/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/090317.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, March 17, 2009, Vol. 13, No. 75 Headlines ABITIBIBOWATER INC: Receives $100MM Backstop Offer from Investor ABITIBIBOWATER INC: Delays Filing of 2008 Annual Report ABITIBIBOWATER INC: Unit's Debt Swap Offer Extended to March 20 AK STEEL: Moody's Cuts Ba2 Outlook to Neg; Still Exposed to Big 3 ALERIS INTERNATIONAL: Court Approves $1-Bil. DIP Financing AMERICAN ACHIEVEMENT: Moody's Raises Ratings on PIK Notes to 'Ca' AMERICAN AXLE: Deloitte Raises Going Concern Doubt on GM Exposure AMERICAN INT'L: Two-Thirds of $173.3BB Aid Go to Trading Partners AMERICREDIT CORP: Moody's Confirms Senior Unsecured Rating at B2 AMR CORP: To Face Cash Squeeze in 2010; Says Fitch; Ratings Junked ARBIOS SYSTEMS: $1 Mil. Investment from Energex Underpins Plan ARTISTDIRECT INC: Inks Corporate Controller Pact with Rousselet ASARCO LLC: Settles Environmental Claims for $1.1 Billion ASARCO LLC: Files Motion to Pursue $1-Bil. Asset Sale to Sterlite ASARCO LLC: Seeks Approval of Plan-Related Discovery Procedures ASARCO LLC: Won't Name New Consultant in AMC Dispute AXCELIS TECHNOLOGIES: Sale Closing Delay to Threaten Going Concern AXCELIS TECHNOLOGIES: To Delay Filing of 2008 Annual Report BELL BUSINESS: Legacy Wants to Extend $250,000 to Finance Payroll BELL BUSINESS: Court Okays Osborn Maledon as Bankruptcy Counsel BERNARD L. MADOFF: Prosecutors to Seek Forfeiture of Assets BETHANY GROUP: Robert Mosier Eyed as Receiver for Affiliates BLOCKBUSTER INC: Will Dodge Bankruptcy, Analysts Say BRIGHAM EXPLORATION: Moody's Cuts Corporate Rating to 'Caa3' CANNERY CASINOS: S&P Changes Outlook on 'B+' Rating to Negative CANWEST GLOBAL: Will Be Forced to File By Year End, Says BMO CEDAR FAIR: Retains Merrill Lynch to Assist in Exploring Sale CHARTER COMMUNICATIONS: Posts $1.495BB Fourth Quarter Net Loss CHRYSLER LLC: Bankr. Lawyer Matthew Feldman to Join Task Force CITIGROUPINC: Board Nominates Four New Independent Directors COLONIAL REALTY: Fitch Keeps Preferred Stock Rating at 'BB+' DE KALB: S&P Upgrades Ratings on 2005 Revenue Bonds From 'CCC' DELPHI CORP: Court Limits Retirees Panel to OPEB Dispute DELPHI CORP: KPMG Puts Ethical Wall Amid GM Engagement DELPHI CORP: Retirees Elevate OPEB Dispute to District Court DELPHI CORP: To Receive $2MM Fed Funding on Fuel Cell Research DHP HOLDINGS: Asks Court to Approve Protocol for Sale of Assets DHP HOLDINGS: Committee Wants Challenge Deadline Moved to May 11 DISCOVERY LAB: Revenues in Late '09; Going Concern Doubt Issued ECLIPSE AVIATION: Client Group Mulls Acquisition of Business FEDERAL FREIGHT: Files for Chapter 11 Bankruptcy Protection FISHER COMMUNICATIONS: Bond Buyback Won't Move Moody's B2 Rating FLEETWOOD ENTERPRISES: Can Use Cash Collateral on Interim Basis FLEETWOOD ENTERPRISES: Faces Class Action for WARN Act Violations FLEETWOOD ENTERPRISES: Seeks Court Nod for KCC as Claims Agent FOAMEX INT'L: Panel Opposes $95-Mil. DIP Loan, Bonus Program FORD MOTOR: Cuts Production in Europe Due to Waning Demand FORD MOTOR: UAW to Accept Common Stock As VEBA Payout FORUM HEALTH: Case Summary & 50 Largest Unsecured Creditors GENERAL GROWTH: Payment Deadline of $395 Million in Bonds Passes GENERAL GROWTH: Lenders Extend Forbearance Until Year's End GENERAL MOTORS: KPMG Puts Ethical Wall Amid Delphi Engagement GENERAL MOTORS: Renames Asset Management Arm to Promark Global GENERAL MOTORS: Bankr. Lawyer Matthew Feldman to Join Task Force GENTA INC: Going Concern Doubt Raised; FDA Rejects Genasense G.I. JOE'S: Files Application to Employ Proskauer Rose as Counsel GREEN VALLEY: Can Access CapitalOne Cash Collateral for 15 Days HARRAH'S ENTERTAINMENT: Investors Buying Debt From Bondholders HUMANA INC: Moody's Assigns Ratings on New Shelf Registration INTEGRA HEALTHCARE: Court Converts Case to Chapter 7 Liquidation INTERSTATE HOTELS: Bad Lodging Environment Cues S&P's Junk Rating JEFFERSON COUNTY: Extends Forbearance with JPMorgan Until June 20 KLAMATH FALLS: S&P Cuts Long-Term Rating to 'BB+' From 'BBB' LANDAMERICA ASSESSMENT: Court to Consider Assets Sale on March 24 LANDAMERICA ASSESSMENT: Wants Schedules Deadline Moved to April LEGENDS GAMING: Plan Confirmation Hearing Scheduled for April 29 LENOX GROUP: Clarion Partners Closes Acquisition of Assets LEHMAN BROTHERS: SunTrust Wants Probe on $3.5M Underwriting Fees LOCAL INSIGHT: Growing Risks Cue Moody's Junk Corporate Rating LYONDELL CHEMICAL: Court OKs Protocol for Misc. Asset Sales MASONITE INT'L: Files for Bankruptcy to Eliminate $2 Bil. in Debt MASONITE INT'L: Case Summary & 20 Largest Unsecured Creditors MGIC INVESTMENT: S&P Junks Counterparty Credit Rating From 'BB+' MILACRON INC: Receives Interim Approval to Tap $55MM GECC Loan MODERN CONTINENTAL: Wants Plan Filing Deadline Moved to May 29 MONACO COACH: Section 341(a) Meeting Scheduled for April 9 MONACO COACH: Wants Court Nod for Omni Management as Claims Agent MONACO COACH: Faces Class Action for WARN Act Violations MUZAK HOLDINGS: Obtains Final OK to Access $20MM Cash Collateral N AMERICAN SCIENTIFIC: Receives Notice of Delisting from Nasdaq NORTEL NETWORKS: Considering Sales of Business Units NORTHEAST BIOFUELS: Faces $8-Million Injunction Suit from Lurgi PACIFIC ENERGY: Seeks Omni Management as Claims Agent PATRIOT HOMES: May Use Cash Collateral of Wells Fargo Until April PEACH HOLDINGS: Moody's Junks Rating; Loan Matures in April PRIME TRAVEL: State Prohibits Sale of Travel Insurance PRIMUS TELECOM: Canadian Units Obtain Waiver of Covenant Default PRIMUS TELECOM: Dec. 31 Balance Sheet Upside-Down by $461.5MM PRIMUS TELECOM: Files for Bankruptcy to Shed Off 50% in Debt PRIMUS TELECOM: Case Summary & 20 Largest Unsecured Creditors QIMONDA NA: To Seek $40 Million DIP Financing from Gordon Brothers QTC MANAGEMENT: Moody's Reviews 'B2' Corporate Family Rating RED SHIELD: Wants Plan Filing Period Extended to March 25, 2009 REUNION INDUSTRIES: Plan Confirmation Hearing Today in Wilmington RH DONNELLEY: Fitch Downgrades Issuer Default Rating to 'C' SCOTT LAKE: Files for Chapter 11 Bankruptcy Protection SCOTTISH ANNUITY: S&P Upgrades Counterparty Rating to 'CCC-' SEMGROUP LP: Court Approves Energy Partners Settlement SIX FLAGS: CEO Says One Debt Holder Refuses to Negotiate SIX FLAGS: Moody's Downgrades Corporate Family Rating to 'Ca' SPORTS MUSEUM: Files for Chapter 7 Liquidation STANFORD GROUP: Court Unfreezes 85% of Brokerage Accounts SUPERIOR OFFSHORE: CRO Lovett Wants Ex-VP to Disgorge $9 Million SYNCORA HOLDINGS: Management Has Going Concern Doubt SYNCORA HOLDINGS: Fund Launches Offer for 56 Unit-Insured RMBS TD AMERITRADE: Fitch Upgrades Issuer Default Rating from 'BB+' TEKOIL & GAS: Files Joint Chapter 11 Plan of Reorganization TRONOX INC: Protocol Crafted to Govern Anadarko Discovery TRONOX INC: U.S. Trustee Appoints Equity Security Committee VIRGIN MOBILE: Has Cash to Fund Operations for Next 12-18 Months VIRGIN MOBILE: Files Revised Copies of Amendments to Sprint Deal VISTEON CORP: Delays Annual Report; In Talks with Lender Groups WILSON N JONES: Moody's Affirms 'Ba3' Rating on $78 Mil. Debt * Computershare Buying Kurtzman Carson for $98 Million * Large Companies With Insolvent Balance Sheets ********* ABITIBIBOWATER INC: Receives $100MM Backstop Offer from Investor ---------------------------------------------------------------- AbitibiBowater