUE TEMPER 8.38 % 9/15/2011 32.00
TRUMP ENTERTNMNT 8.5 % 6/1/2015 13.30
UAL CORP 5 % 2/1/2021 56.50
UNISYS CORP 6.88 % 3/15/2010 65.38
UNISYS CORP 8 % 10/15/2012 37.25
UNITED COMPONENT 9.38 % 6/15/2013 34.50
UNITED MERCH&MFG 3.5 % 3/31/2022 1.00
UNIV CITY FL HLD 8.38 % 5/1/2010 84.00
UNO RESTAURANT 10 % 2/15/2011 45.38
US LEASING INTL 6 % 9/6/2011 25.00
US SHIPPING PART 13 % 8/15/2014 21.81
USAUTOS TRUST 5.1 % 3/3/2011 16.00
USEC INC 6.75 % 1/20/2009 98.88
USFREIGHTWAYS 8.5 % 4/15/2010 66.50
VALASSIS COMM 8.25 % 3/1/2015 27.63
VENOCO INC 8.75 % 12/15/2011 49.50
VERASUN ENERGY 9.38 % 6/1/2017 10.71
VERSO PAPER 11.38 % 8/1/2016 26.50
VESTA INSUR GRP 8.75 % 7/15/2025 1.00
VIRGIN RIVER CAS 9 % 1/15/2012 50.17
VISTEON CORP 7 % 3/10/2014 9.50
VISTEON CORP 8.25 % 8/1/2010 26.86
VISTEON CORP 12.25 % 12/31/2016 13.96
VITESSE SEMICOND 1.5 % 10/1/2024 51.50
WASH MUT BANK NV 5.55 % 6/16/2010 23.50
WASH MUTUAL INC 4.2 % 1/15/2010 70.05
WASH MUTUAL INC 8.25 % 4/1/2010 32.05
WCI COMMUNITIES 4 % 8/5/2023 8.13
WCI COMMUNITIES 6.63 % 3/15/2015 9.00
WCI COMMUNITIES 7.88 % 10/1/2013 6.31
WCI COMMUNITIES 9.13 % 5/1/2012 4.00
WILLIAM LYON 7.5 % 2/15/2014 20.00
WILLIAM LYON 7.63 % 12/15/2012 20.00
WILLIAM LYON 7.63 % 12/15/2012 27.94
WILLIAM LYON 10.75 % 4/1/2013 23.00
WIMAR OP LLC/FIN 9.63 % 12/15/2014 1.18
WOLVERINE TUBE 10.5 % 4/1/2009 80.00
XM SATELLITE 10 % 12/1/2009 41.25
XM SATELLITE 10 % 12/31/2009 38.13
XM SATELLITE 13 % 8/1/2013 24.95
YOUNG BROADCSTNG 8.75 % 1/15/2014 2.08
YOUNG BROADCSTNG 10 % 3/1/2011 0.50
*********
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.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa,
Luke Caballos, Sheryl Joy P. Olano, Carlo Fernandez, Christopher
G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2009. 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 ***