/raid1/www/Hosts/bankrupt/TCR_Public/090127.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, January 27, 2009, Vol. 13, No. 26
Headlines
ARCHWAY COOKIES: Panel Details Scheme to Commit Fraud
AMERICAN HOME: Borrowers Say Chapter 11 Plan Not Confirmable
ARLINGTON RIDGE: Files Amended Chapter 11 Plan of Reorganization
ATLAS SHIPPING: Files for Chapter 15 Protection
BANK OF AMERICA: John Thain to Repay Office Costs at Merrill
BANK OF AMERICA: Thomas Montag to Run Global Markets Operation
BERNARD L. MADOFF: Lays Off Workers, Over 50 Employees Remain
BERNARD L. MADOFF: Seeks May 1 Deadline to Decide on Leases
BILL HEARD: Court Grants Feb. 27 Extension to File Plan
BON-TON STORES: Paying $0.05 per Share Dividend on February 2
BOSTON SCIENTIFIC: Founders Dump $484MM in Shares to Pay Loans
CAPE ANN HOUSING: Lists Up to $500,000 in Debts
CHENG HENG: Court Denies Employment of Matthew Fling as Counsel
CIRCUIT CITY: Zip Express Lures Firedog Customers with Promo
CONEXANT SYSTEMS: Board Committee Adopts 2009 Incentive Plan
CONEXANT SYSTEMS: Affiliate Renews Credit Deal with Wachovia Bank
CONEXANT SYSTEMS: Inks Separation and Release Agreement with CFO
CONEXANT SYSTEMS: Inks Employment Deal With Dwight Decker
CONEXANT SYSTEMS: Promotes Jean Hu as Chief Financial Officer
CONSTAR INTERNATIONAL: EagleRock Disposes of 538,900 Shares
DELPHI CORP: Appaloosa Wants to Examine Debtor's Lead Counsel
DBSI INC: Idaho Wants Examiner Appointed Due to Fraud
DOLE FOOD: Wants Court's Ruling to Pay EUR45.6MM Fine Withdrawn
DURA AUTOMOTIVE: Hires Lazard to Seek Additional Capital
EDUCATION RESOURCES: Gets April 3 Plan Exclusivity Extension
EL PASO BAR: Case Summary & 18 Largest Unsecured Creditors
FOAMEX LP: Anticipates Signing Forbearance Pact with Lenders
FREEPORT-MCMORAN: Posts $13.9 Billion Net Loss in 2008
FRONTIER AIRLINES: Court Approves FAPA Restructuring Agreement
FRONTIER AIRLINES: Plan Exclusivity Periods Extended Until June 4
FRONTIER AIRLINES: Seeks More Time to Decide on Unexpired Leases
GENCO SHIPPING: Collateral Requirements Under $1.4BB Loan Relaxed
GENERAL DATACOMM: Sept. 30 Balance Sheet Upside Down by $34.3MM
GENERAL MOTORS: Under Pressure to Complete Deal with Bondholders
GENERAL MOTORS: Will Lay Off 2,000 Workers, To Close Plants
HARLEY-DAVIDSON INC: Will Lay Off 11% of Work Force
HEATHERWOOD HOLDINGS: Files for Chapter 11 Bankruptcy Protection
IDEARC INC: NYSE Removes Listing of Entire Class of Common Stock
IN THE MOOD: Voluntary Chapter 11 Case Summary
INTERSTATE BAKERIES: Reaches Terms on Exit Funding With GE
KIMBALL HILL: Court Approves Addendum to RWC/HOME Agreement
KIMBALL HILL: Court Denies Nevada Plaintiffs' Bid to Lift Stay
KIMBALL HILL: Court Okays FBG As Securities Voting Agent
KIMBALL HILL: Disclosure Statement Approved; Plan Hearing March 9
KV PHARMACEUTICAL: Suspends Manufacturing & Shipping Operations
LANDSOURCE COMMUNITIES: To Sell Washington Square to Dulce View
LANDSTOCK LLC: Voluntary Chapter 11 Case Summary
LEAR CORP: Hires Goldman Sachs to Negotiate Lending Agreements
LOOK COMMUNICATIONS: Court Approves Sales Process for Key Assets
MERCEDES HOMES: Liquidity Strains Cue Chapter 11 Bankruptcy
MERCEDES HOMES: Case Summary & 50 Largest Unsecured Creditors
MONA LISA: Files for Chapter 11 Bankruptcy Protection
NATIONAL HERITAGE: Case Summary & 20 Largest Unsecured Creditors
NATIONAL HIRSCHFELD: Files for Chapter 11 Bankruptcy Protection
NATIONAL HIRSCHFELD: Case Summary & 20 Largest Unsec. Creditors
NORD RESOURCES: Appoints Randy Davenport as COO & Vice President
ORLEANS HOMEBUILDERS: Gives Update on Compensation and Award Plan
PEOPLE AGAINST: Final Hearing on Cash Collateral Use on Feb. 2
PEOPLE AGAINST: Wants Plan Filing Period Extended to January 22
PEOPLE AGAINST: Wants Plan Filing Period Extended to January 30
PERMALIFE PRODUCTS: Files for Chapter 11 in New Jersey
PERMALIFE PRODUCTS: Case Summary & 12 Largest Unsecured Creditors
PERMALIFE PRODUCTS: Files for Chapter 11 Bankruptcy Protection
PM LIQUIDATING: Jefferies & Co. Discloses 24.5% Equity Stake
PM&E INC: Decides to Dissolve; Assets to be Distributed
PRB ENERGY: Expects to Emerge This Month After Court Okays Plan
PROPEX INC: Creditors and Lenders Oppose New Loan
QUEBECOR WORLD: NY Court Extends Lease Decision Period to Feb. 28
QUEBECOR WORLD: Receives Go-Signal to Implement 2009 PBIP
QUEBECOR WORLD: Taps Samson Belair/Deloitte As Appraisers
QUEBECOR WORLD: Prudential, et al., Seek Payment of Claims
REUNION INDUSTRIES: WebFinancial Et Al. Disclose 27% Equity Stake
REUNION INDUSTRIES: T. Cassidy & T. Amonett Resign as Directors
SMURFIT-STONE: Files for Bankruptcy; Has $750MM Loan Commitment
SMURFIT-STONE: Declining Demand, Recession Cue Bankruptcy Filing
SMURFIT-STONE: Fitch Slashes Rating to 'D' on Bankruptcy Filing
SMURFIT-STONE: Case Summary & 30 Largest Unsecured Creditors
SOUTH CANAAN: Case Summary & two Largest Unsecured Creditors
SPRINT NEXTEL: Will Lay Off 14% of Workforce to Save $1.2 Bil.
STAN LEE MEDIA: Founder, et al., Face Shareholder Derivative Suit
TAHERA DIAMOND: Canadian Court Extends CCAA Stay Until Feb. 27
TIDEWATER MARINA: Case Summary & 11 Largest Unsecured Creditors
TRIBUNE CO: Panel Says Cubs Sale Should be Approved By Court
VALASSIS COMMUNICATIONS: Can Repurchase Term Loans Below Par
VERENIUM CORP: Supplements $120MM Offering of 5.50% Senior Notes
VERGE LIVING: Case Summary & xx Largest Unsecured Creditors
VISTEON CORP: Hires Advisers for Possible Bankruptcy
WASHINGTON MUTUAL: Wants IRS's $2.3-Bil. Claim Disallowed
WRANGEL SEAFOODS: Files for Chapter 11 Bankruptcy Protection
* Morgan Stanley Spots 14 Firms at Risk of Bankruptcy
* Michael Crames Bolts From Kaye Scholer to Join Davis Polk
* Large Companies With Insolvent Balance Sheets
*********
ARCHWAY COOKIES: Panel Details Scheme to Commit Fraud
-----------------------------------------------------
The official committee of unsecured creditors appointed in Archway
Cookies LLC and Mother's Cake & Cookie Co.'s bankruptcy cases, on
behalf of the Debtors' estates, has filed an adversary complaint
against Catterton Partners V, L.P., Catterton Partners V Offshore,
L.P., Catterton Coinvest I, L.L.C., Dough Co., and Archway &
Mother's Cookie Co., Inc., Insight Group Holdings, Inc., James
Michael Chu, William J. Lynch, Craig H. Sakin, and Nikhil K.
Thukral, Mark Berwick, George Knobloch, Keith R. Lively, Mark
Multer, and Donald Stanners, and John Does and XYZ Companies 1-10.
According to papers filed with the Court, Catterton Partners V,
L.P., a Delaware corporation, is a 75.373% shareholder of the
Debtors' parent company, Archway & Mother's Cookie Co., Inc.,
while Catterton Partners V Offshore, L.P, a Cayman Islands Corp.,
is a 24.62% shareholder of Archway & Mother's Cookie.
John Does and XYZ Companies 1 - 10 are persons and legal entities,
including consultants, advisors, other directors and officers and
members of the management team, who aided and abetted, benefited
from, or otherwise participated in the wrongful acts alleged in
the complaint. The identity of these additional parties will be
determined through discovery.
As reported in the Troubled Company Reporter on Jan. 26, 2009,
Peter Lattman and Ianthe Jeanne Dugan at The Wall Street Journal
reported that creditors of Archway Cookies and Mother's Cake and
Cookie filed the lawsuit in the U.S. Bankruptcy Court for the
District of Delaware against Catterton for allegedly participating
in an accounting fraud at Archway Cookies.
According to WSJ, the creditors accused Catterton of turning "a
blind eye to a widespread accounting fraud at Archway that was
neither particularly sophisticated or ingenious." Citing the
creditors, WSJ related that Archway executives created phony sales
and inflated inventory. The Committee said in court documents,
"The accounting fraud was the most convenient way of continuing to
receive senior financing and trade credit to keep the business
afloat. The fraudulent activity could not have succeeded for as
long as it did without the control, participation and acquiescence
of ... Catterton."
The complaint states that the collateral damage was millions of
dollars of increased claims of unsecured creditors, millions of
dollars in administrative costs and expenses relating to the
fraud, and the abrupt shutdown of the business.
The complaint alleges that Catterton ensured that there was no
independent or unbiased third party to monitor and protect the
interests of the Debtors, or ensure that the Debtors were properly
fulfilling the fiduciary duties that the Debtors owed to their
creditors. The complaint goes on to say that Catterton's actions
should not be rewarded by allowing its claims to be paid ahead of,
or pari passu with, the claims of the general unsecured creditors
who were harmed by Catterton's conduct.
In the complaint, the Creditors Committee alleges that all
financial accounting was prepared on a consolidated basis for
Archway Parent, without any separate balance sheets or financial
information for the Debtors, or the Debtors' Canadian affiliates,
A&M Canada and A&M Blocker.
According to the complaint, after failed attempts to return the
Debtors to profitability, the defendants conspired to implement a
fraudulent scheme that would relieve Catterton, as the Debtors'
sole shareholder, from having to fund the Debtors' continuing
losses. The scheme improperly shifted the funding of losses to
Wachovia and the vendors that continued to extend trade credit to
the Debtors.
The complaint alleges that beginning at least as early as December
2007, the Catterton Insiders and Company Insiders began to
manipulate and falsify Archway's financial records. One of the
first major steps in this plan was to utilize the Debtors'
relationship with a new "customer", Elite Logistics, to create
fraudulent sales. Elite, a warehouse and transportation company
with a warehouse facility in Ashland, Ohio, has an agreement with
the Debtors to store finished product produced in the Debtors'
Ashland, Ohio manufacturing plant.
According to the complaint, prior to December 2007, Elite had
never been a customer of the Debtors, yet during the last week of
December 2007, at least 23 shipments of product were sent to
Elite's facility and booked as $1.2 million in sales, thus helping
the Debtors meet their 2007 sales forecast. In reality, the
complaint alleges, these shipments were only being held by Elite
for later distribution, in 2008, to the Debtors' own network of
independent contractors. Much of the product transferred to elite
eventually went stale and the Debtors were forced to replenish it
with new product as orders from independent distributors slowly
trickled in. A substantial amount of product had to be destroyed,
but the sales recorded by the Debtors to Elite in December 2007
were never reversed.
In calculating the Debtors' borrowing base, Wachovia, the
Creditors Committee relates, considered receivables that were
outstanding for more than 60 days to be ineligible receivables.
The Elite receivable of $1.2 million was carried on the Debtors'
books until approximately April 2008, when the invoice was voided
and immediately reissued -- so that it would once again
fraudulently stay within Wachovia's borrowing base formula. Never
once did title pass to Elite or did Elite actually purchase any of
the Debtors' products. Neither Catterton, Insight nor the
Insiders ever questioned how Elite suddenly became one of the
Debtors' largest customers -- at a time when the Debtors were
suffering significant losses and desperately needed continued
trade support from vendors, as well as asset-based financing from
Wachovia.
According to Court documents, because of pressures on the
defendants to meet sales projections and obtain increasing amounts
of funding from Wachovia to cover operational losses, the Insiders
began to record phantom or "virtual" sales that were invoiced and
booked, but for which the product was either never produced, or
produced and shipped at different times and in different amounts
than reflected on the Debtors' financial statements and borrowing
base certificates. There was also pervasive "channel stuffing",
which the defendants either directed or were aware of, that
allowed more product to be "sold" to a distributor than what the
distributor ordered or was willing to purchase; with the
understanding that the distributor could return the product (at
full cost) to the Debtors after the close of the sales reporting
period.
In addition to the fraudulent sales reporting, the Insiders also
manipulated the Debtors' financial records by overstating the
amount of inventory by at least $650,000.
According to the Committee, Keith Roberts, a Certified Public
Accountant, an executive in the Debtors' finance department,
brought the fraudulent reporting to the attention of his
superiors, including Defendant Multer, as early as April 2008. In
or around May 2008, Defendant Multer advised Mr. Roberts that
Insight and the Insiders were aware that the sales figures being
reported to Wachovia and other parties, including Ernst & Young,
were inflated. These accounting irregularities were documented
and brought to the attention of Insight and the Company Insiders
through letters dated May 5, 2008, and July 28, 2008. The letters
claimed that where were approximately 120 fraudulent submissions
to Wachovia from June 5, 2007, through July 14, 2008.
The complaint adds that once it became apparent to Mr. Roberts
that the Defendants would not disclose and correct the fraud, at
least not before a sale of refinancing of the business,
Mr. Roberts wrote a letter to Defendant Stanners on July 22, 2008,
reiterating the concerns raised in the letters and clearly stating
that the fraudulent accounting issues had not been addressed or
disclosed.
Once the true financial condition of the Debtors reached Wachovia,
it refused to make further advances. This situation precipitated
a chain of events that included an immediate shutdown of the
Debtors' operations, except for the Canadian affiliates, and the
termination of all of the Debtors' employees.
About Archway Cookies
Headquartered in Battle Creek, Michigan, Archway Cookies, LLC, --
http://www.archwaycookies.com/-- makes soft-baked cookies. And
crackers. In 1998, Specialty Foods Corp. acquired the Debtors'
for about $100 million.
Parmalat Finanziaria of Italy acquired Mother's Cake and Cookie
Company and Archway Cookies from The Specialty Foods Acquisition
Corporation for $250 million in 2000. Parmalat later sold its
North American Bakery Group, which includes the Archway brands,
Mother's brands and the U.S. and Canadian private label cookie
businesses, to the private equity firm Catterton Partners and
their operating partner Insight Holdings in 2005.
Archway Cookies filed for Chapter 11 protection on Oct. 6, 2008
(Bankr. D. Del. Case No. 08-12323). Its affiliate, Mother's Cake
& Cookie Co. also filed for bankruptcy (Bankr. D. Del. Case No.
08-12326). Michael R. Lastowski, Esq., at Duane Morris, LLP,
represent the Debtors in their restructuring efforts. In their
filing, the Debtors listed estimated assets of between
$50 million and $100 million and estimated debts of between
$500 million and $1 billion.
On Jan. 8, 2009, the Court approved the request of the Debtors to
convert their Chapter 11 cases to cases under Chapter 7 of the
Bankruptcy Code, effective as of Jan. 21, 2009, at 5:00 p.m. The
Court overruled all objections to the Motion.
AMERICAN HOME: Borrowers Say Chapter 11 Plan Not Confirmable
------------------------------------------------------------
The official committee of borrowers in American Home Mortgage
Holdings, Inc.'s Chapter 11 cases asks the U.S. Bankruptcy Court
for the District of Delaware to deny approval of AHM's amended
chapter 11 plan of liquidation dated as of November 25, 2008.
Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington,
Delaware, relates AHM originated hundreds of thousands of loans
and in 2006, it was the 10th largest mortgage lender in the United
States. According to Mr. Macauley, while the Borrowers Committee
is still attempting to obtain precise figures, it appears that at
least tens of thousands of AHM loans -- and many of the loans that
were originated in the three years pre-bankruptcy -- had features
that made them particularly likely to result in defaults and
particularly likely to generate borrower claims. AHM sold a
variety of adjustable rate mortgages with low initial rates or
minimum payment requirements that typically rose much higher after
a few months, at which point many borrowers were shocked to
discover that they could no longer keep up with their monthly
payments.
Mr. Macauley notes that thousands of individual homeowners across
the United States have claims or potential claims against AHM or
its units. These individuals allege that AHM routinely engaged in
deceptive and fraudulent lending practices, systematically
originated and/or serviced mortgages in violation of federal and
state law, and intentionally collected millions of dollars in
illegal fees and interest. Many of these individuals have lost
their homes or are at risk of losing them.
On October 10, 2008, to ensure that the borrowers would be
represented adequately, the Bankruptcy Court ordered the
appointment of the Borrowers Committee. Since then, the Borrowers
Committee, the Debtors, and official committee of unsecured
creditors have negotiated over many aspects of the Plan that will
affect Borrowers, their claims against the Debtors' estates, and
their claims against non-debtors. As a result of recent changes
in the Plan, many borrower objections have been eliminated, but
many have not. Several of the most troubling features of the Plan
have not been modified.
Mr. Macauley asserts that as currently formulated, the Plan cannot
be confirmed for several reasons:
(i) The Plan would give effect to bar dates that were unknown
to most borrowers and were established in violation of
borrowers' rights to due process.
(ii) The Plan would liquidate certain financial institutions
"early-payment-default" claims and "breach-of warranty"
claims by establishing a streamlined protocol that: would
enable the claimants to collect on such claims without
proving at even a prima facie level that the claims are
valid would allow the claims at inflated values; and would
result in the disparate treatment of a favored group of
unsecured creditors (banks and other purchasers of AHM
mortgages) over other similarly situated unsecured
creditors (including borrowers and others).
(iii) The Plan would give effect to "global" settlements of
inter-debtor claims that were negotiated without borrower
input and unfairly disadvantage borrowers.
(iv) The Plan would result in recoveries to many borrowers that
are lower than what they would receive on their claims in
a Chapter 7 liquidation, and the Plan therefore fails the
best-interest-of-creditors test.
(v) The Plan vests extraordinary authority in a conflicted
Plan Trustee and then compounds the problem by giving him
an advance exculpation.
(vi) The Plan would extend the automatic stay in violation of
the Bankruptcy Code, thereby impairing borrower (and
other) claims.
The Plan is due for hearing on Jan. 28, 2009.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for Chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors selected Hahn & Hessen LLP as
its counsel. As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000.
American Home filed a de-consolidated plan of liquidation on
Aug. 15, 2008.
(American Home Bankruptcy News; Bankruptcy Creditors' Service,
Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
ARLINGTON RIDGE: Files Amended Chapter 11 Plan of Reorganization
----------------------------------------------------------------
Arlington Ridge LLC and its debtor-affiliates filed with the U.S.
Bankruptcy Court for the Middle District of Florida on Jan. 14,
2009, an amended Joint Chapter 11 Plan of Reorganization and a
disclosure statement explaining the Amended Plan.
The Court is scheduled to convene a hearing on Feb. 10, 2009, to
consider confirmation of the Plan.
The Debtors, in December 2008, filed the original version of their
Plan, which contemplated the continued development and operation
of Arlington Ridge project and the payment of all non-insider
creditors in full either in cash or over time. At a hearing on
Jan. 8, 2009, however, the Debtors' counsel disclosed that
Wachovia's actions in suing one of the Insider DIP Lenders -- two
of the Debtors' owners M. Steven Sembler and Robert B. Young who
agreed to provide a $1 million debtor-in-possession financing
facility -- caused the Debtors to be in default under the terms of
the DIP Insider Loan. As a result, the Debtors do not have funds
available to fund continued operations and have been forced to
amend the Plan.
Amended Plan Summary
The Plan, as amended, provides for the payment in full of the
general unsecured claims of all non-insider creditors. It leaves
unimpaired the claims of the Arlington Ridge Community Development
District (CDD), a public entity created pursuant to the Florida
Statutes, and the claims of the Lake County Tax Collector for ad
valorem real property taxes.
The Plan contemplates the wind-down of the Debtors' business
operations and for the transition of those business operations and
the transfer of most of the Debtors' real estate and any related
permits and entitlements, to Wachovia, the principal secured
creditors of the Debtors.
Wachovia will take title to the Debtors' real property free and
clear of all general unsecured claims, junior lien claims, and any
interests of the Debtors or their equity holders. Under the Plan,
the Debtors will retain title only to the parcels of real estate
that are pre-sold to purchasers, and the Debtors will use existing
loan proceeds to assure the completion of those Units and the
delivery to the purchisers of title to those Units. The Wachovia
DIP Loan Claims will be paid in full.
To permit the Plan to be confirmed, the Prepetition Claims of
Insiders and Affiliates will be cancelled, and the Insider DIP
Lender will waive its right to any distribution under the Plan.
On the Plan's Effective Date, M. Steven Sembler and Robert B.
Young will deposit monies into an account to fund distributions in
full to non-insider unsecured creditors. Except as otherwise
expressly provided in the Plan, the Reorganized Debtors will be
revested with all of their assets free and clear of any and all
liens, debts, obligations, claims, cure claims, liabilities,
interests, and all other interests.
Treatment of Claims and Interests
A) Unclassified Claims
All Allowed Administrative Expense Claim and U.S. Trustee Fees
will be paid in full. Each Holder of an Allowed Priority Tax
Claim will receive on account of such Allowed Priority Tax Claim
regular instalment payments in cash in accordance with Section
1129(a)(9)(C) of the Bankruptcy Code.
B) Classified Claims
The Plan divides the Claims and Interests into 10 Classes.
Class 1 comprises all Allowed Priority Claims. Each Holder of an
Allowed Priority Claim will be paid 100%, in Cash. Class 1 is
unimpaired.
Class 2 comprises all Secured Claims of the CDD. The Debtors will
pay the Allowed Amount of the CDD's Secured Claims including
operating and maintenance assessments pursuant to the CDD Bonds
and the assessments. Class 2 is unimpaired.
Class 3 comprises all Secured Claims of the Lake County Tax
Collector in connection with 2008 ad valorem real property taxes
on the portion of the Development owned by Arlington Ridge. The
Lake County Tax Collector's Class 3 Secured Claims are non-
recourse and the transfer to Wachovia of the portion of the
Development owned by Arlington Ridge, as described in Class 4B and
4C, is subject to the Lake County Tax Collector's Allowed Class 3
Secured Claims, as its relates to such real estate. Class 3 is
unimpaired.
Class 4A comprises the Wachovia DIP Loan Claims pursuant to the
Wachovia DIP Loan Order. The Wachovia DIP Loan Claims, to the
extent that such claims have not been paid in full on the Plan's
Effective Date, will be paid in full pursuant to the terms of the
Wachovia DIP Loan Order from the first available proceeds from the
sale of the Retained Lots. The Debtors contend that Class 4A is
unimpaired.
Class 4B comprises all Secured Claims of Wachovia in connection
with the Acquisition and Development Loan. On the Plan's
Effective Date, the Debtors will transfer Wachovia's Collateral,
except for the Retained Lots, to it in full satisfaction of its
Allowed Class 4B Secured Claims. The Debtors contend that Class
4B is unimpaired.
Class 4C comprises all Secured Claims of Wachovia in connection
with the Builder's Line of Credit. On the Plan's Effective Date,
the Debtors will transfer Wachovia's Collateral, except for the
Retained Lots, to it in full satisfaction of its Allowed Class 4C
secured Claims. The Debtors contend that Class 4C is unimpaired.
The Retained Lots will remain subject to the Allowed Secured
Claims of the CDD, the Lake County Tax Collector, and Wachovia.
Class 5 comprises the Insider DIP Loan Claims of M. Steven Sembler
and Robert B. Young pursuant to the Insider DIP Financing Order.
The Insider DIP Lender will waive its right to receive a
distribution under the Plan. Class 5 is impaired.
Class 6 comprises all other Secured Claims not otherwise
classified under the Plan. Each Holder of an Allowed Secured
Claim in Class 6 will receive either the collateral securing such
Allowed Claim or the value of such collateral within sixty (60)
days following the later of the Plan's Effective Date or the date
that such collateral is valued pursuant to a Final Order. Class 6
is unimpaired.
Class 7 comprises all Unsecured Claims. Within thirty (30) days
of the Effective Date, each Holder of Allowed Class 7 Unsecured
Claim will be paid the principal amount of such claim in full
from the Unsecured Creditors Fund. Class 7 is unimpaired.
Class 8 comprises all Intercompany Claims. On the Plan's
Effective Date, all Intercompany Claims will be deemed cancelled,
annulled, and extinguished without any further action by any party
and will be of no further force and effect. The Holders of Class
8 Intercompany Claims will not receive any distribution or receive
or retain any Property or Interest under the Plan on account of
such Class 8 Intercompany Claims. Class 8 is impaired.
Class 9 comprises all Equity Interests in YS Holdings and Blair
Communities. All Class 9 Equity Interests will remain in effect;
however, each Holder of an Allowed Equity Interest will receive no
distribution on account of its Allowed Equity Interest until all
other Allowed Claims have been paid in full. Class 9 is
unimpaired.
Class 10 comprises all Membership Interests in Arlington Ridge and
Blair Homecrafters. All Class 10 Membership interests shall
remain in effect; however, each Holder of an Allowed Membership
Interest will receive no distribution on account of its
Allowed Membership Interest until all other Allowed Claims have
been paid in full. Class 10 is unimpaired.
Who May Vote to Accept or Reject Plan
Classes 1, 2, 3, 4, 6, 7, 9 and 10 are unimpaired under the Plan.
These Classes are conclusively presumed to have accepted the Plan
and thus, are not entitled to vote on the Plan.
Classes 5 and 8 are impaired under the Plan. Holders of Class 8
Intercompany Claims will not receive any distribution or receive
or retain any Property or Interest under the Plan and therefore,
Class 8 is deemed not to have accepted the Plan pursuant to Sec.
1126(g) of the Bankruptcy Code. Accordingly, votes of holders of
Class 8 Intercompany Claims are not being solicited by the
Debtors.
Only holders of Claims under Class 5 are being solicited to vote
or reject the Plan.
"Cram-down" Provisions
If one or more of the Impaired Classes of Claims or Interests does
not accept the Plan, the Plan may nevertheless be confirmed and be
binding upon the non-accepting Impaired Class under the "cram-
down" provisions of the Bankruptcy Code, if the Plan does not
"discriminate unfairly" and is "fair and equitable" to the non-
accepting Impaired Classes under the Plan.
A full-text copy of the Amended Disclosure Statement Explaining
the Debtors' Amended Chapter 11 Plan of Reorganization is
available for free at:
http://bankrupt.com/misc/ArlingtonRidgeAmendedDS.pdf
About Arlington Ridge
Saint Petersburg, Florida-based Arlington Ridge LLC and its
affiliates operate a retirement community. The companies filed
for Chapter 11 protection on Oct. 8, 2008 (Bankr. M. D. Fla. Case
No. 08-15678). Amy Denton Harris, Esq., Harley E. Riedel, Esq.,
and Susan H. Sharp, Esq., at Stichter, Riedel, Blain & Prosser,
represent the Debtors as counsel. In its schedules, Arlington
Ridge LLC listed total assets of $84,045 and total debts of
$17,539,779.
ATLAS SHIPPING: Files for Chapter 15 Protection
-----------------------------------------------
Copenhagen, Denmark-based Atlas Shipping A/S filed a Chapter 15
petition before the U.S. Bankruptcy Court for the Southern
District of New York.
According to Bloomberg News, the company listed as much as
$500 million in debt and up to $50 million in assets in its
Chapter 15 petition. Affiliate Atlas Bulk Shipping separately
listed as much as $50 million in debt and up to $10 million in
assets.
Atlas Shipping A/S said Jan. 18 on its Web site that it filed a
petition for bankruptcy with the Bankruptcy Division of the
Maritime and Commercial Court in Copenhagen, Denmark. The
Copenhagen Court entered bankruptcy orders with respect to Atlas
Shipping A/S and its affiliates Atlas Bulk Shipping A/S and Atlas
Shipping Holding A/S.
The Atlas Shipping Group has been operating as an international
contractor of tonnage and provider of transport solutions in the
dry bulk sector with tonnages ranging from 25,000 to 80,000 DWT
(Dead Weight Tons).
Since it was founded in 1996, the group has operated successfully
but due to the historic drops in freight rates the management has
had to realize that if the group continues its operations it will
not be able to fulfill its obligations as they fall due.
The Atlas Shipping Group is owned and operated by Bo Kristensen
who has been involved in the shipping business for more than 25
years. In connection with the bankruptcy filing, Mr. Kristensen
said in connection with the bankruptcy: "It is extremely
unfortunate, not least for all our highly skilled employees and
our loyal customers, that due to the historic drop in freight
rates since August 2008, we have had to realize that within a
foreseeable timeframe the group will no longer be able to fulfill
all its financial obligations as they fall due."
In 2007 the Atlas Shipping Group had net revenues of $789 million
and a profit from operating activities of $109 million.
Total revenue in 2008 has been close to $1 billion, but due to the
global crisis in shipping the group has more than halved its
profit from ordinary activities, i.e. before making the
substantial loss provisions in respect of contracts.
"We unfortunately have to recognize that the present freight rates
and the charter-parties we have entered into before the crisis in
the shipping business commenced will imply a liquidity loss of
approximately $3 [million] a week if we continue our operations in
their present form. If we continue our operations, our present --
and considerable -- liquidity, will be spent within three months
unless the international freight rates increase dramatically
within the same period", says Bo Kristensen and continues,
"Therefore we have in consultation with our advisors decided that
in the present situation the sensible thing to do is to file a
petition for bankruptcy."
"We have informed our employees at a meeting today and we have
now, with the liquidator, Michael Ziegler of Plesner Law Firm and
liquidator Lisa Bo Larsen, Kromann Reumert, started helping our
customers get their vessels to the destinations," says Bo
Kristensen.
The Atlas Shipping Group operates 41 vessels worldwide and has a
total of 25 employees.
Please direct all inquiries to Bo Kristensen or Per Moller at +45
3927 9400. Any inquiries in respect of the estate should be
directed to Michael Ziegler, Attorney-at-Law, Plesner Law Firm, at
+45 3312 1133 or Lisa Bo Larsen, Attorney-at-Law, Kromann Reumert,
at +45 7012 1211.
BANK OF AMERICA: John Thain to Repay Office Costs at Merrill
------------------------------------------------------------
Bradley Keoun and Josh Fineman at Bloomberg News relate that
former Merrill Lynch & Co. CEO John Thain said that he will repay
the $1.2 million spent in renovating his office.
Citing Mr. Thain, Bloomberg relates that the office renovations in
early 2008 included two conference rooms and a reception area.
According to CNBC, Mr. Thain hired decorator Michael Smith. Mr.
Thain said in an interview with CNBC that he decided to start the
renovation due to the condition of the office, when it was left by
former CEO E. Stanley O'Neal. Bloomberg says that Mr. Thain took
over as CEO in December 2007 and sources said that he occupied the
office in March 2008. Bloomberg quoted Mr. Thain as saying, "It
really would have been very difficult for me to use it in the form
it was in. It needed to be renovated, no matter what. I should
have simply paid for it myself at the time."
CNBC states that Mr. Thain paid Mr. Smith about $837,000, and his
purchases are:
-- $87,000 area rugs,
-- $35,115 commode on legs,
-- $25,000 pedestal table, and
-- $68,000 19th-Century credenza.
Bloomberg quoted Mr. Thain as saying, "They were a mistake in the
light of the world we live in today. I will therefore reimburse
the company for all of the costs incurred."
As reported by the Troubled Company Reporter on Jan. 23, 2009,
Bank of America Chairperson and CEO Kenneth Lewis, angered by the
way Mr. Thain handled stunning losses at Merrill Lynch, asked Mr.
Thain to resign from his post. Merrill Lynch had reported a
$15.31 billion fourth-quarter loss, and Mr. Lewis's post has been
questioned due to Merrill Lynch's woes.
Bloomberg, citing Mr. Thain, relates that Merrill Lynch was
"completely transparent" in informing BofA about the losses. Mr.
Thain said tht BofA "learned about these losses when we did,"
according to the report.
Bloomberg relates that Mr. Thain also said that the size and
timing of the bonus payments "were all determined together with
Bank of America," and that the bonus pool was 41% compared to
2007. Citing Mr. Thain, Bloomberg states that the bonus pool also
was "substantially less than the amount allowed under our merger
agreement."
According to Bloomberg, BofA spokesperson Scott Silvestri said
that Merrill Lynch decided on the bonus on its own. The report
quoted Mr. Silvestri as saying, "John Thain and the Merrill Lynch
compensation committee made the decision on the amount and timing
of year-end compensation at Merrill Lynch. We had no legal right
to challenge it."
Bloomberg states that Mr. Thain said in an interview with CNBC
that the bonuses were necessary to keep the best-performing
employees.
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 AMERICA: Thomas Montag to Run Global Markets Operation
--------------------------------------------------------------
Susanne Craig and Carrick Mollenkamp at The Wall Street Journal
report that Bank of America Chairperson and CEO Kenneth Lewis has
promoted Thomas Montag to run the combined company's global
markets operation.
According to WSJ, Mr. Montag was the head of global sales and
trading at Merrill Lynch & Co. when it was bought by BofA this
month. The report states that Mr. Montag was hired by former
Merrill Lynch chief John Thain. Mr. Montag, says the report, was
responsible of the part of Merrill Lynch that piled up the brunt
of its $15.31-billion net loss in the fourth quarter 2008.
WSJ quoted Mr. Lewis as saying, "Tom Montag is getting a well-
deserved promotion. He has provided strong leadership during our
transition so far, and we believe that Global Markets will in the
future be a significant profit center for our company."
Citing a person familiar with Merrill Lynch's operations, WSJ
states that Mr. Montag likely wanted an independent analysis of
Merrill Lynch's trades. A source, according to WSJ, said that Mr.
Montag and his team worked with BofA executives in December,
handling due diligence on the securities firm to understand the
full extent of the losses. WSJ says that Mr. Lewis was then
informed of the problem. The losses mainly came from old
positions that Merrill Lynch inherited from previous management,
WSJ relaets, citing Messrs. Montag and Thain.
Before Merrill Lynch, Mr. Montag spent worked for Goldman Sachs
Group Inc. for 22 years, WSJ reports.
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.
BERNARD L. MADOFF: Lays Off Workers, Over 50 Employees Remain
-------------------------------------------------------------
Bernard L. Madoff Investment Securities LLC has laid off several
dozen workers, including traders from the company's trading arm,
Amir Efrati at The Wall Street Journal report, citing a current
employee and a worker who was laid off.
A person familiar with the matter said that Irving Picard, Bernard
L. Madoff Investment's court-appointed trustee, retained more than
50 workers as he continues to try to sell the market-making
business, WSJ relates. WSJ states that the employees -- including
most of Bernard L. Madoff Investment's senior management -- are
helping out in the investigation of Bernard Madoff's alleged fraud
and the winding down of the operations.
Madoff's Sons Deny Involvement
According to Aaron Lucchetti and Tom Lauricella at WSJ,
Mr. Madoff's sons, Mark and Andrew Madoff, have said that they
knew nothing about the alleged fraud in the investment business
and that they weren't involved in those operations. WSJ says that
the Madoff brothers worked at Bernard L. Madoff Investment's
brokerage arm, which wasn't involved in the fraud. The report
states that prosecutors haven't implicated the brothers, who
interacted with some who worked in the Madoff investment
operation. Citing former employees, the report says that the
brothers met regularly with their father and other senior
officials of the firm in closed-door talks in the company's
offices.
WSJ states that the Madoff brothers gave their father some of
their own money to manage and occasionally talked with Frank
DiPascali, a key lieutenant who now is a focus of probes into the
alleged fraud. According to the report, people familiar with the
matter said that the brothers had argued that a 2001 article,
which raised questions about whether Bernad L. Madoff Investment
was legitimately generating returns, was incorrect, an event which
the brothers' representative has denied.
WSJ reports that there has been no evidence that the Madoff
brothers knew of their father's alleged scam. WSJ states that
their lawyer, Martin Flumenbaum of Paul, Weiss, Rifkind, Wharton &
Garrison LLP, denied that his clients knew about the fraud before
their father told them about it a day before he was arrested and
the brothers reported it to authorities.
"Their [the brothers] compensation was tied to the proprietary-
trading and market-making businesses," which "have now been
destroyed," WSJ quoted Mr. Flumenbaum as saying.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC was a market maker in
US stocks, including all of the S&P 500 and more than 350 Nasdaq
stocks. The firm moved large blocks of stock for institutional
clients by splitting up orders or arranging off-exchange
transactions between parties. It also performed clearing and
settlement services. Clients included brokerages, banks, and
other financial institutions. In addition, Madoff Securities
managed assets for high-net-worth individuals, hedge funds, and
other institutional investors.
The firm is being liquidated in the aftermath of a fraud scandal
involving founder Bernard L. Madoff.
As reported by the Troubled Company Reporter on Dec. 15, 2008, the
Securities and Exchange Commission charged Bernard L. Madoff and
his investment firm, Bernard L. Madoff Investment Securities LLC,
with securities fraud for a multi-billion dollar Ponzi scheme that
he perpetrated on advisory clients of his firm. The estimated
losses from Madoff's fraud were at least US$50 billion.
Also on Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S.
District Court for the Southern District of New York granted the
application of the Securities Investor Protection Corporation for
a decree adjudicating that the customers of BLMIS are in need of
the protection afforded by the Securities Investor Protection Act
of 1970. Irving H. Picard, Esq., was appointed as trustee for the
liquidation of BLMIS, and Baker & Hostetler LLP was appointed as
counsel.
BERNARD L. MADOFF: Seeks May 1 Deadline to Decide on Leases
-----------------------------------------------------------
Irving H. Picard, Esq., as trustee for the liquidation of the
business of Bernard L. Madoff Investment Securities LLC, under the
Securities Investor Protection Act, 15 U.S.C. Section 78aaa, et
seq., asks the U.S. Bankruptcy Court for the Southern District of
New York to enter an order extending the time within which he may
assume or reject executory contracts and unexpired leases on
behalf of the Debtor's estate.
The Trustee wants the deadline extended by 60 days, through
May 1, 2009.
Richard J. Bernard, Esq., at Baker & Hostetler LLP, in New York,
asserts that cause exists to grant the Extension Request in order
to avoid any inadvertent forfeiture in the relatively early stages
of this extremely large and complex case. "It is in the best
interest of the Debtor's estate, customers and creditors to allow
the Trustee additional time to access and review the relevant
records and to determine whether the assumption or assignment of
any executory contracts and unexpired leases would be beneficial
to the estate."
Mr. Bernard asserts that counterparties will not be prejudiced by
this short extension as their rights to seek an order to shorten
the Trustee's time to assume or reject any particular executory
contract or unexpired lease will be preserved.
The Trustee's request is due for hearing on February 4, 2009.
Objections are due January 30, 2009.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC was a market maker in
US stocks, including all of the S&P 500 and more than 350 Nasdaq
stocks. The firm moved large blocks of stock for institutional
clients by splitting up orders or arranging off-exchange
transactions between parties. It also performed clearing and
settlement services. Clients included brokerages, banks, and
other financial institutions. In addition, Madoff Securities
managed assets for high-net-worth individuals, hedge funds, and
other institutional investors.
The firm is being liquidated in the aftermath of a fraud scandal
involving founder Bernard L. Madoff.
As reported by the Troubled Company Reporter on Dec. 15, 2008, the
Securities and Exchange Commission charged Bernard L. Madoff and
his investment firm, Bernard L. Madoff Investment Securities LLC,
with securities fraud for a multi-billion dollar Ponzi scheme that
he perpetrated on advisory clients of his firm. The estimated
losses from Madoff's fraud were at least US$50 billion.
Also on Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S.