Inc. on Monday announced that, further to its recapitalization transaction, a new investor has agreed to provide a backstop commitment of $100 million. AbitibiBowater did not disclose that investor's identity. In consideration for this backstop commitment, the new investor will receive up to $111.1 million of AbitibiBowater's 12.5% First Lien Notes due 2014 and up to 63.5 million Series D Warrants to purchase one share of AbitibiBowater Common Stock per warrant at $1.25 per share. The amount of the backstop commitment that is funded by the new investor will depend upon the extent to which unsecured noteholders participate in the Concurrent Offering. The backstop party will also receive a backstop commitment fee in an amount of $50 of First Lien Notes and 53.895 Series A Warrants, 53.895 Series B Warrants and 53.895 Series C Warrants for each $1,000 committed only in the event the Recapitalization is completed. The backstop commitment was made as part of and pursuant to the terms of AbitibiBowater's Concurrent Offering made in connection with the Recapitalization. Certain investors have provided binding commitments to subscribe for $150 million of the Concurrent Offering therefore a total of $250 million of the $350 million Concurrent Offering has been committed. As reported by the Troubled Company Reporter, AbitibiBowater unveiled on Friday a second phase of its comprehensive recapitalization proposal with respect to its Abitibi-Consolidated Inc. subsidiary. The Recapitalization aims to reduce the Company's debt by $2.4 billion and enhances liquidity. The Recapitalization of Abitibi-Consolidated will provide a stronger financial base for the execution of AbitibiBowater's operating strategy and enhance the long-term value of the Company. AbitibiBowater's obligations to trade creditors, customers and employees (including any pension plan entitlement), will remain unaffected by the Recapitalization. Recapitalization Plan Wins More Support The Company also disclosed that additional noteholders holding approximately $164 million in eligible unsecured notes issued by Abitibi-Consolidated and its subsidiaries, as applicable -- approximately 5.6% of the total outstanding -- have agreed to vote in favor of the Recapitalization, bringing the total support to approximately $1.2 billion (or 39% of the total outstanding). AbitibiBowater will continue to solicit additional support for the Recapitalization from affected noteholders and lenders. As reported by the TCR, these unsecured notes of Abitibi- Consolidated will be affected by the Recapitalization: * 7.875% notes due 2009; * 15.50% notes due 2010; * 8.55% notes due 2010; * 7.75% notes due 2011; * Floating rate notes due 2011; * 6.0% notes due 2013; * 8.375% notes due 2015; * 7.4% debentures due 2018; * 7.5% debentures due 2028; * 8.5% debentures due 2029; and * 8.85% debentures due 2030 April 30 Creditors Meeting in Quebec AbitibiBowater also announced that the Commercial Division of the Superior Court of Quebec in Montreal has granted an interim court order under the Canada Business Corporations Act in connection with the Recapitalization and: -- has called the respective meetings of the affected unsecured notes, secured notes and lenders for April 30, 2009 in Montreal. The meetings will be held at the Fairmont Queen Elizabeth Hotel, 900 Rene-Levesque Blvd. West, in Montreal; and -- has set April 1, 2009 as the record date to determine the Affected stakeholders who are entitled: (i) to receive notice of the meetings; (ii) to vote at the meetings; and (iii) to participate in the Concurrent Offering. Holders of affected unsecured notes, secured notes and lenders who are not holders of record on April 1, 2009, will not be entitled to receive notice of or vote in the meetings or participate in the Concurrent Offering. At the meetings, holders of the three classes of affected stakeholders will be asked to vote on the Plan of Arrangement relating to the Recapitalization: (a) holders of unsecured notes (listed at outstanding amounts) which include: -- $8M 7.875% Notes due August 1, 2009; -- $293M 15.5% Notes due July 15, 2010; -- $395M 8.55% Notes due August 1, 2010; -- $200M 7.75% Notes due June 15, 2011; -- $200M Floating Rate Notes due June 15, 2011; -- $350M 6.00% Notes due June 20, 2013; -- $450M 8.375% Notes due April 1, 2015; -- $100M 7.40% Debentures due April 1, 2018; -- $250M 7.50% Debentures due April 1, 2028; -- $250M 8.50% Debentures due August 1, 2029; -- $450M 8.85% Debentures due April 1, 2030; (b) holders of the $413M 13.75% Senior Secured Notes due 2011; And (c) affected lenders under the $347M Senior Term Loan due 2009. The resolutions of affected unsecured notes, secured notes and lenders shall be considered to be approved by the affirmative vote of not less than two-thirds of the votes cast on each resolution. However, the final order from the Court to proceed with the implementation of the Plan of Arrangement may be sought whether or not the arrangement resolutions are adopted. The interim order obtained from the Superior Court of Quebec includes a stay of proceedings in favor of Abitibi-Consolidated and certain of its affiliates. This will help provide Abitibi- Consolidated with the opportunity to present the Recapitalization to its affected creditors and for the Court to consider whether it should be approved at a hearing scheduled to be held on May 5, 2009, in Montreal. Certain amounts of principal and interest on Abitibi- Consolidated's affected unsecured notes, secured notes and term loan will be due before the meetings of noteholders and lenders. These amounts will not be paid as scheduled and will, if the Plan of Arrangement is approved and implemented, be addressed in accordance with the terms of the Plan of Arrangement. A restated summary of the key terms of the Recapitalization is available at no charge at: http://ResearchArchives.com/t/s?3a57 About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. As reported in the Troubled Company Reporter on Nov. 13, 2008, AbitibiBowater Inc. reported a net loss of US$302 million on sales of US$1.7 billion for the third quarter 2008. These results compare with a net loss of US$142 million on sales of US$815 million for the third quarter of 2007, which consisted only of Bowater Incorporated. The company's 2008 third quarter results reflect the full quarter results for Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company after their combination on Oct. 29, 2007. As reported by the TCR on January 29, 2009, Moody's Investors Service downgraded the corporate family rating of AbitibiBowater Inc.'s subsidiaries Abitibi-Consolidated Inc. and Bowater Incorporated to Caa3 from Caa1. The rating action, according to Moody's, was prompted by AbitibiBowater's weakened liquidity position and the deteriorating economic and industry conditions. "The Caa3 corporate family ratings of Abitibi and Bowater reflect a heightened probability of default in the near term given the anticipated challenges of refinancing or paying down their significant short term debt obligations through asset sales, either of which may prove to be difficult in the current market environment." The ratings of both Abitibi and Bowater also reflect the accelerating decline in demand for newsprint and other paper grades manufactured by both companies as consumers continue to migrate to online news and other forms of electronic media. The TCR reported on February 12, 2009, that Standard & Poor's Ratings lowered its long-term corporate credit rating on newsprint producers AbitibiBowater Inc. and subsidiaries Bowater Inc. and Bowater Canadian Forest Products Inc. two notches to 'CC' from 'CCC'. S&P also lowered the long-term corporate credit rating on Abitibi-Consolidated Inc. one notch to 'CCC-' from 'CCC'. ABITIBIBOWATER INC: Delays Filing of 2008 Annual Report ------------------------------------------------------- AbitibiBowater Inc. has yet to file with the U.S. Securities and Exchange Commission its annual report on Form 10-K for the year ended December 31, 2008. The Company explained it requires additional time to finalize its accounting for certain transactions and to complete its accounting analysis, primarily related to goodwill impairment and long-lived asset impairment, in connection with the finalization of its consolidated financial statements and related disclosures required in its annual report. The Company also requires additional time to more accurately reflect the outcome of a significant pending debt refinancing in its Form 10-K. The Company expects the offer by certain of its direct and indirect subsidiaries to exchange roughly $1.8 billion of debt securities for two series of new senior secured notes to have a significant impact on its financial condition, including its liquidity, capital resources and prospects for its future operations. On Friday, the Company also announced the second phase of its comprehensive recapitalization proposal with respect to its Abitibi-Consolidated Inc. subsidiary. The Recapitalization aims to reduce debt by $2.4 billion and enhance liquidity. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. As reported in the Troubled Company Reporter on Nov. 13, 2008, AbitibiBowater Inc. reported a net loss of US$302 million on sales of US$1.7 billion for the third quarter 2008. These results compare with a net loss of US$142 million on sales of US$815 million for the third quarter of 2007, which consisted only of Bowater Incorporated. The company's 2008 third quarter results reflect the full quarter results for Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company after their combination on Oct. 29, 2007. As reported by the TCR on January 29, 2009, Moody's Investors Service downgraded the corporate family rating of AbitibiBowater Inc.'s subsidiaries Abitibi-Consolidated Inc. and Bowater Incorporated to Caa3 from Caa1. The rating action, according to Moody's, was prompted by AbitibiBowater's weakened liquidity position and the deteriorating economic and industry conditions. "The Caa3 corporate family ratings of Abitibi and Bowater reflect a heightened probability of default in the near term given the anticipated challenges of refinancing or paying down their significant short term debt obligations through asset sales, either of which may prove to be difficult in the current market environment." The ratings of both Abitibi and Bowater also reflect the accelerating decline in demand for newsprint and other paper grades manufactured by both companies as consumers continue to migrate to online news and other forms of electronic media. The TCR reported on February 12, 2009, that Standard & Poor's Ratings lowered its long-term corporate credit rating on newsprint producers AbitibiBowater Inc. and subsidiaries Bowater Inc. and Bowater Canadian Forest Products Inc. two notches to 'CC' from 'CCC'. S&P also lowered the long-term corporate credit rating on Abitibi-Consolidated Inc. one notch to 'CCC-' from 'CCC'. ABITIBIBOWATER INC: Unit's Debt Swap Offer Extended to March 20 --------------------------------------------------------------- Bowater Finance II LLC, an indirect wholly owned subsidiary of AbitibiBowater Inc., on Monday extended the expiration date for its private exchange offers, consent solicitation and concurrent private notes offering until 11:59 p.m., New York City time, on March 20, 2009, unless further extended. The Exchange Offers, Consent Solicitation and Concurrent Notes Offering had been scheduled to expire at 11:59 p.m., New York City time, on March 13, 2009. As of March 13, 2009, roughly 54.5% of the outstanding 9.00% Debentures due 2009, 58.2% of the outstanding Floating Rate Senior Notes due 2010, 64.9% of the outstanding 7.95% Notes due 2011, 68.6% of the outstanding 9.50% Debentures due 2012, 79.2% of the outstanding 6.50% Notes due 2013 and 40.4% of the outstanding 9.375% Debentures due 2021 were validly tendered and not validly withdrawn in the Exchange Offers. The Exchange Offers and Concurrent Notes Offering are being made only to qualified institutional buyers inside the United States and to certain non-U.S. investors located outside the United States. BowFin commenced the Exchange Offers with respect to the outstanding debt securities issued by either Bowater Incorporated or its wholly owned subsidiary Bowater Canada Finance Corporation on February 9, 2009. In connection with the Exchange Offers, the AbitibiBowater and Bowater entered into exchange and support agreements with certain holders of Bowater Notes. As of February 20, 2009, the company and Bowater have entered into Support Agreements with holders of roughly $846 million in aggregate principal amount of Bowater Notes, which represents roughly 47% of the outstanding Bowater Notes and roughly 74% of the Bowater Notes that are required to achieve the minimum tender condition in the Exchange Offers. Since February 9, the company and Bowater have also entered into additional backstop commitment agreements with certain holders of Bowater Notes. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/-- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the company is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. As reported in the Troubled Company Reporter on Nov. 13, 2008, AbitibiBowater Inc. reported a net loss of US$302 million on sales of US$1.7 billion for the third quarter 2008. These results compare with a net loss of US$142 million on sales of US$815 million for the third quarter of 2007, which consisted only of Bowater Incorporated. The company's 2008 third quarter results reflect the full quarter results for Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company after their combination on Oct. 29, 2007. As reported by the TCR on January 29, 2009, Moody's Investors Service downgraded the corporate family rating of AbitibiBowater Inc.'s subsidiaries Abitibi-Consolidated Inc. and Bowater Incorporated to Caa3 from Caa1. The rating action, according to Moody's, was prompted by AbitibiBowater's weakened liquidity position and the deteriorating economic and industry conditions. "The Caa3 corporate family ratings of Abitibi and Bowater reflect a heightened probability of default in the near term given the anticipated challenges of refinancing or paying down their significant short term debt obligations through asset sales, either of which may prove to be difficult in the current market environment." The ratings of both Abitibi and Bowater also reflect the accelerating decline in demand for newsprint and other paper grades manufactured by both companies as consumers continue to migrate to online news and other forms of electronic media. The TCR reported on February 12, 