District Court for the Southern District of New York granted the
application of the Securities Investor Protection Corporation for
a decree adjudicating that the customers of BLMIS are in need of
the protection afforded by the Securities Investor Protection Act
of 1970. Irving H. Picard, Esq., was appointed as trustee for the
liquidation of BLMIS, and Baker & Hostetler LLP was appointed as
counsel.
BILL HEARD: Court Grants Feb. 27 Extension to File Plan
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama
extended until Feb. 27 Bill Heard Enterprises Inc.'s exclusive
period to file a Chapter 11 plan.
According to Bloomberg's Bill Rochelle, Bill Heard has sold six of
its 14 auto dealerships, and is working on a sale of its remaining
assets.
Headquartered in Huntsville, Alabama, Bill Heard Enterprises Inc.
-- http://www.billheardhuntsville.com/-- was one of the largest
dealers of Chevrolet in the United States. The company and 17 of
its affiliates filed for Chapter 11 protection on Sept. 28, 2008
(Bankr. N.D. Ala. Lead Case No. 08-83028). Derek F. Meek, Esq.,
at Burr & Forman, LLP, represents the Debtors in their
restructuring efforts. An official committee of unsecured
creditors has been appointed in the bankruptcy cases. Kilpatrick
Stockton LLP represents the Committee. When the Debtors filed for
protection from their creditors, they listed assets and debts of
between $500 million and $1 billion each.
BON-TON STORES: Paying $0.05 per Share Dividend on February 2
-------------------------------------------------------------
The Bon-Ton Stores, Inc.'s board of directors declared a cash
dividend of five cents per share on the Class A Common Stock and
Common Stock of the company payable Feb. 2, 2009, to shareholders
of record as of Jan. 15, 2009.
York, Pennsylvania-based The Bon Ton Stores Inc. (Nasdaq: BONT) --
http://www.bonton.com/-- operates 281 department stores, which
includes 12 furniture galleries, in 23 states in the Northeast,
Midwest and upper Great Plains under the Bon-Ton, Bergner's,
Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and
Younkers nameplates and, under the Parisian nameplate, three
stores in the Detroit, Michigan area. The stores offer a broad
assortment of brand-name fashion apparel and accessories for
women, men and children, as well as cosmetics and home
furnishings.
Bon-Ton's balance sheet at Nov. 1, 2008, showed total assets of
$2.28 billion, total liabilities of $2.00 billion and
shareholders' equity of about $284.30 million.
For thirteen weeks ended Nov. 1, 2008, the company posted net loss
of $14.33 million compared with net loss of $19.36 million.
For thirty-nine weeks ended Nov. 1, 2008, the company posted net
loss of $82.22 million compared with net loss of $63.63 million
for the same period in the previous year.
* * *
As reported in the Troubled Company Reporter on Jan. 23, 2009,
Moody's Investors Service downgraded the corporate family and
probability of default ratings of Bon-Ton Stores, Inc. to B3 from
B2. Moody's also confirmed the rating on the company's senior
unsecured notes at Caa1 and affirmed its speculative grade
liquidity rating at SGL-3. A negative outlook was assigned. This
action completes the review for possible downgrade initiated on
October 24, 2008.
BOSTON SCIENTIFIC: Founders Dump $484MM in Shares to Pay Loans
--------------------------------------------------------------
Founders of Boston Scientific Corp. disposed of $484 million in
shares to repay loans after other assets were frozen by the Lehman
Brothers Holdings Inc. bankruptcy.
According to Bloomberg, citing regulatory filings, Peter Nicholas,
67, Boston Scientific's chairman and founding chief executive
officer, and John Abele, 71, a director and co-founder, have sold
almost half their stake, or 4.2 percent of company stock, since
Oct. 7.
The sales helped pay off loans secured with company stock when
Lehman's Sept. 15 bankruptcy kept the men from tapping other
assets, the Natick, Massachusetts-based medical device maker said
in October, Bloomberg reported.
The report relates that the sell-off contributed to a 23% decline
in Boston Scientific shares over that time, said Bruce Nudell, a
UBS analyst in New York. Bloomberg recounts that after the
founders dumped 30.8 million shares Oct. 8 to 10, a company
statement assured investors "the majority" of trading was over.
Instead, the duo has unloaded an additional 32.3 million shares
since then, according to filings.
Meanwhile, Boston Scientific announced Jan. 15 a decision by the
Court of Appeals for the Federal Circuit. The case involves a
Boston Scientific patent, which in part is directed to drug-
eluting stents and coating systems. In the decision, the Court
found that the patent was invalid as obvious over the prior art.
The case was an appeal by Johnson and Johnson of a 2005 jury
verdict in the United States District Court for the District of
Delaware that found the patent was valid and infringed by Johnson
and Johnson's Cypher(R) Sirolimus-Eluting Stent System. Boston
Scientific said it is considering its options for challenging the
decision
About Boston Scientific
Boston Scientific -- http://www.bostonscientific.com/-- is a
worldwide developer, manufacturer and marketer of medical devices
whose products are used in a broad range of interventional medical
specialties.
As reported by the Troubled Company Reporter on Oct. 10, 2008,
Standard & Poor's Ratings Services said that the U.S. Supreme
Court's rejection of an appeal by Boston Scientific Corp.
(BB+/Negative/--) regarding the $703 million jury finding
(U.S. District Court in Delaware) will have no impact on the
rating. Boston Scientific continues to explore other avenues of
appeal. In the event that it was unsuccessful, the company had
$1.6 billion of cash as of June 30, 2008.
CAPE ANN HOUSING: Lists Up to $500,000 in Debts
-----------------------------------------------
Court documents say that Cape Ann Housing Opportunity Inc. has
listed $101,000 to $500,000 in debts and less than $50,000 in
assets.
Kathy McCabe at The Boston Globe reports that Cape Ann Housing's
bankruptcy filing follows the foreclosure on the third and final
phase of the project. According to the report, the filing is
aimed at dissolving Cape Ann Housing. The bankruptcy filing, says
the report, excludes three corporations set up to govern each part
of the three-phase housing development.
According to The Boston Globe, nonprofit community development
bank Massachusetts Housing Investment Corp. invested $16 million
in the project and now controls the site. The Boston Globe
relates that the development has 43 apartments and 41
condominiums, with permits for 32 more units to be constructed.
Citing the Massachusetts Housing Investment Corp., The Boston
Globe states that the condominiums, including seven designated as
affordable, are priced from $154,600 for a two-bedroom unit to as
much as $235,000 for a market-rate two-bedroom unit.
The Boston Globe quoted the Massachusetts Housing President Joseph
Flatley as saying, "Interest has been good. The market in that
area for condos is not that great anyway. It's not that big of a
market."
The Boston Globe reports that Massachusetts Housing foreclosed on
the last phase of the project in August 2008, having lost almost
$2 million on the project, its first loss in 18 years of lending
to housing developments statewide.
According to The Boston Globe, Mr. Flatley said, "When we
foreclosed on the property, we basically knew that CAHO was going
bankrupt. We needed to ensure the property was developed."
Mr. Flatley, The Boston Globe relates, said that Massachusetts
Housing has an agreement to sell the property to nonprofit
Community Economic Development Assistance Corp. The Boston Globe
states that Mr. Flatley said that the site will probably be
developed as apartments and that "the current market really
dictates that it will be rentals."
The Boston Globe says that the 43 apartment units of the project
were finished on time, with 41 condo units completed. The
developer turned the deeds of unsold units back to Massachusetts
Housing, after sales slowed to the point where company officials
could not make timely loan payments, The Boston Globe states,
citing Nancy Schwoyer, who led Cape Ann Housing. "We were not
able to pay them back," she said. ". . . We were in this to make
housing available to people in Gloucester. We didn't see the
point of going through foreclosure on those units. We wanted
people to be able to buy them, free and clear, without any
problems," the report quoted Ms. Schwoyer as saying.
Leslie Varghese in Boston represents the developer, The Boston
Globe reports.
Cape Ann Housing Opportunity Inc. is a nonprofit company in
Boston.
As reported by the Troubled Company Reporter on Jan 9, 2009, Cape
Ann Housing filed for Chapter 7 liquidation in the U.S. Bankruptcy
Court for the District of Massachusetts.
CHENG HENG: Court Denies Employment of Matthew Fling as Counsel
---------------------------------------------------------------
The Hon. Robert J. Kressel of the U.S. Bankruptcy Court for the
District of Minnesota denied on Jan. 7, 2009, Cheng Heng Inc.'s
request to employ Matthew L. Fling as its bankruptcy counsel. The
Court's order did not state the reasons for the denial of the
application.
Based in St. Paul, Minnesota, Cheng Heng, Inc. owns and operates
the South St. Paul Hotel and Conference Center. Affiliate Wing
Heng, Inc. owns and operates the LaQuinta hotel. The Debtors
filed separate petitions for Chapter 11 relief on Oct. 21, 2008
(D. Minn. Case No. 08-35467 and 08035466).
Cheng Heng listed between $10 million and $50 million in total
assets and the same range in total debts. Wing Heng, Inc. listed
between $10 million and $50 million in total assets and between
$1 million and $10 million in total debts.
CIRCUIT CITY: Zip Express Lures Firedog Customers with Promo
------------------------------------------------------------
Zip Express Installation is offering a special promotion aimed at
former Firedog customers in need of professional consumer
electronics installation services in the wake of Circuit City's
recent bankruptcy and liquidation.
Using the coupon code "FIREDOG", visitors to
http://www.zipinstallation.comcan receive 15% off of the full
price of their purchase of Zip services -- which include a variety
of home electronics installation, optimization and training
options -- all performed by the company's nationwide network of
certified, professional CE technicians.
"Circuit City's bankruptcy and subsequent liquidation means that
the company's Firedog service will cease to fulfill existing
appointments and thousands of consumers will be searching for
solutions only days before the biggest football game and
television event of the year," said Chris Mauzy, president and CEO
of Zip Express Installation. "Zip is ready to fill this void in
the marketplace -- both in the short term and long term -- with
our expert service and next-day appointments. With Zip, customers
stranded by Firedog can have all of their consumer electronics
installation needs met tomorrow."
Zip Express Installation claims it is the first nationwide
installation service to offer consumers next-day installation
appointments at a specific hour. Zip Express Installation's
nationwide network of more than 16,000 CE-certified installers
provide expert installation and customer service support including
removing packaging trash from clients' homes and educating each
customer on their new setup. Installation services start at
$129.95 and all installations include a one-year warranty. Zip
Express Installation currently retains retail and online
relationships with multiple partners including Target stores,
Office Depot, Amazon.com, TigerExpress.com and others. For retail
partners, TV installation packages and services are offered as an
in-store SKU, similar to a PIN card, and are scanned at checkout.
Online, customers simply choose the service package they want and
add it to their virtual shopping cart.
When the selected service is purchased, customers simply call the
Zip Express toll free number or visit www.zipinstallation.com to
schedule the installation for the specific day and time that is
most convenient for them.
"Firedog customers -- or any consumers searching for fast,
convenient, professional CE installation services -- can rest
assured that with Zip, they won't have to miss a minute of the big
game on February 1, or hassle with any upgrades needed for the
transition to digital television slated for February 17th, and
that their system will absolutely look its best," said Mr. Mauzy.
In addition to its special promotions for Firedog customers, Zip
is also offering special DTV conversion offers for consumers
looking for a simple way to prepare themselves or their relatives
for digital broadcasting and has also launched a dedicated Web
site featuring news and views on the DTV transition. Details can
be found at http://www.staticacrossamerica.com/
Zip Express Installation is headquartered in Minneapolis,
Minnesota.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- is a specialty
retailer of consumer electronics, home office products,
entertainment software and related services. The company has two
segments -- domestic and international.
Circuit City Stores, Inc. (NYSE: CC) together with 17 affiliates
filed a voluntary petition for reorganization relief under Chapter
11 of the Bankruptcy Code on November 10 (E.D. Virg. Lead Case
No.: 08-35653). InterTAN Canada, Ltd., which runs Circuit City's
Canadian operations, also sought protection under the Companies'
Creditors Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of Aug. 31, 2008.
The Debtors failed to reach an agreement with its creditors and
lenders to structure a going-concern transaction. At a hearing
held January 16, 2009, the Debtors obtained Court authority to
sell their business pursuant to an agency agreement with four
liquidators: Great American Group WF LLC, Hudson Capital Partners
LLC, SB Capital Group LLC, and Tiger Capital Group LLC -- the
highest and best bidder for the Debtors' assets. 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.
InterTAN Canada Ltd., an indirect wholly-owned subsidiary of U.S.-
based Circuit City Stores, noted 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.
A full-text copy of the order approving the Sale, including the
Agency Agreement, is available for free at:
http://bankrupt.com/misc/CC_Order_SaleofAllAssets.pdf
The Debtors have told the Court that they remain hopeful that they
will receive a bid contemplating a "going concern transaction" in
lieu of store closing sales and the sale of their miscellaneous
assets, including leases.
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)
CONEXANT SYSTEMS: Board Committee Adopts 2009 Incentive Plan
------------------------------------------------------------
The Compensation and Management Development Committee of the board
of directors of Conexant Systems, Inc., adopted the 2009
Performance Incentive Plan. The 2009 Plan is an annual broad-
based employee bonus program, for the fiscal year ending Oct. 2,
2009.
All Named executive officers and employees worldwide are eligible
to participate in the 2009 Plan, except for employees who
participate in the company's Sales Incentive Plan, employees who
are subject to a separate bonus plan or those not otherwise
eligible. Each eligible employee, including the named executive
officers, is eligible to receive an annual bonus award based upon
the employee's bonus target, the employee's performance during
fiscal 2009, and the size of an incentive pool that the Committee
approves for the payment of bonuses for fiscal 2009 performance.
At the end of fiscal 2009, the Committee, in its sole discretion,
will determine the size of the incentive pool. In exercising its
discretion to determine the size of the incentive pool, if any,
the Committee will consider all circumstances then existing that
it deems relevant, including, but not limited to, the achievement
of certain fiscal 2009 core operating profit goals, market
conditions, forecasts and anticipated expenses to be incurred or
payable during fiscal 2009. The Committee, in its sole
discretion, may increase or decrease individual awards from the
target levels, based on individual performance and available
incentive pool.
A full-text copy of the 2009 Performance Incentive Plan is
available for free at http://ResearchArchives.com/t/s?388d
About Conexant
Headquartered in Newport Beach, California, Conexant Systems, Inc.
(NASDAQ: CNXT) -- http://www.conexant.com/-- has a comprehensive
portfolio of innovative semiconductor solutions which includes
products for Internet connectivity, digital imaging, and media
processing applications. Conexant is a fabless semiconductor
company that recorded revenues of $809.0 million in fiscal year
2007. Outside the United States, the company has subsidiaries in
Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong,
France, Germany, the United Kingdom, Iceland, India, Israel,
Japan, Netherlands, Singapore and Israel.
Conexant Systems, Inc.'s balance sheet at Oct. 3, 2008, showed
total assets of $446.4 million, and total liabilities of
$583.1 million, resulting in shareholders' deficit of
$136.7 million.
The company ended the quarter with $105.9 million in cash and cash
equivalents, a sequential decrease of approximately $30 million.
The decrease was related to several events including the company's
retirement of $80 million of its floating rate senior notes due in
November 2010, the reduction of a short-term receivables facility
by $37 million, and a $16 million cash payment for the purchase of
Freescale's "SigmaTel" multifunction printer business. These
items were partially offset by $95 million in cash received from
the sale of the company's BMP business to NXP.
CONEXANT SYSTEMS: Affiliate Renews Credit Deal with Wachovia Bank
-----------------------------------------------------------------
Conexant Systems, Inc.'s subsidiary and special purpose entity,
Conexant USA, LLC, has renewed its accounts receivable credit
facility with Wachovia Bank N.A. for $50 million through Nov. 27,
2009. It replaces an expiring $80 million credit facility that
was renewed approximately one year ago.
"As expected, we renewed our credit facility with Wachovia,
despite a challenging market and economic environment," Scott
Mercer, Conexant's chairman and chief executive officer, said.
"Our new facility, which is an appropriate amount for the more
streamlined and focused company we are today, will continue to
provide us with financial liquidity and flexibility."
Headquartered in Newport Beach, California, Conexant Systems, Inc.
(NASDAQ: CNXT) -- http://www.conexant.com/-- has a comprehensive
portfolio of innovative semiconductor solutions which includes
products for Internet connectivity, digital imaging, and media
processing applications. Conexant is a fabless semiconductor
company that recorded revenues of $809.0 million in fiscal year
2007. Outside the United States, the company has subsidiaries in
Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong,
France, Germany, the United Kingdom, Iceland, India, Israel,
Japan, Netherlands, Singapore and Israel.
Conexant Systems, Inc.'s balance sheet at Oct. 3, 2008, showed
total assets of $446.4 million, and total liabilities of
$583.1 million, resulting in shareholders' deficit of
$136.7 million.
The company ended the quarter with $105.9 million in cash and cash
equivalents, a sequential decrease of approximately $30 million.
The decrease was related to several events including the company's
retirement of $80 million of its floating rate senior notes due in
November 2010, the reduction of a short-term receivables facility
by $37 million, and a $16 million cash payment for the purchase of
Freescale's "SigmaTel" multifunction printer business. These
items were partially offset by $95 million in cash received from
the sale of the company's BMP business to NXP.
CONEXANT SYSTEMS: Inks Separation and Release Agreement with CFO
----------------------------------------------------------------
Conexant Systems, Inc., executed an agreement which became
effective on December 26, 2008, with Karen L. Roscher, pursuant to
which Ms. Roscher's service as senior vice president and chief
financial officer of the company ceased effective as of Dec. 15,
2008, and on which date Ms. Roscher became a non-executive
employee of the company, which position she holds through Jan. 2,
2009.
Pursuant to the Roscher Agreement, the company elected to
terminate Ms. Roscher's employment as SVP and CFO with the company
per section 8(b)(ii) of the original employment agreement between
Ms. Roscher and the company dated Aug. 24, 2007, and amended
May 29, 2008. Ms. Roscher will receive certain compensation and
benefits that she is entitled to receive pursuant to the 2007
Agreement as a result of her termination "without cause" from the
company.
Pursuant to her employment agreement, Ms. Roscher will receive a
lump sum separation payment in full and final settlement of
matters relating to her employment with the company of $570,000,
which payment will be paid within 30 days of Jan. 2, 2009. In
addition, all of Ms. Roscher's stock options and shares of non-
performance based restricted stock will vest and all vested stock
options may be exercised for 15 months from the date of
termination, after which time all of her stock options will
expire.
In addition, Ms. Roscher is restricted until Jan. 2, 2010 from
soliciting employees or customers of the company.
A full-text copy of the Roscher Agreement is available for free
at: http://ResearchArchives.com/t/s?388b
About Conexant
Headquartered in Newport Beach, California, Conexant Systems, Inc.
(NASDAQ: CNXT) -- http://www.conexant.com/-- has a comprehensive
portfolio of innovative semiconductor solutions which includes
products for Internet connectivity, digital imaging, and media
processing applications. Conexant is a fabless semiconductor
company that recorded revenues of $809.0 million in fiscal year
2007. Outside the United States, the company has subsidiaries in
Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong,
France, Germany, the United Kingdom, Iceland, India, Israel,
Japan, Netherlands, Singapore and Israel.
Conexant Systems, Inc.'s balance sheet at Oct. 3, 2008, showed
total assets of $446.4 million, and total liabilities of
$583.1 million, resulting in shareholders' deficit of
$136.7 million.
The company ended the quarter with $105.9 million in cash and cash
equivalents, a sequential decrease of approximately $30 million.
The decrease was related to several events including the company's
retirement of $80 million of its floating rate senior notes due in
November 2010, the reduction of a short-term receivables facility
by $37 million, and a $16 million cash payment for the purchase of
Freescale's "SigmaTel" multifunction printer business. These
items were partially offset by $95 million in cash received from
the sale of the company's BMP business to NXP.
CONEXANT SYSTEMS: Inks Employment Deal With Dwight Decker
---------------------------------------------------------
Conexant Systems, Inc., disclosed in a regulatory filing with the
Securities and Exchange Commission that the company and Dwight
Decker entered into an employment agreement which replaces and
supersedes any previous employment arrangements or agreements
between Mr. Decker and the company and its affiliates.
Mr. Decker resigned as chairman of the board on Aug. 14, 2008, but
continues to serve as a director of Conexant Systems, Inc.
Pursuant to the employment agreement, Mr. Decker will serve as an
advisor to and will report to the chief executive officer, and his
employment will be considered on a part-time basis and allow
Mr. Decker to pursue other business interests. Mr. Decker's new
employment term will begin on Dec. 4, 2008, and conclude on
Dec. 31, 2009. After that initial term, the agreement will be
automatically extended for additional one-year terms, unless
either party notifies the other that it no longer wishes the
extensions to continue.
Although Mr. Decker will not receive any remuneration for his
services as a director, in exchange for his services as an
employee he will be paid an initial annual base salary of $100,000
through Dec. 31, 2009. For future periods, Mr. Decker's annual
base salary will be determined by the board of directors or the
Compensation Committee and may be increased or decreased in their
discretion. Through Dec. 31, 2009, if the company grants equity
awards to members of the board, the company will grant Mr. Decker
twice the number of equity awards, and in the same form, granted
to other non-executive members of the board during that time.
Thereafter, the company will grant Mr. Decker equity awards
determined by the board of directors or Compensation Committee.
Mr. Decker will be entitled to employee benefits such as health,
dental, life and disability insurance and savings plan
participation.
If Mr. Decker's employment terminates for any reason, the company
will promptly pay him any accrued but unpaid annual base salary
and any other unpaid amounts through his termination date. If the
company terminates the employment without "cause" before
Dec. 31, 2009, then the company will:
i) pay Mr. Decker his annual base salary and provide benefits
through Dec. 31, 2009, in accordance with the company's
normal payroll practices; and
ii) provide coverage under the company's health insurance plan
to Mr. Decker and his eligible dependents for up to 18
months after termination. If Mr. Decker voluntarily
terminates his employment at any time, or the company
terminates his employment without "cause," on or before
Dec. 31, 2009, all unvested options to purchase company
Stock, shares of restricted company Common Stock and
restricted stock units held by Mr. Decker will become fully
vested on his termination date, and, all vested stock
options may be exercised until the earlier of (A) the
second anniversary of his termination date, and (B) the
expiration date of such options set forth in the option
award.
If a change of control occurs on or before Dec. 31, 2009, and the
company terminates Mr. Decker's employment on or before that date
other than due to cause, disability or death, then
i) the company will pay to Mr. Decker a lump-sum payment of
$300,000;
ii) the company will provide coverage under the company's
health insurance plan to Mr. Decker and his eligible
dependents for up to 18 months after termination; and
iii) all of his options, shares of restricted company Common
Stock and restricted stock units will become fully vested
on the termination date and all vested stock options may be
exercised until (A) the earlier of the second anniversary
of the termination date and (B) the expiration date of such
options set forth in the option award. Mr. Decker is
restricted from competing with the company or soliciting
employees or customers of the company during and for
12 months after the employment period.
A full-text-copy of the Employment Agreement is available for free
at: http://ResearchArchives.com/t/s?388c
About Conexant
Headquartered in Newport Beach, California, Conexant Systems, Inc.
(NASDAQ: CNXT) -- http://www.conexant.com/-- has a comprehensive
portfolio of innovative semiconductor solutions which includes
products for Internet connectivity, digital imaging, and media
processing applications. Conexant is a fabless semiconductor
company that recorded revenues of $809.0 million in fiscal year
2007. Outside the United States, the company has subsidiaries in
Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong,
France, Germany, the United Kingdom, Iceland, India, Israel,
Japan, Netherlands, Singapore and Israel.
Conexant Systems, Inc.'s balance sheet at Oct. 3, 2008, showed
total assets of $446.4 million, and total liabilities of
$583.1 million, resulting in shareholders' deficit of
$136.7 million.
The company ended the quarter with $105.9 million in cash and cash
equivalents, a sequential decrease of approximately $30 million.
The decrease was related to several events including the company's
retirement of $80 million of its floating rate senior notes due in
November 2010, the reduction of a short-term receivables facility
by $37 million, and a $16 million cash payment for the purchase of
Freescale's "SigmaTel" multifunction printer business. These
items were partially offset by $95 million in cash received from
the sale of the company's BMP business to NXP.
CONEXANT SYSTEMS: Promotes Jean Hu as Chief Financial Officer
-------------------------------------------------------------
Conexant Systems, Inc., promoted Jean Hu as chief financial
officer and senior vice president, Business Development. The
company also provided updated guidance for its December-ending
first fiscal quarter.
Ms. Hu has been with Conexant since 1999. Prior to being named
chief financial officer, she served as senior vice president of
Strategy and Business Development, with a range of
responsibilities and activities that included strategic planning,
financial analysis, the development of product and market
strategies, investments and alliances, divestitures, and mergers
and acquisitions.
Ms. Hu replaces Karen Roscher, who joined Conexant in September
2007, and will be leaving the company to pursue other
opportunities. In her new role, Ms. Hu will continue to report to
Scott Mercer, Conexant chairman and chief executive officer.
"[Ms. Hu] is a long-time member of Conexant's senior leadership
team who has made many significant contributions over the years,"
Mr. Mercer said. "Most recently, she led our efforts to divest
our set-top box business and acquire Freescale Semiconductor's
'SigmaTel' multifunction printer business. She possesses an
extensive financial background and an in-depth understanding of
our business, strategies, and products. Her skills and experience
will prove invaluable as we work to control costs during this
difficult economic period and concentrate on delivering further
improvements in our business model, improving our long-term
capital structure, and focusing investments on the market segments
where we either lead or have the opportunity to lead.
"I'd also like to thank Karen for her dedication and
contributions, and wish her the best," Mr. Mercer said.
"I'd like to thank [Mr. Mercer] for giving me the opportunity to
serve as Conexant's chief financial officer," Ms. Hu said. "I
look forward to leading the finance organization and working with
the company's senior management team in my new capacity as we
navigate through the current global financial turmoil and lay the
foundation for improved financial performance and profitable
growth in the future."
Ms. Hu joined Conexant in 1999 as director of Strategy and
Business Development. She was promoted to vice president in 2001,
and to senior vice president in 2006. Prior to joining Conexant,
Ms. Hu held positions of increasing responsibility in corporate
financial planning and development with Rockwell International.
Before that, she worked as a consultant providing valuation,
litigation advisory, and M&A services to a wide range of clients.
Hu earned a doctorate in economics from Claremont Graduate School
and holds a bachelor's degree in chemical engineering from Beijing
Chemical Engineering University.
First Fiscal Quarter Business Update
Conexant expected revenues for the first quarter of fiscal 2009 to
be in a range between $83 million and $88 million. Previously,
the company expected revenues in a range between $103 million and
$108 million. Conexant's revenues for the fourth quarter of
fiscal 2008 were $122.6 million. The fourth fiscal quarter was
comprised of 14 weeks instead of the normal 13, a circumstance
that occurs once every seven years in order to keep fiscal years
aligned with calendar years.
Core gross margins for the first quarter of fiscal 2009 were
expected to be 53% to 54%, below previous expectations of 54.5% to
55.5% due to lower revenues. The company also anticipated that
first fiscal quarter core operating income will be in a range
between $1.0 million and $4.0 million, resulting in a core net
loss of $0.05 to $0.09 per share. Previously, the company
expected first fiscal quarter core operating income in a range
between $11 million and $13 million, which would have resulted in
core net income of $0.09 to $0.12 per share.
"With the worsening worldwide economic environment and the decline
in consumer spending, demand for our products has softened
considerably since we provided guidance for our first fiscal
quarter at the end of October," Mr. Mercer said. "Over the past
six weeks, we have responded to numerous customer requests to
cancel and reschedule orders, and we anticipate that these
requests will continue into the new calendar year. At this point,
it looks like the March quarter will pose challenges beyond the
seasonal revenue declines we normally anticipate. We plan to
continue to adjust our cost structure to mitigate the effects of
these rapidly changing economic conditions."
About Conexant
Headquartered in Newport Beach, California, Conexant Systems, Inc.
(NASDAQ: CNXT) -- http://www.conexant.com/-- has a comprehensive
portfolio of innovative semiconductor solutions which includes
products for Internet connectivity, digital imaging, and media
processing applications. Conexant is a fabless semiconductor
company that recorded revenues of $809.0 million in fiscal year
2007. Outside the United States, the company has subsidiaries in
Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong,
France, Germany, the United Kingdom, Iceland, India, Israel,
Japan, Netherlands, Singapore and Israel.
Conexant Systems, Inc.'s balance sheet at Oct. 3, 2008, showed
total assets of $446.4 million, and total liabilities of
$583.1 million, resulting in shareholders' deficit of
$136.7 million.
The company ended the quarter with $105.9 million in cash and cash
equivalents, a sequential decrease of approximately $30 million.
The decrease was related to several events including the company's
retirement of $80 million of its floating rate senior notes due in
November 2010, the reduction of a short-term receivables facility
by $37 million, and a $16 million cash payment for the purchase of
Freescale's "SigmaTel" multifunction printer business. These
items were partially offset by $95 million in cash received from
the sale of the company's BMP business to NXP.
CONSTAR INTERNATIONAL: EagleRock Disposes of 538,900 Shares
-----------------------------------------------------------
EagleRock Capital Management, L.L.C., disclosed in a regulatory
filing dated January 5, 2009, that it disposed of 538,900 shares
of common stock of Constar International Inc. between December 30
and 31, 2008.
EagleRock may be deemed to beneficially own 2,171,482 shares after
the transactions. The shares are directly owned by certain funds,
including EagleRock Master Fund, LP and EagleRock Institutional
Partners, LP, of which EagleRock Capital Management, LLC, is the
investment manager. Nader Tavakoli is the managing member and
principal of EagleRock. By reason of the provisions of Rule 16a-1
under the Securities Exchange Act of 1934, as amended, EagleRock
and Mr. Tavakoli may be deemed to be the beneficial owners of the
securities beneficially owned by the Funds. In addition, Mr.
Tavakoli may be deemed to be the beneficial owner of 278,473
shares of Common Stock beneficially owned by another entity.
Headquartered in Philadelphia, Pennsylvania, Constar International
Inc. (NASDAQ: CNST) -- http://www.constar.net-- produces
polyethylene terephthalate plastic containers for food, soft
drinks and water. The company provides full-service packaging
services. The company and five of its affiliates filed for
Chapter 11 protection on Dec. 30, 2008 (Bankr. D. Del. Lead Case
No. 08-13432). Wilmer Cutler Pickering Hale and Dorr LLP
represents the Debtors as their bankruptcy counsel. The Debtors
proposed Bayard, P.A., as local counsel; Pricewaterhouse Coopers
as auditors and accountants; Greenhill & Co. LLC as financial
advisor; and Epiq Systems Inc. Claims and Balloting Agent. When
the Debtors filed for protection from their creditors, they posted
$420,000,000 in total assets and $538,000,000 as of
Nov. 30, 2008.
DELPHI CORP: Appaloosa Wants to Examine Debtor's Lead Counsel
-------------------------------------------------------------
A lawyer for Delphi Corp., told the U.S. Bankruptcy Court for the
Southern District of New York he has no personal knowledge of
short sales in the company's stock by investors who canceled a
plan to provide $2.55 billion in bankruptcy exit financing for
Delphi, Bloomberg News reported.
Delphi Corp., in May 2008, filed before the Bankruptcy Court a
lawsuit against Appaloosa Management L.P., and other parties in
light of their refusal to comply with their agreement to provide
US$2.55 billion in equity exit financing. Appaloosa's termination
of their Equity Purchase and Commitment Agreement stalled the
consummation of Delphi's Plan of Reorganization, which was
confirmed by the Court January 25, 2008, and kept Delphi in
Chapter 11. The parties have agreed to a May 2009 trial and a
Feb. 7 deadline to complete all discovery.
On Dec. 18, 2008, Delphi made available lead bankruptcy lawyer
John Wm. Butler, Jr, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Chicago, Illinois, as a witness "[w]ith respect to the
allegations of the complaint and the interpretation of the
provisions of the EPCA." Appaloosa has asked the Bankruptcy Court
to compel Delphi to submit Mr. Butler for additional deposition,
on or before Feb. 2, 2009. Appaloosa said it's requesting for a
deposition beyond the usual seven-hour limit provided by Rule
30(d)(1) of the Federal Rules of Civil Procedure, because Mr.
Butler testified both in an individual capacity and as a Delphi
representative.
Bloomberg News reports that a 294-page transcript of testimony by
Mr. Butler disclosed details of the company's dealings with
Appaloosa from January 2008, when the Bankruptcy Court approved
Delphi's reorganization plan, to April, when Appaloosa terminated
the EPCA.
According to Bloomberg, Mr. Butler, in the December deposition,
said he had no knowledge of any Plan Investors shorting Delphi's
stock to weaken the company's ability to secure the financing.
Mr. Butler did say he had conversations with Appaloosa about
whether short sales violated the funding agreement. "There was
one set of allegations related to alleged short selling and other
transactions we believed were violative" of the accord, Mr. Butler
testified, according to Bloomberg's report. "I believe that the
plan investors did know that one or more of the plan investors did
have knowledge of short selling."
The parties to the EPCA were:
* A-D Acquisition Holdings, LLC, and
Appaloosa Management, L.P.
* Harbinger Del-Auto Investment Company, Ltd.,
Harbinger Capital Partners Special Situations GP, LLC, and
Harbinger Capital Partners Master Fund I, Ltd.
* Dolce Investments LLC and Cerberus Capital Management L.P.
* Merrill Lynch, Pierce, Fenner & Smith Inc.
* UBS Securities LLC and UBS AG
* Goldman, Sachs & Co.
* Pardus DPH Holding LLC, Pardus Capital Management L.P.,
Pardus Special Opportunities Master Fund L.P., and
Pardus Capital Management LLC
Short-Selling Allegations
Delphi has said short-selling was an issue in the case because
some of the Plan Investors may have had an incentive for Delphi to
fail. According to Bloomberg, in a short sale, a trader tries to
profit from a price decline by selling borrowed shares in the hope
of repaying the loan later with cheaper stock.
Delphi's short-selling allegations came in March 2008, a month
before the parties were scheduled to close on their $2.55-billlion
equity financing agreement, which would have allowed Delphi to
exit bankruptcy protection. On April 4, however, Appaloosa sent a
notice that it has terminated the EPCA because Delphi violated the
terms of the Agreement.
In mid-March 2008, Delphi obtained permission to conduct an
investigation on the Investors in connection with the short-
selling allegations. In Delphi's request for the probe, Delphi's
counsel, Albert Togut, Esq., at Togut, Segal & Segal LLP, in New
York, said that Delphi received information from a stakeholder who
"alleged direct knowledge of inappropriate conduct relating to at
least one Investor involved with the Debtors' efforts to
consummate the Plan." The unnamed Stakeholder's information,
Mr. Togut says, included allegations that:
(1) one or more Investors may have been trading in or shorting
one or more of Delphi's outstanding public securities;
(2) the Trading Investors may currently have material
unrealized or realized gains on the Illegal Investments;
and
(3) the Trading Investors may have communicated with
Appaloosa, the Debtors' Lead Plan Investor, or Appaloosa's
representatives concerning scenarios or courses of conduct
pursuant to which the New EPCA will not be consummated or
funded to the detriment of the Debtors and their
stakeholders.
In its May 2009 lawsuit against the Plan Investors, Delphi
included the short-selling allegations in its lawsuit -- "[O]n or
about March 26, 2008, Delphi was shocked to learn from a credible
source that certain of Delphi's committed equity investors had
been trying to avoid their obligations by seeking to persuade exit
financing lenders to withdraw their commitments, in an effort to
render Delphi unable to satisfy the financing condition under the
Investment Agreement. This source advised Delphi, and Delphi
alleges and believes, that the direct communications with exit
lenders were engaged in by certain of the Additional Investors,
not by Appaloosa itself, because Appaloosa was too smart to engage
in that conduct directly. Nonetheless, Appaloosa and the other
Initial Investors defendants herein remain legally responsible for
the misconduct of the Additional Investors. The misconduct also
includes short-selling of Delphi's securities which could only
have had the purpose or effect of depressing the value of Delphi
and making it only more difficult for Delphi to obtain the exit
financing needed for consummation of the Plan all in violation of
the Investment Agreement."
The Additional Investors comprise a group of about a dozen
investors who had entered into an agreement with Appaloosa, et
al., and UBS dated July 20, 2007 titled Additional Investors
Agreement. The Additional Investors Agreement sets forth the
terms on which the Additional Investors agree to participate in
the equity purchase obligations of the Investors and UBS.
John Doe to Testify
Delphi has presented to the Court a certain John Doe who has
testified that an employee of one of the Additional Investors told
him that (i) the Additional Investor was net short in Delphi
bonds; and (2) the Additional Investor and others were prepared to
offer to pay the $250 million breakup fee the EPCA group members
faced if they did not fund Delphi's emergence from bankruptcy.
Delphi has requested to the Bankruptcy Court that it enter an
order designating Mr. Doe's identity as "highly confidential"
information, thereby barring the disclosure to the Defendants'
clients. Delphi said that Mr. Doe faces reputational harm from
being identified in the investment community as a source of some
of Delphi's allegations in its lawsuit. Mr. Doe works in the
distressed debt field. "Over the last 10 years he has dealt
regularly on a business basis with all the defendant firms."
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ)
-- http://www.delphi.com/-- is the single supplier of vehicle
electronics, transportation components, integrated systems and
modules, and other electronic technology. The company's
technology and products are present in more than 75 million
vehicles on the road worldwide. Delphi has regional
headquarters in Japan, Brazil and France.
The company filed for Chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represent the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007. The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008. The Plan has not been consummated after a group
led by Appaloosa Management, L.P., backed out from their
proposal to provide US$2,550,000,000 in equity financing to
Delphi.
(Delphi Bankruptcy News, Issue 147; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DBSI INC: Idaho Wants Examiner Appointed Due to Fraud
-----------------------------------------------------
The State of Idaho Department of Finance, asks the U.S. Bankruptcy
Court for the District of Delaware to appoint an examiner in DBSI,
Inc.'s Chapter 11 cases.
Idaho's request is scheduled for hearing on Feb. 4, 2009, at 10:00
a.m. Objections are due Jan. 29.
A group of tenant-in-common investors on November 21, 2008, filed
request for an appointment of an examiner. DBSI and its official
committee of unsecured creditors objected to the request.
According to Alan Conilogue, Deputy Attorney General for the State
of Idaho, there is cause for the appointment of an examiner in the
Chapter 11 cases. He relates that DBSI and its affiliates have
participated in numerous fraudulent securities transactions that
have defrauded hundreds of creditors. "In addition, the extent of
the fraud perpetrated by the Debtors and their owner/manager
Douglas L. Swenson are only beginning to surface. The appointment
of an examiner will serve the best interests of creditors and
other interests of the estates, and it will also provide the most
cost-effective means of performing the investigation that is
required under the facts and circumstances of these cases."
Before filing for bankruptcy protection, DBSI operated various
entities that sold interests in real property packaged as
tenancies in common. While engaged in the selling of TIC
Properties, the Debtors committed numerous fraudulent acts in an
effort to make a profit. In its fraud complaint against Mr.
Swenson, et al., before District Court of the Fourth Judicial
District of the State of Idaho, the Department alleged that the
defendants sold a TIC Property at a 46% markup after owning it for
only two weeks. That transaction allegedly yielded a profit of
$6,200,000 to the defendants. Even worse, the defendants,
utilizing the authority of a Special Durable Power of Attorney,
substituted non-recourse loans for recourse loans without
informing the investors of the change, recalls Mr. Conilogue.
In addition, the Debtors, and their President and Chief Executive
Officer, Mr. Swenson, engaged in a broad pattern of fraudulent
behavior and material misrepresentations that cost investors
millions of dollars, Mr. Conilogue relates. In perpetrating their
fraudulent scheme, the Debtors violated Idaho securities laws by
selling unregistered securities and failing to register those
securities.
Given the allegations contained in its Jan. 14, 2009 fraud
complaint against DBSI and Mr. Swenson and the complex
interrelationship among Mr. Swenson and the numerous
Debtor entities, the Department respectfully requests the
appointment of an examiner pursuant to Section 1104(c) of the
Bankruptcy Code.
About DBSI Inc.
Headquartered in Meridian, Idaho, DBSI Inc. -- http://www.dbsi.com
-- operates a real estate company. DBSI and 145 of its affiliates
filed for Chapter 11 protection on Nov. 10, 2008 (Bankr. D. Del.