2009, that Standard & Poor's Ratings lowered its long-term corporate credit rating on newsprint producers AbitibiBowater Inc. and subsidiaries Bowater Inc. and Bowater Canadian Forest Products Inc. two notches to 'CC' from 'CCC'. S&P also lowered the long-term corporate credit rating on Abitibi-Consolidated Inc. one notch to 'CCC-' from 'CCC'. AK STEEL: Moody's Cuts Ba2 Outlook to Neg; Still Exposed to Big 3 ----------------------------------------------------------------- Moody's Investors Service affirmed AK Steel Corporation's Ba2 corporate family rating and changed the rating outlook to negative from stable. The change in outlook reflects the challenges facing AK Steel as steel industry conditions remain difficult and capacity utilization rates low. In addition, although AK Steel has successfully reduced its aggregate exposure to the automotive industry in recent years, this market, particularly with respect to GM, Ford and Chrysler, still accounts for an important percentage of volumes and earnings. In addition, although certain input costs are moderating, AK Steel continues to have a relatively high cost base. Moody's expects that continued softness in key markets for the Company, such as automotive and manufacturing, increasing weakness in the electrical steel markets, low operating rates and fixed cost absorption pressures will contribute to significant deterioration in earnings levels. AK Steels Ba2 corporate family rating is supported by its business mix, which continues to be heavily weighted to contract positions and its strong liquidity position. The Company had cash balances of $573 million at year-end December 31, 2008, and availability of roughly $683 million under its $850 million borrowing base revolving credit facility. Should the Company's liquidity position deteriorate significantly the rating would come under further pressure. Moody's last rating action on AK Steel was September 19, 2008, when the corporate family rating was upgraded to Ba2 from Ba3. Headquartered in West Chester, Ohio, AK Steel is a middle tier integrated steel producer. Revenues in fiscal 2008 were 7.6 billion on steel shipments of 5.9 million tons. ALERIS INTERNATIONAL: Court Approves $1-Bil. DIP Financing ---------------------------------------------------------- Aleris International Inc. has won final approval from the U.S. Bankruptcy Court for the District of Delaware of a $1 billion debtor-in-possession financing facility. According to Steven Church of Bloomberg, Judge Brendan Linehan Shannon approved the loans, which provided for a roll-up of $575 million in prepetition secured loans, despite objections by lenders Babson Capital Management LLC and J. Aron & Co. Babson and J. Aron are prepetition secured lenders but they did not participate in the DIP financing. Under the terms of the DIP loan, prepetition claims of lenders who participate in the DIP financing will be rolled up as DIP loans. Babson and J. Aron opposed having their old loans take a lower priority than the DIP loan. Babson pointed out that the Debtors seek to prime existing secured lenders by at least $1.585 billion, while citing the precipitous decline in the value of their assets as a primary basis for filing bankruptcy petitions. It added that the proposed roll-up does not benefit the Debtors' estates, only the lenders. "This is so detrimental to the interest of the" older lenders, Babson's attorney, John Ventola, also said in court. Babson claimed it shouldn't be bound by the terms of the DIP loan even though it signed a contract agreeing to join the group of lenders providing Aleris more than $1 billion. Babson sold its right to participate in that DIP loan, so it isn't providing any new money to Aleris, Ventola said. Judge Shannon ruled that the DIP loan contract was valid and that Babson continued to be bound by it. Shannon rejected Babson's claim that the terms of the loan changed at the last minute. Babson is owed about $48 million from its pre-bankruptcy loan to Aleris, Ventola said in court. J. Aron, a unit of Goldman Sachs Group Inc., argued that it should have the right to force Aleris to pay in full the $61 million it loaned the company before the bankruptcy. Judge Shannon, however, said that only lenders who agreed to participate in the new DIP loan to Aleris could have any of their old loan bought out. About $575 million of the new loan would pay off older loans, Bloomberg said, citing court records. Aleris had put off until March 16 the hearing that had been scheduled for March 12 on final approval of a secured $1.075 billion loan to finance the reorganization. Objections were made by secured and unsecured creditors, Bloomberg's Bill Rochelle said. About Aleris International Aleris International, Inc. produces and sells aluminum rolled and extruded products. Aleris operates primarily through two reportable business segments: (i) global rolled and extruded products and (ii) global recycling. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates over 40 production facilities in North America, Europe, South America and Asia, and employs approximately 8,400 employees. Aleris operates 27 production facilities in the United States with eight production facilities that provided rolled and extruded aluminum products and 19 recycling production plants. Aleris International, Inc., aka IMCO Recycling Inc., and various affiliates filed for bankruptcy on February 12, 2009 (Bankr. D. Del. Case No. 09-10478). The Hon. Brendan Linehan Shannon presides over the cases. Stephen Karotkin, Esq., and Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges LLP in New York, serve as lead counsel for the Debtors. L. Katherine Good, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A. In Wilmington, Delaware, serves as local counsel. Moelis & Company LLC, acts as financial advisors; Alvarez & Marsal LLC a as restructuring advisors, and Kurtzman Carson Consultants LLC as claims and noticing agent for the Debtors. As of Dec. 31, 2008, the Debtors had total assets of $4,168,700,000; and total debts of $3,978,699,000. Bankruptcy Creditors' Service, Inc., publishes Aleris International Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Aleris International, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945- 7000) AMERICAN ACHIEVEMENT: Moody's Raises Ratings on PIK Notes to 'Ca' ----------------------------------------------------------------- Moody's Investors Service raised the remaining portion of American Achievement Group Holding Corp.'s Senior PIK Notes' rating to Ca (LGD-5, 77%) from C and changed the probability of default rating to Caa3 from Caa3/LD. The company's other ratings were affirmed, including the Caa2 corporate family rating. The rating outlook is stable. These ratings were changed: -- American Achievement Group Holding Corp. -- Probability-of-default rating at to Caa3 from Caa3/LD -- $102 million (current value) Senior PIK notes due 2012 to Ca (LGD-5, 77%) from C These ratings were affirmed -- American Achievement Holding Corp. -- Corporate Family Rating Caa2 -- AAC Group Holding Corp. -- $132 million (current value) Senior discount notes due 2012 -- Caa3 (LGD-3, 49%) American Achievement Corporation -- $150 million senior subordinated notes due 2012 - B3 (LGD-2, 20%) American Achievement Corporation -- $40 million senior secured revolving credit facility due 2010 -- B1 (LGD-1, 3%) -- $70 million senior secured term loan due 2011 -- B1 (LGD-1, 3%) The rating outlook is stable. Headquartered in Austin, Texas, American Achievement Corporation is a leading provider of school-related affinity products and services. The company holds strong market shares in each of its product segments -- yearbooks, class rings, and graduation products. Revenues for the last 12 months ended November 29, 2008 were $311 million. AMERICAN AXLE: Deloitte Raises Going Concern Doubt on GM Exposure ----------------------------------------------------------------- American Axle & Manufacturing Holdings Inc.'s auditors raised "substantial doubt" about the ability of the Company to continue as a going concern. In its annual report on Form 10-K, American Axle disclosed with the Securities and Exchange Commission that it incurred a net loss of $1.22 billion on $2.11 billion of revenues for the year ended Dec. 31, 2008, compared to a net income of $37 million on $3.25 billion of revenues in the year 2007. American Axle is the principal supplier of driveline components to GM for its rear-wheel drive (RWD) light trucks and SUVs manufactured in North America, supplying substantially all of GM's rear axle and front four-wheel drive and all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms. Sales to GM were approximately 74% of our total net sales in 2008, 78% in 2007 and 76% in 2006. "Further reduction in our sales to GM or further reduction by GM of its production of RWD light trucks or SUVs could have a material adverse effect on our results of operations and financial condition." American Axle is also the principal supplier of driveline system products for the Chrysler Group's heavy-duty Dodge Ram full-size pickup trucks (Dodge Ram program) and its derivatives. Sales to Chrysler LLC (Chrysler) were approximately 10% of our total net sales in 2008, 12% in 2007 and 14% in 2006. Net sales to customers other than GM and Chrysler were 16% of sales in 2008 as compared to 10% in 2007 and 2006. According to Deloitte & Touche LLP, the domestic automotive industry experienced a significant downturn which has an adverse impact on American Axle's two largest customers. Deloitte & Touche's report is attached to the company's Form 10-K. "If these customers are unable to continue operating as going concerns, the Company could suffer significant unfavorable consequences," Deloitte said." Accordingly, it is uncertain whether the Company will be in compliance with the covenants in its debt agreements throughout 2009. These factors raise substantial doubt about the Company's ability to continue as a going concern." American Axle says its largest customers continue to adapt to current market conditions, including historically low U.S. industry production volumes and rapid shifts in consumer preferences. During the second half of 2008, GM announced and accelerated plans to significantly reduce production capacity for several of AAM's major light truck product programs in response to the market changes described below. In the fourth quarter of 2008, both GM and Chrysler secured government financing commitments under the Troubled Asset Relief Program (TARP); however, both have since made requests for additional government financing commitments to continue operations through 2009, which commitments have not yet been provided. Although each Company has achieved progress on critical capacity rationalization objectives and other important restructuring initiatives, it is uncertain whether the government will continue to provide necessary financial support, or whether the companies will be able to secure sufficient alternate sources of funding to continue as a going concern if the government does not provide sufficient financing in the future. In addition, the terms of the government financing commitments provided to GM and Chrysler include certain milestones, which if not met by these companies by March 31, 2009, entitle the government to accelerate repayment of the loans. If GM or Chrysler were not able to continue their operations, many suppliers, including American Axle, could suffer unfavorable consequences. These unfavorable consequences, according to American Axle, could include payment delays, inability to collect trade and other accounts receivable, price reductions, production volume declines or the failure to honor contractual commitments, including sourcing decisions and financial obligations. The Company says it has made significant adjustments to its business plan to adapt to lower industry production volumes, improve its liquidity position and diversify its customer base and revenue concentrations: -- As a result of an expanded product development focus that now includes highly engineered AWD and RWD applications for passenger cars, crossover vehicles and commercial vehicles, it has increased our total global served market by approximately 30%. -- The Company is reducing our domestic production capacity by approximately 70%, while at the same time increasing global installed capacity by 150%. -- In 2008, American Axle negotiated new hourly labor agreements with the International Association of Machinists (IAM) and International UAW at the original U.S. locations. Pursuant to these new labor agreements, we are converting the former fixed legacy labor cost structure of these facilities to a highly flexible, competitive and variable cost structure. -- In connection with hourly and salaried attrition programs administered in 2008, AAM reduced its global hourly and salaried workforce by more than 25% in 2008. -- It has significantly reduced its inventories, amended its revolving credit facility and suspended our quarterly cash dividend program in 2009. The amendment of the credit facility in the fourth quarter of 2008 extended the maturity of a portion of the facility through 2011 and provides AAM with additional financial covenant flexibility. American Axle says it will continue to evaluate its customers' compliance with the provisions of the TARP, market conditions and its underutilized U.S. capacity and may take further restructuring actions. "These potential future actions could result in additional special charges, including additional asset impairments and further workforce reductions." GM, Chrysler Bankruptcy to Hurt AAM In the "risks factors" section in its Annual Report, American Axle said, "Our business could be adversely affected if GM and/or Chrysler filed for bankruptcy or were unable to comply with the terms of the Secured Term Loan Facility provided by the U.S. Treasury and any additional requirements of the Troubled Asset Relief Program (TARP)." The Company notes that in the fourth quarter of 2008, both GM and Chrysler publicly announced that they would not be able to meet near-term working capital requirements without additional private funding, which seemed unlikely based on the distress in the credit markets, or assistance from the federal government. Both GM and Chrysler secured financing commitments by entering into loan agreements with the U.S. Treasury and began borrowing under those agreements in the fourth quarter of 2008. These loan agreements are conditioned upon submitting viable plans of reorganization and sustainability to the President of the United States in the first quarter of 2009. On February 17, 2009, both companies submitted