Lead Case No. 08-12687). Lawyers at Young Conaway Stargatt &
Taylor LLP represent the Debtors as counsel. The Official
Committee of Unsecured Creditors tapped Greenberg Traurig, LLP as
its bankruptcy counsel. Kurtzman Carson Consultants LLC is the
Debtors' notice claims and balloting agent. When the Debtors
filed for protection from their creditors, they listed assets and
debts of between $100 million and $500 million each.
DOLE FOOD: Wants Court's Ruling to Pay EUR45.6MM Fine Withdrawn
--------------------------------------------------------------
Dole Food Company Inc. disclosed in a filing with the Securities
and Exchange Commission that on Dec. 24, 2008, Dole filed an
application with the Court of First Instance of the European
Communities requesting it to annul the European Commission
Decision of Oct. 15, 2008, finding that Dole infringed Article 81
of the EC Treaty and imposing a fine on Dole of EUR45.6 million.
On Oct. 21, 2008, Dole received notification of the European
Commission Decision relating to a proceeding under Article 81 of
the EC Treaty in Case COMP/39188 - Bananas, by which a fine of
EUR45.6 million was imposed by the Commission of the European
Communities on Dole Food Company, Inc. and Dole Fresh Fruit Europe
OHG, jointly and severally.
As stated in Article 2 of the Decision, the fine is not due until
three months after the date of notification of the Decision, i.e.,
on Jan. 22, 2009.
On Dec. 3, 2008, the European Commission agreed in writing that if
Dole makes an initial payment of $10 million to the Commission on
or before Jan. 22, 2009, then the Commission will stay the
deadline for a provisional payment, or coverage by a prime bank
guaranty, of the remaining balance plus interest as from Jan. 22,
2009, until April 30, 2009.
About Dole Food
Based in Westlake Village, California, Dole Food Company Inc. --
http://www.dole.com/-- is the world's largest producer and
marketer of high-quality fresh fruit, fresh vegetables and fresh-
cut flowers. Dole markets a growing line of packaged and frozen
foods and is a produce industry leader in nutrition education and
research.
Dole Food's balance sheet at Oct. 4, 2008, showed total assets of
$4.4 million, total liabilities of $4.0 billion and stockholders'
equity of $429.3 million
As of Oct. 4, 2008, the company had a cash balance of
$70.8 million, an asset based revolving credit facility borrowing
base of $350 million and $190 million outstanding under the ABL
revolver. After taking into account approximately $5.3 million of
outstanding letters of credit issued under the ABL revolver, the
company had approximately $154.7 million available for borrowings
as of Oct. 4, 2008. Amounts outstanding under the term loan
facilities were $913.4 million at Oct. 4, 2008. In addition, the
company had approximately $82.4 million of letters of credit and
bank guarantees outstanding under its pre-funded letter of credit
facility at Oct. 4, 2008.
For quarter ended Oct. 4, 2008, the company posted net loss of
$21.3 million compared with net loss of $63.3 million for the same
period in the previous year.
For three quarters ended Oct. 4, 2008, the company reported net
income of $130.4 million compared with net loss of $24.4 million
for the same period in the previous year.
As reported Troubled Company Reporter on Jan. 23, 2009,
Participations in a syndicated loan under which Dole Food is a
borrower traded in the secondary market at 75.69 cents-on-the-
dollar during the week ended Jan. 16, 2009, according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. This represents an increase of 1.97 percentage points
from the previous week, the Journal relates. Dole Food pays
interest at 175 points above LIBOR. The loan matures April 5,
2013. The bank loan carries Moody's Ba3 rating and Standard &
Poor's B+ rating.
DURA AUTOMOTIVE: Hires Lazard to Seek Additional Capital
--------------------------------------------------------
DURA Automotive Systems Inc. has hired investment-banking firm of
Lazard Ltd. to advise it on its liquidity problems and to seek out
additional capital, John D. Stoll and Jeffrey McCracken at The
Wall Street Journal report, citing people familiar with the
matter.
According to WSJ, a source said that DURA Automotive "has quickly
fallen way, way behind any expectations" that were laid out in its
reorganization plan. WSJ states that DURA Automotive has about
13,000 workers, but recently put 400 to 500 salaried employees on
indefinite layoff. The report says that DURA Automotive has also
closed some of its U.S. plants for the rest of January 2009.
Citing DURA Automotive spokesperson Sean McGuire, WSJ relates that
the firm is in the "final stages of attracting new investment. We
are in a somewhat unique position because of our recent aggressive
operational restructuring, reduced dependence on U.S sales and our
low debt load."
About DURA Automotive
Rochester Hills, Michigan-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural
door modules and exterior trim systems for the global automotive
industry. The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries. DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.
The company has three locations in Asia -- China, Japan and Korea.
It has locations in Europe and Latin-America, particularly in
Mexico, Germany and the United Kingdom.
The Debtors filed for chapter 11 petition on Oct. 30, 2006,
(Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq.,
Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at
Kirkland & Ellis LLP are lead counsels for the Debtors' bankruptcy
proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron,
Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors'
co-counsels. Baker & McKenzie acts as the Debtors' special
counsel. Togut, Segal & Segal LLP is the Debtors' conflicts
counsel. Miller Buckfire & Co., LLC is the Debtors' investment
banker. Glass & Associates Inc., gives financial advice to the
Debtor. Kurtzman Carson Consultants LLC handles the notice,
claims and balloting for the Debtors and Brunswick Group LLC acts
as their Corporate Communications Consultants for the Debtors.
As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total assets
and $1,623,632,000 in total liabilities.
On April 3, 2008, the Court approved the Debtors' revised
Disclosure Statement explaining their revised Chapter 11 plan of
reorganization. On June 27, 2008, the Debtors emerged from
Chapter 11 bankruptcy protection.
EDUCATION RESOURCES: Gets April 3 Plan Exclusivity Extension
------------------------------------------------------------
The Education Resources Institute, Inc., obtained an extension of
its deadline to file and seek confirmation of a Chapter 11 plan.
The U.S. Bankruptcy Court for the District of Massachusetts
extended TERI's exclusive periods within which it may file a plan
of reorganization until April 3, 2009, and solicit acceptances of
that plan until June 2, 2009, without prejudice to the Debtor's
right to seek further extensions of the exclusive periods.
In TERI's request for an extension, Gina Lynn Martin, Esq., at
Goodwin Procter LLP, in Boston, Massachusetts, explained that the
Debtor needs additional time to:
(a) continue evaluation and negotiation with its lenders to
determine the amount of lenders' claims;
(b) continue its negotiations with The First Marblehead
Corporation and the 17 Trusts who have asserted claims in
excess of $12 billion in the Debtor's case; and
(c) continue to work with the Official Committee of Unsecured
Creditors to formulate a consensual plan of reorganization
based on the resolution with the larger secured lenders
and the trusts integrated with the business plan
previously provided to the Committee.
As part of the plan negotiations, the parties are making progress
on the formulation of a claims estimation procedure that the
parties hope to include in the reorganization plan, Ms. Martin
relates. The Debtor is continuing to provide reports to the
Committee's financial advisor to assist the Committee in its
review of the appropriate "inputs" to use in the claims
estimation procedure. The Debtor and the Committee are hopeful
that the production of information and the Committee's review of
such information will be completed in the near term, Ms. Martin
told the Court.
The Committee, Ms. Martin added, is preparing a draft of a
description of the claims estimation procedure that it intends to
circulate among the Debtor, FMC and other interested parties for
review and comment within the requested extended exclusivity
period.
Independent of the settlement discussions with the Trusts, Ms.
Martin said the Debtor has had several meetings and believes it
is close to finalizing a term sheet regarding a plan of
reorganization with the Committee. The terms of the settlement
with the Committee are not conditioned on reaching a settlement
with the Trusts and, therefore, even if negotiations with the
Trusts fail, the Debtor and the Committee are hopeful they can
submit a consensual plan that can be consummated in the second
quarter of 2009, Ms. Martin states.
About The Education Resources Institute Inc.
Headquartered in Boston, Massachussetts, The Education Resources
Institute Inc. -- http://www.teri.org/-- aka Boston Systems
Resources Inc., Brockton Education Opportunity Center, TERI, TERI
College Access, TERI College Access Centers and TERI Marketing
Services Inc., is a nonprofit organization that promotes
educational opportunities for all through its college access and
loan guarantee activities. Founded in 1985, TERI is a guarantor
of private or non-government student loans with more than $17
billion in outstanding guarantees.
The Debtor filed for Chapter 11 petition on April 7, 2008 (Bankr.
D. Mass. Case No. 08-12540.) Daniel Glosband, Esq., Gina L.
Martin, Esq., at Goodwin Procter LLP represent the Debtor in its
restructuring efforts. The Debtor's Conflicts Counsel is Craig
and Macauley PC. Grant Thornton LLP, acts as financial advisors,
and Citigroup Global Markets Inc. acts as investment banker. Its
Claims Agent is Epiq Bankruptcy Solutions LLC. When the Debtor
filed for protection from its creditors, it listed estimated
assets of more that $1 billion and estimated debts of $500,000 to
$1 billion.
(TERI Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
EL PASO BAR: Case Summary & 18 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: El Paso Bar-B-Que Company, Inc.
8541 E Anderson, Suite 106
Scottsdale, AZ 85255
Tel: (480) 609-0011
Bankruptcy Case No.: 09-01186
Type of Business: The Debtor operates a chain of restaurants.
See: http://www.elpasobarbeque.com/
Chapter 11 Petition Date: January 23, 2009
Court: District of Arizona (Phoenix)
Judge: George B. Nielsen Jr.
Debtor's Counsel: Dean M. Dinner, Esq.
ddinner@nussbaumgillis.com
Randy Nussbaum, Esq.
rnussbaum@nussbaumgillis.com
Nussbaum & Gillis P.C.
14500 N. Northsight Blvd., #116
Scottsdale, AZ 85260
Tel: (480) 609-0011
Fax: (480) 609-0016
Estimated Assets: $1 million to $10 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
John Martin business services $8,000,000
567 San Nicholas Drive
Ste. 400
Newport Beach, CA 92660
Bill Prather business services $1,000,000
10944 E. Lillian Lane
Scottsdale, AZ 85259
DDRA Community Services business services $90,142
Dept. 102307-2578
PO Box 73362
Cleveland, OH 44193
National Retail Properties business services $88,300
LP
City of Glendale TPT Tax $68,702
Taxt & License Division
Petree El Paso Surprise LLC business services $67,012
Petree El Paso Goodyear LLC business services $65,192
MJ Kivel LLC business services $62,278
Restaurant Liquid Services LLC business services $37,039
Cosi Swan LT Investment LLC business services $35,911
Vestar Arizona XVII LLC business services $33,399
Jan-Pro Cleaning Systems business services $28,765
Maricopa County Treasurer tax $27,103
Palmeri, Tyler, Wiener, business services $19,436
Wihel & Waldron
Duskins & Duskins CPA's business services $16,965
Core3 Inc. business services $16,304
Lewis & Rocca LLP business services $13,058
The Arizona Republic business services $11,219
The petition was signed by William Prather, president.
FOAMEX LP: Anticipates Signing Forbearance Pact with Lenders
------------------------------------------------------------
Foamex International Inc. has said it anticipates entering into a
forbearance agreement with each of its Revolving Credit facility
lenders and its First Lien lenders as soon as possible.
Foamex on Friday announced several significant developments in its
efforts to restructure its balance sheet and enhance long term
value while continuing normal business operations. Foamex said it
is engaged in discussions with certain lenders holding more than a
majority of its First Lien Term Loans regarding restructuring
options including, without limitation, a possible amendment to the
Company's First Lien Term Loan facility.
In addition, to continue the process for a restructuring of its
balance sheet and in consideration of its best long-term interest,
Foamex has not made the $7.3 million interest payment on its First
Lien and Second Lien Loans that was due by January 21, 2009, upon
expiration of the applicable grace period.
"[The] actions are consistent with our number one priority over
the past two years to deleverage," said Jack Johnson, President
and Chief Executive Officer. "We will continue to negotiate with
our First Lien lenders to strengthen our business by restructuring
our debt. We have reduced debt by approximately $240 million in
the last two years."
"Importantly, these steps and our ongoing negotiations should have
no effect on Foamex's day-to-day operations. We continue to have
enough cash to support our daily operations and Bank of America,
the agent for our Revolving Credit facility, continues to work
constructively with us during these discussions. We remain
committed to continuing to provide our loyal customers with the
high level of service and products to which they are accustomed
and to maintaining strong supplier relationships," Johnson
continued.
About Foamex International Inc.
Foamex International, Inc. (FMXL) -- http://www.foamex.com/--
headquartered in Media, PA, produces polyurethane foam-based
solutions and specialty comfort products. The Company services the
bedding, furniture, carpet cushion and automotive markets and also
manufactures high-performance polymers for diverse applications in
the industrial, aerospace, defense, electronics and computer
industries.
* * *
Standard & Poor's Ratings Services has lowered its corporate
credit rating on Foamex L.P. to 'D' from 'CCC+'. At the
same time, S&P lowered the issue-level rating on the company's
$425 million first-lien term loans to 'D' from 'CCC+', with a
recovery rating of '4', indicating S&P's expectation for average
(30% to 50%) recovery in the event of a payment default. S&P also
lowered the issue-level rating on the company's $175 million
second-lien term loans to 'D' from 'CCC-', and the recovery rating
is '6', indicating S&P's expectation for negligible (0% to 10%)
recovery in the event of a default.
Moody's Investors Service downgraded Foamex L.P.'s Probability of
Default Rating to D from Caa2 and its Corporate Family Rating to
Ca from Caa2. Moody's also downgraded the company's first lien
term loan to Ca from Caa2 and its second lien term loan to C from
Caa3. The outlook is negative.
FREEPORT-MCMORAN: Posts $13.9 Billion Net Loss in 2008
------------------------------------------------------
Freeport-McMoRan Copper & Gold Inc. reported a fourth-quarter 2008
net loss applicable to common stock of $13.9 billion, compared
with net income of $414 million for the fourth quarter of 2007.
For the year ended December 31, 2008, FCX reported a net loss of
$11.3 billion, compared with net income of $2.8 billion in 2007.
The results for the year ended December 31, 2007, include the
operations of Phelps Dodge beginning March 20, 2007.
James R. Moffett, Chairperson of the Board, and Richard C.
Adkerson, President and Chief Executive Officer, said, "We are
taking decisive actions to respond to the currently weak global
economic conditions so that our company is positioned to operate
on a lean, efficient and low-cost basis while preserving our
valuable resources and growth opportunities for the future. We
have a portfolio of assets and an experienced team which enable us
to operate effectively during varying market conditions. Our
long-lived reserves, leading market positions in copper and in
molybdenum, significant gold production, and attractive growth
opportunities in an industry where supply growth has been
constrained will enable us to benefit as the world's economies
improve. Our Grasberg mine with its significant production of
high-grade copper and gold ore provides the foundation for
sustaining our assets for future success."
Revised Operating Plans
Commodity prices declined dramatically during the fourth quarter
of 2008. After averaging $3.61 per pound for the first nine
months of 2008, London Metal Exchange (LME) copper prices declined
to a four-year low of $1.26 per pound in December 2008 and
experienced unprecedented volatility over the last few months.
The LME copper price was $1.38 per pound at January 23, 2009.
Molybdenum prices averaged approximately $33 per pound in the
first nine months of 2008. Slowing demand for molybdenum,
principally in the metallurgical sector during the fourth quarter
of 2008 resulted in a sudden and sharp decline in molybdenum
prices. The Metals Week Dealer Oxide price declined to a multi-
year low of $8.75 per pound in November 2008 and was $9.30 per
pound as of January 26, 2009.
While FCX's long-term strategy of developing its resources to
their full potential remains in place, the severity of the decline
in commodity prices and the present economic and credit
environment limits FCX's ability to invest in growth projects and
required adjustments to its near-term plans. FCX announced a
series of actions in December 2008 and is today announcing further
changes to its near-term operating plans to reduce costs and
enhance cash flow performance in the context of weak economic
conditions and low commodity prices. FCX views the long-term
outlook for its business positively, supported by limitations on
supplies of copper and by the requirements for copper in the
world's economy; however, FCX is responding aggressively to the
sudden downturn in the copper and molybdenum markets and the
uncertain economic outlook.
The revised operating plans reflect reductions in costs associated
with lower operating rates and the effects of declines on energy
prices and other commodity-based input costs, and FCX's fourth-
quarter 2008 LCM inventory adjustments. In addition, FCX has
initiated significant reductions in exploration, research and
administrative costs and suspended its common stock dividend and
share purchase program.
FCX will continue to adjust its operating strategy as market
conditions change.
Fourth-quarter 2008 consolidated copper sales of 1,197 million
pounds were 36 percent higher than fourth-quarter 2007 sales of
878 million pounds and slightly higher than December 2008
estimates of 1,165 million pounds. Fourth-quarter 2008
consolidated gold sales of 462 thousand ounces were nearly three
times higher than fourth-quarter 2007 gold sales of 161 thousand
ounces and 16 percent higher than December 2008 estimates of 400
thousand ounces. Fourth-quarter 2008 consolidated sales of copper
and gold were higher than the year-ago period primarily because of
higher ore grades at Grasberg and were higher than December 2008
estimates because of slightly higher production and the timing of
shipments. Consolidated molybdenum sales of
12 million pounds in the fourth quarter of 2008 were lower than
fourth-quarter 2007 sales of 19 million pounds because of slowing
demand and revised mine plans for molybdenum production.
Consolidated unit net cash costs averaged $1.04 per pound in the
fourth quarter of 2008 and $1.16 for the year 2008. Cash costs
increased significantly during 2008, principally for energy and
sulfuric acid. Commodity-based input costs began to decrease in
the fourth quarter of 2008 as a result of the recent sharp
declines in prices of energy and other commodity-based input
costs.
North America Copper Mines
FCX operates five open-pit copper mines in North America (Morenci,
Bagdad, Sierrita and Safford in Arizona and Tyrone in New Mexico).
By-product molybdenum is produced primarily at Sierrita and
Bagdad. All of the North America mining operations are wholly
owned, except for Morenci. FCX records its 85 percent joint
venture interest in Morenci using the proportionate consolidation
method.
Consolidated copper sales in North America totaled 387 million
pounds in the fourth quarter of 2008, 22 percent higher than
fourth-quarter 2007 sales primarily because of additional
production from the Safford mine, which began operations in
December 2007.
In response to weak market conditions, during the fourth quarter
of 2008 and in January 2009, FCX revised its operating plans at
its North America copper mines. FCX's revised operating plans
reflect a 50 percent reduction in the mining and crushed leach
rates at Morenci, a 50 percent reduction in the mining and
stacking rates at the newly commissioned Safford mine, a 50
percent reduction in the mining rate at the Tyrone mine and a
suspension of mining and milling activities at the Chino mine.
The revised plans also include capital cost reductions, including
deferrals of incremental expansion projects at the Sierrita and
Bagdad mines and the planned restart of the Miami mine. The
revised plans at each of the operations incorporate the impacts of
lower energy, acid and other consumables; reduced labor costs and
a significant reduction in capital spending plans. These plans
will continue to be reviewed and additional adjustments may be
made as market conditions warrant.
For the year 2009, FCX expects sales from North America copper
mines to approximate 1.1 billion pounds of copper. By-product
molybdenum production is expected to total 28 million pounds in
2009. The effect of curtailed production rates in North America
is estimated to approximate 400 million pounds of copper in 2009,
an approximately 30 percent reduction compared to October 2008
estimates. If FCX continues to operate at reduced rates,
production in 2010 would be expected to decline by approximately
an additional 200 million pounds because of impacts of 2009 mining
activities to 2010 leaching operations.
North America unit net cash costs were higher in the 2008 periods
as compared with the 2007 periods primarily because of increases
in energy, labor, sulfuric acid, maintenance and other input
costs, combined with higher unit costs at Safford as the mine
began production in December 2007. In addition, unit net cash
costs for the year 2008 were impacted by higher mining rates and
lower grades at Morenci. A sharp decline in molybdenum prices in
the fourth quarter of 2008 resulted in lower by-product credits.
FCX's five operating North America copper mines have varying cost
structures because of differences in ore grades and ore
characteristics, processing costs, by-products and other factors.
During the fourth quarter of 2008, North America's unit net cash
costs at its operating copper mines ranged from less than $0.05
per pound at one mine to approximately $1.95 per pound at the
Morenci mine, which comprised about 45 percent of North America
copper production. The revised operating plans and reduced input
costs are expected to result in significantly lower costs in 2009.
Based on current operating plans and assuming achievement of
current 2009 sales estimates, an average molybdenum price of $9
per pound for 2009 and estimates for commodity-based input costs,
FCX estimates that its average unit net cash costs, including
molybdenum credits, for its North America copper mines would
approximate $1.17 per pound of copper for 2009 (unit net cash
costs for individual mines would range from approximately $0.90
per pound to $1.25 per pound of copper). The 2009 estimate is
benefiting from the operating plan revisions and revised input
costs, partly offset by draw downs of inventory with higher
average costs, which add approximately $0.04 per pound, and
incremental pension costs, which add approximately $0.03 per
pound. Unit net cash costs for 2009 would change by approximately
$0.02 per pound for each $1 per pound change in the average price
of molybdenum for 2009.
South America Copper Mines
FCX operates four copper mines in South America -- Cerro Verde in
Peru and Candelaria, Ojos del Salado and El Abra in Chile. These
operations are consolidated in FCX's financial statements, with
outside ownership reported as minority interests. FCX owns a
53.56 percent interest in Cerro Verde, an open-pit mine producing
both electrowon copper cathodes and copper and molybdenum
concentrates.
FCX owns 80 percent of the Candelaria and Ojos del Salado mining
complexes, which include the Candelaria open-pit and underground
mines and the Ojos del Salado underground mines. These mines use
common processing facilities to produce copper concentrates. FCX
owns a 51 percent interest in El Abra, an open-pit mine producing
electrowon copper cathodes.
During the fourth quarter of 2008 and January 2009, FCX revised
its operating plans at its South America copper mines in response
to weak market conditions. The revised operating plans for 2009
principally reflect the incorporation of reduced input costs and
the impacts of favorable foreign exchange rates on operating
costs; reduced mining rates at the Candelaria and Ojos del Salado
mines to reduce costs and improve average ore grades; a
significant reduction in capital spending plans, including a
deferral of the planned incremental expansion at Cerro Verde and a
delay in the sulfide project at El Abra; and reduced spending for
discretionary items. These items do not have a significant effect
on estimated 2009 production volumes but impact 2010 production by
approximately 100 million pounds. In response to market
conditions, FCX plans to temporarily curtail the molybdenum
circuit at Cerro Verde, which produced 3 million pounds of
molybdenum in 2008.
For 2009, FCX expects South America sales of 1.4 billion pounds of
copper and 100 thousand ounces of gold. Volumes in 2009 are lower
than 2008 because of the impact of previously anticipated mining
of lower ore grades at Candelaria.
South America unit net cash costs for the fourth quarter of 2008
totaled $1.02 per pound, reflecting higher site production and
delivery costs offset by lower treatment charges compared with the
fourth quarter of 2007. South America unit net cash costs were
higher for the year 2008 compared with the year 2007 primarily
because of higher input costs, including energy, labor and
supplies. These increases were partly offset by increased
production, favorable by-product credits and lower treatment
charges.
FCX's four South America copper mines have varying cost structures
because of differences in ore grades and ore characteristics,
processing costs, by-products and other factors. During the
fourth quarter of 2008, unit net cash costs for FCX's South
America copper mines ranged from $0.85 per pound to $1.45 per
pound. The Cerro Verde mine, which comprises approximately 45
percent of South America production, had a unit net cash costs of
$0.85 per pound in the fourth quarter of 2008.
Assuming achievement of current 2009 sales estimates and estimates
for commodity-based input costs, FCX estimates that its average
unit net cash costs, including gold and molybdenum credits, for
its South America copper mines would approximate $1.00 per pound
of copper for 2009 (unit net cash costs for individual mines would
range from approximately $0.90 per pound to $1.25 per pound of
copper). South America unit site production and delivery costs
for 2009 reflect reduced input costs and currency exchange rates
partly offset by the mining of lower ore grades in 2009 compared
with 2008.
Indonesia Mining
Through its 90.64 percent owned subsidiary PT Freeport Indonesia
(PT-FI), FCX operates the world's largest copper and gold mine in
terms of reserves at its Grasberg operations in Papua, Indonesia.
Indonesia copper and gold sales in the fourth quarter of 2008 were
higher than in the fourth quarter of 2007 as a result of mining in
a higher ore grade section of the Grasberg open pit, as planned.
At the Grasberg mine, the sequencing in mining areas with varying
ore grades causes fluctuations in the timing of ore production,
resulting in varying quarterly and annual sales of copper and
gold. After mining in a relatively low-grade section of the open
pit in the last half of 2007 and first half of 2008, FCX is
currently mining in a high-grade section which is expected to
continue throughout 2009.
FCX expects Indonesia sales of 1.3 billion pounds of copper and
2.1 million ounces of gold for the year 2009, compared with
1.1 billion pounds of copper and 1.2 million ounces of gold for
2008.
PT-FI's unit net cash costs, including gold and silver credits,
averaged $0.55 per pound for the fourth quarter of 2008, compared
with $1.39 per pound for the fourth quarter of 2007. The lower
unit net cash costs in 2008 primarily reflected higher copper and
gold volumes and higher gold prices. Unit site production and
delivery costs will vary with fluctuations in production volumes
because of the primarily fixed nature of PT-FI's cost structure.
FCX expects PT-FI's 2009 unit net cash costs to be significantly
lower than 2008 levels because of higher gold volumes and reduced
commodity-based input costs. Assuming achievement of current 2009
sales estimates, average gold prices of $800 per ounce for 2009
and revised estimates for energy, currency exchange rates and
other cost factors, FCX expects PT-FI's average unit net cash
costs per pound to approximate zero for 2009. Unit net cash costs
for 2009 would change by approximately $0.08 per pound for each
$50 per ounce change in the average price of gold for 2009.
Cash, Debt, and Financing Transactions
At December 31, 2008, FCX had consolidated cash of $872 million.
Net of minority interests' share, taxes and other costs, cash
available to parent company is $454 million:
December 31, 2008
-----------------
Cash at domestic companies $112 (a)
Cash from international operations 760
Total consolidated cash 872
Less: Minority interests' share (267)
Cash, net of minority interests' share 605
Taxes and other costs if distributed (151)
Net cash available to parent company $454
a. Includes cash at FCX's parent and North America mining
operations.
At December 31, 2008, FCX had $7.4 billion in debt. At
December 31, 2008 FCX had $150 million of borrowings and
$74 million of letters of credit issued under its revolving credit
facilities, resulting in total availability of approximately $1.3
billion. FCX plans to use its credit facility from time to time
during 2009 for working capital and short-term funding
requirements but does not intend to use the facility for long-term
funding items.
FCX has no significant debt maturities in the near-term.
Year (in millions)
----
2009 $ 67
2010 10
2011 135
----
Total 2009 - 2011 $212
===
In December 2008, in privately negotiated transactions, FCX
induced conversion of 0.3 million shares of its 5[1/2]%
Convertible Perpetual Preferred Stock with a liquidation
preference of $268 million into 5.8 million shares of FCX common
stock. To induce the conversion of these shares, FCX issued to
the holders an additional aggregate 1.0 million shares of FCX
common stock valued at $22 million. FCX recorded a $22 million
charge to preferred dividends in the fourth quarter of 2008.
Preferred dividend savings resulting from these transactions will
total approximately $15 million per annum.
Outlook
FCX's revised operating plans result in reductions of 400 million
pounds of copper in 2009 (9 percent) and 800 million pounds of
copper in 2010 (17 percent) compared to October 2008 estimates.
Projected sales volumes for the first quarter of 2009 approximate
990 million pounds of copper, 500 thousand ounces of gold and
13 million pounds of molybdenum. The achievement of FCX's sales
estimates will be dependent on the achievement of targeted mining
rates, the successful operation of production facilities, the
impact of weather conditions and other factors.
Using estimated sales volumes for 2009 and assuming 2009 average
prices of $1.50 per pound of copper, $800 per ounce of gold and $9
per pound of molybdenum, FCX's consolidated operating cash flows,
net of an estimated $0.6 billion of working capital requirements,
would approximate $1.0 billion in 2009. Working capital
requirements principally involve the timing of settlements with
customers on 2008 provisionally priced sales. The impact on FCX's
2009 operating cash flows would approximate $260 million for each
$0.10 per pound change for copper,
$60 million for each $50 per ounce change for gold and
$50 million for each $1 per pound change for molybdenum. FCX's
capital expenditures are currently estimated to approximate
$1.3 billion for 2009 and $1.0 billion for 2010.
FCX expects to fund its capital spending programs and working
capital requirements through operating cash flows, available cash
and credit facilities. In addition, FCX may raise additional debt
and/or equity capital depending on terms and market conditions.
About Freeport-McMoran
Headquartered in Phoenix, Arizona, Freeport-McMoRan Copper & Gold
Inc. (NYSE: FCX) -- http://www.fcx.com/-- is an international
mining company that operates large, long-lived, diverse assets
with significant proven and probable reserves of copper, gold and
molybdenum. FCX has a portfolio of operating, expansion and
growth projects in the copper industry and is the producer of
molybdenum. The Grasberg mine in Indonesia, the world's largest
copper and gold mine in terms of reserves, is the company's key
asset. Freeport-McMoRan also operates significant mining
operations in North and South America and is developing the world-
class Tenke Fungurume project in the Democratic Republic of Congo.
The completion of Freeport-McMoran's acquisition further expands
the company's global operations. The former Phelps Dodge Corp.
has mining operations in Chile, Peru, Colombia, Venezuela and
Ecuador, among others.
* * *
As reported by the Troubled Company Reporter on April 9, 2008,
Fitch Ratings upgraded its rating on Freeport-McMoRan Copper &
Gold Inc.'s convertible preferred stock to 'BB' from 'BB-'.
Fitch posted on its Web site:
Freeport-McMoRan
Convertible Preferred Stock
Maturity Date Currency Original Amount Coupon Ratings
Rate Long Term
01-MAY-2010 US$ 2,500,000,000 6.75% BB
N/A US$ 1,100,000,000 5.5% BB
N/A US$ -- 5.5% BB
As reported by the Troubled Company Reporter on Feb. 21, 2008,
Moody's Investors Service upgraded Freeport's corporate family
rating to Ba1 from Ba2, and its rating on $6.0 billion of senior
unsecured notes to Ba2 (LGD5, 74%) from Ba3.
FRONTIER AIRLINES: Court Approves FAPA Restructuring Agreement
--------------------------------------------------------------
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern
District of New York authorized Frontier Airlines Inc. and its
affiliates to perform under their Restructuring Agreement with
Frontier Airlines Pilots Association, which was ratified by the
FAPA membership on January 5, 2009.
Frontier and FAPA leaders reached the Agreement in December 2008,
to effectuate the modified terms in the Union's collective
bargaining agreement with the airline, which extends certain wage
and benefit concessions through December 2011.
Terms of the Ratified Restructuring Agreement
The Restructuring Agreement provides for Frontier pilots' wage
reductions that vary over time, specifically:
Compensation Period Pay Rate
------------------- --------
01/20/2009 to 01/05/2011 reduced by 10%
01/20/2011 to 07/05/2011 reduced by 7% for all pilots with
at least one year of service
07/20/2011 to 01/05/2012 reduced by 4% for all pilots with
at least one year of service
First Officers, while on the first step of the First Officer pay
scale, will have their hourly rate reduced by 1% with respect to
the First Compensation Period.
Commencing with the paycheck for January 20, 2012, hourly rates
for all pilots with at least one year of service with Frontier
will be restored to the hourly rates.
Under the Restructuring Agreement, FAPA will be granted an
allowed general non-priority unsecured claim for $28,957,432 in
the Debtors' cases pursuant to Section 502 of the Bankruptcy
Code. The FAPA Claim is not subject to reconsideration under
Section 502 or otherwise, and is inclusive of the claim asserted
by the Union under an interim wage agreement in October 2008.
The Debtors provided the relevant documents and agreements to the
Statutory Committee of Unsecured Creditors. A full-text copy of
the FAPA Restructuring Agreement is available for free at
http://bankrupt.com/misc/FAPARestructuringPact.pdf.
The Restructuring Agreement provides for reductions in pay and
benefits of Frontier pilots, which, according to the Debtors, will
result in labor cost savings of approximately $25 million over the
duration of the Agreement.
In its order, the Court granted FAPA an allowed general non-
priority unsecured claim for $28,957,432 in the Debtors' cases
pursuant to Section 502 of the Bankruptcy Code. The Union asserts
the FAPA Claim on account of the concessions it made to the
Debtors under an interim wage agreement in October 2008, and the
Restructuring Agreement.
FAPA will have the sole authority and responsibility to determine
the manner of allocation among pilots on account of the FAPA
Claim. In this regard, no FAPA-represented pilot will have any
claim or cause of action on account of the FAPA Interim Agreement
or the FAPA Restructuring Agreement.
Prior to Judge Drain's approval of the Restructuring Agreement,
the Debtors certified that no objections were filed with the
Court in relation to their request.
About Frontier Airlines Inc.
Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provides air transportation
for passengers and freight. It operates jet service carriers
linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities
in Mexico, and 1 city in Canada, as well as provide service from
other non-hub cities, including service from 10 non-hub cities to
Mexico.
Frontier Airlines and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.
08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh
R. McCullough, Esq., at Davis Polk & Wardwell, represent the
Debtors in their restructuring efforts. Togul, Segal & Segal
LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.
Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Frontier Airlines Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
FRONTIER AIRLINES: Plan Exclusivity Periods Extended Until June 4
-----------------------------------------------------------------
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern
District of New York extended Frontier Airlines and its debtor-
affiliates' exclusive periods to:
(i) file a plan of reorganization through June 4, 2009; and
(ii) solicit and obtain acceptances of that plan through
August 4, 2009.
Prior to the Court's entry of its order, Damian S. Schaible,
Esq., at Davis Polk & Wardwell, in New York, certified to the
Court that as of January 13, 2009, no answer, objection or other
responsive pleading to the Debtors' request have been filed.
The Debtors sought the extension to avoid the necessity
of having to formulate a plan of reorganization prematurely and
to ensure that their ultimate plan of reorganization best
addresses the interests of the Debtors, their employees,
creditors and estates, Marshall S. Huebner, Esq., at Davis Polk &
Wardwell, in New York, told the Court at a hearing.
Specifically, Mr. Huebner said, an extension of the Debtors'
Exclusive Periods is required to enable them to:
(a) continue to refine and implement their business model to
deliver both a more efficient cost structure and future
revenue growth, so that they can compete effectively
within the commercial passenger aviation industry;
(b) finalize implementation of their successful restructuring
initiatives;
(c) finish the process of analyzing, rationalizing and, where
appropriate, renegotiating their executory contracts and
related obligations;
(d) continue the evaluation and reconciliation of the more
than 1,400 proofs of claim that have been filed in the
Chapter 11 cases;
(e) complete their work with various potential liquidity
providers to secure adequate liquidity to permit emergence
from Chapter 11; and
(f) develop a plan of reorganization reflecting their
Initiatives.
Frontier Airlines has said it is confident that its reduced fleet
and network, and its strong focus on its Denver base, will enable
it to emerge from Chapter 11 in spring this year, David Field of
Airline Business reported.
The Company's vice-president of planning and revenue management,
Tom Bacon, said that to survive and plot out a successful
reorganization, Frontier primarily trimmed network and fleet, and
launched a new approach to pricing. Specifically, Mr. Bacon said,
the airline launched an innovative fare structure in December,
which bundles up its various ancillary services into three tiers.
The tiers differ according to what the passenger pays to get, like
movies, checked bags, refundability.
Mr. Bacon further noted that Frontier made Denver "a stronger
hub," with easy connections through adjusted schedules. However,
the airline had to strategize and trimmed 17% of its Denver
departures. "We had to pull back from a number of cities and
we've become much more Denver-focused," he said. "We ended a
number of the longer-distance routes, and also pulled out of
markets that just could not support service at oil prices as high
as they were."
Extraordinary customer loyalty was also a major factor in the
airline's survival, Mr. Bacon pointed out.
Frontier CEO Sean Menke also told The Denver Post that Frontier
was able to cut costs through:
* a three-year pay cut for pilots from which Frontier expects
savings of $25 million;
* eliminating five of 22 DIA gates and reducing ticket
counter and office space; and
* rejecting Lynx contract with Republic Airways for annual
savings of $20 million.
However, Mr. Menke admitted that the organization needs to
diversify its revenue streams because having all their eggs in
the Denver basket isn't a viable strategy, The Post reports.
Frontier is negotiating with AirTran for possible expansions of
their marketing agreement, and the airline may consider flying
its regional carrier, Lynx, as a regional carrier for other
airlines, Mr. Menke pointed out. He clarified that Frontier "is
not in merger talks," says The Post.
The paper further noted that Mr. Menke's immediate concern is
lining up exit financing to get Frontier out of bankruptcy. In
line with this, says Chris Walsh of Rocky Mountain News, the
airline is starting to meet with potential investors and
partners.
The airlines has also tweaked its severance plan ahead of its big
push to exit bankruptcy, outlining a specific circumstance in
which employees won't be eligible for extended pay and benefits,
says Mr. Walsh. Workers who receive "a substantially similar
position" at the company if it emerges from bankruptcy with a
different ownership structure, won't be offered severance,
according to a letter sent to staff last week, he says.
"This is simply a way to continue to provide protection to our
employees as well as limit some of the liability to the company
as we look for plan sponsors to emerge from bankruptcy," Frontier
Spokesman Steve Snyder said, according to the report.
In November 2008, Frontier had a net profit of $2.9 million, its
first profitable month since plunging into bankruptcy. Frontier
also had the fewest complaints of any airline in the industry
during November 2008 as measured in the Department of
Transportation's Monthly "Air Travel Consumer Report," according
to a company statement.
The DOT November 2008 report, released on January 14, 2009,
details the operational performance of the country's 19 largest
air carriers, including the 11 recognized major airlines.
Frontier ranked third among all airlines for lowest mishandled
bag rate in November, marking the fifth consecutive month in
which Frontier has ranked among the top five major carriers for
fewest delayed bags.
The carrier also ranked third among the major carriers in overall
flight completion performance, or fewest flight cancellations,
with a 99.76% completion factor. Frontier reported no flights on
the DOT's list of chronically delayed or canceled flights --
meaning delayed or canceled over 70% of the time.
"You've got to give Frontier, its management and its people all
the credit in the world," said George Hamlin of ACA Associates, a
New York-based airline consulting firm, reports The Post. "The
fact it's still there to compete says a lot about the spirit of
the enterprise."
About Frontier Airlines Inc.
Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provides air transportation
for passengers and freight. It operates jet service carriers
linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities
in Mexico, and 1 city in Canada, as well as provide service from
other non-hub cities, including service from 10 non-hub cities to
Mexico.
Frontier Airlines and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.
08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh
R. McCullough, Esq., at Davis Polk & Wardwell, represent the
Debtors in their restructuring efforts. Togul, Segal & Segal
LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.
Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Frontier Airlines Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
FRONTIER AIRLINES: Seeks More Time to Decide on Unexpired Leases
----------------------------------------------------------------
Frontier Airlines and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to:
(i) authorize the assumption of unexpired leases of non-
residential real property; and
(ii) extend the time period during which the Debtors may assume
or reject non-residential real property leases, as
consented by the Lessors.
A hearing to consider the Debtors' request is scheduled for
February 4, 2009. Objections, if any, must be filed by
January 27.
Timothy E. Graulich, Esq., at Davis Polk & Wardwell, in New York,
relates that the Debtors have expended substantial effort to
review each of the Remaining Unexpired Leases, which process has
involved:
-- reviewing the terms of the Leases;
-- assessing their market value;
-- evaluating the feasibility and cost of moving certain of
the Debtors' operations and the potential impact of the
relocation on the Debtors' businesses;
-- evaluating the potential economic impact of Assumption or
Rejection; and
-- evaluating the Remaining Unexpired Leases in the context of
the ongoing development of the Debtors' fleet and overall
business plan.
Section 365(d)(4) of the Bankruptcy Code provides the Debtors with
an initial 120-day period to assume or reject unexpired leases of
non-residential real property. The Debtors' initial Lease
Decision Deadline ended on August 8, 2008. In July 2008, the
Debtors sought and obtained the first extension of an additional
90 days, through and until November 6, 2008, to determine whether
to assume or reject approximately 70 Unexpired Leases.
Mr. Graulich adds that prior to the expiration of the First
Extended Lease Decision Deadline, the Debtors assumed 21, and
rejected three Initial Leases. However, the Debtors needed
additional time to review 33 more Leases.