their viability plans and are required to provide a progress report of their viability plan by March 31, 2009. If the U.S. government does not approve of the submitted plans, it may accelerate the repayment of the loans provided to either or both companies. Even if the U.S. government allows the loans provided to GM and Chrysler to remain outstanding, it is not certain that the loans will be sufficient to meet their working capital requirements in 2009 or future periods, American Axle points out. "As part of their viability plans, both companies have requested additional funding from the U.S. government to cover near-term liquidity requirements. It is possible that additional funding, public or private, would not be available to meet these needs." "If either GM or Chrysler is unable to continue operations, we could suffer unfavorable consequences, such as payment delays, inability to collect trade and other accounts receivable, price reductions, production volume declines or the failure to honor contractual commitments including sourcing decisions and financial obligations," American Axle says. A copy of the Annual Report is available at: http://researcharchives.com/t/s?3a56 About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/ -- is a world leader in the manufacture, engineering, design and validation of driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for trucks, sport utility vehicles, passenger cars and crossover utility vehicles. In addition to locations in the United States (Michigan, New York, Ohio and Indiana), the company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea, Thailand and the United Kingdom. * * * The Troubled Company Reporter reported on Jan. 29, 2009, that American Bankruptcy Institute reported that Bankruptcy Research firm KDP Investment Advisors said American Axle Manufacturing Holdings Inc. is at high risk of filing for bankruptcy in the next 12 months as declining auto production further pressures the supplier's earnings. The TCR, on Jan. 14, 2009, also reported that Standard & Poor's Ratings Services has lowered its corporate credit rating on Detroit-based American Axle Manufacturing & Holdings Inc. to 'CCC+' from 'B' and removed all the ratings from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. The outlook is negative. At the same time, S&P also lowered its issue-level ratings on the company's debt. AMERICAN INT'L: Two-Thirds of $173.3BB Aid Go to Trading Partners ----------------------------------------------------------------- Liam Pleven, Serena Ng, and Sudeep Reddy at The Wall Street Journal report that American International Group Inc. disclosed Sunday that about two-thirds of the $173.3 billion in government financial assistance it received has been paid out to trading partners like banks and municipalities in the U.S. and abroad. According to WSJ, AIG tried deflecting increasing criticism of how government funds went to various banks and used to pay employee bonuses at AIG's Financial Products unit that almost bankrupted the Company. Citing AIG, WSJ relates that about $120 billion in financial aid to AIG had been distributed in the form of cash, collateral, and other payouts to banks, municipalities, and other institutions in the U.S. and abroad between September 16, 2008, and December 31, 2008. WSJ relates that this includes $52 billion of outflow from AIG's Financial Products. WSJ notes that another $43.7 billion was used to repay banks and brokers that were clients of AIG's securities-lending business. AIG also used $24 billion in Federal money to acquire mortgage-linked securities that the Company insured so that the contracts tied to them could be torn up. AIG, WSJ states, said on Sunday that AIG paid out $12.1 billion to municipalities in many states from September 16 to December 31, under guaranteed investment agreements that promised a fixed rate of return. According to WSJ, much of the bailout money was linked to contracts AIG sold to the firms to insure against losses on securities. WSJ notes that the trading partners were given more collateral to protect against losses as AIG's condition deteriorated. About American International Based in New York, American International Group, Inc. (AIG), is the leading international insurance organization with operation in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. During the third quarter of 2008, requirements to post collateral in connection with AIG Financial Products Corp.'s credit default swap portfolio and other AIGFP transactions and to fund returns of securities lending collateral placed stress on AIG's liquidity. AIG's stock price declined from $22.76 on Sept. 8, 2008, to $4.76 on Sept. 15, 2008. On that date, AIG's long-term debt ratings were downgraded by Standard & Poor's, a division of The McGraw- Hill Companies, Inc., Moody's Investors Service and Fitch Ratings, which triggered additional requirements for liquidity. These and other events severely limited AIG's access to debt and equity markets. On Sept. 22, 2008, AIG entered into an $85 billion revolving credit agreement with the Federal Reserve Bank of New York and, pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000 shares of Series C Perpetual, Convertible, Participating Preferred Stock to a trust for the benefit of the United States Treasury. At Sept. 30, 2008, amounts owed under the facility created pursuant to the Fed Credit Agreement totaled $63 billion, including accrued fees and interest. Since Sept. 30, AIG has borrowed additional amounts under the Fed Facility and has announced plans to sell assets and businesses to repay amounts owed in connection with the Fed Credit Agreement. In addition, subsequent to Sept. 30, 2008, certain of AIG's domestic life insurance subsidiaries entered into an agreement with the NY Fed pursuant to which the NY Fed has borrowed, in return for cash collateral, investment grade fixed maturity securities from the insurance subsidiaries. On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through its Troubled Asset Relief Program, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends. AIG and the Fed also agreed to revise the existing FRBNY credit facility. The loan terms were extended from two to five years to give AIG time to complete its planned asset sales in an orderly manner. The equity interest that taxpayers will hold in AIG, coupled with the warrants, will total 79.9%. At Sept. 30, 2008, AIG had $1.022 trillion in total consolidated assets and $950.9 billion in total debts. Shareholders' equity was $71.18 billion, including the addition of $23 billion of consideration received for preferred stock not yet issued. The Troubled Company Reporter reported on March 4, 2009, that Moody's Investors Service confirmed the A3 senior unsecured debt and Prime-1 short-term debt ratings of American International Group, Inc. AIG's subordinated debt rating has been downgraded to Ba2 from Baa1. The rating outlook for AIG is negative. This rating action follows AIG's announcement of net losses of $62 billion for the fourth quarter and $99 billion for the full year of 2008, along with a revised restructuring plan supported by the US Treasury and the Federal Reserve. This concludes a review for possible downgrade that was initiated on September 15, 2008. AMERICREDIT CORP: Moody's Confirms Senior Unsecured Rating at B2 ---------------------------------------------------------------- Moody's Investors Service confirmed the ratings of AmeriCredit Corp. (senior unsecured at B2) and assigned a negative outlook. The rating action concludes the review for possible downgrade initiated on November 19, 2008. The confirmation reflects ACF's recent amendment and extension of its Master Warehouse Facility and its MTN V warehouse facility, which addresses a substantial financial uncertainty. The terms and conditions of the amendment, although reflective of current market conditions, are materially less favorable to ACF. These include a lower commitment amount and higher pricing on the MWF, and lower advance rates. Nevertheless, the facilities provide adequate financial flexibility for ACF given its liquidity position and significantly reduced originations run-rate. The rating action also reflects the fact that ACF's unsecured debt maturity profile is manageable, with the remaining due dates being September 2011 ($275 million senior converts), September 2013 ($237 million senior converts), and June 2015 ($92 million senior unsecured notes). Moreover, despite substantially reduced origination volumes, Moody's believes the degree of franchise erosion being experienced by ACF is manageable given the state of the industry, characterized by shrinking volumes, consolidation, and a number of significant players leaving the industry. Having said this, Moody's notes that ACF still faces considerable risks given the severe recession being experienced by the U.S. economy and the continuing disruption of the capital markets. These forces are impacting ACF via elevated credit losses and limited access to funding. Despite higher pricing and credit quality on new originations, profitability of new loans will be constrained by sharply higher borrowing costs. Moreover, cash flow will likely be pressured by cash trapping in certain term ABS trusts and the need to adhere to more conservative advance rates and credit enhancement requirements in the amended warehouse facilities. In the circumstances, ACF will need to carefully manage liquidity for the short term, and hope the capital markets and economic environment provide them with the opportunity to have a viable business model in the future. The negative outlook on the company's ratings reflects these risks and is consistent with Moody's outlook for the US consumer finance industry generally and auto finance specifically. In addition to severe recessionary conditions currently being experienced in the US, key issues include extreme financial pressure on the US consumer and depressed used car values. These pressures are likely to continue for the balance of 2009, and quite possibly well into 2010, in Moody's view. In order to return to a stable outlook, ACF must demonstrate a sustained return to profitability while maintaining satisfactory unrestricted liquidity. On the other hand, significant incremental deterioration in liquidity, asset quality, or profitability beyond anticipated tolerances could lead to further negative pressure on the ratings. The last rating action on ACF was on November 19, 2008, when Moody's downgraded the company's ratings and left the ratings on review for possible downgrade. AmeriCredit is a leading independent automobile finance company based in Fort Worth, Texas. As of December 31, 2008 the company reported total managed receivables of approximately $13 billion. AMR CORP: To Face Cash Squeeze in 2010; Says Fitch; Ratings Junked ------------------------------------------------------------------ Fitch Ratings has downgraded the debt ratings of AMR Corp. and its principal operating subsidiary, American Airlines, Inc.: AMR -- Issuer Default Rating (IDR) to 'CCC' from 'B-'; -- Senior Unsecured Debt to 'C/RR6' from 'CCC/RR6'. American Airlines -- IDR to 'CCC' from 'B-'; -- Secured Bank Credit Facility to 'B+/RR1' from 'BB-/RR1'. The Rating Outlook for both AMR and American is Negative. The downgrade follows this winter's collapse in global air travel demand, which has eroded AMR's near-term cash flow generation potential at a time when the airline faces substantial fixed obligations and declining unrestricted cash balances. The 'CCC' rating reflects Fitch's view that AMR is now more likely to face a liquidity squeeze moving into 2010 as historically tight capital market conditions continue to limit the carrier's ability to refinance very heavy upcoming debt maturities. While AMR and its principal U.S. airline competitors entered the year with hopes that far lower jet fuel prices and reduced industry available seat mile capacity would drive a 2009 cash flow turnaround, pressure on demand and passenger yields now appears to be intensifying (particularly in higher-yielding international business markets), raising the risk of a sharp downturn in revenue that could offset much of the positive impact of lower fuel costs this year. In the absence of a stabilization of revenue per available seat mile trends, AMR is likely to report another year of negative free cash flow at a time when scheduled debt maturities are heavy ($1.8 billion in 2009 alone) and access to the capital markets remains very constrained. Fitch now expects AMR's unrestricted cash and investments balance to fall well below the year-end 2008 level of $3.1 billion during 2009, as ongoing operating losses in the first quarter combine with cash capital spending and principal payments to drain cash from the company over the next few quarters. To be sure, the AMR's operating results remain highly sensitive to jet fuel prices, which are now more than 50% lower than last summer's peak. Still, the margin of safety with respect to changes in energy prices is thin as a result of the deteriorating revenue outlook. Even if AMR is successful in refinancing a large portion of upcoming debt maturities through new aircraft-backed borrowing as assets become unencumbered, the airline faces a longer term challenge in meeting heavy fixed cash obligations (both debt payments and ultimately cash pension funding requirements) in the 2010-2011 period. Scheduled debt maturities for the years 2009- 2011 total $5.3 billion. Furthermore, pension funding requirements beyond 2009 could ramp up dramatically if another year of poor plan asset returns widens AMR's underfunded pension liability ($4.2 billion on a projected benefit obligation basis as of Dec. 31, 2008). In the aftermath of the 2008 market collapse, AMR's funded position slipped from approximately 96% of the PBO as of year-end 2007 to 70% at the end of 2008. Importantly, AMR retains unencumbered assets (including aircraft, engines, the American Eagle regional airline subsidiary, route authorities and potential proceeds from a sale of frequent flyer miles) that the carrier values at $3.5 billion. In addition, AMR estimates that a further $1 billion in assets will become unencumbered this year as secured debt is paid down. Given the current state of the capital markets, however, there is no assurance that financing or sale of these assets will raise the amount of capital required to meet future cash obligations while maintaining unrestricted liquidity above critical levels ($1.25 billion as defined in the bank credit facility liquidity covenant). Following the significant pull-down in scheduled capacity carried out by AMR and most of its