Mr. Graulich notes that Section 365(d)(4)(B)(ii) of the
Bankruptcy Code permits the Court to grant an additional
extension beyond the maximum 90-day extension of the statutory
120-day Lease Decision Deadline "upon prior written consent of
the lessors."
Mr. Graulich says to allow them additional time to determine the
optimal treatment of the Remaining Unexpired Leases, the Debtors
intend to obtain before February 4, 2009, the consent of each of
the lessors for the Remaining Leases to a further extension of
the Lease Decision Deadline to February 6, 2009.
Assumed Leases
In connection with their review of the Remaining Unexpired
Leases, the Debtors have determined to assume 24 Leases effective
as of February 9, 2009, and pay corresponding cure amounts.
A complete list of the Assumed Leases is available for free at:
http://bankrupt.com/misc/Frontier_24AssumedLeases.pdf
Mr. Graulich adds that certain of the Assumed Leases may have
realizable value for the Debtors in the market. To preserve and
maximize this potential market value, the Debtors expressly
reserve the right to sell and assign each Assumed Lease at a
future date pursuant to Sections 363 and 365(f) of the Bankruptcy
Code. The Debtors also reserve the right to modify any of their
Assumption decision, including the redesignation of any of the
Assumed Leases for rejection, by filing with the Court and
serving on the Assumed Party a written notice. If a
Redesignation Notice is timely filed and served, the Redesignated
Assumed Lease will not be assumed and instead, will be rejected
as of the effective date identified in the Redesignation Notice.
If an Assumed Lease is not redesignated for rejection, the
Debtors nevertheless reserve the right to later reject the
Assumed Lease, which resulting damages will be limited by the
Section 503(b)(7) of the Bankruptcy Code.
About Frontier Airlines Inc.
Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provides air transportation
for passengers and freight. It operates jet service carriers
linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities
in Mexico, and 1 city in Canada, as well as provide service from
other non-hub cities, including service from 10 non-hub cities to
Mexico.
Frontier Airlines and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.
08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh
R. McCullough, Esq., at Davis Polk & Wardwell, represent the
Debtors in their restructuring efforts. Togul, Segal & Segal
LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.
Bankruptcy Creditors' Service, Inc., publishes Frontier Airlines
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Frontier Airlines Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
GENCO SHIPPING: Collateral Requirements Under $1.4BB Loan Relaxed
-----------------------------------------------------------------
Genco Shipping & Trading Limited has entered into an agreement to
amend the Company's $1.4 billion credit facility. DnB NOR Bank
ASA and Bank of Scotland PLC acted as the lead arrangers of the
ten-year facility.
Under terms of the amended 10-year $1.4 billion facility, the
collateral maintenance requirement will be waived until such time
that Genco is in a position to satisfy the covenant and certain
other conditions. Genco will continue to be able to borrow the
undrawn portion of the loan during the waiver period. Amounts
borrowed under the amended facility begin to reduce on March 31,
2009 at $12.5 million per quarter and will bear interest at LIBOR
plus 2.00%.
Genco plans to fund the three remaining Capesize newbuildings
expected to be delivered in 2009 with the undrawn portion of its
credit facility as well as cash flow from operations. Currently,
Genco has approximately 67% of its fleet's estimated available
days secured on contracts for the remainder of 2009.
Under the terms of the amended credit facility, the Company's cash
dividends and its share repurchases will be suspended, effective
immediately. Genco will be able to reinstate its dividend policy
and share repurchase program once the Company can represent that
it is in a position to again satisfy the collateral maintenance
covenant. The amendment to the credit facility places no further
restrictions on uses of the Company's cash.
John C. Wobensmith, CFO, commented, "During a time when Genco's
modern fleet continues to generate stable revenue and cash flow,
management has taken further important steps aimed at ensuring
that the Company emerges from the current market environment as a
leader in the industry. With the amendment of its $1.4 billion
credit facility, Genco has both solidified the Company's ability
to fund its remaining three vessels and increased its financial
flexibility. We believe that the favorable long-term fundamentals
in the drybulk industry remain intact and the Company is in a
strong position to seek opportunities to take advantage of the
current weakness in the drybulk industry for the benefit of
shareholders."
About Genco Shipping & Trading Limited
Genco Shipping & Trading Limited -- http://www.gencoshipping.com-
- transports iron ore, coal, grain, steel products and other
drybulk cargoes along worldwide shipping routes. Genco Shipping &
Trading Limited currently owns a fleet of 32 drybulk vessels
consisting of six Capesize, eight Panamax, four Supramax, six
Handymax and eight Handysize vessels, with an aggregate carrying
capacity of approximately 2,396,000 dwt. After the expected
delivery of three vessels the Company has agreed to acquire, Genco
Shipping & Trading Limited will own a fleet of 35 drybulk vessels,
consisting of nine Capesize, eight Panamax, four Supramax, six
Handymax and eight Handysize vessels, with an aggregate carrying
capacity of approximately 2,908,000 dwt.
GENERAL DATACOMM: Sept. 30 Balance Sheet Upside Down by $34.3MM
---------------------------------------------------------------
Howard S. Modlin, chairperson of the board and chief executive
officer, and William G. Henry, vice president for finance &
administration and chief financial officer, disclosed in a
regulatory filing dated January 13, 2009, that General DataComm
Industries, Inc., incurred a net loss and used a significant
amount of cash in its operating activities for the twelve months
ended September 30, 2008.
The company posted a net loss of $3,035,000 for the year ended
September 30, 2008, compared with net income of $3,582,000 for the
same period a year earlier.
"The company has no current ability to borrow additional funds.
It must, therefore, fund operations from cash balances, cash
generated from operating activities and any cash that may be
generated from the sale of non-core assets such as real estate and
others. The company has outstanding $19.5 million of debentures
and accrued interest thereon of $9.8 million which matured on
October 1, 2008. The liquidity risks raise substantial doubt
about the company's ability to continue as a going concern,"
Mr. Modlin and Mr. Henry said.
"Management has responded to its liquidity and cash flow risks in
2008 by selling its patents for proceeds of $4,000,000 while
retaining rights to use the patented technologies. In 2007,
senior debt was replaced with mortgage debt on more favorable
terms. In addition, management has implemented operational
changes: reducing certain salaries, restructuring the sales force,
increasing factory and office shutdown time, constraining expenses
and reducing the employee workforce. The company also continues
to pursue the sale or lease of its headquarters land and building
in Naugatuck, Connecticut.
As of Sept. 30, 2008, the company's balance sheet showed total
assets of $8,422,000 and total liabilities of $42,774,000,
resulting in total stockholders' deficit of $34,352,000.
A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?38a1
According to Mr. Modlin and Mr. Henry, the company's financial
statements for fiscal 2008 which follow have not yet been audited.
The company has limited financial resources and had been
negotiating audit fees with its audit firm. The negotiations
delayed the start of the fiscal 2008 audit and on January 5, 2009,
the audit firm terminated its audit relationship with the company.
The predecessor audit firm had not commenced its audit of the
company's 2008 year-end financial statements, but had completed
its reviews of the company's condensed financial statements
included in Form 10-Q for each of the first three quarters of
fiscal 2008. The company is in the process of appointing new
auditors. The predecessor audit firm's report on the company's
fiscal 2007 financial statements is expected to be reissued in
connection with the completion of the audit of the company's
fiscal 2008 financial statements.
About General DataComm
Based in Naugatuck, Connecticut, General DataComm Industries Inc.
(Other OTC: GNRD.PK) -- http://www.gdc.com/-- provides secure,
NEBS-compliant networking for telcos, governments and businesses.
GDC's solutions help customers to bridge technologies, maximize
their investments in existing voice and data networks, and
transition to the newest network architectures. GDC's product
offerings enable legacy and DSL network access; bandwidth
management, multiprotocol label switching (MPLS), voice over IP
(VoIP), Ethernet, power over Ethernet (PoE), and wireless
networking, and are supported by services for network
installation, maintenance, operations, repair, enterprise security
management and complete network outsourcing.
Going Concern Doubt
Eisner LLP, in New York, expressed substantial doubt about General
DataComm Industries Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Sept. 30, 2007. The auditing firm reported that
the company has both a working capital and stockholders' deficit
at Sept. 30, 2007, and has no current ability to obtain new
financing.
GENERAL MOTORS: Under Pressure to Complete Deal with Bondholders
----------------------------------------------------------------
General Motors Corp. is under pressure to reach a deal with its
bondholders. The Financial Times notes that under the terms of a
$13.4 billion loan granted by the Treasury, GM must agree with a
group of bondholders by February 17 on a plan to cut debt by at
least two-thirds -- via conversion to equity, new debt or both.
It has until April 30 to implement a deal, according to the
report.
As reported in the Troubled Company Reporter on Jan. 22, Pacific
Investment Management Co., a.k.a. Pimco, has left an investor
committee negotiating with General Motors to exchange debt for
shares. Bloomberg quoted Pimco's chief investment officer Bill
Gross as saying, "We're just not good committee members. We have
the interests of our clients more at heart than the interests of
particular corporations or even the government, I guess, so it's
best that we simply look at the situation from afar as opposed to
from inside."
Bloomberg reported that Pimco is one of the biggest holders of GM
bonds, behind Franklin Resources Inc., Capital Research &
Management Co. and Fidelity Investments. According to Bloomberg,
Pimco owns more than $138 million of the debt, and that its
largest holding is EUR39 million of GM's EUR1.5 billion of 8.375%
bonds due in 2033.
According to Bloomberg, Pimco broke in December an agreement to
join bondholders in GMAC LLC's $38 billion debt swap. Citing a
person familiar with the matter, Bloomberg states that the
10-member GM bondholder committee overlaps with the GMAC group.
Pimco, Bloomberg relates, withdrew from its agreement with a
committee of GMAC bondholders to swap their debt for as little as
60 cents on the dollar. About 59% of the bonds were exchanged
without Pimco's participation, the report states.
Bloomberg states that Pimco's withdrawal means that the company
may gain less information from other investors or have a smaller
influence in negotiations with GM. The report says that Pimco's
resignation from the committee may not hinder GM's restructuring.
GM CEO Rick Wagoner, according to the report, said last week that
it was too early to say how GM would work with creditors to win
their assent in reducing debt.
According to Bloomberg, GM needs to cut two-thirds of its
$27.5 billion in unsecured public debt and is negotiating with the
committee of creditors as part of an effort to secure loans from
the government.
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units. GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela. GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.
As reported in the Troubled Company Reporter on Nov. 10, 2008,
General Motors Corporation's balance sheet at Sept. 30, 2008,
showed total assets of US$110.425 billion, total liabilities of
US$170.3 billion, resulting in a stockholders' deficit of
US$59.9 billion.
* * *
As reported in the Troubled Company Reporter on Nov. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings, including
the corporate credit rating, on General Motors Corp. to 'CCC+'
from 'B-' and removed them from CreditWatch, where they had been
placed with negative implications on Oct. 9, 2008. S&P said that
the outlook is negative.
Fitch Ratings, as reported in the Troubled Company Reporter on
Nov. 11, 2008, placed the Issuer Default Rating of General Motors
on Rating Watch Negative as a result of the company's rapidly
diminishing liquidity position. Given the current liquidity level
of US$16.2 billion and the pace of negative cash flows, Fitch
expects that GM will require direct federal assistance over the
next quarter and the forbearance of trade creditors in order to
avoid default. With virtually no further access to external
capital and little potential for material asset sales, cash
holdings are expected to shortly reach minimum required operating
levels. Fitch placed these on Rating Watch Negative:
-- Senior secured at 'B/RR1';
-- Senior unsecured at 'CCC-/RR5'.
As reported in the Troubled Company Reporter on June 24, 2008,
DBRS has placed the ratings of General Motors Corp. and General
Motors of Canada Limited Under Review with Negative Implications.
The rating action reflects the structural deterioration of the
company's operations in North America brought on by high oil
prices and a slowing U.S. Economy.
GENERAL MOTORS: Will Lay Off 2,000 Workers, To Close Plants
-----------------------------------------------------------
Sharon Terlep and Jeff Bennett at The Wall Street Journal report
that General Motors Corp. said on Monday that it will lay off
2,000 more employees and will close most of its assembly plants
due to dropping sales.
WSJ relates that GM needs the downsizing even though it already
stopped production this month and cut output by 20% last year.
Citing a GM spokesperson, WSJ states that the layoffs will be
implemented in its small-car factory in Lordstown, Ohio, and its
plant in Michigan that makes crossovers including the GMC Acadia
and Buick Enclave. According to the report, the Lordstown factory
was operating on three shifts and overtime a few months ago as GM
tried to meet demand for small cars. One of two shifts in that
plant will be eliminated, the report states. About 800 employees
will be affected in Ohio, while 1,200 will be affected in
Michigan, the report says.
According to WSJ, GM will idle 14 of its 24 North American
assembly plans for a week or more in the second and third quarter.
WSJ quoted Morningstar Inc. analyst David Whiston as saying, "It
just shows how huge the uncertainty is in the market and how bad
the market is. You have to have production meet demand and there
is no sense to put more inventory out there and then go beg your
dealers to take more cars. The old model has been to overproduce
and then throw a lot of incentives in the market, but that just
kills your residual values."
WSJ reports that the production cuts are part of GM's recovery
plan.
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.
General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units. GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela. GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.
As reported in the Troubled Company Reporter on Nov. 10, 2008,
General Motors Corporation's balance sheet at Sept. 30, 2008,
showed total assets of US$110.425 billion, total liabilities of
US$170.3 billion, resulting in a stockholders' deficit of
US$59.9 billion.
* * *
As reported in the Troubled Company Reporter on Nov. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings, including
the corporate credit rating, on General Motors Corp. to 'CCC+'
from 'B-' and removed them from CreditWatch, where they had been
placed with negative implications on Oct. 9, 2008. S&P said that
the outlook is negative.
Fitch Ratings, as reported in the Troubled Company Reporter on
Nov. 11, 2008, placed the Issuer Default Rating of General Motors
on Rating Watch Negative as a result of the company's rapidly
diminishing liquidity position. Given the current liquidity level
of US$16.2 billion and the pace of negative cash flows, Fitch
expects that GM will require direct federal assistance over the
next quarter and the forbearance of trade creditors in order to
avoid default. With virtually no further access to external
capital and little potential for material asset sales, cash
holdings are expected to shortly reach minimum required operating
levels. Fitch placed these on Rating Watch Negative:
-- Senior secured at 'B/RR1';
-- Senior unsecured at 'CCC-/RR5'.
As reported in the Troubled Company Reporter on June 24, 2008,
DBRS has placed the ratings of General Motors Corp. and General
Motors of Canada Limited Under Review with Negative Implications.
The rating action reflects the structural deterioration of the
company's operations in North America brought on by high oil
prices and a slowing U.S. Economy.
HARLEY-DAVIDSON INC: Will Lay Off 11% of Work Force
---------------------------------------------------
Kerry E. Grace and Shirleen Dorman at The Wall Street Journal
report that Harley-Davidson Inc. said it will lay off 1,100
employees, about 11% of its work force, over the next two years.
According to WSJ, Harley-Davidson has been laying off employees
and cutting production as consumers cut back on their
discretionary spending, especially of big-ticket items, due to the
declining economy. Citing Harley-Davidson, WSJ states that 70% of
the latest layoffs -- including 800 hourly production employees
and 300 nonproduction, salaried positions -- will be implemented
in 2009.
WSJ relates that Harley-Davidson expects the layoffs to result in
$110 million to $140 million charges over 2009 and 2010. The
company, according to the report, expects to save $60 million to
$70 million per year through the layoffs.
Harley-Davidson's financial-services unit was hurt by credit
market woes, WSJ says. WSJ reports that Harley-Davidson said on
Friday that it was considering options to provide the unit with
the liquidity it needs. The report states that the unit helps
consumers finance their motorcycles and independent dealers their
inventory and played a big role in damping the prior quarter's net
profit. The unit, according to the report, has joined the Federal
Reserve's commercial paper facility, even as it uses other sources
to meet short-term funding needs.
2008 Results
Harley-Davidson reported decreased revenue, net income and
earnings per share for the fourth quarter of 2008 compared to the
year-ago quarter. The company said it plans lower motorcycle
shipments in 2009 and made public its overall strategy to deal
with the current economic environment.
"We have a strong core business anchored by a uniquely powerful
brand, but we are certainly not immune to the current economic
conditions," said Jim Ziemer, Chief Executive Officer, Harley-
Davidson. "We have a clear strategy to not only deal with the
economic conditions, but also strengthen our long-term operations
and financial results. We are executing that strategy with
confidence and conviction."
Fourth-Quarter and Full-Year Results
Revenue for the quarter was $1.29 billion compared to
$1.39 billion in the year-ago quarter, a 6.8% decrease. Net
income for the quarter was $77.8 million compared to
$186.1 million in the fourth quarter 2007, a decrease of 58.2%.
Fourth quarter diluted earnings per share were $0.34, a 56.4%
decrease compared to last year's $0.78.
Revenue for the full year 2008 was $5.59 billion compared to
$5.73 billion in 2007, a 2.3% decline. Full-year net income was
$654.7 million, compared to $933.8 million in 2007. Diluted
earnings per share were $2.79, a decrease of 25.4% compared to
$3.74 in 2007. The full-year results are below the previously
provided company guidance.
For the full year, wholesale shipments of Harley-Davidson(R)
motorcycles were 303,479 units, an 8.2% decrease compared to
330,619 units in 2007.
2009 Shipment Plan, Gross Margins
In the first quarter of 2009, the company plans to ship between
74,000 and 78,000 new Harley-Davidson motorcycles, a 3.0% to 8.5%
increase versus the first quarter of 2008. However, for the full
year 2009, the company plans to ship between 264,000 and 273,000
new Harley-Davidson motorcycles, a 10% to 13% reduction from 2008.
"We reduced our production levels prudently in 2008, helping our
dealers achieve lower inventory levels," said Mr. Ziemer, "and
we're going to show similar discipline in 2009. That's not only
critical for the health of our business, but for our dealers'
businesses, as well."
For the full year 2009, the company expects gross margins to be
between 30.5% and 31.5%, which compares to 34.5% for the full year
2008. The decrease is primarily due to an expected unfavorable
shipment mix versus 2008, the allocation of fixed costs over fewer
units, and expected unfavorable foreign currency exchange rates
versus 2008. Given the volatility of the current economic
environment, the company also indicated it would not provide EPS
guidance for 2009.
Strategy for the Current Economic Environment
The company is executing a three-part strategy that includes a
number of measures to deal with the impact of the recession and
worldwide slowdown in consumer demand, with the intent of
strengthening its operations and financial results going forward.
"Our strategy is focused on three critical areas: to invest in the
Harley- Davidson brand, get our cost-structure right, and obtain
funding for HDFS to help our dealers sell motorcycles and our
retail customers to buy them," said Mr. Ziemer.
Investing in the Brand
The company is reinforcing its support of the Harley-Davidson
brand, accelerating its ongoing marketing efforts to reach out to
emerging rider groups, including younger and diverse riders. In
addition, the company will continue to focus on product
innovations targeted at specific growth opportunities with its
strong core customer base and new riders.
In the U.S., the company said its Sportster(R) motorcycle trade-up
program is being well-received by dealers and consumers and is
generating new floor traffic during the winter months. The
program lets riders who already own a qualifying Sportster
motorcycle, or who buy a new Sportster motorcycle, receive back
the original Manufacturer's Suggested Retail Price value when they
trade up to a Harley-Davidson Big Twin or VRSC motorcycle at
participating dealerships.
Outside the U.S., the company will continue to support the
product, dealer development and marketing activities which, during
the last several years, have helped drive strong retail sales
growth.
"Among other things, the Harley-Davidson brand stands for strength
and resilience, and we're managing the business in this economic
climate in ways that we believe will build long-term value into
the brand," said Mr. Ziemer.
Adjusting the Cost Structure
As a result of motorcycle volume reduction and the company's
commitment to improve its cost structure, Harley-Davidson plans
to:
-- Consolidate its two engine and transmission plants in the
Milwaukee area into its facility in Menomonee Falls,
Wisconsin.
-- Consolidate paint and frame operations at its assembly
facility in York.
-- Close its distribution facility in Franklin,
consolidating Parts and Accessories and General
Merchandise distribution through a third party.
-- Discontinue its domestic transportation fleet operation.
The planned volume reduction and restructuring actions are
expected to result in the elimination of about 1,100 jobs over
2009 and 2010, including about 800 hourly production positions and
about 300 non-production, primarily salaried positions. About 70%
of the workforce reduction is expected to occur in 2009.
"We obviously need to make adjustments to address the current
volume declines," said Mr. Ziemer. "But we are also determined to
do that in a way that will make us more competitive for the long
term. Our management group will engage with union leaders,
through our partnering relationship, regarding these changes."
On a combined basis, Harley-Davidson expects the volume reduction
and changes to operations to result in one-time charges of
approximately $110 million to $140 million over 2009 and 2010, and
ongoing annual savings of approximately $60 million to
$70 million upon completion of the restructuring actions.
Obtaining Additional Funding for HDFS
The company said it is evaluating a range of options to provide
the necessary liquidity for the wholesale and retail lending
activities of Harley-Davidson Financial Services (HDFS).
"We're evaluating options in order to obtain the necessary funding
to support Harley-Davidson dealers and customers throughout the
year," said Tom Bergmann, Chief Financial Officer of Harley-
Davidson Inc., and interim President of HDFS.
Fourth Quarter Results for Motorcycles and Related Products
Segment
Revenue from Harley-Davidson motorcycles was $1.02 billion, a
decrease of $95.4 million or 8.5% versus the same period last
year. Shipments of Harley-Davidson motorcycles totaled 76,581
units, down 4,625 units or 5.7% compared to last year's fourth
quarter.
Revenue from Parts and Accessories (P&A), which consists of
Genuine Motor Parts and Genuine Motor Accessories, totaled
$152.1 million, lower by $13.1 million or 7.9% compared to the
year-ago quarter. Revenue from General Merchandise, which
consists of MotorClothes(R) apparel and collectibles, totaled
$69.0 million, a decline of $4.4 million or 6.0% from the year-
ago quarter.
Gross margin for the fourth quarter of 2008 was 31.6% of revenue
compared to 35.7% for the fourth quarter last year. This decrease
is primarily due to unfavorable shipment mix versus last year's
fourth quarter, higher product costs and the cost of the Sportster
motorcycle trade-up promotion. Fourth quarter operating margin
decreased to 12.0% from 18.1% in the fourth quarter of 2007,
reflecting the impact of lower revenue in the fourth quarter of
2008 compared to the year-ago period.
Motorcycle Retail Sales Data
During the fourth quarter, worldwide retail sales of Harley-
Davidson motorcycles decreased 13.1% compared to the fourth
quarter of 2007. U.S. retail sales of Harley-Davidson motorcycles
were down 19.6% for the quarter. The overall heavyweight
motorcycle market in the U.S. decreased 25.5% for the same period.
Retail sales of Harley-Davidson motorcycles grew 0.7% in the
company's international markets during the fourth quarter of 2008
compared to the year-ago period. Fourth quarter retail sales
increased 1.4% in Canada; the Europe Region was up 3.4%; the Asia
Pacific Region was down 8.9%; and the Latin America Region was up
28.0%.
For the full-year 2008, worldwide retail sales of Harley-Davidson
motorcycles declined 7.1% compared to the prior year. U.S. retail
sales of Harley-Davidson motorcycles declined 13.0% for the full
year while the U.S. heavyweight market was down 7.0% for the same
period. International retail sales of Harley-Davidson motorcycles
increased 10.3% for the full year 2008.
Full year data are listed in the accompanying tables.
Financial Services Segment
Harley-Davidson Financial Services (HDFS) recorded an operating
loss of $24.9 million for the fourth quarter, $63.5 million lower
than the operating income in the year-ago quarter. The decrease
is primarily due to a $35.1 million write-down of retained
securitization interests and a $28.4 million write-down to fair
value of finance receivables held for sale. The write-downs were
due to higher projected credit losses and an increase in the
discount rate used for the valuation of receivables.
"Our priorities for HDFS in 2009 are to continue to obtain funding
for its lending activities, manage credit losses in this
challenging environment and provide support to the Harley-Davidson
dealer network," said Mr. Bergmann.
Income Tax Rate
The company's fourth quarter effective income tax rate was 36.9%
compared to 35.5 in the same quarter last year. The 2008 fourth
quarter increase was primarily related to the tax implications of
MV Agusta, which the company acquired in August 2008.
Harley-Davidson, Inc.'s Twelve Month Results
For the full year of 2008, revenue totaled $5.59 billion, down
2.3% from last year's $5.73 billion. Shipments of Harley-Davidson
motorcycles were 303,479 units, compared to last year's 330,619
units. Harley-Davidson motorcycle revenue was
$4.28 billion, down 3.8% compared to last year's $4.45 billion.
P&A revenue was $858.7 million, down 1.1% compared to last year's
$868.3 million. General Merchandise revenue increased to
$313.8 million, a 2.8% increase compared to $305.4 million in the
full year of 2007.
HDFS operating income was $82.8 million, a 61.0% decrease from
last year's $212.2 million.
Cash Flow
Cash and marketable securities totaled $593.6 million as of
Dec. 31, 2008. Cash used by operations was $684.6 million, and
capital expenditures were $232.2 million during the full year of
2008.
For the full year of 2009, capital expenditures, excluding those
associated with restructuring activities, are expected to be
between $180 million and $200 million. The company expects
restructuring activities to result in additional capital
expenditures of $10 million to $20 million in 2009.
Stock Repurchase
The company did not repurchase shares in the fourth quarter of
2008. For the full year 2008, the company repurchased
6.4 million shares of its common stock at a cost of
$250.4 million. On Dec. 31, 2008, the company had 232.8 million
shares of common stock outstanding.
As of Dec. 31, 2008, there were 16.7 million shares remaining on a
board-approved share repurchase authorization. An additional
board-approved share repurchase authorization is in place to
offset option exercises.
About Harley-Davidson
Harley-Davidson, Inc., is the parent company for the group of
companies doing business as Harley-Davidson Motor Company (HDMC),
Buell Motorcycle Company (Buell), MV Agusta and Harley-Davidson
Financial Services (HDFS). Harley-Davidson Motor Company produces
heavyweight custom, touring and cruiser motorcycles. Buell
produces American sport performance motorcycles. MV Agusta
produces premium, high-performance sport motorcycles sold under
the MV Agusta(R) brand and lightweight sport motorcycles sold
under the Cagiva(R) brand. HDFS provides wholesale and retail
financing and insurance programs primarily to Harley-Davidson and
Buell dealers and customers.
As reported by the Troubled Company Reporter on Oct. 21, 2008,
Moody's downgraded three tranches from two vehicle loan
transactions issued by Harley-Davidson Motorcycle Trust which were
placed on review for possible downgrade on June 16, 2008. In all
cases, the decisions were prompted by current low enhancement
levels relative to the updated expected loss projections.
Complete rating actions are:
Issuer: Harley-Davidson Motorcycle Trust 2007-2
-- Cl. C, Downgraded to Ba2 from Baa2
Issuer: Harley-Davidson Motorcycle Trust 2007-3
-- Cl. B, Downgraded to A1 from Aa3
-- Cl. C, Downgraded to Ba2 from Baa2
HEATHERWOOD HOLDINGS: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------------------
Lauren B. Cooper at Birmingham Business Journal reports that
Heatherwood Holdings LLC has filed for Chapter 11 bankruptcy
protection in the U.S. Bankruptcy Court for the Northern District
of Alabama, as poor economy hurt golfing and private club
industries.
Birmingham Business relates that Heatherwood Holdings tried to
close. Citing Heatherwood Holdings members' attorney, the report
says that the group of members, incorporated as HGC Inc., secured
a temporary restraining order to keep the Heatherwood Country Club
open, despite declines in revenue and membership at the club and
18-hole golf course.
According to Birmingham Business, HGC sued Heatherwood Holdings in
December 2008, in response to notification that the club would
stop operating by the end of the month due to "insurmountable
obstacles."
Charles Denaburg, the attorney for Heatherwood Holdings, said that
the club wasn't profitable due to the poor economy, the declining
golf industry, and increased competition in new golf courses and
few new players, Birmingham Business states.
Birmingham, Alabama-based Heatherwood Holdings, LLC, owns and
operates Heatherwood Country Club, an 18-hole regulation length
golf course in Birmingham, Alabama. The company filed for Chapter
11 bankruptcy protection on Jan. 6, 2009 (Bankr. N.D. Ala. Case
No. 09-00076). Steven D. Altmann, Esq., at Najjar Denaburg, P.C.,
assists the company in its restructuring effort. The company
listed $1,000,001 to $10,000,000 in assets and $1,000,001 to
$10,000,000 in debts.
IDEARC INC: NYSE Removes Listing of Entire Class of Common Stock
----------------------------------------------------------------
The New York Stock Exchange LLC notified the Securities and
Exchange Commission of its intention to remove the entire class of
common stock of Idearc Inc. from listing and registration on the
Exchange at the on Jan. 2, 2009, pursuant to the provisions of
Rule 12d2-2 (b), because, in the opinion of the Exchange, the
Common Stock is no longer suitable for continued listing and
trading on the Exchange.
NYSE stated that the company has fallen below the Exchange's
continued listing standard for average closing price of less than
$1.00 over a consecutive 30 trading day period. The company's
Common Stock closed at $0.13 on Nov. 18, 2008.
1. The Exchange's Listed Company Manual, Sections 802.01C,
states, in part, that the Exchange would normally give
consideration to delisting a security of either a domestic
or non-U.S. issuer when: average closing price of a security
is less than $1.00 over a consecutive 30 trading-day period.
2. The Exchange, on Nov. 19, 2008, determined that the Common
Stock must be suspended from trading on Nov. 21, 2008, and
directed the preparation and filing with the Commission of
this application for the removal of the Common Stock from
listing and registration on the Exchange. The company was
notified by letter on Nov. 19, 2008.
3. Pursuant to the authorization, a statement was issued on
Nov. 19, 2008, and an statement was made on the 'ticker' of
the Exchange at the close of the trading session on
Nov. 19, 2008, and other various dates of the proposed
suspension of trading in the Common Stock. Similar
information was included on the Exchange's Web site.
Trading in the Common Stock on the Exchange was suspended
on Nov. 21, 2008.
4. The company had a right to appeal to the Committee for
Review of the board of directors of NYSE Regulation the
determination to delist the Securities, provided that it
filed a written request for a review with the Secretary of
the Exchange within ten business days of receiving notice
of delisting determination. The company did not file a
request within the specific time period.
About Idearc Inc.
Headquartered in Dallas, Texas, Idearc Inc. (NYSE: IAR) --
http://www.idearc.com/-- provides yellow and white page
directories and related advertising products in the United States
and the District of Columbia. Products include print yellow
pages, print white pages, Superpages.com, Switchboard.com and
LocalSearch.com, the company's online local search resources, and
Superpages Mobile, its information directory for wireless
subscribers.
The company is the exclusive official publisher of Verizon print
directories in the markets in which Verizon is currently the
incumbent local exchange carrier. The company uses the Verizon
brand on its print directories in its incumbent markets, as well
as in its expansion markets.
* * *
As reported in the Troubled Company Reporter on Nov. 10, 2008,
Moody's Investors Service has downgraded its $2,850 million senior
unsecured notes, due 2016 to Caa2, LGD5, 87% from B3, LGD5, 87%.
IN THE MOOD: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: In the Mood Restaurant Lounge Inc.
807 Stanley Avenue
Brooklyn, New York 11208
Bankruptcy Case No.: 09-40491
Chapter 11 Petition Date: January 23, 2009
Court: Eastern District of New York (Brooklyn)
Judge: Dennis E. Milton
Debtor's Counsel: Gary M. Kushner, Esq.
gkushner@fcsmcc.com
Forchelli, Curto, Schwartz, Mineo, et al.
330 Old Country Road
PO Box 31
Mineola, NY 11501
Tel: (516) 248-1700
Fax: (516) 248-1729
Estimated Assets: unstated
Estimated Debts: unstated
The Debtor did not file a list of 20 largest unsecured creditors.
The petition was signed by Dennis Mills, president.
INTERSTATE BAKERIES: Reaches Terms on Exit Funding With GE
----------------------------------------------------------
Interstate Bakeries Corporation has reached an agreement in
principle with GE Capital Corp. on key terms for a revised asset-
based revolving credit financing facility.
"We are now working diligently with GE Capital and our other
financing providers to finalize all documentation for our exit
financing. We are optimistic that we will emerge from Chapter 11
in the near future," said Craig Jung, CEO of IBC.
IBC's existing debtor-in-possession financing matures, and its
exit financing commitments expire, on February 9, 2009.
"Given today's challenging credit markets, our road to emergence
from Chapter 11 has been longer and more challenging than
anticipated, but we have now reached the final stretch," Mr. Jung
said. "While much work remains to be done to close our financing
transactions, we believe that our accord with GE Capital has
cleared the last significant obstacle to our emergence," he said.
"Negotiations with GE Capital over the past several days have been
constructive, and so I am optimistic we will have a timely
completion of this transaction."
IBC said it has filed a motion with the bankruptcy court seeking
approval to close on the amended terms of the revolving credit
facility, and that it expects the court to have a hearing on the
motion on Thursday, January 29, 2009.
IBC also cautioned that there can be no assurance that its exit
financing will close as expected.
About Interstate Bakeries
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh-baked
bread and sweet goods, under various national brand names,
including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and
Drake's(R). Currently, IBC employs more than 25,000 people and
operates 45 bakeries, as well as approximately 800 distribution
centers and approximately 800 bakery outlets throughout the
country.
The company and eight of its subsidiaries and affiliates filed for
chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6% senior subordinated convertible notes due Aug. 15, 2014) in
total debts.
The Debtors first filed their Chapter 11 Plan and Disclosure
Statement on Nov. 5, 2007. On Jan. 30, 2008, the Debtors received
court approval of the disclosure statement explaining their first
amended plan. IBC did not receive any qualifying alternative
proposals for funding its plan in accordance with the court-
approved alternative proposal procedures.
The Debtors, on Oct. 4, 2008, filed another Plan, which
contemplates IBC's emergence from Chapter 11 as a stand-alone
company. The filing of the Plan was made in connection with the
plan funding commitments, on Sept. 12, 2008, from an affiliate of
Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and
Monarch Master Funding Ltd.
On December 5, 2008, the Bankruptcy Court confirmed IBC's Amended
New Joint Plan of Reorganization. The plan was filed October 31,
2008. The exit financings that form the basis for the Plan are
reflected in corresponding debt and equity commitments.
KIMBALL HILL: Court Approves Addendum to RWC/HOME Agreement
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
approved a second addendum to a Membership Agreement entered into
by Kimball Hill, Inc., and its affiliates with Residential
Warranty Company, LLC, Western Pacific Mutual Insurance Company,
HOME/RWC of Texas and Warranty Underwriters Insurance Company.
The Debtors also obtained permission to assume the Membership
Agreement, as amended.
Before filing for bankruptcy, the Debtors obtained third-party
warranty insurance provided by RWC/HOME for home sales that
closed after April 18, 2008, to assure prospective homebuyers
that their warranty coverage would not be disrupted under any
circumstances. Pursuant to the Customer Programs Motion, the
Debtors provide all of their homebuyers with a standard limited
warranty referred to as "the 2+ Advantage Warranty." The 2+
Warranty obligates the Debtors to repair, replace, or monetarily
compensate their homebuyers for any part of a sold home that is
materially defective due to the Debtors' workmanship or
materials. "RWC/HOME's Warranty Insurance therefore was not
intended to replace the Debtors' warranty obligations, but
provided a backstop for wary homebuyers to rely on," Ray C.
Schrock, Esq., at Kirkland & Ellis LLP, in New York, maintains.
In light of the plan to wind-down their homebuilding operations,
the Debtors anticipate that they will be unable to continue
administering warranty claims on homes sold during the wind-down
period which are currently complete or under construction.
Accordingly, in late December 2008, the Debtors amended the
Membership Agreement and entered into a second addendum to the
Membership Agreement with RWC/HOME, a copy of which is available
at no charge at:
http://bankrupt.com/misc/Kimball_2ndAddendum_MembershipPact.pdf
Pursuant to the Second Addendum, the Debtors will enroll about
708 additional homes closed on or after December 31, 2008 in the
RWC/HOME Limited Warranty Program upon their completion and sale
to homebuyers. All Wind-Down Homes enrolled in the RWC/HOME
Limited Warranty Program will be covered by the 2+ Advantage
Warranty and the Debtors' standard ten-year warranty covering
major structural defects. In addition, RWC/HOME will continue to
honor any Warranty Claims and will provide warranty service to
those homes that closed after April 18, 2008.
Furthermore, the Debtors will pay RWC/HOME (a) an additional
$1,000,000 and (b) a rate of $500 for each Wind-Down Home
enrolled in the RWC/HOME Limited Warranty Program. The
$1,000,000 payment to RWC/HOME will be added to the current
$2,000,000 balance previously paid by the Debtors to RWC/HOME
under the first addendum to the Membership Agreement. In effect,
an aggregate of $3,000,000 will be available to satisfy all of
the Debtors' warranty obligations with respect to those homes
enrolled in the RWC/HOME Limited Warranty Program.
Additionally, the Debtors will not be responsible for reimbursing
RWC/HOME for any retained deductibles due under the Membership
Agreement prior to the Second Addendum. The Debtors will also
not be responsible for indemnifying the RWC/HOME for any claims,
losses, expenses, or damages that RWC/HOME may incur arising from
the Debtors' failure to perform their obligations under the
Membership Agreement prior to the Second Addendum, including any
breach of the Membership Agreement or the Debtors' obligations
contained in any warranty issued on any home enrolled in the
RWC/HOME Limited Warranty Program.
The Debtors told the Court that adequate assurance of future
performance or cure payments are not warranted under the
circumstances as no defaults exist under the Membership
Agreement.
About Kimbal Hill
Headquartered in Rolling Meadow, Illinois, Kimball Hill Inc. --
http://www.kimballhillhomes.com/-- is one of the largest
privately-owned homebuilders and one of the 30 largest
homebuilders in the United States, as measured by home deliveries
and revenues. The company designs, builds and markets single-
family detached, single-family attached and multi-family homes.
The company currently operate within 12 markets, including, among
others, Chicago, Dallas, Fort Worth, Houston, Las Vegas,
Sacramento and Tampa, in five regions: Florida, the Midwest,
Nevada, the Pacific Coast and Texas.
Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11
protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-
10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents
the Debtors in their restructuring efforts. The Debtors'
consolidated financial condition as of Dec. 31, 2007, reflected
total assets of $795,473,000 and total debts $631,867,000.
Kimball Hill filed a chapter 11 plan of liquidation on
December 2, 2008, which provides for the winding down of the
Debtors' business. The Plan has the support of the official
committee of unsecured creditors and the company's senior lenders.
Bankruptcy Creditors' Service, Inc., publishes Kimball Hill
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings of Kimball Hill, Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
KIMBALL HILL: Court Denies Nevada Plaintiffs' Bid to Lift Stay
--------------------------------------------------------------
Judge Susan Pierson Sonderby of the U.S. Bankruptcy Court for the
Northern District of Illinois denied the request by a group of
plaintiffs to lift the automatic stay to allow Kimball Hill Inc.
and its debtor-affiliates to participate at a January 30, 2009,
formal fairness hearing at Clark County District Court, in Las
Vegas, Nevada.
In February 2006, several residence owners of Las Vegas, Nevada,
sued Ipex, Inc., Ipex USA, LLC, and certain other parties in the
U.S. District Court of Clark County Nevada, in a construction
defect class action for alleged defective Kitec and PlumbBetter
piping systems and components resold, manufactured and
distributed by the Ipex Defendants. The Plaintiffs include,
among others, Tracie Quinterro and Eric Quinterro, Ladybeth and
Charles Panusis, Raul and Brenda Garcia, and Stephen and Sheila
Inferrera.
The Class sent a notice of defect to the Debtors in March 2008,
pursuant to the Nevada Revised Statutes. The Class has also
filed proofs of claim of about $13,000,000 on account of the
alleged defective plumbing.
Subsequently, the Class and Ipex Defendants executed a Class
Action Settlement and Release Agreement, which is expressly
conditioned on the dismissal of all current and future claims and
causes of action against the Defendants by non-settling parties
and non-parties arising from the Kitech and PlumbBetter plumbing.
District Court Judge Timothy Williams for the District of Nevada
has granted preliminary approval of the Ipex Settlement and
scheduled the fairness hearing for January 30, 2009, 9:00 a.m., at
Clark County District Court, Complex Litigation Center.
In its request, the Class asked the Court to modify the automatic
stay to allow:
(a) allow the Debtors to participate in the formal fairness
hearing;
(b) allow the Nevada Court to enter necessary findings,
judgment and order in the Nevada Class Action formal
fairness hearing, and to enter related dismissal orders,
including orders dismissing claims that the Debtors could
assert against the Ipex Defendants if the Nevada Court
makes the necessary filings; and
(c) rule that any findings, judgments and order entered by the
Nevada Court with respect to the Formal Fairness Hearing
will be deemed binding on the Debtors, provided, however,
that the Debtors' rights to appeal any findings and order
are preserved.
The Class said there is a strong probability they and the Ipex
Defendants will prevail on the merits at the Formal Fairness
Hearing.
Debtors Respond
The Debtors, however, asked the Court to reject the request.
While the Class Plaintiffs agree to dismiss all claims against
the Ipex Defendants, they are not proposing to withdraw their
claims against the Debtors notwithstanding that they are seeking
the Debtors' participation in the formal fairness hearing, Ray C.
Schrock, Esq., at Kirkland & Ellis LLP, in New York, pointed out.
Mr. Schrock said lifting the automatic stay is patently
prejudicial, contending that the proposed stay modification would
strip the Debtors and their successors of the right to pursue
claims against the Ipex Defendants without getting anything in
return. The Debtors' potential claims against the Ipex
Defendants are a valuable part of the Debtors' estates and should
be preserved for the benefit of the Debtors' creditors, he said.
The Class Plaintiff's unfounded assertions do no tip the balance
of hardships in favor of modifying the automatic stay, Mr.
Schrock said.
The Official Committee of Unsecured Creditors supported the
Debtors' arguments.
About Kimbal Hill
Headquartered in Rolling Meadow, Illinois, Kimball Hill Inc. --
http://www.kimballhillhomes.com/-- is one of the largest
privately-owned homebuilders and one of the 30 largest
homebuilders in the United States, as measured by home deliveries
and revenues. The company designs, builds and markets single-
family detached, single-family attached and multi-family homes.
The company currently operate within 12 markets, including, among
others, Chicago, Dallas, Fort Worth, Houston, Las Vegas,
Sacramento and Tampa, in five regions: Florida, the Midwest,
Nevada, the Pacific Coast and Texas.
Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11
protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-
10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents
the Debtors in their restructuring efforts. The Debtors'
consolidated financial condition as of Dec. 31, 2007, reflected
total assets of $795,473,000 and total debts $631,867,000.
Kimball Hill filed a chapter 11 plan of liquidation on
December 2, 2008, which provides for the winding down of the
Debtors' business. The Plan has the support of the official
committee of unsecured creditors and the company's senior lenders.
Bankruptcy Creditors' Service, Inc., publishes Kimball Hill
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings of Kimball Hill, Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
KIMBALL HILL: Court Okays FBG As Securities Voting Agent
--------------------------------------------------------
Kimball Hill, Inc., and its debtor-affiliates seek the authority
of the U.S. Bankruptcy Court for the Northern District of Illinois
to employ Financial Balloting Group LLC, as their securities
voting agent, retroactive to November 28, 2008, pursuant.
The Debtors has submitted to the Court a Joint Plan of
Reorganization and an accompanying Disclosure Statement. Ray C.
Schrock, Esq., at Kirkland & Ellis LLP, in New York, relates that
the solicitation of votes on the Debtors' Plan will be
complicated given the existence of publicly-traded debt issued
prepetition. Mr. Schrock explains that these complexities stem
from the fact that public securities often are held in a "Street
name" by a custodian such as a bank, broker, or other nominee,
rather than in the name of the beneficial owner. In most
instances, the identities of beneficial owners of public
securities entitled to receive notices and solicitation materials
are not easily known or determinable.
Accordingly, to ensure the solicitation of appropriate parties
and the accurate tabulation of ballots, the Debtors have
determined to retain the services of experienced personnel to
assist in the solicitation of holders of publicly-held
securities.
The only holders of claims based on publicly traded securities
entitled to vote on the Debtors' Plan are the beneficial holders
and nominees of the Debtors' 10 1/2% senior subordinated notes
due 2012 and issued pursuant to the senior subordinated notes
indenture, Mr. Schrock relates.
As securities voting agent, FBG will:
(a) advise the Debtors and their counsel on all aspects
regarding plan solicitation with respect to holders of
publicly-held securities, including timing issues,
solicitation issues, and voting and tabulation procedures;
(b) review the voting and tabulation procedures of the
disclosure statement, ballots and master ballots, and all
other relevant documents, specifically, as they may relate
to holders of publicly held securities;
(c) work with the Debtors to seek appropriate information from
The Depository Trust Company and the nominees under the
public debt issues to obtain appropriate information
necessary to solicit the votes of holders of publicly-held
securities;
(d) mail documents to any registered record holders of
securities, if any;
(e) coordinate the distribution of the Debtors' solicitation
package to "Street" name holders of debt securities by
forwarding the appropriate documents to the proxy
departments of the banks and brokerage firms holding the
securities, or their agent;
(f) distribute copies of the master ballots and instructions
to the appropriate nominees so that firms may cast votes
on behalf of beneficial owners of publicly-held debt
securities;
(g) prepare a certificate of service for filing in Court;
(h) handle requests for documents from parties-in-interest
with respect to publicly-held debt securities, including
brokerage firms, banks, and institutional holders;
(i) respond to telephone inquiries from security holders and
nominees regarding the disclosure statement and voting
procedures;
(j) make telephone calls to non-objecting beneficial owners or
registered holders of securities to confirm receipt of
plan documents and respond to questions about voting
procedures, as requested by the Debtors;
(k) receive and examine all ballots and master ballots and
date and time stamp the originals of all those ballots
upon receipt; and
(l) tabulate all ballots and master ballots cast by debt
holders received prior to the voting deadline in
accordance with established voting procedures, and prepare
a vote certification for filing with the Court.
For the contemplated services, the Debtors will pay FBG:
-- a project fee of $10,000 for acting as solicitation and
information agent for holders in "Street" name;
-- a fee between $1.75 and $2.25 per package, or $500 at the
minimum, for the assembly and mailing of solicitation
packages to registered record holders of bonds and any
other voting party;
-- a minimum charge of $2,000 to take up to 250 telephone
calls from security holders and other parties within a
30-day solicitation period, plus $8 per call in excess of
250 telephone calls;
-- a fee of $3,500 for notice mailings to holders of debt and
equity securities in "Street" name; and
-- a fee ranging between $0.50 and $0.65 per envelope for up
to two paper notices that fold into an envelope, or a $250
minimum fee, plus applicable consulting fees, for notice
mailings to any registered record holders of securities or
other individual parties.
In addition, FBG may also assist in:
* the review and development of materials, including the
Disclosure Statement, the Plan, ballots and master
ballots;
* the preparation of testimony and attendance at Court
hearings; and
* the preparation of affidavits, certifications, fee
applications, invoices, and reports.
The Debtors will pay FBG for these additional services based on
the firm's standard hourly consulting rates:
Professional Hourly Rate
------------ ------------
Executive Director $410
Director/Vice President $360
Senior Case Manager $300
Case Manager $240
Case Analyst $190
Programmer II $195
Programmer I $165
Clerical $65
The Debtors will also reimburse FBG for actual and necessary
expenses it incurred or will incur.
Mr. Schrock notes that FBG will be responsible for noticing,
balloting, tabulation, and solicitation with respect to the
Debtors publicly traded securities only. FBG's services,
therefore, are not duplicative with that of Kurtzman Carson
Consultants, the Court-approved claims, noticing, voting, and
solicitation agent in the Debtors' cases, he maintains.
In a declaration dated January 20, 2009, Jane Sullivan, executive
director of FBG, disclosed that her firm has dealings with Owen
Corning, Federal Express, Verizon and Sprint, all parties-in-
interest in the Debtors' cases, in matters unrelated to FBG's
representation of the Debtors. Ms. Sullivan assures the Court
that FBG is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The Court is set to consider the Debtors' request at a hearing on
February 3, 2009. Any objection must be filed no later than
January 29.
About Kimbal Hill
Headquartered in Rolling Meadow, Illinois, Kimball Hill Inc. --
http://www.kimballhillhomes.com/-- is one of the largest
privately-owned homebuilders and one of the 30 largest
homebuilders in the United States, as measured by home deliveries
and revenues. The company designs, builds and markets single-
family detached, single-family attached and multi-family homes.
The company currently operate within 12 markets, including, among
others, Chicago, Dallas, Fort Worth, Houston, Las Vegas,
Sacramento and Tampa, in five regions: Florida, the Midwest,
Nevada, the Pacific Coast and Texas.
Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11
protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-
10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents
the Debtors in their restructuring efforts. The Debtors'
consolidated financial condition as of Dec. 31, 2007, reflected
total assets of $795,473,000 and total debts $631,867,000.
Kimball Hill filed a chapter 11 plan of liquidation on
December 2, 2008, which provides for the winding down of the
Debtors' business. The Plan has the support of the official
committee of unsecured creditors and the company's senior lenders.
Bankruptcy Creditors' Service, Inc., publishes Kimball Hill
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings of Kimball Hill, Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
KIMBALL HILL: Disclosure Statement Approved; Plan Hearing March 9
-----------------------------------------------------------------
Judge Susan Pierson Sonderby of the U.S. Bankruptcy Court for the
Northern District of Illinois approved on January 21, 2009, the
Disclosure Statement explaining the Joint Plan of Reorganization
of Kimball Hill, Inc., and its debtor-affiliates and the Official
Committee of Unsecured Creditors. The Court found that the
Disclosure Statement prepared by Plan Proponents contains adequate
information pursuant to Section 1125(a) of the Bankruptcy Code
necessary for creditors to make an informed vote on the Plan.
Plan Amendment
The Debtors amended the Chapter 11 Plan and Disclosure Statement
on January 12, 2009, to reflect that they are a party to a real
property purchase and sale contract with K. Hovnanian Homes -
DFW, L.L.C. K. Hovnanian previously opposed the Plan to the
extent it lacked disclosure of the Hovnanian Contract. It noted
that the Contract was not listed in the Debtors' Schedules of
Assets and Liabilities previously filed with the Court.
A full-text copy of the Court-approved Disclosure Statement is
available for free at: http://bankrupt.com/misc/Kimball_DS.pdf
The Debtors also amended the Plan to clarify that no release
under the Plan injunction provision will be granted with respect
to claims that have been released or compromised under the Plan,
where the entities holding those released or compromised claims
are permanently enjoined from taking any actions against the
Debtor except to recover insurance proceeds against them in a
nominal capacity on condition that the Plan Administrator or
Liquidation Trust Administrator agrees.
A blacklined copy of the Kimball Hill Amended Plan is available
for free at:
http://bankrupt.com/misc/Kimball_AmendedPlan_Blackline.pdf
Any objections not otherwise settled, withdrawn or resolved are
overruled, the Court ruled.
A full-text copy of the Disclosure Statement Order is available
at for free at: http://bankrupt.com/misc/Kimball_DSOrder.pdf
Plan Solicitation Dates & Materials
Upon review, Judge Sonderby opined that the Plan, the Disclosure
Statement, and the Ballots and Master Ballots provide holder of
claims and other parties-in-interest sufficient notice with
respect to the release, exculpation and injunction provisions
contained in the Plan pursuant to Rule 3016(c) of the Federal
Rules of Bankruptcy Procedure.
The Court has established January 13, 2009, as the record date
for determining:
(a) holder of claims entitled to receive the solicitation
package in accordance with the solicitation procedures;
(b) holder of claims entitled to vote on the Plan; and
(c) whether claims have been properly transferred or assigned
pursuant to Rule 3001(e) of the Federal Rules of
Bankruptcy Procedure so that the assignee can vote as
holder of the claim.
The Court has also approved the proposed Solicitation Procedures
with respect to gathering votes for the Plan.
The Debtors will distribute or cause to distribute Solicitation
Packages to parties entitled to vote on the Plan by January 30,
2009. The Solicitation Package will contain:
1. a copy of the Court-approved Disclosure Order, the Plan,
exhibits to the Plan, and other supplements;
2. a copy of the Solicitation Procedures Order, together with
the Solicitation Procedures;
3. a cover letter describing the contents of the Solicitation
Package;
4. a letter from the Debtors' significant constituents urging
holders in each Voting Class to accept the Plan; and
5. the Confirmation Hearing Notice; and
6. the appropriate ballots and master ballots, and ballot
instructions, with a pre-addressed postage pre-paid return
envelope.
All Ballots and Master Ballots must be properly executed,
completed and delivered by (i) first class mail, (ii) overnight
courier or (iii) personal delivery so as to be actually received
by the voting and solicitation agent or the securities voting
agent no later than be 5:00 p.m., prevailing Pacific Time, on
February 27, 2009.
Ballots, Master Ballots and copies of the Plan and Disclosure
Statement need not be provided to:
-- holders of unclassified claims and holder of claims in
unimpaired classes, who are deemed to accept the Plan, as
these holders will receive the applicable non-voting status
notices in lieu of the solicitation package; and
-- holders of claims in impaired classes who will not receive
any distribution under the Plan and are thus conclusively
deemed to reject the Plan. They will only receive the
applicable non-voting status notice in lieu of the
solicitation package.
Confirmation Hearing
Parties who wish to object to the confirmation of the Plan must
filed a written formal objection no later than 5:00 p.m., Central
Time, on February 27, 2009. The Court will convene the
Confirmation Hearing on March 9, 2009 at 2:00 p.m., Central Time.
Exclusivity Extended
Judge Sonderby also extended the Debtors' exclusive period of
filing a Chapter 11 Plan through and including April 16, 2009;
and the Debtors' exclusive solicitation period with respect to
that Plan through and including June 16, 2009.
The Debtors have told the Court that they must maintain their
exclusive rights during this critical juncture to preserve the
stability of their bankruptcy cases.
Admin. Claims Bar Date Set
Judge Sonderby also established two administrative bar dates:
(a) February 27, 2009 as the first administrative bar date or
the deadline for filing administrative expense claims
arising on or after the Petition Date but before
January 16, 2009.
(b) May 4, 2009 as the second administrative bar date or the
deadline for filing administrative expense claims arising
between January 16, 2009 and the effective date of a
confirmed Chapter 11 plan in the Debtors' cases.
Any creditor who is required to file an administrative claim but
fails to do so by the applicable deadlines will not be treated as
a holder of an administrative expense claim against the Debtors,
the Court ruled. The Court also approved the Administrative
Claim form.
About Kimbal Hill
Headquartered in Rolling Meadow, Illinois, Kimball Hill Inc. --
http://www.kimballhillhomes.com/-- is one of the largest
privately-owned homebuilders and one of the 30 largest
homebuilders in the United States, as measured by home deliveries
and revenues. The company designs, builds and markets single-
family detached, single-family attached and multi-family homes.
The company currently operate within 12 markets, including, among
others, Chicago, Dallas, Fort Worth, Houston, Las Vegas,
Sacramento and Tampa, in five regions: Florida, the Midwest,
Nevada, the Pacific Coast and Texas.
Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11
protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-
10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents
the Debtors in their restructuring efforts. The Debtors'
consolidated financial condition as of Dec. 31, 2007, reflected
total assets of $795,473,000 and total debts $631,867,000.
Kimball Hill filed a chapter 11 plan of liquidation on
December 2, 2008, which provides for the winding down of the
Debtors' business. The Plan has the support of the official
committee of unsecured creditors and the company's senior lenders.
Bankruptcy Creditors' Service, Inc., publishes Kimball Hill
Bankruptcy News. The newsletter tracks the Chapter 11
proceedings of Kimball Hill, Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
KV PHARMACEUTICAL: Suspends Manufacturing & Shipping Operations
---------------------------------------------------------------
KV Pharmaceutical Company has voluntarily suspended the
manufacturing and shipping of all of its products, other than
certain products that it distributes but does not manufacture.
The suspension began on January 22, 2009.
Additionally, the company will conduct a voluntary recall of most
of its products. The scope and depth of the recall are currently
under discussion with the U.S. Food and Drug Administration (FDA).
These actions are being taken in cooperation with the previously
announced inspection by the FDA of the company's operations and
inventory, which began in December. To resume shipments as
quickly as possible, the company is working with a third-party
consulting group, Lachman Consultant Services, Inc., to review
manufacturing and packaging processes.
"The new leadership team at KV realizes that we are in a very
challenging time for the company," said interim President and CEO
David Van Vliet. "We are committed, however, to resolving these
issues and resuming production as soon as possible by working
closely with the FDA and the independent experts from Lachman
Consultant Services."
KV expects these actions to have a material adverse effect on its
financial condition, and as a result, may not be in compliance
with one or more covenants included in a credit agreement with its
lenders. As of December 31, 2008, the outstanding balance under
this line of credit was approximately $30 million.
The company's Board of Directors has appointed a special committee
consisting of these members of the Board:
-- Jean M. Bellin,
-- Kevin S. Carlie,
-- Terry B. Hatfield,
-- Jonathon E. Killmer and
-- Norman D. Schellenger.
Mr. Hatfield, the Chairman of the Board, has been appointed to
serve as the Chairman of the special committee. The special
committee was formed in response to the initiation of a series of
putative class action shareholder lawsuits alleging violations of
the federal securities laws by the company and certain individuals
as well as the receipt of an informal inquiry from the SEC. The
company, at the direction of the special committee, is fully
cooperating in all governmental matters, including the SEC
informal inquiry. The company is also responding to requests for
information from the Office of the United States Attorney for the
Eastern District of Missouri and FDA representatives working with
that office. The special committee was delegated by the Board the
authority to act on behalf of the Board with respect to these and
all related government inquiries and litigation matters. The
special committee has retained independent legal counsel.
About KV Pharmaceutical Company
Based in St. Louis, Missouri, KV Pharmaceutical Company
(NYSE: KVa/KVb) is a fully integrated specialty pharmaceutical
company that develops, manufactures, markets, and acquires
technology- distinguished branded and generic/non-branded
prescription pharmaceutical products. The company markets its
technology distinguished products through ETHEX Corporation, a
national leader in generic pharmaceuticals and Ther-Rx
Corporation, its branded drug subsidiary.
LANDSOURCE COMMUNITIES: To Sell Washington Square to Dulce View
---------------------------------------------------------------
A unit of LandSource Communities Development LLC's has entered
into an agreement relating to the sale of property commonly known
as Washington Square in accordance with the standard bidding
procedures approved by the U.S. Bankruptcy Court for the District
of Delaware.
Debtor LNR-Lennar Washington Square, LLC, and Dulce View (Los
Angeles), LLC, a California limited liability company have entered
into a Stalking Horse Agreement, dated January 14,2009, a copy of
which is available at:
http://bankrupt.com/misc/LandS_Dulce_APA.pdf1
Certain key terms of the Stalking Horse Agreement are:
* Purchased Assets: The property commonly known as Washington
Square.
* Stalking Horse Purchase Price: $45,000,000
* Break-Up Fee: $1,500,000
* Break-Up Fee as Percentage of Stalking Horse Purchase Price:
Approximately 3.33%
* Expense Reimbursement for Stalking Horse: up to $200,0003
* Minimum Deposit Required Upon Bid Submission: 3.67% of the
purchase price in the submitted bid
* Deposit Required by Successful Bidder: $2,000,000 (in
addition to minimum deposit required upon bid submission)
* Prior Offers By Stalking Horse: None
The Stalking Horse and any subsidiaries or equity interest holders
are not insiders or affiliates of any of the Debtors within the
meaning of the Bankruptcy Code.
Under the Stalking Horse Agreement, the Stalking Horse is entitled
to reimbursement of expenses under certain circumstances. Prior
to reimbursing any expenses, Washington Square will require the
Stalking Horse to submit an itemized statement of expenses the
Stalking Horse actually incurred and for which it seeks
reimbursement, and Washington Square will review these expenses
for reasonableness, and to verify that they were incurred in
connection with the proposed purchase of the Purchased Assets.
The sale of the Purchased Assets remains subject to competing
offers from any prospective bidder made in accordance with the
Bidding Procedures. All interested parties are invited to make
bids to purchase the Purchased Assets in accordance with the terms
of the Bidding Procedures. The minimum bid amount for Qualified
Bids for the Purchased Assets is not less than $47,500,000.
Following the Auction, the Debtors will request that the
Bankruptcy Court enter an order approving the prevailing bid for
the Purchased Assets and authorizing the sale of the Purchased
Assets free and clear of liens, claims, encumbrances and other
interests pursuant to Section 363(f) of the Bankruptcy Code.
Bidding for the Purchased Assets will be subject to this schedule:
* Deadline for Objecting to Stalking Horse or Break-Up Fee:
January 21, 2009. Objections must be filed with the
Bankruptcy Court and served upon the Notice Parties by this
date.
* Hearing Date if Any Objections Are Received to the Stalking
Horse or Break-Up Fee: January 22, 2009 at 11 :00 a.m. New
York Time.
* Deadline for Submitting a Competing Bid: January 30, 2009 at
5:00 p.m. New York Time.
* Auction: February 4, 2009 at 9:00 a.m. California Time. If
one or more competing bids are received by the Debtor prior
to the Bid Deadline, or an Agent requests an Auction, the
Debtor will conduct an Auction at the offices of Paul,
Hastings, Janofsky & Walker LLP, 515 South Flower Street,
Twenty-fifth Floor, Los Angeles, CA 90071.
About LandSource Communities
LandSource Communities Development LLC, which operates in Arizona,
California, Florida, New Jersey, Nevada and Texas, is involved in
the planning and development of master planned communities and
transforming undeveloped land into ready-to-build home sites and
commercial properties. With the exception of one development
project in Marina del Rey, California, LandSource does not build
homes or commercial properties.
LandSource and 20 of its affiliates filed for chapter 11
bankruptcy protection before the U.S. Bankruptcy Court for the
District of Delaware on June 8, 2008 (Lead Case No. 08-11111).
The Debtors are represented by Marcia Goldstein, Esq., at Weil
Gotshal & Manges in New York, and Mark D. Collins, Esq., at
Richards Layton & Finger in Wilmington, Delaware. Lazard Freres &
Co. acts as the Debtors' financial advisors, and Kurtzmann Carson
Consultants serves as the Debtors' notice and claims agent.
According to the Troubled Company Reporter on May 22, 2008,
LandSource sought help from its lender consortium to restructure
$1.24 billion of its debt. LandSource engaged a 100-bank lender
group led by Barclays Capital Inc., which syndicates LandSource's
debt. LandSource had received a default notice on that debt from
the lender group after it was not able to timely meet its payments
during mid-April. However, LandSource failed to reach an
agreement with its lenders on a plan to modify and restructure its
debt, forcing it to seek protection from creditors. (LandSource
Bankruptcy News, Issue No. 16; http://bankrupt.com/newsstand/or
215/945-7000).
LANDSTOCK LLC: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Landstock, LLC
PO Box 113
Lena, MS 39094
Bankruptcy Case No.: 09-00209
Chapter 11 Petition Date: January 23, 2009
Court: Southern District of Mississippi (Jackson Divisional
Office)
Debtor's Counsel: Jeffrey Kyle Tyree, Esq.
jktyree@harrisgeno.com
Harris Jernigan & Geno, PPLC
P.O. Box 3380
Ridgeland, MS 39158-3380
Tel: (601) 427-0048
Fax: (601) 427-0050
Estimated Assets: $10 million to $50 million
Estimated Debts: $1 million to $10 million
The Debtor did not file a list of 20 largest unsecured creditors.
The petition was signed by Charles E. Clark, authorized
representative.
LEAR CORP: Hires Goldman Sachs to Negotiate Lending Agreements
--------------------------------------------------------------
John D. Stoll and Jeffrey McCracken at The Wall Street Journal
report that Lear Corp. has hired Goldman Sachs Group to help it
negotiate amendments and waivers to its lending agreements.
Citing people familiar with the matter, WSJ states that Lear,
struggling amid dropping sales and liquidity woes, also hired the
New York investment-banking firm of Miller Buckfire & Co.
Morgan Stanley said that Lear, along with Chemtura Corp. and Rite
Aid Corp., may need to undergo a debt restructuring or risk
defaulting on bonds as they come due in the coming year, Reuters
states. The report quoted Morgan Stanley as saying, "The lack of
new-issue financing will persist, in our view, resulting in
limited access for higher quality BB-rated credits and none for
CCC-rated issuers."
According to Reuters, analysts said, "In the wake of a global
recession, the scarcity of capital has left even companies that
have liquidity today to begrudgingly contend with the real
possibility of liquidity issues tomorrow." The analysts, Reuters
relates, said that 'CCC'-rated firms with negative free cash flow
and bonds coming due would have to restructure their debt or risk
a default and a potential bankruptcy. Reuters states that Morgan
Stanley said that 14 companies with these ratings that also have
negative free cash flow and maturing debt include:
-- Lear,
-- Chemtura,
-- Rite Aid,
-- Charter Communications Inc.,
-- Smurfit-Stone Container Corp.,
-- Pliant Corp.,
-- Abitibi-Consolidated,
-- Bowater Inc.,
-- XM Satellite Radio Holdings,
-- General Growth Properties,
-- American Media Operations,
-- Muzak Holdings LLC,
-- Broder Brothers Co., and
-- Duane Reade Holdings Inc.
Reuters quoted Morgan Stanley as saying, "We do not suggest
imminent default risk for these issues as other alternatives exist
including asset sales, debt-for-equity swaps or debt exchanges.
That said, we argue that the incremental benefits of these
alternatives decline in effectiveness as we head deeper into this
recession."
About Lear
Based in Southfield, Michigan, Lear Corp. is a global automotive
supplier, conducting business in two product operating segments:
seating and electrical and electronic. The seating segment
includes seat systems and the components. The electrical and
electronic segment includes electrical distribution systems and
electronic products, primarily wire harnesses, junction boxes,
terminals and connectors, various electronic control modules, as
well as audio sound systems and in-vehicle television and video
entertainment systems. The assembly process with respect to the
electrical and electronic segment is performed in low-cost labor
sites in Mexico, Honduras, the Philippines, Eastern Europe and
Northern Africa. Lear has divested substantially all of the
assets of its interior segment, which included instrument panels
and cockpit systems, headliners and overhead systems, door panels,
flooring and acoustic systems and other interior products.
As reported by the Troubled Company Reporter on Jan. 9, 2009,
Moody's Investors Service lowered the Corporate Family and
Probability of Default ratings of Lear Corporation, to Caa2 from
B3. In a related action, the rating of the senior secured term
loan was lowered to Caa1 from B2, and the rating on the senior
unsecured notes was lowered to Caa2 from B3. The ratings remain
on review for further possible downgrade.
According to the TCR on Jan. 15, 2009, Standard & Poor's Ratings
Services said it lowered its corporate credit rating on
Southfield, Michigan-based Lear Corp. to 'B-' from 'B'. At the
same time, S&P also lowered its issue-level ratings on the
company's debt. The ratings remain on CreditWatch, where they had
been placed with negative implications on Nov. 13, 2008.
LOOK COMMUNICATIONS: Court Approves Sales Process for Key Assets
----------------------------------------------------------------
The Ontario Superior Court of Justice approved on Jan. 21, 2009, a
sales process for the sale of some or all, in whole or in part, of
substantially all of the assets of Look Communications Inc.
Pursuant to the Sales Process Order, Grant Thornton Limited, the
Court-appointed Monitor, has been appointed to manage and conduct
the Sales Process in consultation with Look.
Look Communications Inc. received shareholder approval on Jan. 14,
2009, for its Plan of Arrangement which will permit the orderly
sale of all or substantially all of its assets, in order to
maximize shareholder value.
A Plan of Arrangement is a plan made pursuant to Section 192 of
the Canada Business Corporations Act which is drawn up by an
individual or company to offer ways of paying debts, so as to
avoid bankruptcy proceedings.
A copy of the Sales Process order and related documents and
information is available at:
http://www.look.ca/en/maximizingshareholdervalue/
The assets available for purchase include approximately 100 Mhz of
contiguous licensed spectrum and a mobile franchise license.
The deadline for submission of bids to Grant Thornton Limited is
12:00 noon (EST) on Feb. 16, 2009.
Information packages outlining the Sales Process and containing
certain documentation necessary to submit a bid for some or all,
in whole or in part, of the assets of Look may be obtained from
the following individuals at Grant Thornton Limited:
Tim Oldfield, CA Rea Godbold, CA
Grant Thornton Limited Grant Thornton Limited
200 Bay St. 19th Floor 200 Bay St. 19th Floor
Royal Bank Plaza, South Tower Royal Bank Plaza, South Tower
Toronto, Ontario M5J 2P9 Toronto, Ontario M5J 2P9
Tel: (416) 360-5004 Tel: (416) 360-4942
toldfield@grantthornton.ca rgodbold@grantthornton.ca
About Look Communications
Look Communications Inc. -- http://ww.look.ca/-- delivers a full
range of communications services including high-speed and dial-up
Internet access, digital television distribution, to both the
business and residential markets in Ontario and Quebec. The
company provides its digital television distribution and wireless
Internet services using its approximately 100 MHz of Multipoint
Distribution System spectrum in the 2.5 to 2.7 GHz frequency band.
Look has offices in Montreal (Quebec) and Milton (Ontario) and
Look's shares are listed on the TSX Venture Exchange under the
symbols "LOK" for Multiple Voting Shares and "LOK.A" for
Subordinate Voting Shares.
MERCEDES HOMES: Liquidity Strains Cue Chapter 11 Bankruptcy
-----------------------------------------------------------
Mercedes Homes Inc. together with certain of its subsidiaries
filed Chapter 11 petitions to reorganize before the United States
Bankruptcy Court in West Palm Beach, Florida.
The company said in its Web site it has suffered from the
prolonged weakness in the economies of the markets where it does
business. The company has also suffered liquidity strains due, in
part, to the takeover of one of its lenders in its lending
syndicate by the Federal Deposit Insurance Corporation.
The FDIC took over Franklin Bank, N.A., one of the company's first
lien lenders. In December 2008, the FDIC refused to honor a draw
request made by the company under the first lien loan agreement,
despite the fact that the other First Lien Lenders funded its
share of the requested draw. The FDIC's refusal to fund
constituted a default of Franklin's obligations under the first
lien loan agreement.
The company asked Home Buyers Warranty Corporation to provide
customers with home warranties, wherein homebuyers are provided a
ten year structural defect warranty and a two year warranty from
defects in the plumbing, electrical and mechanical systems.
The company said it intends to operate in the normal course of
business during this financial reorganization. The company
expects to move quickly through the reorganization process and to
emerge from its reorganization proceedings better capitalized and
financially stronger.
Headquartered in Melbourne, Florida, Mercedes Homes Inc. --
http://www.mercedeshomes.com-- operate a homebuilding company
that was established in 1983 by Howard Buescher, a 23-year veteran
of the homebuilding business and his daughter Susan Girard. The
company employs approximately 400 people who sell, and construct,
homes of distinctive quality in over 80 communities in Florida,
Texas and North and South Carolina.
MERCEDES HOMES: Case Summary & 50 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Mercedes Homes, Inc.
6905 N. Wickham Rd., #501
Melbourne, FL 32940
Bankruptcy Case No.: 09-11191
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Space Coast Truss, Inc. 09-11194
Mercedes Homes of Texas Holding Corp. 09-11197
Suntree Office Complex, LLC 09-11201
Engineering and Drafting Services, Inc. 09-11203
Mercedes Homes of the Carolinas, Inc. dba Mercedes 09-11204
MHI Holding Company, LLC 09-11205
Mercedes Homes of Texas, Ltd. 09-11207
MHI Building Products, LP 09-11208
Solid Wall Systems, Inc 09-11209
Dairy Towne Community Developers, Inc. 09-11211
Type of Business: The Debtors operate a homebuilding company that
was established in 1983 by Howard Buescher, a
23-year veteran of the homebuilding business
and his daughter Susan Girard. The company
employs approximately 400 people who sell, and
construct, homes of distinctive quality in over
80 communities in Florida, Texas and North and
South Carolina.
See: http://www.mercedeshomes.com/
Chapter 11 Petition Date: January 26, 2009
Court: Southern District of Florida (West Palm Beach)
Judge: Paul G. Hyman Jr.
Debtor's Counsel: Tina M. Talarchyk, Esq.
Squire, Sanders & Dempsey, LLP
TTalarchyk@ssd.com
777 S. Flagler Dr. #1900
West Palm Beach, FL 33401
Tel: (561) 650-7261
Fax: (561) 655-1509
Chief Restructuring Officer: Richard M. Williamson and Alvarez &
Marsal North American LLC
Valuation Expert: Odyssey Capital Group LLC
Financing Advisor: Michael P. Kahn & Associates LLC
Claims and Noticing Agent: Kurtzman Carson Consultants LLC
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
The Debtor's Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Fifth Third bank $7,149,402
Attn: Kathleen M. Gilbert
1700 66th Street North, #201
St. Petersburg, FL 33710
84 Lumber $614,967
3050 S. Mellonville Avenue
Sanford, FL 32773
Del Air Electrical Services $562,750
Inc.
531 Codisco Way
Sanford, FL 32771
Toho Water Authority $443,543
Sears Commercial One $434,839
AFCO Insurance Note $423,121
Payable
Select Floors Ltd. $383,476
Probuild South LLC $376,547
Builders First Choice Inc. $355,225
FPC Masonry LP $345,888
Jimmy Weeks $320,642
Kent Moore Cabinets Ltd. $312,557
Creative Touch Interiors $261,404
Floors Inc. dba Creative $237,232
Touch Interiors
Collis Roofing $220,201
AICCO Insurance Note Payable $216,000
De Lage Landen Financial $209,686
Service
Anchor Concrete Inc. $199,231
HUB International $188,771
Select Floors Ltd./Select $184,702
Floors Mgmt., LL
Prestige AB Ready Mix of $182,423
Melbourne LLC
Ken-Man Plumbing $179,727
Dan's Roofing Inc. $179,673
Christianson Plumbing $179,353
Mg Building Materials $178,703
Bradco Supply Corp. $172,438
Sunrise Landscaping $172,041
Charles Hubb Plumbing Inc. $166,618
Floors Inc. dba Creative $164,738
Touch Interior
Mid-Atlantic Builders Inc. $163,822
BMC West $160,081
Gale Insulation $157,007
Empire Countertops Inc. $155,910
Frymire Services Inc. $154,769
Branco Lath & Stucco Inc. $149,358
Urban Concrete $146,343
Calvins Electric Ltd. $140,702
Casa Mechanical Services-A $136,376
Norcraft Company LLC $132,689
Texas Interior Solutions $127,884
W.W. Plastering Inc. $125,020
Concrete Masters Inc. $123,678
Fox Electric Ltd. $119,865
D&W Painting Inc. $116,618
Countryside Landscape Inc. $116,247
Blue Bell Landscaping Inc. $115,054
DLA of Brevard $113,079
Masco Builder Cabinet $112,087
ABC Drywall of North $106,298
Masco BCG $105,818
The petition was signed by Robert M. Kush, chief financial
officer.
MONA LISA: Files for Chapter 11 Bankruptcy Protection
-----------------------------------------------------
OrlandoSentinel.com reports that Mona Lisa at Celebration, LLC,
has filed for Chapter 11 bankruptcy protection in the U.S.
Bankruptcy Court for the Middle District of Florida.
According to OrlandoSentinel.com, Mona Lisa executives said that
85% of the hotel's rooms were under contract by the middle of
2006. The report states that Mona Lisa missed its initial opening
date by about a year. The report says that Mona Lisa opened
months before its bankruptcy filing.
Mona Lisa, OrlandoSentinel.com relates, has reported $10 million
to $50 million in liabilities.
A creditors' meeting will be held on Feb. 23, 2009,
OrlandoSentinel.com reports.
Celebration, Florida-based Mona Lisa at Celebration, LLC --
http://www.monalisasuitehotel.com/-- and its affiliates operate
hotel and restaurant. The companies filed for Chapter 11
bankruptcy protection on Jan. 15, 2009 (Bankr. M.D. Fla. Case No.
09-00458). R. Scott Shuker, Esq., Latham Shuker Eden & Beaudine
LLP assists the companies in their restructuring efforts. The
companies listed $10 million to $50 million in assets and
$10 million to $50 million in liabilities.
NATIONAL HERITAGE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: National Heritage Foundation, Inc.
6201 Leesburg Pike, Suite 405
Falls Church, VA 22044
Tel: (800) 986-4483
Bankruptcy Case No.: 09-10525
Type of Business: The Debtor is a non-profit tax-exempt charitable
institution.
See: http://www.nhf.org/
Chapter 11 Petition Date: January 24, 2009
Court: Eastern District of Virginia (Alexandria)
Judge: Stephen S. Mitchell
Debtor's Counsel: Alan Michael Noskow, Esq.
anoskow@pattonboggs.com
Patton Boggs LLP
8484 Westpark Drive, 9th Floor
McLean, VA 22102-3596
Tel: (703) 744-8102
Estimated Assets: More than $100 million
Estimated Debts: $1 million to $100 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Juan J. Mancillas, MD judgment $6,200,000
Sylvia Mancillas
Carlo Landa Mancillas
Omar Landa Mancillas
c/o Albert T. Garcia, III
and Adrian R. Martinez
Garcia & Martinez LLP
10113 N. 10th Street
Suite H
McAllen, TX 78504
Tel: (956) 380 3700
c/o Ray Marchan
Law Office of Ray R.
Marchan
1265 N. Expressway
Brownsville, TX 78520
Tel: (956) 546-0333
Cesare Siepi annuity $41,250
Louellen Siepi
12095 Brookfield
Club Drive
Roswell, GA 30075
Tel: (770) 998-2209
Imelda Sermersheim annuity $12,694
5266 Lake
Newburg Drive
Newburgh, IN 47630
Tel: (812) 853-6410
Virginia A. Howarth annuity $19,687
Matthew C. Allen, Jr. annuity $11,665
Michael Rogers annuity $8,948
Orlando Keith Owen annuity $6,166
David F. Giannuzzi annuity $5,994
William T. Reid annuity $5,818
Eleanor B. Greenway annuity $3,875
William Cunningham annuity $3,458
Garret Deskins Virginia annuity $3,285
Deskins
Geneva Schoenheit annuity $3,133
Mary Shrier annuity $3,083
Mary S. McNeeley annuity $2,600
Jeremia Brandt annuity $2,231
Billie Treat annuity $2,052
Anne Woodwall annuity $1,958
Judit Bowen annuity $1,650
Trimark Corporation annuity $7,776
The petition was signed by Janet H. Ridgely. vice president.
NATIONAL HIRSCHFELD: Files for Chapter 11 Bankruptcy Protection
---------------------------------------------------------------
The Denver Post reports that National Hirschfeld LLC has filed for
Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for
the District of Colorado.
According to The Denver Post, National Hirschfeld said that it
filed for bankruptcy to get more time to sell its assets. On Jan.
13, 2009, National Hirschfeld laid off most of its 250 employees,
and will close on Jan. 30, 2009, The Denver Post relates.
National Hirschfeld chairperson Barry Hirschfeld said in a
statement, "After exploring financial alternatives to no avail,
our decision to close is a firm one, but this filing offers us
options that might not have been otherwise available to us."
National Hirschfeld LLC is a 102-year-old printing company in
Denver.
NATIONAL HIRSCHFELD: Case Summary & 20 Largest Unsec. Creditors
---------------------------------------------------------------
Debtor: National Hirschfeld, LLC
5200 Smith Road
Denver, CO 80216
Bankruptcy Case No.: 09-10968
Type of Business: The Debtor offers printing and digital imaging.
See: http://www.nh-access.com/
Chapter 11 Petition Date: January 23, 2009
Court: District of Colorado (Denver)
Judge: Michael E. Romero
Debtor's Counsel: Jeffrey Weinman, Esq.
jweinman@epitrustee.com
730 17th St., Ste. 240
Denver, CO 80202
Tel: (303) 572-1010
Estimated Assets: $10 million to $50 million
Estimated Debts: $1 million to $10 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Gould Paper Construction $1,101,740
135 S. LaSalle St.
Dept. 2284
Chicago, IL 60674-2284
XPEDX - Denver $797,182
3900 Lima St.
Denver, CO 80239-3364
Spicers Paper Inc. $539,835
Martha Perez
12310 Slauson Ave.
Santa Fe Springs, CA
90670-2629
Unisource Worldwide Inc. $282,425
XEROX Capital $130,747
Qwexpress $101,741
Katzke paper $99,735
Colorado Envelope $83,581
PFS Web $78,707
Case Paper $77,191
Flint Group $51,917
Pearson Education $51,301
United Transportation $49,804
Services Inc.
H&S Supply Company $46,164
Purchase Power $45,596
Colorado Label Company Inc. $43,768
Pitman Company $42,377
Federal Express $38,759
Colorado State Treasurer $38,614
On Target Mailing Svc. $38,239
The petition was signed by Barry Hirschfeld, manager.
NORD RESOURCES: Appoints Randy Davenport as COO & Vice President
----------------------------------------------------------------
The Board of Directors of Nord Resources Corporation has appointed
Randy Davenport as Chief Operating Officer and Vice President
effective as of January 12, 2009. Mr. Davenport is succeeding
Erland (Andy) A. Anderson, who is retiring, but has agreed to
remain with the Corporation as a consultant during a transitional
period.
"We are fortunate both that we have found a highly experienced
mining executive in Randy Davenport to succeed Andy and that until
July 2009 we will continue to benefit from Andy's wealth of
experience," John Perry, President and Chief Executive Officer,
said in a press release.
"Andy Anderson has played a pivotal role in assisting Nord
Resources in recognizing the potential of the Johnson Camp Mine to
the point that we are now on the verge of commencing mining and
processing new copper ore," Mr. Perry said.
As a result of the changes, the current officers of the
Corporation are:
Name Age Current Office
---- --- --------------
Ronald A. Hirsch 64 Chairman of the Board
John T. Perry 42 President & Chief Executive Officer
Wayne M. Morrison 51 VP, CFO, Secretary, Treasurer
Randy L. Davenport 53 VP & Chief Operating Officer
The Corporation's officers are appointed annually by the Board of
Directors.
Business Background
Prior to joining the Corporation, Mr. Davenport held the position
of Vice President, Resource Development, Freeport-McMorRan Copper
& Gold Inc. In addition, he had previously held a number of
senior positions during two decades with Phelps Dodge Corporation,
then the world's second-largest copper producer, which was
acquired by Freeport-McMorRan in 2007.
In his career at Phelps Dodge, Mr. Davenport's responsibilities
included managing large copper mining operations, overseeing major
mining construction projects, several feasibility and scoping
studies, and directing the expansion of established operations and
the start-up of green-field projects and acquisitions. Mr.
Davenport's career at Phelps Dodge also included five years as
President of Sociedad Minera Cerro Verde, a Phelps Dodge
subsidiary which owned and operated an open-pit copper mine in
Arequipa, Peru, that included a fully integrated mining and
solvent extraction electrowinning facility, the same process that
the Corporation is using at its Johnson Camp Mine.
Mr. Davenport has a Bachelor of Science degree in Mining
Engineering from the University of Idaho and has served in the
U.S. Marine Corps and the Army National Guard.
Terms of Employment
The Corporation and Mr. Davenport have entered into a letter
agreement dated January 12, 2009, whereby Mr. Davenport was
offered the position of Chief Operating Officer and Vice
President, effective January 12, 2009.
Pursuant to the terms of the Letter Agreement, Mr. Davenport is
entitled to a salary of $230,000 per annum. In addition, Mr.
Davenport was granted 500,000 stock options on January 12, 2009,
pursuant to the Corporation's 2006 Stock Inventive Plan. These
stock options vest as to 166,667 on April 12, 2009, 166,667 on
January 12, 2010, and 166,666 on January 12, 2011. The stock
options have an exercise price of $0.205 per share and expire on
January 12, 2014.
The Letter Agreement also provides that Mr. Davenport will receive
all customary benefits from the Corporation (including health care
benefits, 401-K and 3 weeks of vacation annually), and that he
will also be eligible for participation in bonus plans as
implemented by the Board of Directors at a target level of 50% of
his salary.
The Corporation and Mr. Davenport will enter into a formal
executive employment agreement on these terms, for a term of at
least three years, upon confirmation of his acceptability of as an
executive officer from the Toronto Stock Exchange. The Letter
Agreement provides that, among other provisions, the formal
executive employment agreement will include a provision stating
that, in the event Mr. Davenport's employment is terminated by the
Corporation without cause, he will be entitled to continuation of
his base salary for 12 months.
About Nord Resources
Based in Tucson, Arizona, Nord Resources Corporation (Pink Sheets:
NRDS) -- http://www.nordresources.com/-- is a copper producer,
which controls a 100% interest in the Johnson Camp SX-EW copper
project in Arizona. Nord's near term objective is to resume
mining and leaching operations at the Johnson Camp mine, which has
been on care and maintenance status since August 2003. Nord has
decided to proceed with its mine plan bases on an updated
feasibility study that was completed in October 2005, subject to
raising sufficient financing.
For three months ended Sept. 30, 2008, the company incurred net
loss of $1,608,328 compared with a net income of $1,040,684 for
the same period in the previous year. For nine months ended Sept.
30, 2008, the company reported net loss of $2,173,359 compared to
net loss of $475,303 for the same period in the previous year.
At Sept. 30, 2008, the company's balance sheet showed total assets
of $37,116,627, total liabilities of $33,012,744 and shareholders'
equity of $4,103,883.
Going Concern Doubt
On March 26, 2008, Mayer Hoffman McCann PC, in Denver, Colorado,
expressed substantial doubt about Nord Resources Corporation's
ability to continue as a going concern after auditing the
company's consolidated financial statements as of the years ended
Dec. 31, 2007, and 2006. The auditing firm company reported that
the company incurred a net loss of $2,500,000 and $6,200,000
during the years ended Dec. 31, 2007, and 2006.
The company's continuation as a going concern is dependent upon
its ability to generate sufficient cash flow to meet the company's
obligations on a timely basis, to produce copper at a level where
it can become profitable, to pay off existing debt and provide
sufficient funds for general corporate purposes.
ORLEANS HOMEBUILDERS: Gives Update on Compensation and Award Plan
-----------------------------------------------------------------
Orleans Homebuilders, Inc., disclosed in a regulatory filing that
at its annual meeting of stockholders in December, the company's
stockholders approved the Orleans Homebuilders, Inc., Amended and
Restated Stock Award Plan. The Amended and Restated Plan
increases the number of shares of Common Stock authorized for
issuance under the plan from 400,000 to 1,000,000 shares.
A full-text copy of the Amended And Restated Stock Award Plan is
available for free at http://ResearchArchives.com/t/s?389a
The company adopted an amendment to the Orleans Homebuilders,
Inc., Supplemental Executive Retirement Plan to add a new section
to the SERP to clarify that the earliest possible vesting date for
plan participants who have participated in the plan for five years
is Sept. 1, 2010.
A full-text copy of the Supplemental Executive Retirement Plan is
available for free at: http://ResearchArchives.com/t/s?389b
The company adopted an amendment to the Orleans Homebuilders, Inc.
Executive Compensation Deferral Plan.
-- Revisions were made to permit participants who attain the
age of at least 60 years, are vested in the plan and are
terminated by the company to elect to have distribution of
their account made in up to three annual installments.
This revision is effective as of Jan. 1, 2009.
-- Revisions were made to provide that, upon a change in
control, each participant's deferred compensation benefit
will be distributed in a single lump sum, unless the
participant elects otherwise. This revision is effective
as of Jan. 1, 2009.
-- A new section was added to permit participants to modify
distribution elections made before Dec. 31, 2008, and
scheduled for payment in 2009 or later to the extent
permitted under Section 409A of the Internal Revenue Code
of 1986, as amended. This revision is effective as of
Dec. 1, 2008.
A full-text copy of the Executive Compensation Deferral Plan is
available for free at: http://ResearchArchives.com/t/s?389c
On Dec. 4, 2008, the Compensation Committee awarded Michael T.
Vesey, president and chief operating officer, an option to acquire
150,000 shares of company common stock with an exercise price
equal to the fair market value of the company's common stock on
December 4, 2008, which was $2.20. The option will vest in five
equal installments on each of the first five anniversaries of the
award, is subject to the terms of the company's Second Amended and
Restated 2004 Omnibus Stock Incentive Plan and is contingent upon
Michael T. Vesey executing an appropriate Option Agreement in the
form adopted by the Committee. The option agreement provides for
accelerated vesting in the event that Mr. Michael T. Vesey's
employment terminates as a result of his death or disability.
The Compensation Committee also awarded Thomas R. Vesey, executive
vice president of Southern Region, an option to acquire 60,000
shares of company common stock with an exercise price equal to the
fair market value of the company's common stock on Dec. 4, 2008,
which was $2.20. The option will vest in five equal installments
on each of the first five anniversaries of the award, is subject
to the terms of the Omnibus Plan and is contingent upon Thomas R.
Vesey executing an appropriate Option Agreement in the form
adopted by the Committee. The option agreement provides for
accelerated vesting in the event that Thomas R. Vesey's employment
terminates as a result of his death or disability.
On Dec. 4, 2008, the company's Compensation Committee resolved to
grant Mr. Herdler, 250,000 restricted shares of the company's
common stock in recognition of Mr. Herdler's contributions to the
company during his employment to-date and in connection with the
terms of his employment with the company. The Grant is subject to
the terms of the Omnibus Plan.
The restricted stock granted to Mr. Herdler will vest at a rate of
62,500 shares per year on each of the first, second, third and
fourth anniversaries of the date of the Grant, subject to
acceleration of vesting under certain circumstances, including if
Mr. Herdler's employment with the company terminates as a result
of his death or disability, the company terminates his employment
without cause, or he terminates his employment with the company
for good reason. "Disability," "cause" and "good reason" have the
meanings provided in Mr. Herdler's employment agreement with the
company. In addition, in the event of a change of control, as
defined in Mr. Herdler's employment agreement, 50% of the shares
of restricted stock not vested at that time will vest
automatically and the other 50% of the shares of restricted stock
not vested at that time will generally vest only if the change in
control occurs contemporaneously with or after the company has
achieved any of the performance targets identified in the Herdler
Plan. The accelerated vesting occurs only if Mr. Herdler is
employed by the company on the date the change of control occurs
or on any date within 120 days prior to a change of control.
Except for the acceleration events described, any shares that have
not vested are subject to forfeiture in the event Mr. Herdler's
employment with the company terminates. The Committee also
approved payments to be made by the company to Mr. Herdler from
time to time in amounts sufficient to allow Mr. Herdler to pay
income tax liability triggered on each vesting date and the
company provided Mr. Herdler a letter agreement confirming that
the payments would be made.
A full-text copy of the Restricted Stock is available for free at:
http://ResearchArchives.com/t/s?389d
The company's Compensation Committee approved, and the company and
Garry P. Herdler, the company's executive vice president and chief
financial officer, entered into, the First Amendment to Employment
Agreement to amend the Employment Agreement between the company
and Mr. Herder dated Feb. 27, 2008. The First Amendment contains
these material terms:
-- Mr. Herdler's annual base salary for fiscal year 2009 is
increased, retroactively to July 1, 2008, to $650,000 and
his annual base salary for fiscal year 2010 and thereafter
will be $675,000, provided that for Fiscal 2013 and
thereafter, the company has agreed to discuss whether Mr.
Herdler's base salary will be increased;
-- The third payment of Mr. Herdler's signing bonus, in the
amount of $250,000, will be paid on or before Dec. 31,
2008, instead of on Feb. 27, 2009;
-- Mr. Herdler's guaranteed minimum bonus is extended into
fiscal years 2010 and 2011, with a guaranteed minimum bonus
of $350,000 in each of those fiscal years, to be paid 50%
on December 31 and 50% on June 30 of the applicable fiscal
year. Mr. Herdler must generally be employed by the
company on each of those payments dates to receive the
guaranteed minimum bonus. His guaranteed minimum bonus
will be subtracted from any addition bonus award to which
Mr. Herdler may be entitled under the Original Employment
Agreement;
-- The provisions regarding termination upon a change in
control are expanded to provide that, in the event of a
change in control of the company, if Mr. Herdler's
employment is terminated due to death or disability within
one year after the change in control, the event will be
considered a termination for "good reason" for all
purposes;
-- The non-compete period was reduced from six months to 60
days; however, the non-solicitation period remains at 12
months;
Any tax gross-up payments owed to Mr. Herdler must be paid soon as
practicable after the determination of the amount required,
pursuant to Section 409A of the Internal Revenue Code, as amended;
-- Mr. Herdler will be able to receive bonuses in accordance
with the Herdler Plan if certain performance objectives
adopted by the Compensation Committee are met; and
-- It was clarified that all bonus income, regardless of when
received, will be considered "recognized bonus" for the
purpose of the company's Supplemental Executive Retirement
Plan, as amended.
In addition, the First Amendment contained additional revisions to
the Original Employment Agreement for the purpose of complying
with Section 409A of the Code.
A full-text copy of the First Amendment to Employment Agreement is
available for free at: http://ResearchArchives.com/t/s?389e
The company's Compensation Committee adopted the Orleans
Homebuilders, Inc., Cash Bonus Plan for Garry P. Herdler. The
Herdler Plan provides for a cash bonus of $375,000 to be paid to
Mr. Herdler in the event the company achieves certain performance
targets as determined by the Compensation Committee, which may
generally include targets relating to:
i) capital structure initiatives;
ii) refinancing the company's outstanding debt as by the
issuance of new debt, equity or equity-linked securities by
the company or a joint venture in which the company is a
participant; or
iii) the company entering into a new or modified credit facility
as a modified credit facility extending the maturity date
of the company's revolving credit facility.
The maximum amount payable pursuant to the Herdler Plan is
$750,000, provided the company achieves at least two of such
performance targets. In the event Mr. Herdler is awarded a cash
bonus pursuant to the Herdler Plan, he will be given the option of
using up to 50% of that cash bonus at the time of the award to
purchase restricted shares of the company's stock at a purchase
price of $2.75 per share or up to 136,363 shares of fully vested
common stock will be issued to Participant if all awards are
earned under the Herdler Plan and Mr. Herdler elects to have all
such awards payable in company common stock.
The company approved the terms of an at-will employment agreement
with the company's president and chief operating officer, Michael
T. Vesey and authorized the company to prepare and enter into the
definitive written agreements as may be necessary to implement the
terms of the At-Will Agreement.
Pursuant to the terms of the At-Will Agreement, Mr. Vesey will
retain the title of president and COO, reporting to the chairman
of the board and chief executive officer. His base salary will be
$535,000, which will be reviewed no less often than annually.
Mr. Vesey will be eligible to continue his participation in the
Orleans Homebuilders, Inc. Incentive Compensation Plan which
provides for the payment of an annual incentive bonus to Mr. Vesey
equal to 1.5% of the company's "net pre-tax profit" for the
applicable fiscal year. Mr. Vesey will also be eligible to
receive additional bonuses at the company's discretion.
Consistent with Mr. Vesey's current employment arrangements,
Mr. Vesey will continue to be eligible to participate in the
company's group insurance plan, health plan, SERP, Compensation
Deferral Plan and 401(k) plan. Mr. Vesey will be eligible for
four weeks of vacation per year. In addition, Mr. Vesey will
enter into a Non-Competition and Confidentiality Agreement with
the company restricting his ability to engage in certain
activities that are competitive with the company for a period of
six months after his termination and restricting his ability to
solicit certain company employees and customers for a period of
one year after his termination. The agreement will also contain
customary confidentiality provisions.
Pursuant to the terms of the At-Will Agreement, Mr. Vesey will be
entitled to these:
1) upon termination by the company without cause or by Mr.
Vesey for good reason, Mr. Vesey will be entitled to any
accrued incentive bonus under the Incentive Bonus Plan, a
pro-rata portion of any bonuses for which he is eligible in
the year of termination based on the higher of his bonuses
with respect to the prior year or the average bonuses he
received with respect to the prior two years, he will be
reimbursed for a full eighteen months of COBRA coverage and
assistance in securing alternative group health coverage
once COBRA is no longer available;
2) upon termination due to death, Mr. Vesey will be entitled
to the benefits under (1) above as well as salary
continuation for a period of 90 days;
3) if terminated for any reason within 120 days prior to a
change in control, including death, or for any reason
within one year after a change in control, including death,
or if Mr. Vesey terminates his employment with the company
for good reason within eleven months subsequent to a change
in control or he terminates his employment for any reason
within the thirty days prior to the first anniversary of
the change in control, Mr. Vesey will be entitled, without
duplication, to the benefits under (1) above and severance
in an amount equal to three times Mr. Vesey's three-year
average total compensation received in the three years
prior to termination, with a cap of $1.2 million of total
compensation to be included in the calculation for any
particular year. Any severance amount payable will be
reduced by any amount paid or payable as a death benefit
under the company's SERP and will be payable in one lump
sum soon as practicable after termination of employment,
except to the extent the parties avoid a violation of
Section 409(a)(2)(B)(i) of the Code. To be eligible for
the severance payments described, Mr. Vesey will be
required to execute and not revoke a separation and general
release in a form acceptable to the company.
The At-Will Agreement also provides that, if the value of any
"parachute payments" exceed three times his base amount by more
than ten percent, the company will generally pay to Mr. Vesey a
"tax gross-up" to cover certain taxes associated with "excess
parachute payments" under Section 4999 of the Internal Revenue
Code in connection with a change of control, that the net amount
received by him is equal to the total payments he would have
received had he not been characterized as being entitled to
"excess parachute payments." If the value of the "parachute
payments" exceeds three times his base amount by less than ten
percent, the company will reduce the amount of the "excess
parachute payments" to avoid any tax gross-up payments.
The company anticipated entering into one or more definitive
written agreements with Mr. Vesey with these terms on or before
Dec. 31, 2008.
The company's Compensation Committee approved a Second Amendment
to Employment Contract with Jeffrey P. Orleans, chairman of the
board and chief executive officer of the company. The Second
Amendment to Employment Agreement modifies provisions relating to
the federal income tax treatment of certain arrangements in order
to comply with Section 409(A) of the Code.
A full-text copy of the Jeffrey Second Amendment to Employment
Contract is available for free at:
http://ResearchArchives.com/t/s?389f
The company's Compensation Committee approved a new form of Non-
Qualified Stock Option agreement for employees under the Omnibus
Plan. The Employee Option Form includes a new provision that
permits the Compensation Committee to provide for the acceleration
of the vesting of options under certain circumstance.
A full-text copy of the Non-Qualified Stock Option is available
for free at: http://ResearchArchives.com/t/s?38a0
About Orleans Homebuilders, Inc.
Orleans Homebuilders, Inc. -- http://www.orleanshomes.com--
develops, builds and markets high-quality single-family homes,
townhouses and condominiums. The company serves a broad customer
base including luxury, move-up, empty nester, active adult and
first-time homebuyers. The company currently operates in the
following eleven distinct markets: Southeastern Pennsylvania;
Central and Southern New Jersey; Orange County, New York;
Charlotte, Raleigh and Greensboro, North Carolina; Richmond and
Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The
company's Charlotte, North Carolina operations also include
adjacent counties in South Carolina.
Orleans Homebuilders, Inc.'s balance sheet at Sept. 30, 2008,
showed total assets of $668.4 million, total liabilities of
$607.4 million and stockholders' equity of about $64 million.
For three months ended Sept. 30, 2008, the company posted net loss
of $21.9 million compared with net loss of $2.0 million for the
same period in the previous year.
As of Sept. 30, 2008, the company had $29,344 of borrowing
capacity under its secured revolving credit facility, subject to
borrowing base availability. At Sept. 30, 2008, the company had
borrowings in excess of availability of $6,487. In connection
with entering into its Second Amended Credit Agreement, the
company made payments on its credit facility of $19,000, giving
the company availability of $12,513 immediately after these net
repayments. A majority of its debt is variable rate, based on the
30-day LIBOR rate, and therefore, the company is exposed to market
risk in connection with interest rate changes. At Sept. 30, 2008,
the 30-day LIBOR rate of interest was 3.92625%. The LIBOR rate
has since decreased and as of Oct. 31, 2008, was 2.58125%
PEOPLE AGAINST: Final Hearing on Cash Collateral Use on Feb. 2
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas has
authorized People Against Drugs Affordable Public Housing Agency,
on an interim basis, to use Cash Collateral held by PNC Bank and
NexBank, SSC, the Debtor's prepetition lenders, to fund payroll,
satisfy employee obligations, pay suppliers and other vendors, and
meet other on-going business obligations through Dec. 31, 2008, in
accordance with a budget.
This is the Court's fourth interim order authorizing the use of
Cash Collateral. A final hearing on the Debtor's Motion is
scheduled for Feb. 2, 2009.
The Debtor tells the Court that the use of Cash Collateral is
necessary on an interim basis to avoid immediate and
irreparable harm to it, its estate, and all of its creditors.
As adequate protection for the Use of Cash Collateral, the
Debtor's pre-petition lenders are granted a replacement lien on
and security interest in the same types and items of the Debtor's
property acquired or arising post-petition in which the particular
lender held an interest pre-petition, which Replacement Lien will
have the same extent, validity, effect and priority as the
respective lien held by a lienholder as of the Petition Date and
will secure the same respective obligations as are secured by the
pre-petition liens, but only to the extent of any diminution in
value of lender's collateral position.
No replacement lien granted herein shall prime the pre- and post-
petition ad valorem property tax liens of Dallas County, if any.
The Debtor's obligations to its pre-petition lenders are:
PNC Bank, Promissory Note $10,763,694
National Association
NexBank, SSB Credit Line $355,126
Garland, Texas-based People Against Drugs Affordable Public
Housing Agency -- http://www.peopleagainstdrugs.org/-- was a
nonprofit corporation founded in 1991 to help schools and police
highlight the dangers of drug abuse and to offer "gang-and-
drug free living environments," according to Bloomberg News,
quoting what Texas state officials said in a statement in June.
The company filed for Chapter 11 protection on Sept. 17, 2008
(Bankr. N. D. Tex. Case No. 08-34696). Christina Walton
Stephenson, Esq., Gerrit M. Pronske, Esq., and Rakhee V. Patel,
Esq., at Pronske & Patel, P.C., represent the Debtor as counsel.
In its schedules, the Debtor listed total assets of $12,516,289
and total debts of $12,615,708.
PEOPLE AGAINST: Wants Plan Filing Period Extended to January 22
---------------------------------------------------------------
People Against Drugs Affordable Public Agency asks the U.S.
Bankruptcy Court for the Northern District of Texas to extend
until Jan. 22, 2009, its exclusive period to file a plan of
reorganization, and to extend its exclusive period to confirm said
plan of reorganization until March 23, 2009. The Debtor's last
day to file a plan expires on Jan. 15, 2009, and the deadline to
confirm a plan is March 16, 2009.
The Debtor relates that it needs additional time in order to file
a feasible, confirmable plan.
The Court has set a Feb. 24, 2009 hearing date to consider the
Debtor's motion.
Garland, Texas-based People Against Drugs Affordable Public
Housing Agency -- http://www.peopleagainstdrugs.org/-- was a
nonprofit corporation founded in 1991 to help schools and police
highlight the dangers of drug abuse and to offer "gang-and-
drug free living environments," according to Bloomberg News,
quoting what Texas state officials said in a statement in June.
The company filed for Chapter 11 protection on Sept. 17, 2008
(Bankr. N. D. Tex. Case No. 08-34696). Christina Walton
Stephenson, Esq., Gerrit M. Pronske, Esq., and Rakhee V. Patel,
Esq., at Pronske & Patel, P.C., represent the Debtor as counsel.
In its schedules, the Debtor listed total assets of $12,516,289
and total debts of $12,615,708.
PEOPLE AGAINST: Wants Plan Filing Period Extended to January 30
---------------------------------------------------------------
People Against Drugs Affordable Public Agency asks the U.S.
Bankruptcy Court for the Northern District of Texas to extend
until Jan. 30, 2009, its exclusive period to file a Chapter 11
plan of reorganization, and to extend its exclusive period to
solicit acceptances of the said plan until March 31, 2009. The
Debtor's last day to file a plan expires on Jan. 15, 2009, and the
deadline to solicit acceptances of the plan is March 16, 2009.
The Debtor relates that it needs additional time in order to file
a feasible, confirmable plan.
The Court has set a Feb. 24, 2009 hearing date to consider the
Debtor's motion.
Garland, Texas-based People Against Drugs Affordable Public
Housing Agency -- http://www.peopleagainstdrugs.org/-- was a
nonprofit corporation founded in 1991 to help schools and police
highlight the dangers of drug abuse and to offer "gang-and-
drug free living environments," according to Bloomberg News,
quoting what Texas state officials said in a statement in June.
The company filed for Chapter 11 protection on Sept. 17, 2008
(Bankr. N. D. Tex. Case No. 08-34696). Christina Walton
Stephenson, Esq., Gerrit M. Pronske, Esq., and Rakhee V. Patel,
Esq., at Pronske & Patel, P.C., represent the Debtor as counsel.
In its schedules, the Debtor listed total assets of $12,516,289
and total debts of $12,615,708.
PERMALIFE PRODUCTS: Files for Chapter 11 in New Jersey
------------------------------------------------------
Permalife Products LLC sought bankruptcy protection from creditors
before the U.S. Bankruptcy Court for the District of New Jersey
after defaulting on a loan.
According to Bloomberg News, Guttenberg, New Jersey-based
Permalife, in its bankruptcy petition, listed $2.7 million in
assets and $21.1 million in debt.
A fire at one of the company's recycling units in Arizona
led to an October 2008 default on Permalife's $5 million credit
line with JPMorgan Chase Bank, company officials said in court
filings, according to Bloomberg. The bankruptcy filing was
designed to stave off "Chase's likely collection activities,"
according to the filing.
Permalife Products LLC -- http://www.permalife.com/--
manufactures rubber mulch used to cover playgrounds and make
sports fields softer.
PERMALIFE PRODUCTS: Case Summary & 12 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: PermaLife Products, LLC
7000 Boulevard East
Guttenberg, NJ 07093
Bankruptcy Case No.: 09-11482
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
New York Rubber Recycling, LLC 09-11489
Bristow Rubber Recycling, LLC 09-11496
Arizona Rubber Recycling, LLC 09-11500
Type of Business: The Debtors operate rubber recycler operating
facilities in New York, New Jersey, Michigan,
Arizona and Oklahoma where they transform
environmental problems into opportunities to
improve and enhance America's landscape and
leisure activities.
See: http://www.permalife.com/
Chapter 11 Petition Date: January 23, 2009
Court: District of New Jersey (Newark)
Judge: Morris Stern
Debtor's Counsel: Jay L. Lubetkin, Esq.
jlubetkin@rltlawfirm.com
Rabinowitz Lubetkin & Tully, L.L.C.
293 Eisenhower Parkway, Suite 100
Livingston, NJ 07039
Tel: (973) 597-9100
Fax: (973) 597-9119
Estimated Assets: $1 million to $10 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Gemini Managers Inc. $3,692,466
20 William Street
Wellesley Hills, MA 02481
JPMorgan Chase collateral FMV: $6,446,485
KY1-4340 $1,852,046
312 South Fourth
Street
Louiville, KY 40202
Chase Equipment Leasing Inc. collateral FMV: $1,157,314
1111 Polaris Parkway, Ste. A3 45,000
Columbus, OH 43240
Black Rock Capital $445,073
Chase Card Services $418,456
Blue Sky International $117,000
Thomas Reichman $105,828
American Express $85,096
Wachovia Insurance Services $75,012
Exact Software North $74,848
America Inc.
Mall at the Galaxy $72,977
Keith M. Miller $58,740
The petition was signed by Martin J. Sergi, president and board
member.
PERMALIFE PRODUCTS: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
Jef Feeley at Bloomberg News reports that Permalife Products LLC
has filed for Chapter 11 bankruptcy protection in the U.S.
Bankruptcy Court for the District of New Jersey, after defaulting
on a loan.
Court documents say that Permalife Products listed $2.7 million in
assets and $21.1 million in liabilities.
According to court documents, Permalife Products officials said
that a fire at one of the recycling units in Arizona led to an
October 2008 default on the company's $5 million credit line with
JPMorgan Chase Bank. Permalife Products said in the court
documents that the Chapter 11 filing was aimed at staving off
"Chase's likely collection activities." Permalife Products Martin
Sergi, according to the documents, said that company officials
"believed they had no alternative but to seek Chapter 11
bankruptcy relief."
Mr. Sergi said in court documents that Permalife Products had
about $18 million in sales in 2008 and a loss of $2.5 million.
Bloomberg relates that three of Permalife Products' recycling
units, including the Arizona facility, also filed for bankruptcy
protection on Jan. 23, 2009.
Bloomberg states that Permalife Products listed JPMorgan Chase as
its largest secured creditor, with a $5.08 million claim.
Guttenberg, New Jersey-based Permalife Products LLC makes rubber
mulch used to cover playgrounds and sports fields softer. The
company uses colored, recycled rubber to cover playgrounds and pad
athletic fields to help protect users from injury. Besides
footing for playgrounds and sports fields, Permalife Products'
rubber mulch is used by landscapers and manufacturers, who turn
the recycled material into everything from car parts to welcome
mats.
PM LIQUIDATING: Jefferies & Co. Discloses 24.5% Equity Stake
------------------------------------------------------------
Jefferies & Company, Inc., and Jefferies Group, Inc., disclosed in
a regulatory filing dated January 7, 2009, that they may be deemed
to own 3,381,802 shares of PM Liquidating Corp.'s common stock,
representing 24.5% of the total shares outstanding.
Headquartered in Norcross, Georgia, ProxyMed Inc. f/k/a MedUnite,
Inc. -- http://www.medavanthealth.com-- facilitates the exchange
of medical claim and clinical information. On Sept. 17, 2008, the
company filed Articles of Amendment to its Articles of
Incorporation to change its name from ProxyMed, Inc. to PM
Liquidating Corp.
The company and two of its affiliates filed for Chapter 11
protection on July 23, 2008 (Bankr. D. Del. Lead Case No.08-
11551). Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at
Young Conaway Stargatt & Taylor, L.L.P., represent the Debtors in
their restructuring efforts.
The Debtors indicated $40,655,000 in total consolidated assets and
$47,640,000 in total consolidated debts as of December 31, 2007.
In its petition, ProxyMed Transaction Services, Inc. indicated
$10,000,0000 in estimated assets and $10,000,000 in estimated
debts.
PM&E INC: Decides to Dissolve; Assets to be Distributed
-------------------------------------------------------
PM&E, Inc., formerly M.P.C. Inc. disclosed in a notice that at a
meeting on Sept. 11, 2008, the shareholders of PM&E, Inc., voted
to dissolve the corporation in accordance with a Plan of
Dissolution adopted at the meeting.
According to the notice, the corporation is winding up its affairs
and liquidating its assets pursuant to the procedures and
requirements of the New York Business Corporation Law. The
corporation's assets are now being distributed to the shareholders
of record as of Dec. 22, 2008, subject, however, to a reserve of
$50,000 to cover claims of any unknown creditors and to pay the
final expenses of dissolution. Any amount remaining after all
claims are settled will also be distributed to the shareholders.
For more information, please contact the corporation's President,
Herbert Friedlander, at 011-507-215-0134, or by mail to Apartado #
0831-02084, Paitilla, Panama, Republic of Panama.
PRB ENERGY: Expects to Emerge This Month After Court Okays Plan
---------------------------------------------------------------
On January 16, 2009, the United States Bankruptcy Court for the
District of Colorado entered an order confirming PRB Energy,
Inc.'s Modified Second Amended Joint Plan of Reorganization. PRB
expects the Plan to be effective within the next two weeks.
The Plan cancels all 8,721,994 shares of PRB Energy's currently
outstanding common stock and provides that PRB Energy will issue
15.0 million shares of new PRB Energy common stock. PRB Energy
will issue West Coast Opportunity Fund, LLC 13.5 million shares
(90%) of New Equity, issue the holders of unsecured claims, on a
pro rata basis, 1.425 million shares (9.5%) of New Equity and
issue the holders of unsecured claims against PRB Oil & Gas, Inc.,
a subsidiary of PRB Energy, on a pro rata basis, 75,000 shares
(0.5%) of New Equity. The holders of PRB Energy's senior
subordinated convertible notes are considered holders of unsecured
claims. Holders of the currently outstanding PRB Energy common
stock will not receive anything under the Plan, and the currently
outstanding common stock will be cancelled. The holders of the
New Equity will have preemptive rights on any additional offerings
of New Equity by PRB Energy until
December 30, 2011. Holders of unsecured claims will also be
issued, on a pro rata basis, warrants to acquire 1.425 million
shares of New Equity at an exercise price of $2.50 per share and
the holders of unsecured claims of PRB Oil & Gas will also be
issued, on a pro rata basis, warrants to acquire 75,000 shares of
New Equity at an exercise price of $2.50 per share.
The Plan provides for PRB Energy to continue as a public company
following its emergence from bankruptcy and for the New Equity to
trade on the OTC Bulletin Board or a nationally recognized
securities exchange, subject to compliance with applicable
regulations. The Plan provides that WCOF will loan PRB
$1.5 million in exit financing to pay certain post-petition claims
and administrative fees. Further, PRB Funding, LLC will have the
option to have its $275,000 post-petition claims paid in full or
converted to New Equity at a conversion rate of $1.00 per share.
In addition, with certain exceptions, the Plan requires that
within 90 days of the confirmation of the Plan, WCOF will commit
and guarantee to raise no less than $7.5 million for PRB through
the offering and sale of New Equity by PRB Energy.
The Plan provides that WCOF will hold a secured claim against PRB
in the amount of $16.95 million consisting of pre-confirmation
principal, interest, attorney's fees and a prepayment premium
relating to debentures held by WCOF. This claim will be secured
by a first lien on the assets of PRB and will bear interest at 10%
per annum. The maturity date for the first $3.75 million is
December 31, 2009, with the remainder due on December 31, 2010.
The Plan further provides that PRB Energy's new board of directors
will consist of Gus Blass, William Hayworth and Atticus Lowe.
Following the effective date of the Plan, PRB Energy will change
its corporate name to Black Raven Energy, Inc.
A full-text copy of the company's Modified Second Amended Joint
Plan of Reorganization dated December 3, 2008, is available for
free at: http://researcharchives.com/t/s?38a2
About PRB Energy
Headquartered in Denver, PRB Energy, Inc. formerly PRB Gas
Transportation, Inc. -- http://www.prbenergy.com/-- operates as
independent energy companies engaged in the acquisition,
exploitation, development and production of natural gas and
oil. In addition, PRB Energy provides gas gathering, processing
and compression services for properties it operates and for third-
party producers. PRB Energy operates as two business segments
through two wholly-owned subsidiaries, PRB Oil and Gas, Inc., a
gas and oil exploitation and production company, and PRB
Gathering, Inc., a gathering and processing company, formed in
August 2006. The company conducts its business activities in
Wyoming, Colorado and Nebraska. The Debtor, PRB Oil & Gas, Inc.
and PRB Gathering, Inc. filed separate petitions for Chapter 11
relief on March 5, 2008 (Bankr. D. Colo. Lead Case No. 08-12658).
Faegre & Benson LLP; Donald D. Allen, Esq., Edward M. Hepenstall,
Esq., James T. Markus, Esq., Jennifer M. Salisbury, Esq., and John
F. Young, Esq., at Block, Markus & Williams LLC represent the
Debtors in their restructuring efforts. Daniel J. Garfield, Esq.,
and Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck,
P.C., represent the Official Committee of Unsecured Creditors as
counsel. The Debtor listed assets of between
$50 million and $100 million and liabilities of between
$10 million and $50 million. The Court confirmed PRB Energy,
Inc.'s Modified Second Amended Joint Plan of Reorganization on
January 16, 2009.
PROPEX INC: Creditors and Lenders Oppose New Loan
-------------------------------------------------
Creditors oppose of Propex Inc.'s proposal to obtain $65 million
in financing to replace a $60 million loan scheduled to expired
Jan. 23.
According to Bloomberg's Bill Rochelle, the secured lenders oppose
the new financing, pointing to the company's own projections
showing a $30 million cash loss during the next 90 days. According
to the lenders, the new financing, consisting of $33 million to
pay off existing financing for the reorganization, will use up the
remainder covering cash losses, while forcing a quick sale of the
assets. They contend neither a sale nor a liquidation will pay
them in full.
The official committee of unsecured creditors of Propex opposes
the loan, saying it forces a quick sale "at the lowest price"
without proper marketing or time for buyer to investigate
financial information, Mr. Rochelle reported.
Bloomberg adds that parties who have objected to the loan have
opposed Propex's request for an emergency hearing.
Proposed New DIP Loan
Propex Inc. and its affiliated debtors seek authority from the
U.S. Bankruptcy Court for the Eastern District of Tennessee to
obtain up to $65,000,000 of postpetition financing under a 2009
DIP Facility with Wayzata Investment Partners LLC and certain
other financial institutions.
The Debtors recount that in February 2008, they got final Court
approval of a $60,000,000 postpetition loan from BNP Paribas and
certain other lenders. The 2008 DIP Facility will expire on its
own terms on January 23, 2009.
As BNP Paribas has declined to extend the 2008 DIP Facility, the
Debtors reveal that they negotiated a new replacement DIP
facility with Wayzata Investment Partners LLC.
Pursuant to arm's-length negotiations, the Debtors and Wayzata
agreed on the terms of a financing facility for the Debtors'
estates for 2009. The salient terms of the 2009 DIP Facility
are:
Borrower: Propex Inc.
Guarantors: Propex Holdings Inc. and each direct and
indirect subsidiary of Propex Inc. Propex
Inc. pledges 100% of all its equity interest
in its Guarantors, including non-domestic
subsidiaries.
Lenders: A syndicate of funds manages by Wayzata
Investment Partners LLC. Wayzata will appoint
an administrative agent under the 2009 DIP
Facility.
Commitment &
Availability: The 2009 Credit Agreement provide for a
delayed draw term credit facility of
$65,000,000 in the aggregate.
Availability: $30,000,000 will be available upon the
Bankruptcy Court's entry of an interim order
approving the 2009 DIP Facility. The
remaining $35,000,000 will be available on
the Bankruptcy Court's entry of a final, non-
appealable order approving the 2009 DIP
Facility, draws upon which will not be less
than $1,000,000 and not more than $5,000,000.
The Debtors may not make more than two draws
within a calendar month, and no more than
$10,000,000 in draws may be made in any 30 day
rolling period. Furthermore, any draws in
excess of $40,000,000 will be allowed in the
sole discretion of the Required Lenders.
Maturity Date: The Credit Agreement will mature on the
earliest to occur of:
(1) April 23, 2009;
(2) the effective date of any plan of
reorganization;
(3) the consummation of any sale pursuant to
Section 363 of the Bankruptcy Code;
(4) at the sole discretion of the Lenders,
upon the occurrence and continuation of an
Event of Default under the Loan Documents;
(5) the date of payment in full in cash of all
obligations under the Loan Documents; and
(6) failure of the Debtors to obtain a final
order approving the 2009 DIP Facility
within 20 days, subject to the Bankruptcy
Court's availability, of the date of the
initial loan made under the 2009 DIP
Facility.
Purpose: The proceeds 2009 DIP Facility will be used
to:
(i) pay fees and expenses associated with
the financings; and
(ii) provide for the working capital
requirements and other general corporate
purposes of Propex Inc., Propex Holdings
and their subsidiaries during the
pendency of the Debtors' Chapter 11
cases.
Priority
and Liens: As security for all of Propex's obligations
under the 2009 DIP Facility, each Guarantor
and Parent Guarantor will grant the Agent
a valid and perfected superpriority security
interest in, and lien on, all collateral of
the Borrower and Guarantors pursuant to
Section 364 of the Bankruptcy Code, with the
lien being senior and prior in all respects to
any other lien of any kind, including, without
limitation, the liens and security interest
securing the prepetition indebtedness of
Propex under that certain Credit Agreement
dated as of January 31, 2006, and as amended
from time to time.
Carve-Out: The liens and superpriority claims granted to
the Lenders with respect to the 2009 DIP
Facility will be subject and subordinate to,
following the occurrence and during the
pendency of a Carve-Out Event:
(a) a carve-out of $1,000,000 for the allowed
fees and expenses of the retained
professionals of the Debtors and the
Official Committee of Unsecured Creditors
incurred after the Carve -Out Event;
(b) quarterly fees required to be paid
pursuant to Section 28 of the Bankruptcy
Code; and
(c) any fees payable to the Clerk of the
Bankruptcy Court and any agent, plus all
fees and expenses prior to the Carve-Out
event but not yet paid to the extent the
fees and expenses are approved and allowed
by the Bankruptcy Court, subject to the
rights of the Agent, the Lenders, and any
other party-in-interest to object to the
award of any fees and expenses.
Interest: All amounts outstanding under the Senior
Credit Facilities will bear interest at the
LIBOR Rate plus 1000 basis points, assessed on
a 360/actual basis.
The LIBOR Rate is defined as including a floor
of 5%, which is subject to upward adjustment.
Fees and
Expenses: Propex will pay the Agent:
-- 1.5% of the Facility Threshold upon entry
of the Interim Order; and
-- 1.5% of the Facility Threshold upon entry
of the Final Order.
If Propex is allowed to make draws above
$40,000,000, then Propex will immediately pay
Agent, for the ratable account of each Lender,
a fully earned, non-refundable fee equal to 3%
of the difference between the Gross Commitment
and the Facility Threshold. The fees will be
paid from draws facility.
Upon termination, repayment or refinancing in
full of the 2009 DIP Facility, Propex will pay
the Agent a fully earned, non-refundable exit
fee equal to 3% of the Gross Commitment other
in connection with a Plan or disposition
pursuant to Section 363 of the Bankruptcy Code
acceptable to the Requisite Lenders.
Chapter 11
Process: Under the Credit Agreement, the Debtors will
covenant to take certain actions in their
Chapter 11 cases, among other things, seeking
confirmation of an amended Chapter 11 plan,
which will incorporate a sale of substantially
all of their assets, or in the absence of a
confirmed plan, a sale of substantially all of
their assets pursuant to Section 363 of the
Bankruptcy Code, within time periods prior to
April 23, 2009.
The 2009 DIP Facility also provides for the usual and customary
terms of borrowing conditions, events of default and
indemnification provisions.
A full-text copy of the 2009 Wayzata DIP Facility can be accessed
for free at: http://bankrupt.com/misc/PropexWayzataDIP.pdf
Henry J. Kaim, Esq., at King & Spalding, LLP, in Houston, Texas,
maintains that the Debtors' ability to maintain business
relationships with their vendors and suppliers and otherwise
finance their operations is dependent on their ability to obtain
the funds made available under the 2009 DIP Facility.
The Court will convene a hearing on January 22, 2009, to consider
the Debtors' request.
About Propex Inc.
Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber. It also produces
primary and secondary carpet backing. Propex operates in North
America, Europe, and Brazil.
The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No.
08-10249). The Debtors have selected Edward L. Ripley, Esq.,
Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in
Houston, Texas, to represent them. The Official Committee of
Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin
Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel.
Propex Inc., and its affiliates delivered to the Court a Joint
Plan of Reorganization and Disclosure Statement on October 29,
2008. Propex's exclusive period to solicit acceptances of the
Plan expires Dec. 29, 2008.
As of June 29, 2008, the Debtors' balance sheet showed total
assets of US$562,700,000, and total debts of US$551,700,000.
The Debtors have filed their Disclosure Statement and Plan of
Reorganization on October 29, 2008.
Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy
News. The newsletter tracks the chapter 11 proceedings
undertaken by Propex Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
QUEBECOR WORLD: NY Court Extends Lease Decision Period to Feb. 28
-----------------------------------------------------------------
Quebecor World (USA), Inc., and 52 other debtor-subsidiaries of
Quebecor World Inc., relate that there are four unexpired leases.
The Debtors' deadline to assume or reject two of the remaining
leases expired on January 22, 2009.
At the Debtors' behest, the U.S. Bankruptcy Court for the Southern
District of New York extended until February 28, 2009, the
deadline by which the Debtors may assume or reject:
* Quebecor World (USA), Inc.'s lease with Pfizer Inc., for a
property located at the 11th Floor of 150 East 42nd Street,
in New York; and
* QW Memphis Corp.'s lease with Industrial Development Board
of Dyer County for a property located at 2030 Sylvan Road,
in Dyersburg, Tennessee.
The Debtors said they have obtained the written consent of each
of the lessors regarding the extension of the decision period.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW) -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Ernst & Young, Inc., the monitor of Quebecor World Inc., and its
affiliates' reorganization proceedings under the Canadian
Companies' Creditors Arrangement Act, filed a petition under
Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court
for the Southern District of New York on September 30, 2008, on
behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The chapter 15
case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at
Allen & Overy LLP, in New York, serves as counsel to the chapter
15 petitioner.
QWI and certain of its subsidiaries commenced the CCAA proceedings
before the Quebec Superior Court (Commercial Division) on January
20, 2008. The following day, 53 of QWI's U.S. subsidiaries,
including Quebecor World (USA), Inc., filed
petitions under Chapter 11 of the U.S. Bankruptcy Code.
The Honorable Justice Robert Mongeon oversees the CCAA case.
Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the
Company in the CCAA case. Ernst & Young Inc. was appointed as
Monitor.
Quebecor World (USA) Inc., its U.S. subsidiary, along with other
U.S. affiliates, filed for chapter 11 bankruptcy before the U.S.
Bankruptcy Court for the Southern District of New York (Lead Case
No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter
LLP, represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
QWI is the only entity involved in the CCAA proceedings that is
not a Debtor in the Chapter 11 Cases.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$3,412,100,000 total
liabilities of US$4,326,500,000 preferred shares of US$62,000,000
and total shareholders' deficit of US$976,400,000.
The Hon. Robert Mongeon of the Quebec Superior Court has extended
until Dec. 14, 2008, the stay under the Canadian Companies'
Creditors Arrangement Act.
Bankruptcy Creditors' Service, Inc., publishes Quebecor World
Bankruptcy News. The newsletter tracks the proceedings initiated
by Quebecor World Inc. and its U.S. and Non-U.S. subsidiaries
under the U.S. Bankruptcy Code and the Companies' Creditors
Arrangement Act in Canada. (http://bankrupt.com/newsstand/or
215/945-7000)
QUEBECOR WORLD: Receives Go-Signal to Implement 2009 PBIP
---------------------------------------------------------
Quebecor World (USA), Inc., and 52 other debtor-subsidiaries of
Quebecor World Inc., sought and obtained authority from the U.S.
Bankruptcy Court for the Southern District of New York to
implement and continue the Plant Based Incentive Plan for 2009.
According to the Debtors, the PBIP is designed to stimulate the
achievement of organizational efforts and reward outstanding
performance at the plant level.
The Court previously authorized the Debtors to implement and
continue Management Incentive Compensation Plan for the first
half of 2009 and the Plant Based Incentive Plan for 2008.
All printing plants and divisions in North America are included
in the PBIP. There are currently 320 employees eligible for
incentive compensation under the PBIP if they meet these required
performance indicators under the PBIP:
(1) Capacity;
(2) Productivity;
(3) Quality;
(4) Health and Safety; and
(5) Budgeted Adjusted EBITDA.
The 2009 PBIP is substantially similar to the 2008 program, except
for a significant change with regard to the Health and Safety
performance indicator. The 2009 PBIP provides that for employees
under the program to be considered eligible for a bonus payment in
2009, in addition to meeting the component targets, the plant at
which an employee works must have either (a) achieved its 2008
Health and Safety goal, or (b) pass a Health and Safety audit.
The PBIP program includes a target incentive award and a maximum
incentive award for each employee, which amounts represent a
percentage of the base salary earned by such employee in 2009.
The target incentive levels vary from 15% to 30% of base salary,
and the maximum incentive an employee can receive ranges from 25%
to 50% of base salary.
An employee's eligibility percentage is based on the level of
that employee's responsibility in the company, with the eligible
employees' salaries generally ranging from approximately $40,000
to $200,000, and with the large majority of the employees making
between $60,000 and $135,000.
For 2009, if all 320 participants meet the target incentive award
payout, the aggregate cost of the PBIP program will be about $5.5
million, with the cost of amounts payable to employees of the
Debtors being approximately $5.0 million.
If all of the 320 participants meet the maximum incentive target
for which they are eligible, the total cost of the PBIP program
will be $9.1 million, with the cost on account of possible awards
payable to employees of the Debtors being approximately
$8.4 million. Under the proposed 2009 PBIP, payments under the
program due to employees who meet the necessary conditions will
be due and payable in March 2010.
Michael J. Canning, Esq., at Arnold & Porter LLP, in New York,
told the Court that the PBIP has been carefully structured to
balance the need to motivate and provide appropriate market-
competitive compensation to the Debtors' critical workforce,
while ensuring that the Debtors' bankruptcy estates receive an
enhanced value from the contributions of these employees. The
purpose of the PBIP is to provide a system of incentive based
compensation that will promote the maximization and preservation
of enterprise value, he adds.
The Debtors require the continued efforts and loyalty of their
employees at the critical juncture in their Chapter 11 cases, and
must take proactive steps to ensure that sufficient incentives
are in place to allow these employees to feel justly compensated,
consistent with market standards, for the challenging and
demanding tasks attendant to operating the Debtors' businesses
while under Chapter 11 protection, Mr. Canning states.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW) -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Ernst & Young, Inc., the monitor of Quebecor World Inc., and its
affiliates' reorganization proceedings under the Canadian
Companies' Creditors Arrangement Act, filed a petition under
Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court
for the Southern District of New York on September 30, 2008, on
behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The chapter 15
case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at
Allen & Overy LLP, in New York, serves as counsel to the chapter
15 petitioner.
QWI and certain of its subsidiaries commenced the CCAA proceedings
before the Quebec Superior Court (Commercial Division) on January
20, 2008. The following day, 53 of QWI's U.S. subsidiaries,
including Quebecor World (USA), Inc., filed
petitions under Chapter 11 of the U.S. Bankruptcy Code.
The Honorable Justice Robert Mongeon oversees the CCAA case.
Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the
Company in the CCAA case. Ernst & Young Inc. was appointed as
Monitor.
Quebecor World (USA) Inc., its U.S. subsidiary, along with other
U.S. affiliates, filed for chapter 11 bankruptcy before the U.S.
Bankruptcy Court for the Southern District of New York (Lead Case
No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter
LLP, represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
QWI is the only entity involved in the CCAA proceedings that is
not a Debtor in the Chapter 11 Cases.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$3,412,100,000 total
liabilities of US$4,326,500,000 preferred shares of US$62,000,000
and total shareholders' deficit of US$976,400,000.
The Hon. Robert Mongeon of the Quebec Superior Court has extended
until Dec. 14, 2008, the stay under the Canadian Companies'
Creditors Arrangement Act.
Bankruptcy Creditors' Service, Inc., publishes Quebecor World
Bankruptcy News. The newsletter tracks the proceedings initiated
by Quebecor World Inc. and its U.S. and Non-U.S. subsidiaries
under the U.S. Bankruptcy Code and the Companies' Creditors
Arrangement Act in Canada. (http://bankrupt.com/newsstand/or
215/945-7000)
QUEBECOR WORLD: Taps Samson Belair/Deloitte As Appraisers
---------------------------------------------------------
Quebecor World (USA), Inc., and 52 other debtor-subsidiaries of
Quebecor World Inc., sought and obtained authority from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Samson Belair, also known as Deloitte & Touche s.e.n.c.r.l., to
provide certain valuation and asset appraisal services.
For the Valuation Services, Deloitte will:
(a) perform a goodwill impairment test of Quebecor World,
Inc.'s North American reporting unit as of December 31,
2008, which coincides with QWI's year-end, based on the
November 30, 2008, balance sheet of QWI's North American
reporting unit;
(b) perform liquidation valuation analysis of the Debtors'
assets for use in the preparation of the Debtors'
liquidation analysis incident to the preparation of the
Debtors' plan of reorganization and disclosure statement;
(c) estimate the fair value of QWI's North American reporting
unit, the fair value of the properties, plants and
equipment of QWI's North American reporting unit, and the
fair value of the intangible assets of QWI's North
American reporting unit; and
(d) calculate the residual goodwill in QWI's North American
reporting unit.
In connection with the Debtors' liquidation analysis and for
fresh start accounting purposes, Deloitte will value the Debtors'
assets at both orderly and forced liquidation values.
In an Engagement Letter, Deloitte will deliver its preliminary
conclusions to the Debtors by January 31, 2009, with a draft
report to be delivered by February 13, 2009, and a final report
by February 20, 2009.
Deloitte has estimated that the total fees for the Valuation
Services it will provide will be between C$630,000 and C$660,000.
Of this amount, Deloitte estimates that the total fees that will
be charged to the Debtors on account of the Valuation Services
will be C$245,000. The estimated fees for the valuation Services
are:
Services Fee Range
-------- ---------
Step # 1 Goodwill Impairment Test C$105,000-C$115,000
Step #2 Goodwill Impairment Test C$25,000
Properties, plant and equipment
appraisals C$480,000-C$500,000
Finalization of file and
discussion with auditor C$20,000
---------
Total C$630,000-C$660,000
Deloitte will also be reimbursed for reasonable out-of-pocket
expenses, including airfares, hotels, meals and related costs.
Nicolas Panagis, a partner at Deloitte, assures the Court that
his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code, and does not represent
any interest adverse to the Debtors or their estates.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW) -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Ernst & Young, Inc., the monitor of Quebecor World Inc., and its
affiliates' reorganization proceedings under the Canadian
Companies' Creditors Arrangement Act, filed a petition under
Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court
for the Southern District of New York on September 30, 2008, on
behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The chapter 15
case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at
Allen & Overy LLP, in New York, serves as counsel to the chapter
15 petitioner.
QWI and certain of its subsidiaries commenced the CCAA proceedings
before the Quebec Superior Court (Commercial Division) on January
20, 2008. The following day, 53 of QWI's U.S. subsidiaries,
including Quebecor World (USA), Inc., filed
petitions under Chapter 11 of the U.S. Bankruptcy Code.
The Honorable Justice Robert Mongeon oversees the CCAA case.
Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the
Company in the CCAA case. Ernst & Young Inc. was appointed as
Monitor.
Quebecor World (USA) Inc., its U.S. subsidiary, along with other
U.S. affiliates, filed for chapter 11 bankruptcy before the U.S.
Bankruptcy Court for the Southern District of New York (Lead Case
No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter
LLP, represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
QWI is the only entity involved in the CCAA proceedings that is
not a Debtor in the Chapter 11 Cases.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$3,412,100,000 total
liabilities of US$4,326,500,000 preferred shares of US$62,000,000
and total shareholders' deficit of US$976,400,000.
The Hon. Robert Mongeon of the Quebec Superior Court has extended
until Dec. 14, 2008, the stay under the Canadian Companies'
Creditors Arrangement Act.
Bankruptcy Creditors' Service, Inc., publishes Quebecor World
Bankruptcy News. The newsletter tracks the proceedings initiated
by Quebecor World Inc. and its U.S. and Non-U.S. subsidiaries
under the U.S. Bankruptcy Code and the Companies' Creditors
Arrangement Act in Canada. (http://bankrupt.com/newsstand/or
215/945-7000)
QUEBECOR WORLD: Prudential, et al., Seek Payment of Claims
----------------------------------------------------------
Prudential Relocation, Inc., asks the U.S. Bankruptcy Court for
the Southern District of New York to compel Quebecor World (USA)
Inc. and its debtor-affiliates to immediately pay $126,664.
Prudential and the Debtors are parties to a prepetition services
agreement wherein Prudential performed relocation services for the
Debtors' employees in exchange for payment by the Debtors.
Prudential has filed a $522,832 claim for services provided to the
Debtors as of the Petition Date. Prudential continued to provide
relocation services to the Debtors postpetition. Prudential
alleges that the Debtors failed to pay it $126,664 for
postpetition relocation services.
Heller Family, LLC, asks the Court to direct Debtor Quebecor
World Logistics, Inc., to immediately pay $102,027 for
postpetition rents due from the Debtor's lease of a warehouse
located at 399 Mill Road, in Edison, Middlesex County, New
Jersey. Thomas W. Halm, Jr., Esq., at Hill Wallack LLP, in
Princeton, New Jersey, tells the Court that the Debtor's continued
use of the NJ Warehouse while it was preparing the Warehouse to
open for operations clearly establishes that these charges are
actual and necessary costs and expenses of preserving the estate.
He adds that the Debtor and Heller Family clearly contemplated
that the Debtor would fully pay Heller all of the rents due under
the Lease for its continued use of the Warehouse postpetition.
Pazin & Meyers, Inc., seeks the Court's permission to file a late
claim in the amount of $28,804 for goods and services it provided
to the Debtors. Pazin explains that through a clerical oversight
and error in its counsel's law office, the December 5, 2008 Bar
Date Notice did not get properly entered into the calendar system
maintained by the law firm. Consequently, the Bar Date passed
without the proof of claim being timely filed.
Michael E. Norton, Esq., at Norton & Associates, LLC, in New
York, on behalf of Pazin, asserts that allowing Pazin to file its
claim at this time would have de minimis impact on the Debtors'
bankruptcy cases. He points out that the Bar Date only very
recently passed and the Debtors have only recently commenced
their review of the many thousands of claims which have been
filed in their cases. He adds that the review clearly will take
a number of months before it is completed and claims are resolved
or settled, and there are no plans of reorganization filed or
proposed by Debtors.
The Los Angeles County Treasurer and Tax Collector withdrew Claim
No. 6256 seeking $339,604 from the Debtors. The County did not
cite the reason for the withdrawal.
Meanwhile, the Debtors, in a Court-approved stipulation, have
agreed to allow the United States Government, on behalf of the
Internal Revenue Service, to file consolidated proofs of claim in
Quebecor World (USA), Inc.'s case. The consolidated claim will be
deemed filed against each Debtor. All proof of claim forms filed
by the Government, on behalf of the IRS, must clearly identify for
each claim asserted the names of the Debtors against which the
claim is being asserted. The parties state that requiring the
Government, on behalf of the IRS, to file separate proofs of claim
against each of the Debtors is unnecessary and would impose a
significant administrative burden on the parties and the Court.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW) -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Ernst & Young, Inc., the monitor of Quebecor World Inc., and its
affiliates' reorganization proceedings under the Canadian
Companies' Creditors Arrangement Act, filed a petition under
Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court
for the Southern District of New York on September 30, 2008, on
behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The chapter 15
case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at
Allen & Overy LLP, in New York, serves as counsel to the chapter
15 petitioner.
QWI and certain of its subsidiaries commenced the CCAA proceedings
before the Quebec Superior Court (Commercial Division) on January
20, 2008. The following day, 53 of QWI's U.S. subsidiaries,
including Quebecor World (USA), Inc., filed
petitions under Chapter 11 of the U.S. Bankruptcy Code.
The Honorable Justice Robert Mongeon oversees the CCAA case.
Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the
Company in the CCAA case. Ernst & Young Inc. was appointed as
Monitor.
Quebecor World (USA) Inc., its U.S. subsidiary, along with other
U.S. affiliates, filed for chapter 11 bankruptcy before the U.S.
Bankruptcy Court for the Southern District of New York (Lead Case
No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter
LLP, represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
QWI is the only entity involved in the CCAA proceedings that is
not a Debtor in the Chapter 11 Cases.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$3,412,100,000 total
liabilities of US$4,326,500,000 preferred shares of US$62,000,000
and total shareholders' deficit of US$976,400,000.
The Hon. Robert Mongeon of the Quebec Superior Court has extended
until Dec. 14, 2008, the stay under the Canadian Companies'
Creditors Arrangement Act.
Bankruptcy Creditors' Service, Inc., publishes Quebecor World
Bankruptcy News. The newsletter tracks the proceedings initiated
by Quebecor World Inc. and its U.S. and Non-U.S. subsidiaries
under the U.S. Bankruptcy Code and the Companies' Creditors
Arrangement Act in Canada. (http://bankrupt.com/newsstand/or
215/945-7000)
REUNION INDUSTRIES: WebFinancial Et Al. Disclose 27% Equity Stake
-----------------------------------------------------------------
WebFinancial L.P., Steel Partners II, L.P., Steel Partners II
Master Fund L.P., Steel Partners LLC, and Warren G. Lichtenstein
disclosed in a regulatory filing dated January 5, 2009, that "as
of the close of business on January 2, 2009, WebFinancial may be
deemed to indirectly beneficially own up to 4,697,950 Pledged
Shares [of Reunion Industries, Inc.], constituting approximately
27.0% of the Shares outstanding."
Upon any disposition of the Pledged Shares, each of the holders of
the Senior Notes, including WebFinancial, would be entitled to
receive its pro-rata portion of the proceeds of such disposition
up to the amount required to satisfy the disputed amount due under
the Senior Notes.
Steel Master is the owner of approximately 99% of the limited
partnership interests in WebFinancial. WebFinancial is the sole
limited partner of Steel Partners II. Partners LLC is the manager
of WebFinancial, Steel Partners II and Steel Master. The general
partner of Steel Partners II has delegated to Partners LLC the
exclusive power to vote and dispose of the securities held by
Steel Partners II. Warren G. Lichtenstein is the manager of
Partners LLC. By virtue of these relationships, each of Steel
Master, Partners LLC and Mr. Lichtenstein may be deemed to
beneficially own the Shares owned by WebFinanical.
Headquartered in Pittsburgh, Pennsylvania, Reunion Industries,
Inc., owns and operates industrial manufacturing operations that
design and manufacture engineered, high quality products for
specific customer requirements. These products include large
diameter seamless pressure vessels, manufactured by its CP
Industries division, and hydraulic and pneumatic cylinders,
manufactured by its Hanna Cylinders division. In addition,
the Debtor has a 65% interest in Shanghai Klemp Metal Products
Co., Ltd., a Chinese company located in Shanghai, China.
Shanghai Klemp manufactures metal bar grating.
Reunion Industries filed for chapter 11 protection on Nov. 26,
2007, (Bankr. D. Conn. Case No. 07-50727). Two Reunion Industries
stockholders, Charles E. Bradley, Sr. Family, L.P., and John Grier
Poole Family, L.P., filed separate Chapter 11 petitions on the
same day (Bankr. D. Conn. Case Nos. 07-50725 and 07-50726). Carol
A. Felicetta, Esq. at Reid and Riege, P.C.S. represents the
Debtors in their restructuring efforts.
REUNION INDUSTRIES: T. Cassidy & T. Amonett Resign as Directors
---------------------------------------------------------------
Effective December 31, 2008, Thomas L. Cassidy and Thomas N.
Amonett resigned as directors of Reunion Industries, Inc. The
Board of Directors elected Thomas M. Certo as a director,
effective January 1, 2009, to fill one of the vacancies created by
the resignations. Mr. Certo will also serve on the Board's Audit
and Compensation Committees.
Since 1997, Mr. Certo has served as President and Chief Executive
Officer of Gemini Holdings, Inc., a company based in Pittsburgh,
Pennsylvania that is engaged in the business of acquiring,
managing and expanding mid-market companies from a diverse array
of industries.
Headquartered in Pittsburgh, Pennsylvania, Reunion Industries,
Inc., owns and operates industrial manufacturing operations that
design and manufacture engineered, high quality products for
specific customer requirements. These products include large
diameter seamless pressure vessels, manufactured by its CP
Industries division, and hydraulic and pneumatic cylinders,
manufactured by its Hanna Cylinders division. In addition,
the Debtor has a 65% interest in Shanghai Klemp Metal Products
Co., Ltd., a Chinese company located in Shanghai, China.
Shanghai Klemp manufactures metal bar grating.
Reunion Industries filed for chapter 11 protection on Nov. 26,
2007, (Bankr. D. Conn. Case No. 07-50727). Two Reunion Industries
stockholders, Charles E. Bradley, Sr. Family, L.P., and John Grier
Poole Family, L.P., filed separate Chapter 11 petitions on the
same day (Bankr. D. Conn. Case Nos. 07-50725 and 07-50726). Carol
A. Felicetta, Esq. at Reid and Riege, P.C.S. represents the
Debtors in their restructuring efforts.
SMURFIT-STONE: Files for Bankruptcy; Has $750MM Loan Commitment
---------------------------------------------------------------
Smurfit-Stone Container Corporation and its U.S. and Canadian
subsidiaries filed on January 26, 2009, voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court in
Wilmington, Delaware. The Canadian subsidiaries will also file to
reorganize under the Companies' Creditors Arrangement Act in the
Ontario Superior Court of Justice in Canada.
The Company plans to use this process to restructure its debt,
resulting in a capital structure more suited to support its long-
term growth and profitability. The Company's normal day-to-day
operations will continue without interruption. Smurfit-Stone
remains completely focused on serving its customers.
Pending Court approval, the Company has received commitments for
up to $750 million in debtor-in-possession financing to fund
continuing operations:
-- $350 million consists of new incremental funding;
-- $400 million represents replacement of existing Accounts
Receivable Securitization facilities both in the U.S. And
Canada.
The DIP financing will enable the Company to continue to satisfy
customary obligations associated with ongoing operations of its
business, including payment of employee wages and benefits in the
ordinary course, and payment of post-petition obligations to
vendors under existing terms.
Patrick J. Moore, chairman and CEO, said, "Over the past decade,
we built one of North America's premier containerboard and
packaging companies. But, our financial performance has not
reflected the full potential of our earnings power due to higher
cost operations and burdensome debt levels dating back to the
original formation of the company. As a result of our three-year
transformation program, we have been focused on improving our
operating performance and our operations are now well invested and
far more cost effective.
"Yet, the acceleration of the unprecedented global economic
recession has weakened demand for packaging, and the frozen credit
markets have prevented an out-of-court refinancing of our capital
structure. While this is not the outcome we anticipated, we are
taking this action to become a more financially healthy company.
"This combination of a modern, cost-effective operating platform
and a reorganized capital structure through Chapter 11 will
represent a new beginning for Smurfit-Stone. I am confident that
we will emerge a much stronger company structured for future
growth and greater profitability."
All operations outside of the U.S. and Canada are excluded from
this process and none of Smurfit-Stone's subsidiaries or
operations outside of the U.S. and Canada commenced Chapter 11,
CCAA or similar proceedings.
Smurfit-Stone has filed a variety of customary first day motions
with the Court in Delaware and will seek an initial order in the
Canadian proceedings, which will help enable it to continue to
conduct business as usual while it completes its restructuring.
Smurfit-Stone's legal advisor is Sidley Austin LLP; its Canadian
counsel is Stikeman Elliott LLP; and its financial advisor is
Lazard.
More information about Smurfit-Stone's reorganization is available
on the Company's Web site at http://www.smurfit-stone.com/
Employee, retiree, customer and supplier inquiries can be made at
877-264-9638. If outside of the U.S. and Canada, inquiries can be
made at 503-597-7694.
About Smurfit-Stone
Smurfit-Stone Container Corp. is North American's second largest
maker of corrugated packaging. Headquartered in Chicago,
Illinois, Smurfit-Stone Container (Nasdaq: SSCC) --
http://www.smurfit-stone.com/-- 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. Smurfit-Stone operates
approximately 170 facilities and employs approximately 22,000
people, and generated revenue of $7.4 billion in 2007. The
company is a member of the Sustainable Forestry Initiative(R), and
the Chicago Climate Exchange.
* * *
Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Smurfit-Stone
Container Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
SMURFIT-STONE: Declining Demand, Recession Cue Bankruptcy Filing
----------------------------------------------------------------
Smurfit-Stone Container Corporation filed for bankruptcy because
of an unprecedented decline in demand for its products, and its
inability to refinance its debt due to recent downturn in the
global economy, says Charles A. Hinrichs, chief financial officer
and a senior vice president.
According to Mr. Hinrichs, the company's financial performance
depends primarily upon the market demand for its products and the
prices that it receives for such products. The recent downturn in
the global economy has resulted in an unprecedented decline in
demand for the company's products, leading to increased inventory
levels and downward pressure on the Company's operating income.
At the same time, Mr. Hinrichs relates, substantial price
competition and volatility in the pulp and paper industry has
resulted in decreased prices for the company's products which,
coupled with the company's leveraged financial position and the
recent volatility in energy prices and the cost of raw materials,
have adversely impacted the company's financial performance. In
addition, recent and dramatic changes in the capital markets have
adversely impacted the company's prospects for refinancing its
revolving credit and securitization facilities. Because of these
factors, Smurfit-Stone has found it necessary to seek bankruptcy
protection from creditors.
On Jan. 26, Smurfit-Stone and its affiliates filed petitions for
Chapter 11 protection before the U.S. Bankruptcy Court for the
District of Delaware. Certain of the company's affiliates,
including Smurfit-Stone Container Canada Inc., a wholly owned
subsidiary of SSCE, and certain of its affiliates, will apply for
protection from their creditors in Canada pursuant to the
Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 or
other insolvency laws in the Ontario Superior Court of Justice
(Commercial List).
Smurfit-Stone Canada, et al., will seek, inter alia, an order from
the Canadian Court imposing a stay of all proceedings against the
them and their property in Canada.
Smurfit-Stone is one of the leading integrated manufacturers of
paperboard and paper-based packaging in North America and one of
the world's largest paper recyclers. The company operates 162
manufacturing facilities that are primarily located in the United
States and Canada, including 14 paper mills (12 in the United
States and 2 in Canada), 122 container plants (102 in the United
States (including 1 in Puerto Rico), 16 in Canada, 3 in Mexico,
and 1 in China), and 26 reclamation plants (all in the United
States). The company also owns approximately one million acres of
timberland in Canada and operates wood harvesting facilities in
Canada and the United States. The company employs approximately
21,250 employees, ofwhom approximately 17,400 are based in the
United States. For the fiscal year ended December 31, 2007, the
Company recorded revenues of approximately $7.420 billion,
resulting in a net loss of approximately $115 million for fiscal
year 2007. For the quarterly period ended September 30, 2008, the
company reported approximately $7.450 billion in total assets and
$5.582 billion in total liabilities on a consolidated basis.
According to Bloomberg News, Smurfit-Stone joins other pulp- and
paper-related bankruptcies as rising Internet use hurts magazines
and newspapers. Corp. Durango SAB, Mexico's largest papermaker,
sought U.S. bankruptcy in October. Quebecor World Inc., a magazine
printer and Pope & Talbot Inc., a pulp-mill operator, also sought
cross-border bankruptcies for their operations in the U.S. and
Canada.
* * *
Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Smurfit-Stone
Container Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
SMURFIT-STONE: Fitch Slashes Rating to 'D' on Bankruptcy Filing
---------------------------------------------------------------
Fitch Ratings has downgraded the ratings of Smurfit-Stone
Container Corporation:
-- Issuer Default Rating (IDR) to 'D' from 'C';
-- Secured bank debt to 'CCC/RR2' from 'CCC/RR1';
-- Senior unsecured debt to 'C/RR6' from 'C/RR4'.
The preferred stock rating remains at 'C/RR6'.
The ratings downgrades have been prompted by the voluntary
bankruptcy filing under Chapter 11 by SSCC and its subsidiaries as
well as filings by the company's Canadian subsidiaries under the
Creditors Arrangement Act. Approximately $1.270 billion in
secured debt and $2.275 billion in unsecured debt is affected.
SSCC has obtained commitments for $750 million of debtor-in-
possession financing (DIP) not currently rated by Fitch, of which
approximately $400 million will be used to refinance off-balance
sheet accounts receivable securitizations and $350 million of
which will be used to finance ongoing operations. The change in
the secured and the unsecured Recovery Ratings of SSCC reflect the
inclusion of the incremental funding in the DIP facility and a
revision to the estimated liquidation values of certain assets.
SSCC is a key North American producer in the corrugated box
markets with 14 paper mills and 122 corrugated container plants.
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.
* * *
Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Smurfit-Stone
Container Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
SMURFIT-STONE: Case Summary & 30 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Smurfit-Stone Container Corporation
150 North Michigan Avenue
Chicago, Illinois 60601
Bankruptcy Case No.: 09-10235
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Smurfit-Stone Container Enterprises, Inc. 09-10236
Calpine Corrugated, LLC 09-10237
Cameo Container Corporation 09-10238
Lot 24D Redevelopment Corporation 09-10239
Atlanta & Saint Andrews Bay Railway Company 09-10240
Stone International Services Corporation 09-10241
Stone Global, Inc. 09-10242
Stone Connecticut Paperboard Properties, Inc. 09-10243
Smurfit-Stone Puerto Rico, Inc. 09-10244
Smurfit Newsprint Corporation 09-10245
SLP Finance I, Inc. 09-10246
SLP Finance II, Inc. 09-10247
SMBI Inc. 09-10248
Smurfit-Stone Container Canada Inc. 09-10249
Stone Container Finance Company of Canada II 09-10250
3083527 Nova Scotia Company 09-10251
MBI Limited/Limit‚e 09-10252
Smurfit-MBI 09-10253
639647 British Columbia Ltd. 09-10254
B.C. Shipper Supplies Ltd. 09-10255
Specialty Containers Inc. 09-10256
SLP Financial General Partnership 09-10257
Francobec Company 09-10258
605681 N.B. Inc. 09-10259
Type of Business: The Debtors (Nasdaq: SSCC) are North American's
second largest makers of corrugated packaging.
Smurfit-Stone Container Corp. is a publicly
traded holding company that operates through a
wholly owned subsidiary, Smurfit-Stone Container
Enterprises Inc. SSCC is an integrated producer
of containerboard and corrugated containers
(paper-based industrial packaging) and is a
large collector, marketer, and exporter of
recycled fiber. Smurfit-Stone operates
approximately 170 facilities and employs
approximately 22,000 people.
As reported by the Troubled Company Reporter on
Jan. 19, 2009, 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'. "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.
Fitch Ratings also downgraded its issuer
default rating of Smurfit to 'C' from 'B'.
"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," Fitch
said.
http://www.smurfit-stone.com/
Chapter 11 Petition Date: January 26, 2009
Court: District of Delaware
Judge: Brendan Linehan Shannon
Debtors' Counsel: James F. Conlan, Esq.
Matthew A. Clemente, Esq.
Dennis M. Twomey, Esq.
Bojan Guzina, Esq.
Sidley Austin LLP
One South Dearborn Street
Chicago, IL 60603
Tel: (312) 853-7000
Fax: (312) 853-7036
http://www.sidley.com
--- and ---
Robert S. Brady, Esq.
Edmon L. Morton, Esq.
Young Conaway Stargatt & Taylor
The Brandywine Building
1000 West Street, 17th Floor
P.O. Box 391
Wilmington, DE 19899-0391
Tel: (302) 571-6600
Fax: (302) 571-1253
http://www.ycst.com
Claims Agent: Epiq Bankruptcy Solutions LLC
Financial & Investment Consultant: PricewaterhouseCooper LLC
300 Madison Avenue
New York, NY 10017
Investment Banker: Lazard Freres & Co. LLC
190 S. LaSalle Street, 31st Floor
Chicago, Illinois 60603
The Debtors' financial condition as of September 30, 2008:
Total Assets: $7,450,000,000
Total Debts: $5,582,000,000
The Debtors' Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York bond debt $1,400,000,000
101 Barclay Street
New York, NY 10286
Fax: (212) 815-5707
The Bank of New York Trust bond debt $675,000,000
Company NA
2 North LaSalle Street
Suite 1020
Chicago, IL 60602
Fax: (312) 827-8542
BNY Trust Company Midwest bond debt $200,000,000
2 North LaSalle Street
Suite 1020
Chicago, IL 60602
Fax: (312) 827-8542
The CIT Group/Equipment guaranty of $36,800,000
Financing Inc. amended and
305 Fellowship Road, Ste. 300 restated credit
Mount Laurel, NJ 08054 agreement dated
July 28, 2008
Attn: Martin Healey
James H. Rollins
Holland & Knight LLP
One Atlantic Center
Suite 2000
1201 West Peachtree
Street, N.E.
Atlanta, Georgia 30309
Fax: (404) 541-4434
British Petroleum trade; secured $22,062,850
28301 Ferry Road, 2nd Floor by L/C in amount
Warrenville, IL 60555 of $19,052,850
Attn: Candice Duet
Tel: (630) 836-7629
Fax: (630) 836-4600
International Paper and trade $12,906,122
Affiliates
PO Box #9758
Attn: Jenny Iranon
Tel: (253) 288-4730
Fax: (901) 214-1248
Union Bank of California NA guaranty of loan $9,171,665
Two Walnut Creek Center and security
200 Pringle Avenue, Suite 500 agreement dated
Walnut Creek, CA 94596 March 30, 2006
Attn: Commercial Finance
Division
Barry Freeman
Jeffer, Mangels, Butler &
Marmaro, LP
19000 Avenue of the Stars
7th Floor
Los Angeles, CA 90067
Fax: (310) 712-3393
Lead Plaintiffs in the civil litigation $8,750,000
action titled Arnold Inda;
Daniel Romero; Albert Villa;
Rebuen Corte and Joseph
Cortez; Felipe Mendoza; John
Jimenez; Raymond Lamontagne;
individually and on behalf
of a class of similarly
situated v. Smurfit Stone
Container Corporation
Posner & Rosen LLP
3600 Wilshire Blvd.
Suite 1800
Los Angeles, CA 90010
Attn: Howard Z. Rosen
Jason C. Marsili
Tel: (213) 389-6050
Fax: (213) 389-0663
Georgia Pacific Corporation trade $5,477,664
and Affiliates
Attn: Jason Smither
133 Peachtree St., N.E.
Atlanta, GA 30303
Tel: (404) 652-5937
Fax: (404) 584-1470
Corn Products International trade $3,808,207
and Affiliates
PO Box #409882
Atlanta, GA 30384-9882
Attn: Dennis Callanan
Tel: (708) 551-2600
Fax: (708) 551-2700
BHS Corrugated North trade $3,419,975
America Inc. and Affiliates
9103 Yellow Brick Road
Suite N
Baltimore City, MD 21237-4702
Attn: Greg Wolf
Tel: (410) 574-4211
Fax: (410) 574-4571
CSX Transportation and trade $3,180,820
Affiliates
500 Water St. SC J180
Jacksonville, FL 32202
Attn: Dan Murray
Tel: (847) 910-3062
Fax: (904) 359-2459
Voith Fabrics US Sales Inc trade $2,915,525
and Affiliates
PO Box #88572
Milwaukee, WI 53288
Attn: Bob Gallo
Tel: (920) 731-0769
Fax: (920) 734-1444
Norampac and Affiliates trade $2,748,203
1061 Parent Street
ST. Bruno (Quebec), J3V 6R7
Canada
Attn: Patrick Chaperon
Tel: (450) 461-8600
Fax: (450) 461-8636
Green Bay Packaging Inc trade $2,471,990
and Affiliates
BIN 53139
Milwaukee, WI 53288
Marquip Inc. and Affiliates trade $2,198,544
33758 Treasury Center
Cook, IL 60694-3700
Attn: Randy Lorenz
Tel: (608) 255-4220
Fax: (314) 862-8858
Motion Industries Inc. and trade $2,099,343
Affiliates
PO Box #862
Springdale, AR 72765
Attn: W.E. Bill Horn
Tel: (205) 951-1148
Fax: (205) 951-1172
Rock Tenn Co. & Affiliates trade $2,044,139
PO Box #8500
Philadelphia, PA 19178
Attn: Dan Bergin
Tel: (631) 851-9028
Fax: (770) 263-3582
Norfolk Southern Corporation trade $2,040,920
& Affiliates
PO Box #532888
Atlanta, GA 30353-2888
Attn: John Reilly
Tel: (708) 409-1502
Fax: (757) 664-5069
Erco Worldwide & Affiliates trade $2,009,986
302 The East Mall, Suite 200
Toronto, ON M9B 6C7 Canada
Attn: Dave Gallagher
Tel: (509) 521-1396
Fax: (239-0235
Weavexx Corp & Affiliates trade $1,813,534
24446 Network Place
Chicago, IL 60673-1244
Attn: Joel Farmer
Tel: (865) 250-0245
Fax: (919) 556-2432
Equistar trade $1,792,081
2718 Collections Center Drive
Chicago, IL 60693
Attn: John Kangas
Tel: (630) 443-7310
Fax: (713) 652-7430
Airtek Construction Inc. & trade $1,791,265
PO Box #388
Troy, AL 36081
Attn: Mark Smith
Tel: (334) 566-7400
Fax: (334) 556-7496
RS Harritan Co. Inc. & trade $1,782,176
Affiliates
PO Box #24157
Richmond, VA 23224-0157
Attn: Cynthia Cecil
Tel: (804) 275-7821
Fax: (804) 743-8380
Graphic Sciences Inc. & trade $1,633,547
Affiliates
Unit 024944
Portland, OR 97208
Attn: Jeff Ashburn
Tel: (501) 276-4465
Fax: (503) 460-0225
Sheriff And Brown tax $1,591,372
500 East Court St.
Jonesboro, LA 71251
Attn: Andy Brown
Tel: (318) 259-9021
Fax: (318) 259-8268
Boise Cascade Paper Div. trade $1,577,153
PO Box #120001 Dept 0778
Dallas, TX 75312-0778
Attn: Lori Walston
Tel: (208) 384-7829
Fax: (208) 384-4852
Cedar Bay Generating Co. trade; secured $1,576,050
Ltd. Partnership by L/C in the
401 Alton St. amount of
Attn: Sminole Mill $10,000,000
Tel: (904) 751-4000
Fax: (904) 751-7370
The petition was signed by Craig A. Hunt, secretary.
* * *
Bankruptcy Creditors' Service, Inc., publishes Smurfit-Stone
Bankruptcy News. The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Smurfit-Stone
Container Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
SOUTH CANAAN: Case Summary & two Largest Unsecured Creditors
------------------------------------------------------------
Debtor: South Canaan Cellular Investments, LLC
564 Spring Oaks Drive
West Chester, PA 19382
Bankruptcy Case No.: 09-10473
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
South Canaan Cellular Equity, LLC 09-10474
Chapter 11 Petition Date: January 25, 2009
Court: Eastern District of Pennsylvania (Philadelphia)
Debtor's Counsel: Gretchen M. Santamour, Esq.
gsantamour@wolfblock.com
Wolf, Block, Schorr and Solis Cohen LLP
1650 Arch Street, 22nd Floror
Philadelphia, PA 19103 2097
Tel: (215) 977 2467
Fax: (215) 405 2907
Estimated Assets: $10 million to $50 million
Estimated Debts: $1 million to $10 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
South Canaan Cellular loan $22,500
Communications Co.
650 Old Willow Avenue
Suite E
Honesdale, PA 18431
Bauknight Pietras & Stormer professional fees $2,000
PA
1517 Gervais Street
PO Box 1330
Attn: Denise Gunter
Columbia, SC 29202
The petition was signed by Carolyn Copp, president.
SPRINT NEXTEL: Will Lay Off 14% of Workforce to Save $1.2 Bil.
--------------------------------------------------------------
Amol Sharma at The Wall Street Journal reports that Sprint Nextel
Corp. will lay off 14% of its work force, to be completed by the
end of the first quarter.
Sprint Nextel will take actions in the first quarter of 2009 to
reduce internal and external labor costs by approximately
$1.2 billion on an annualized basis. The actions include the
elimination of approximately 8,000 positions within the company,
which is expected to be largely completed by March 31. The
positions to be eliminated will impact all levels of the company,
and the impact on geographic locations will vary.
The reduction total includes approximately 850 positions expected
to be eliminated under a voluntary separation plan started late
last year. The company expects to recognize a charge in excess of
$300 million in the first quarter of 2009 for severance and
related costs associated with the reduction.
WSJ states that Sprint Nextel laid off about 4,000 employees last
year.
"Labor reductions are always the most difficult action to take,
but many companies are finding it necessary in this environment,"
said Sprint CEO Dan Hesse. "We continue to improve the customer
experience and these improvements are reflected in much higher
levels of satisfaction in customer surveys and in independent
performance tests. Our commitment to quality will not change."
Sprint has seen a notable reduction in calls per subscriber to
customer care and increased customer satisfaction resulting from
customer service improvements. The company is committed to these
high standards of customer care and innovation. In line with this
commitment, the headcount reductions in these functions will be
less than in non-customer facing groups. Furthermore, the
company's networks continue to operate with current best-ever
metrics and has resulted in Sprint being named by Gizmodo as the
winner of its nationwide 3G data test last month. Sprint also
offers customers the best value in the industry plus high-
performance devices like the Samsung InstinctTM, the BlackBerry
CurveTM and the upcoming Palm PreTM, that make it easy for
customers to enjoy everything their wireless handsets can do.
The labor cost reductions are the latest action in the company's
efforts to make its cost structure more competitive in the
industry and to remain financially secure in a challenging
economic environment. Sprint repaid $2 billion in debt in the
second half of 2008, and renegotiated its credit facility terms
with the expectation of sufficient liquidity to pay debt coming
due during the next two years. At the end of the third quarter
2008, the company had a cash balance of $4.1 billion, and said
that it had expected to continue to generate Free Cash Flow in the
fourth quarter.
Company cost reductions also include a decision to suspend the
401(k) match for 2009, to extend a 2008 suspension of annual
salary increases through 2009, and to suspend its tuition
reimbursement program for 2009.
WSJ relates that Sprint Nextel's chief network officer Kathy
Walker is among those who will be leaving. Ms. Walker, according
to WSJ, oversees the design and operation of the carrier's
networks as well as its information technology.
Sprint Nextel will stop matching payments for employee-retirement
plans and suspend yearly pay increases this year, as the company
tries to cut costs and shore up its balance sheet, WSJ states.
Sprint Nextel, WSJ reports, said that it repaid about $2 billion
in debt in the second half of 2008. WSJ says that Sprint Nextel
had a cash balance of $4.1 billion and total debt of about
$22.6 billion at the end of the third quarter 2008.
About Sprint Nextel
Sprint Nextel Corp. -- http://www.sprint.com/-- offers a
comprehensive range of wireless and wireline communications
services bringing the freedom of mobility to consumers, businesses
and government users. Sprint Nextel is widely recognized for
developing, engineering and deploying innovative technologies,
including two robust wireless networks serving about 54 million
customers at the end of the fourth quarter 2007; industry-leading
mobile data services; instant national and international walkie-
talkie capabilities; and a global Tier 1 Internet backbone.
STAN LEE MEDIA: Founder, et al., Face Shareholder Derivative Suit
-----------------------------------------------------------------
Martin Garbus, Esq., has filed a shareholder derivative suit on
January 26, 2009, against Marvel Entertainment and its chairman
Isaac Perlmutter, as well as Stan Lee, the creator of Marvel's
major superhero characters and former Marvel Studio head, Avi
Arad. Mr. Garbus is suing for recovery in excess of $750 million
representing one-half of the proceeds from such blockbuster films
as Spider Man, Iron Man and X-Men franchises.
The suit accuses Messrs. Perlmutter, Arad, and Stan Lee and Marvel
of denying Stan Lee Media, Inc. shareholders their rights in
ownership of 50% of both the legendary superhero characters and
intellectual properties created by Stan Lee, which have become
among the top entertainment franchises in the world.
SLMI was placed into Chapter 11 Reorganization in Bankruptcy by
Stan Lee in 2001 after the dot-com bust and emerged in November
2006, beginning a titanic battle between shareholders and the
company's founder, Mr. Lee.
SLMI shareholders contend that Messrs. Lee and Perlmutter, along
with Mr. Lee's partner Arthur Lieberman and former Marvel Studios
president Avi Arad, improperly colluded to hide and misappropriate
financial interests in Lee's creations assigned to Stan Lee Media
in 1998 and reaffirmed in 1999.
TAHERA DIAMOND: Canadian Court Extends CCAA Stay Until Feb. 27
--------------------------------------------------------------
Tahera Diamond Corporation received an extension to the stay
period under the Companies' Creditors Arrangement Act, which was
previously set to expire on January 23, 2009. The court approved
extension is now in place until February 27, 2009. During the
extension of the stay period, the Company, will continue with
efforts to complete a sale of its remaining assets in consultation
with Caz Petroleum Inc., the Company's leading secured creditor.
No value is expected to remain available to shareholders as a
result of the foregoing.
About Tahera Diamond
Tahera Diamond Corporation (TSX: TAH) -- http://www.tahera.com/--
is a Canadian owned diamond mining company. Tahera's wholly-owned
Jericho project, commencing commercial production in early 2006,
represents Canada's third, and Nunavut's first, diamond mine.
On Jan. 16, 2008, Tahera obtained an order from the Ontario
Superior Court of Justice granting Tahera and its subsidiary
protection pursuant to the provisions of the CCAA. Tahera sought
protection under CCAA, as its current cash flows and cash on hand
would not allow it to meet its current obligations and its
obligations with respect to the 2008 winter road resupply. The
Ontario Superior Court of Justice extended the Debtor's CCAA stay
period until Sept. 30, 2008.
TIDEWATER MARINA: Case Summary & 11 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Tidewater Marina Holding, L.C.
8216A Old Courthouse Rd.
Vienna, VA 22182
Bankruptcy Case No.: 09-10480
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Tidewater Marina Management, L.C. 09-10481
Chapter 11 Petition Date: January 22, 2009
Court: Eastern District of Virginia (Alexandria)
Judge: Robert G. Mayer
Debtor's Counsel: Stephen E. Leach, Esq.
sleach@ltblaw.com
Leach Travell Britt, PC
8270 Greensboro Drive, Suite 1050
McLean, VA 22102
Tel: (703) 584-8902
Fax: (703) 584-8901
Estimated Assets: $10 million to $50 million
Estimated Debts: $1 million to $10 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
W. Dewey Rasnake, CPA trade debt $104,000
8216 Old Courthouse Rd.
Suite A
Vienna, VA 22182
Tel: (703) 893-3000
Chesapeake Bay Magazine trade debt $5,700
1819 Bay Ridge Ave.
Annapolis, MD 21403
Offshore Communications trade debt $1,254
500 Victory Rd
Quincy, MA 02171
Murphy Propeller trade debt $986
Shul-Mar Equipment Inc. trade debt $864
Rappahannock Comm. College trade debt $700
Hostar Marina trade debt $540
Pioneer Research trade debt $330
Doggett trade debt $200
John McNair Assoc. trade debt $138
The Journal trade debt unknown
The petition was signed by Katharine R. Sobotka, member.
TRIBUNE CO: Panel Says Cubs Sale Should be Approved By Court
------------------------------------------------------------
The official committee of unsecured creditors in Tribune Co.'s
Chapter 11 cases wants Tribune to submit its proposed sale of its
Chicago Cubs baseball team to the U.S. Bankruptcy Court for the
District of Delaware for approval.
"It is our expectation that the company will seek court approval
of any sale," committee attorney Howard Seife said in an e-mail,
according to Bloomberg News.
While Tribune owns the Cubs, the Cubs wasn't included in the
Chapter 11 filing.
Tribune may not be required to seek approval of the sale from U.S.
Bankruptcy Judge Kevin J. Carey, who is overseeing the Chapter 11
case, attorney Derek Abbott said, according to Bloomberg. "If the
Cubs are selling their assets in an asset sale and the Cubs are
not a debtor, it generally would not require court approval,"
Abbott, a bankruptcy attorney with Morris, Nichols, Arsht &
Tunnell in Wilmington, said.
Bankruptcy Law360 said last week that in an apparent effort to
keep its Chapter 11 case running smoothly, the Tribune Co. has
reportedly disclosed to creditors it has settled on a leading bid
for the Chicago Cubs baseball team, perhaps its most prized asset.
Tribune previously set a Nov. 27 deadline for bids for its
baseball franchise, but opted to extend the date. According to
the Wall Street Journal, instability in the credit markets is
making the process more difficult, and two people familiar with
the sale said that groups interested in Chicago Cubs learned that
the deadline is now considered "soft." Uncertainty among major
lenders has made determining the value of Chicago Cubs and the
costs of bids more difficult and time-consuming, making the
Nov. 27 deadline impossible to meet, WSJ says, citing bidders.
WSJ said November that Tribune's offer to keep as much as 50% of
the team for an undetermined period would make purchasing Chicago
Cubs more affordable, but Tribune's debt problems have increased
the risk of a potential leveraged partnership with the company.
Headquartered in Chicago, Illinois, Tribune Company --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball
team. The company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No.
08-13141). The Debtors proposed Sidley Austion LLP as their
counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware
counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as
financial advisors; and Epiq Bankruptcy Solutions LLC as claims
agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in
total assets and $12,972,541,148 in total debts.
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)
VALASSIS COMMUNICATIONS: Can Repurchase Term Loans Below Par
------------------------------------------------------------
Valassis has entered into an amendment to its senior secured
credit facility to, among other things, permit Valassis to use up
to $125 million to repurchase its outstanding term loans under the
senior secured credit facility at prices below par through one or
more "modified Dutch" auctions during 2009. The amendment does
not obligate Valassis to make any such repurchases. In addition,
Valassis agreed to voluntarily reduce the availability under the
revolving credit portion of its senior secured credit facility
from $120 million to $100 million in exchange for the ability to
keep $20 million of revolving loans outstanding at the time it
commences any modified Dutch auction. As of Sept. 30, 2008,
Valassis had $612.3 million of term loans outstanding under its
credit facility. There can be no assurance that Valassis will
repurchase any such loans.
The credit agreement amendment also permits Valassis to exclude
from the definition of Consolidated Interest Expense swap breakage
costs in connection with any repurchases or payments on
outstanding loans, including pursuant to a modified Dutch auction.
"Coming on the heels of the payoff and cancellation of our 6-5/8%
Senior Secured Notes that matured on Jan. 15, 2009, we believe
that this credit agreement amendment will be credit enhancing and
will mark the next step in our continuing efforts to deleverage
our balance sheet," said Robert L. Recchia, Valassis Executive
Vice President and Chief Financial Officer.
Valassis will file a copy of the credit agreement amendment on
Form 8-K with the Securities and Exchange Commission.
About Valassis
Valassis -- http://www.valassis.comand http://www.redplum.com--
is one of the nation's leading media and marketing services
companies, serving more than 15,000 advertisers. Headquartered
in Livonia, Michigan with approximately 7,000 associates in 28
states and eight countries, Valassis is recognized for its
associate and corporate citizenship programs, including its
America's Looking for Its Missing Children(R) program. Valassis
companies include Valassis Direct Mail, Inc., Valassis Canada,
Promotion Watch, Valassis Relationship Marketing Systems, LLC and
NCH Marketing Services, Inc.
VERENIUM CORP: Supplements $120MM Offering of 5.50% Senior Notes
----------------------------------------------------------------
Verenium Corporation filed with the Securities and Exchange
Commission on Dec. 8, 2008, a prospectus supplement No. 7 to the
$120,000,000 5.50% Convertible Senior Notes due 2027 prospectus
dated Aug. 6, 2007. The prospectus supplements and amends the
prospectus relating to the resale by certain securityholders of
5.50% Convertible Senior Notes due 2027 issued by Verenium, and
the shares of common stock issuable upon conversion of the notes.
The Prospectus has amended and supplemented the related footnotes
in the "Selling Security Holders" section on pages 24-28 of the
prospectus as:
Name: KBC Financial Products Cayman Islands Ltd.
Principal Amount of Notes Beneficially
Owned and Offered Hereby: 3,776,000
Percentage of Notes Outstanding: 3.1%
Shares of Common Stock Beneficially
Owned before the Offering: -
Common Stock Owned Upon
Completion of the Offering:
Number of Shares: -
Percentage: Less than 1%
KBC Financial Products Cayman Islands Ltd. is an affiliate of KBC
Financial Products USA, Inc., a registered broker-dealer. KBC
Financial Products Cayman Islands Ltd. has represented to the
company that the notes held by them were purchased in the ordinary
course of business and that at the time of purchase of the notes
held by them, they did not have any agreements or understandings,
directly or indirectly, with any person to distribute the notes
held by them or the common stock issuable upon conversion of the
notes held by them. The amount of notes represented to be held by
KBC Financial Products Cayman Islands Ltd. does not include
$3,724,000 in additional notes acquired by KBC Financial Products
Cayman Islands Ltd. from KBC Diversified Fund, a segregated
portfolio of KBC AIM Master Fund, Spc. on
Nov. 14, 2008.
The initial conversion price for the notes was $8.16 per share.
Effective as of April 1, 2008, the conversion price for the notes
was $6.40 per share. This conversion price is subject to further
adjustment in certain events.
About Verenium Corporation
Based in Cambridge, Massachusetts, Verenium Corporation (Nasdaq:
VRNM) -- http://www.verenium.com/-- is engaged in the development
and commercialization of next-generation cellulosic ethanol, an
environmentally-friendly and renewable transportation fuel, as
well as high-performance specialty enzymes for applications within
the alternative fuels, specialty industrial processes, and animal
nutrition and health markets.
Going Concern/Possible Bankruptcy
As reported in the Troubled Company Reporter on April 1, 2008,
Ernst & Young LLP, in San Diego, expressed substantial doubt about
Verenium Corporation's ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 31, 2007. The auditing firm pointed to the
company's recurring operating losses and accumulated deficit of
$437.1 million at Dec. 31, 2007.
As of Sept. 30, 2008, Verenium Corporation's balance sheet showed
$172.4 million in total assets, $181.9 million in total
liabilities, a net asset deficiency and stockholders' deficit of
$29.1 million and an accumulated deficit of $610.0 million. The
company reported $133.2 million in net loss for the third quarter
of 2008, compared with $20.4 million in net loss in the third
quarter of 2007. For the nine months ended September 30, 2008,
the company had net losses of $172.9 million.
The company has said it will require additional capital to fund
its operations, and plans to address the expected shortfall of
working capital through a combination of additional corporate
partnerships and collaborations, federal and state grant funding,
incremental product sales, selling or financing assets, and, if
necessary and available, the sale of equity or debt securities.
If the company is unsuccessful in raising additional capital from
any of these sources, it will defer, reduce, or eliminate certain
planned expenditures. The company will continue to consider other
financing alternatives including but not limited to, a divesture
of all or part of its business. There can be no assurance that
the company will be able to obtain any sources of financing on
acceptable terms, or at all. If the company cannot obtain
sufficient additional financing in the short-term, it may be
forced to restructure or significantly curtail its operations,
file for bankruptcy or cease operations.
On August 6, 2008, the company entered into a strategic
partnership with BP Biofuels North America LLC, to accelerate the
development and commercialization of cellulosic ethanol. During
the initial 18-month phase of the joint development program, the
company expects to receive $90 million in connection with the
transaction, of which $24.5 million has been received as of
September 30, 2008. In connection with the strategic partnership,
the company formed a special purpose entity, Galaxy Biofuels LLC.
Verenium expects the BP funding to substantially fund its working
capital requirements into 2009.
VERGE LIVING: Case Summary & xx Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Verge Living Corporation
fka The Aquitania Corporation
fka AO Bonanza Holding, LLC
71 South Los Carneros
Goleta, CA 93117
Bankruptcy Case No.: 09- 10177
Type of Business: The Debtor operates a real estate company.
See: http://www.vergeliving.com/
Chapter 11 Petition Date: January 23, 2009
Court: Central District Of California (Santa Barbara)
Judge: Robin Riblet
Debtor's Counsel: Robert M. Yaspan, Esq.
tmenachian@yaspanthau.com
Law Offices of Robert M. Yaspan
21700 Oxnard St., Ste. 1750
Woodland Hills, CA 91367
Tel: (818) 905-7711
Fax: (818) 501-7711
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Euroweb RE Inc. real estate debt; $10,600,000
468 North Camden collateral FMV:
Dr. Suite 244 $1,940,000
Beverly Hills, CA 90210
Dennis Rusk trade debt $800,000
Dennis Rusk LLC
c/o Law Offices of Richard
Vilkin
1286 Crimson Sage Avenue
Henderson, NV 89012
LM Construction trade debt $134,948
6166 S. Sandhill Rd.
Suite A
Las Vegas, NV 89120
Ballhard Spahr trade debt $125,566
Darren Dunckel $70,000
Logical Engineering trade debt $61,500
MMT EJL & Assoc. trade debt $35,784
Schirmer Engineering trade debt $31,266
Haggai Ravid trade debt $30,000
Power Plus trade debt $27,282
TWG Consultants trade debt $24,301
Dupont Engineering trade debt $18,107
Sage Construction trade debt $17,107
Geotek trade debt $16,400
Baughman & Turner trade debt $13,213
American France trade debt $7,714
American Arbitration trade debt $7,355
Association
The petition was signed by Darren Dunckel, chief executive
officer.
VISTEON CORP: Hires Advisers for Possible Bankruptcy
----------------------------------------------------
Visteon Corp. has hired Kirkland & Ellis LLP as bankruptcy counsel
and Rothschild Inc. as financial adviser to prepare for a possible
bankruptcy filing, John D. Stoll and Jeffrey McCracken report,
citing people familiar with the matter.
The sources said that Visteon's hiring of the experts doesn't mean
a bankruptcy filing is imminent, WSJ relates. WSJ states that the
sources said that Visteon and its advisers are studying whether it
should file for bankruptcy pre-emptively to conserve its cash.
According to Bloomberg, Visteon, a former unit of Ford Motor Co.,
fell to a record low in New York trading after a report that the
supplier had hired advisers to prepare for a possible bankruptcy
filing. The company's shares fell 7 cents, or 32 percent, to 15
cents at 4:15 p.m. in New York Stock Exchange composite trading.
That was the lowest close since trading began in June 2000,
according to data compiled by Bloomberg.
WSJ states that Visteon's bonds trade below 20 cents on the
dollar, indicating that investors believe that the company
wouldn't be able to pay off its debt. Sources said that Visteon
has plenty of cash right now, but it burned through more than $400
million in 2008, according to WSJ. The report says that Visteon
is worried that it could face a liquidity crisis later in 2009.
According to WSJ, a person familiar with the matter said that
Visteon's probability of filing for bankruptcy is "about 65% to
70%," mainly depending of on the outcome of high-levels talks with
Ford Motor Co. Visteon is one of Ford Motor's biggest parts
suppliers.
Visteon, says WSJ, and will cut pay by as much as 10% for any
employee making more than $75,000.
WSJ reports that a bankruptcy filing by Visteon could affect Ford
Motor. Visteon, in bankruptcy protection, might be able to reject
and renegotiate parts contracts with Ford Motor that it felt were
unprofitable, according to the report. Visteon, WSJ states, might
also be able to evade or beat back any concessions that Ford Motor
demands from its suppliers. Visteon also supplies parts to
General Motors Corp., Chrysler LLC, Nissan Motor Co., and BMW AG.
Restructuring and Other Actions
Visteon completed its three-year improvement plan at a lower cost
and with greater savings than originally planned. Recent actions
taken at two Western European manufacturing locations bring to 30
the total number of facilities addressed. As of Dec. 31, 2008,
$68 million was available in the escrow account to fund future
restructuring actions.
Visteon continues to take other aggressive actions in light of the
current vehicle production environment. The company is on track
to complete, by the end of first quarter 2009, the reduction of
800 salaried employees globally, announced in October 2008. This
action will generate an estimated per annum savings of $60 million
once completed. For the month of January 2009, Visteon adopted a
four-day workweek schedule for about 2,000 salaried employees at
its Van Buren Township and Plymouth, Mich., facilities
commensurate with a 20% reduction in base salaries. This action
will be reassessed based on future market conditions. The company
also has implemented other actions to reduce costs including the
suspension of 401(k) matching contributions and 2009 salary
increases, the elimination of certain benefit programs, and a
reduction in new hiring. Additional actions are being taken to
reduce capital expenditures, working capital and non-personnel
expenses.
Preliminary 2008 Financial Data
Visteon has provided preliminary estimates of certain financial
information for the fourth quarter and full year 2008. Visteon
expects to release its final fourth-quarter and full-year 2008
financial results on Feb. 25, 2009.
Product sales for fourth quarter 2008 are estimated to be
$1.55 billion, while full year 2008 sales are estimated at
$9.1 billion. Approximately 22% of total fourth quarter product
sales were in North America, with 37% in Europe and 35 percent in
Asia-Pacific. The reduction in fourth quarter sales compared with
a year ago is largely attributable to significantly lower vehicle
production by Visteon's global customers.
Visteon continues to win new business with a broad spectrum of
customers across all regions, a reflection of the company's
significant global footprint and breadth of innovative products.
New business wins in 2008 were about $650 million. Many of the
innovations in Visteon's climate, interiors, electronics and
lighting products are featured on vehicles prominently displayed
at the 2009 North American International Auto Show in Detroit.
This includes significant products for both the NAIAS 2009 Car of
the Year -- Hyundai Genesis -- and the 2009 Truck of the Year,
Ford F-150.
Visteon's year-end 2008 cash balances were $1.18 billion, which
include $75 million drawn under the company's principal U.S.
credit line. Visteon's debt balances at year-end 2008 were
approximately $2.76 billion and include $92 million for the non-
cash impact of on-balance sheet accounting treatment for the
Europe securitization facility, which was amended in fourth
quarter 2008.
About Visteon Corp.
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. The company also has corporate offices
in Shanghai, China; and Kerpen, Germany; the company has
facilities in 26 countries and employs approximately 38,500
people.
As reported in the Troubled Company Reporter on Nov. 4, 2008,
Visteon Corporation's balance sheet at Sept. 30, 2008, showed
total assets of US$5.9 billion and total liabilities of
US$6.4 billion, resulting in shareholders' deficit of roughly
US$530 million.
The company reported a net loss of US$188 million on total sales
of US$2.11 billion. For third quarter 2007, Visteon reported a
net loss of US$109 million on sales of US$2.55 billion.
Visteon reported a net loss of US$335 million for the first nine
months of 2008, compared with a net loss of US$329 million for the
same period a year ago.
* * *
The Troubled Company Reporter said on Jan. 14, 2009, that Standard
& Poor's Ratings Services lowered its corporate credit rating on
Visteon Corp. to 'CCC' from 'B-' and removed all the ratings from
CreditWatch, where they had been placed on Nov. 13, 2008, with
negative implications. The outlook is negative. At the same
time, S&P also lowered its issue-level ratings on the company's
debt.
TCR reported on Nov. 27, 2008, that Moody's Investors Service
lowered Visteon Corporation's corporate family and probability of
default ratings to Caa2, and Caa1, respectively. In a related
action, Moody's also lowered the ratings of Visteon's senior
secured term loan to B3 from Ba3, unguaranteed senior unsecured
notes to Caa3 from Caa2, and guaranteed senior unsecured notes to
Caa2 from Caa1. Visteon's Speculative Grade Liquidity remains
SGL-3. The outlook is negative.
WASHINGTON MUTUAL: Wants IRS's $2.3-Bil. Claim Disallowed
---------------------------------------------------------
Washington Mutual, Inc., and its debtor-affiliates, along with its
official committee of unsecured creditors and its noteholders
group, contend that the Internal Revenue Service's Claim No. 8 for
$2,326,611,411, should be disallowed because it accounts for
corporate income taxes -- for tax years 1994 to 1995, 1998 to
2007, and 2009 -- that "are yet to be assessed."
The United States of America, through the IRS, asked the U.S.
Bankruptcy Court for the District of Delaware to lift the
automatic stay imposed under Section 362(d) of the Bankruptcy Code
to allow it to set off a $55,028,000 payment to Washington Mutual,
Inc., against the IRS Claim. The $55 million payment was
authorized by Senior Judge Loren A. Smith of the U.S. Court of
Federal Claims on December 19, 2008, in the federal action
captioned American Savings Bank, F.A., et al. v. United States,
No. 98-872 C.
In a declaration filed with the Court, James E. Carreon, vice
president and tax manager of WaMu, states that the Debtors expect
to be owed a net refund, which is true prior to accounting for the
large net operating loss that the WaMu consolidated tax group
incurred during 2008. The 2008 NOLs will further ensure that the
Debtors are in a net refund position, and that no net amounts will
be owed to the IRS, he says.
Additionally, the resolution of certain smaller administrative
issues that remain outstanding for years prior to 2001 will result
in either WaMu being entitled to a refund, or owing no additional
taxes, Mr. Carreon tells the Bankruptcy Court.
The Debtors maintain that they continue to work with the IRS
during the ongoing exam process relating to the Tax Assessments,
which, until completed, will deem the IRS Claim "speculative and
highly contingent." Accordingly, the Debtors ask the Court to
reduce the IRS Claim to $0.
In a separate filing, the Debtors maintain that the IRS' request
for setoff should be denied because IRS has failed to show that
it had a debt and a claim that arose prior to the Petition Date;
and that the debt and claim, if any, are mutual obligations.
The IRS Claim is neither "absolutely owing" nor a "definite
liability" because the tax deficiency asserted by the Claim is
still "under exam," thereby failing to establish its right to
setoff to justify its request to lift the Stay, Mark D. Collins,
Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware, maintains.
The Creditors Committee, WaMu Noteholders Group and Appaloosa
Management L.P. and Centerbridge Partners, L.P., join the
Debtors' objection to the IRS' lift stay request.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries. The company
operates in four segments: the Retail Banking Group, which
operates a retail bank network of 2,257 stores in California,
Florida, Texas, New York, Washington, Illinois, Oregon, New
Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and
Connecticut; the Card Services Group, which operates a nationwide
credit card lending business; the Commercial Group, which conducts
a multi-family and commercial real estate lending business in
selected markets, and the Home Loans Group, which engages in
nationwide single-family residential real estate lending,
servicing and capital markets activities.
Washington Mutual Bank was taken over Sept. 25 by U.S. government
regulators. The next day, WaMu and its debtor-affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). Wamu owns
100% of the equity in WMI Investment. Weil Gotshal & Manges
represents the Debtors as counsel. When WaMu filed for protection
from its creditors, it listed assets of $32,896,605,516 and debts
of $8,167,022,695. WMI Investment listed assets of $500,000,000
to $1,000,000,000 with zero debts.
(Washington Mutual Inc. Bankruptcy News; Bankruptcy Creditors'
Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000)
WRANGEL SEAFOODS: Files for Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Wrangell Seafoods has filed for Chapter 11 bankruptcy protection
in the U.S. Bankruptcy Court for the District of Alaska, Fort Mill
Times reports.
Citing a Wrangell city official, Fort Mill Times relates that two
bad fishing seasons were likely a major part of Wrangel Seafoods'
problem. According to Fort Mill Times, Wrangell city manager Bob
Prunella said that Wrangell area fishermen expected to catch many
chum salmon over the past two fishing seasons at nearby Anita Bay,
but weren't able to do so, and harvests of pink salmon also have
been poor for two years.
Fort Mill Times states that Alaska Pulp Corp. bought Wrangell
Seafoods in 1974 and sold it a decade later to J.S. McMillian
Fisheries Ltd., which gave it the name Wrangell Fisheries Inc. In
1998, J.S. McMillian wanted to divest their interest due to
financial restructuring. Wrangel Seafoods assets were sold to the
city of Wrangell in June 1998, the report says. The city,
according to the report, leased those assets to a newly formed
firm, Wrangell Seafoods Inc.
Wrangell Seafoods posted on its Web site that it has 21
shareholders, including seafood industry participants, fishermen,
residents, and business owners.
According to Fort Mill Times, the city solicited proposals for the
sale of the cannery and cold storage. Wrangell Seafoods entered
into a sales agreement in 2000 with the city, Fort Mill Times
states. The report says that the agreement has financing terms of
30 years at 4% interest.
Court documents say that Wrangell Seafoods' creditors include:
-- Bahrt and Associates,
-- Wyatt Refrigeration,
-- Lynden Transport Inc.,
-- Seattle Tacoma Box Co.,
-- the city of Wrangell,
-- Liberty Northwest Workmans' Comp,
-- Alaska Marine Lines, and
-- Bering Pacific Seafoods.
About Wrangell Seafoods
Wrangell, Alaska-based Wrangell Seafoods, Inc., operates a seafood
plant. The Wrangell plant also processes halibut, herring,
lingcod, rockfish, shrimp, prawns, and sea cucumber. Wrangell
Seafoods began operations in 1956 as a partnership known as Harbor
Seafoods Inc. The company focused on expansion into several areas
of seafood processing.
The company filed for Chapter 11 bankruptcy protection on Jan. 9,
2009 (Bankr. Alaska Case No. 09-00012). Daniel G. Bruce, Esq., at
Baxter Bruce & Sullivan PC assists the company in its
restructuring effort. The company listed $10,000,000 to
$50,000,000 in assets and $10,000,000 to $50,000,000 in
liabilities.
* Morgan Stanley Spots 14 Firms at Risk of Bankruptcy
-----------------------------------------------------
Reuters reports that Morgan Stanley said on Friday that companies
like Lear Corp., Chemtura Corp., and Rite Aid Corp. are among
companies that may need to undergo a debt restructuring or risk
defaulting on bonds.
Citing Morgan Stanley analysts Jocelyn Chu and Greg Peters,
Reuters relates that $100 billion of bonds and bank debt will
mature in 2009 and 2010. The analysts, according to Reuters, said
that many firms may succeed in refinancing or paying back the
debt, but credit markets remain closed to the lowest-rated firms.
The report quoted Morgan Stanley as saying, "The lack of new-issue
financing will persist, in our view, resulting in limited access
for higher quality BB-rated credits and none for CCC-rated
issuers."
According to Reuters, analysts said, "In the wake of a global
recession, the scarcity of capital has left even companies that
have liquidity today to begrudgingly contend with the real
possibility of liquidity issues tomorrow." The analysts, Reuters
relates, said that 'CCC'-rated firms with negative free cash flow
and bonds coming due would have to restructure their debt or risk
a default and a potential bankruptcy. Reuters states that Morgan
Stanley said that 14 companies with these ratings that also have
negative free cash flow and maturing debt include:
-- Lear,
-- Chemtura,
-- Rite Aid,
-- Charter Communications Inc.,
-- Smurfit-Stone Container Corp.,
-- Pliant Corp.,
-- Abitibi-Consolidated,
-- Bowater Inc.,
-- XM Satellite Radio Holdings,
-- General Growth Properties,
-- American Media Operations,
-- Muzak Holdings LLC,
-- Broder Brothers Co., and
-- Duane Reade Holdings Inc.
Reuters quoted Morgan Stanley as saying, "We do not suggest
imminent default risk for these issues as other alternatives exist
including asset sales, debt-for-equity swaps or debt exchanges.
That said, we argue that the incremental benefits of these
alternatives decline in effectiveness as we head deeper into this
recession."
* Michael Crames Bolts From Kaye Scholer to Join Davis Polk
-----------------------------------------------------------
Davis Polk & Wardwell said that Michael J. Crames has joined the
firm's New York office as Senior Restructuring Counsel. Mr. Crames
will practice in the firm's Insolvency and Restructuring Group,
advising clients on corporate turnarounds, financial
restructurings and bankruptcy, as well as risk management.
Mr. Crames has long been recognized as one of the leading
bankruptcy lawyers in the country. He has represented companies
in many of the most complex and prominent bankruptcy matters,
including Integrated Health Services, Inc., Walter Industries,
Inc., LTV Corp., Johns-Manville Corp., Dow Corning Corp., and US
Home Corp. In addition, he has had major involvements in Owens
Corning, Armstrong World Industries, Inc., and USG Corp. Mr.
Crames also represented Pennzoil in its case against Texaco
regarding the acquisition of Getty Oil. Mr. Crames was chairman
of Kaye Scholer's Executive Committee and its managing partner for
five years and previously was a named partner in Levin &
Weintraub, Crames & Edelman, which merged with Kaye Scholer in
1990.
"Mike Crames is a recognized leader in the bankruptcy field and
brings a vast amount of experience and knowledge with him," said
John R. Ettinger, managing partner of Davis Polk & Wardwell.
"Given the challenging current economic environment, his arrival
bolsters our preeminent insolvency and restructuring team at a
crucial juncture."
"A number of us have worked with Mike on complex, high profile
bankruptcies, such as those involving LTV and Johns-Manville,"
said Donald S. Bernstein, co-chair of Davis Polk's Insolvency and
Restructuring Group. "We will benefit greatly, not only from his
exceptional knowledge and experience, both in the bankruptcy court
and the boardroom, but also through his unsurpassed ability to
lead and coordinate the broad cross-disciplinary teams of lawyers
that Davis Polk typically fields in major insolvency and
restructuring matters."
"Davis Polk is clearly one of the go-to firms for the types of
unprecedented and highly complex matters that we are witnessing in
these extraordinary times," said Mr. Crames. "I look forward to
working closely with such a bright, dedicated and distinguished
group of lawyers."
Davis Polk represents leading lenders around the world and some of
the world's largest troubled companies in connection with both
out-of-court restructurings and insolvency proceedings. The
firm's Insolvency and Restructuring practice is also well known
for its credit risk management work for the world's leading
financial institutions and for debtor-in-possession and exit
financings in connection with insolvency proceedings. Recent
representations by the group include the New York Federal Reserve
Bank and the US Department of Treasury in the broad financing
package for AIG, Delta Air Lines, Frontier Airlines and the Star
Tribune in their bankruptcy proceedings; Telecom Argentina in
connection with its global insolvency proceedings; JPMorgan Chase
as agent bank in connection with the bankruptcy proceedings of
Tribune Companies; 19 global financial institutions in connection
with the restructuring of monoline insurer Syncora Guarantee; and
Citi as agent bank in the $8.5 billion debtor-in-possession
financing in connection with Lyondell Chemical's bankruptcy
filing.
Mr. Crames is a member of the National Bankruptcy Conference
(along with Davis Polk partners Donald S. Bernstein, who chairs
the organization, and Marshall S. Huebner), a group of 60 leading
lawyers, law professors and judges that advises the US Congress on
bankruptcy legislation, and a fellow of the American College of
Bankruptcy. He served as chairman of the Committee on Bankruptcy
and Corporate Reorganization of the Association of the Bar of the
City of New York and the Bankruptcy Committee of the New York
County Lawyers Association. Crames was an honoree of the
Bankruptcy and Reorganization Group, Lawyers Division of the UJA-
Federation, a coveted honor awarded annually to a leader in the
field, and was the recipient of the American Jewish Committee's
Judge Learned Hand Human Relations Award. He co-authored "The
Fundamentals of Bankruptcy and Corporate Reorganization" and also
was the Benjamin Weintraub Distinguished Lecturer at Hofstra
University School of Law.
About Davis Polk & Wardwell
Davis Polk & Wardwell -- http://www.dpw.com-- is a global law
firm based in New York City. For 160 years, its lawyers have
advised companies and global financial institutions on their most
challenging legal and business matters. Davis Polk ranks among
the world's preeminent law firms across the entire range of its
practice, which spans such areas as capital markets, mergers and
acquisitions, credit, litigation, private equity, tax, investment
management, insolvency and restructuring, executive compensation,
intellectual property, real estate and trusts and estates. The
firm has approximately 700 lawyers in offices in New York, Menlo
Park, CA, Washington, DC, London, Paris, Frankfurt, Madrid, Hong
Kong, Beijing and Tokyo.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share- Total
Total holders Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ ------- -------
ABSOLUTE SOFTWRE ABT CN 107 (3) 31
APP PHARMACEUTIC APPX US 1,105 (42) 260
ARBITRON INC ARB US 162 (9) (39)
BARE ESCENTUALS BARE US 272 (25) 125
BLOUNT INTL BLT US 485 (20) 119
CABLEVISION SYS CVC US 9,717 (4,966) (1,583)
CENTENNIAL COMM CYCL US 1,432 (1,021) 101
CHENIERE ENERGY CQP US 2,021 (312) 179
CHENIERE ENERGY LNG US 3,049 (266) 423
CHOICE HOTELS CHH US 350 (91) (8)
CLOROX CO CLX US 4,587 (364) (396)
CV THERAPEUTICS CVTX US 392 (226) 286
DISH NETWORK-A DISH US 7,177 (2,129) (1,318)
DOMINO'S PIZZA DPZ US 441 (1,437) 84
DUN & BRADSTREET DNB US 1,642 (554) (206)
ENERGY SAV INCOM SIF-U CN 464 (263) (92)
EXELIXIS INC EXEL US 255 (23) (1)
EXTENDICARE REAL EXE-U CN 1,621 (31) 125
FERRELLGAS-LP FGP US 1,510 (12) (114)
GARTNER INC IT US 1,115 (15) (253)
GENERAL MOTO-CED GM AR 110,425 (58,994) (18,461)
GENERAL MOTORS GM US 110,425 (58,994) (18,461)
HEALTHSOUTH CORP HLS US 1,980 (874) (218)
IMAX CORP IMX CN 238 (91) 41
IMAX CORP IMAX US 238 (91) 41
INDEVUS PHARMACE IDEV US 263 (130) 19
INTERMUNE INC ITMN US 206 (92) 134
ION MEDIA NETWOR IION US 1,137 (1,621) 96
KNOLOGY INC KNOL US 647 (44) 13
LINEAR TECH CORP LLTC US 1,498 (306) 991
MEDIACOM COMM-A MCCC US 3,688 (279) (311)
MOODY'S CORP MCO US 1,694 (894) (331)
NATIONAL CINEMED NCMI US 569 (476) 86
NAVISTAR INTL NAV US 10,390 (1,495) 1,660
NPS PHARM INC NPSP US 202 (208) 90
OCH-ZIFF CAPIT-A OZM US 2,224 (173) -
OSIRIS THERAPEUT OSIR US 29 (8) (14)
OVERSTOCK.COM OSTK US 145 (4) 33
PALM INC PALM US 661 (151) (40)
REGAL ENTERTAI-A RGC US 2,557 (224) (112)
REVLON INC-A REV US 877 (999) 8
ROTHMANS INC ROC CN 545 (213) 102
SALLY BEAUTY HOL SBH US 1,527 (697) 367
SONIC CORP SONC US 818 (55) (9)
SUCCESSFACTORS I SFSF US 168 (3) 4
SUN COMMUNITIES SUI US 1,222 (28) -
SYNTA PHARMACEUT SNTA US 91 (35) 58
TAUBMAN CENTERS TCO US 3,182 (20) -
TEAL EXPLORATION TEL SJ 70 (36) (80)
THERAVANCE THRX US 255 (125) 184
UAL CORP UAUA US 20,731 (1,282) (1,583)
UST INC UST US 1,402 (326) 237
WEIGHT WATCHERS WTW US 1,110 (901) (270)
WESTERN UNION WU US 5,504 (90) 319
WR GRACE & CO GRA US 3,754 (179) 970
*********
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 ***