U.S. competitors last September, RASM trends stabilized somewhat in the early fall. Unit revenue comparisons began to worsen materially in December, however, as the full impact of the financial crisis and the global economic downturn rippled through to air travel demand. RASM pressure appears to be most acute in international markets, where sharp declines in front-cabin business demand seemed to worsen in January and February. For American, year-to-date mainline system traffic fell by 12.6% through February 2009 on a 9.2% decline in ASM capacity. Load factor declines were largest in international markets (down 4.7 points), while mainline domestic load factors fell less sharply (1.6 points) due to the larger amount of capacity taken out of the domestic network. Critical trans-Atlantic business routes such as New York JFK to London Heathrow are particularly vulnerable in the current environment, as high-fare financial services industry demand has fallen sharply. Looking ahead to the peak seasonal demand period, AMR sees forward booked load factors down by approximately 2.5 percentage points year over year (approximately 4.5 points in international markets). Factoring in the potential for material yield declines to accompany this traffic weakness, Fitch believes that sharp RASM declines of 10% or more are not out of the question through at least the second quarter. In a stressed revenue scenario of this type, much of the anticipated fuel cost savings this year will be eroded by passenger revenue declines. Should demand soften further this spring, AMR and other U.S. carriers may elect to pull more scheduled capacity out of under- performing markets beyond the currently planned consolidated system capacity reductions of 6.5% this year. The current plan calls for 2009 international capacity to be down about 2.5% versus 2008. The rapid slide in energy prices after July 2008(when crude oil prices peaked at $147 per barrel) will provide AMR with substantial cost savings this year after consolidated fuel expense reached an all-time high of $9 billion in 2008 ($2.3 billion higher than the 2007 fuel expense level). Based on AMR's forecasted full year 2009 jet fuel price of $1.78 per gallon (after hedges) (as noted in a March 10, 2009 investor presentation), AMR's annual fuel costs would decline by approximately $3.5 billion this year. As underwater fuel derivative positions roll off by mid-year, AMR will be able to participate fully in the spot fuel price decline. Fitch does not expect AMR's cash position to be affected materially by the need to post additional cash collateral with fuel hedge counter- parties. As of year-end 2008, AMR had posted $575 million of fuel hedge cash collateral. This amount was not included in the year- end unrestricted cash and investments balance of $3.1 billion. Some of the benefits of lower fuel prices will be offset this year by rising unit operating costs in areas such as employee benefits (higher pension accruals), airport costs and aircraft rents. AMR has forecasted non-fuel unit operating expenses to be up approximately 9% this year. Pressure on non-fuel unit costs could intensify if the carrier is forced to cut scheduled capacity further. This follows from the fact that fixed costs cannot be reduced in line with capacity reduction - at least over the short term. With regard to aircraft commitments, all of AMR's scheduled Boeing 737-800 aircraft deliveries through late 2010 have committed financing in place. AMR is committed to take 29 B737-800 deliveries in 2008, 39 in 2010 and eight in 2011. Taking into account committed aircraft financing, cash capital spending will be limited to approximately $500 million in 2009. The addition of new aircraft debt, alongside any new refinancing of upcoming maturities, will delay any progress toward total debt reduction during a period of continuing stress in the operating environment. Additional increases in AMR's lease-adjusted leverage will, in Fitch's view, further erode the sustainability of its highly leveraged capital structure as fixed financing obligations grow relative to AMR's long-term cash flow generation potential. Credit facility covenant relief negotiated during the height of the fuel crisis last spring provided AMR with a respite from compliance with an EBITDAR fixed charge coverage test until the quarter ending June 30, 2009. At that time, test measurement will be carried out on a rolling basis until a full year test is reinstated at the end of the March 2010 quarter. Headroom above the second quarter and third quarter covenant levels could be eroded if RASM trends fail to stabilize in the peak summer demand period when the bulk of annual cash flow is generated. The RR1 Recovery Rating for American's secured credit facility ($691 million outstanding on the revolver and term loan at the end of 2008) reflects Fitch's expectation that recovery levels of 90% or more are likely in a default scenario. The credit agreement calls on the carrier to maintain strong asset coverage ratios in its credit facility collateral pool. The revolver expires on June 17, 2009, and the final maturity date for the term loan portion is Dec. 17, 2010. Recovery expectations for unsecured bondholders are poor (less than 10%), as reflected in the RR6 Recovery Rating for that debt class. Fitch could further downgrade the IDRs for AMR and American to 'CC' or below if demand pressure intensifies through the second and third quarters, eroding RASM further and increasing the risk of a liquidity crisis in early 2010. Any significant spike in jet fuel prices, while unlikely in light of the current global macroeconomic outlook, could also lead to a downgrade. A revision in the Rating Outlook to Stable is possible if signs of a sustainable economic recovery, accompanied by improved capital market access and low fuel prices, begin to appear by late 2009 or early 2010. ARBIOS SYSTEMS: $1 Mil. Investment from Energex Underpins Plan -------------------------------------------------------------- Arbios Systems, Inc. has signed a term sheet containing preliminary terms for a recapitalization of the company through a $1,000,000 stock subscription by Arbios Acquisition Partners, LLC. Since January 9, 2009, the company has been proceeding under Chapter 11 of the United States Bankruptcy Code under the jurisdiction of the Bankruptcy Court in the District of Delaware. The company and AAP intend to file a reorganization plan reflecting the terms of this proposed transaction, which, if approved by the Bankruptcy Court and all of the company's relevant classes, could lead to the company's emergence from Chapter 11. AAP is a limited liability company formed for the purpose of completing the proposed transaction. AAP is a wholly owned subsidiary of Energex Systems, Inc., a New Jersey-based company that was organized in 1999 to develop patented therapeutic medical devices to treat chronic conditions and diseases. The transaction contemplated by the term sheet calls for Arbios to cancel all of its currently existing equity (including all outstanding common stock, warrants, and options) and to issue new shares of common stock: (i) to AAP, which will represent 90% of the newly issued shares of the Company; and (ii) to the existing Arbios stockholders, which will represent 10% of the newly issued shares, allocated among the existing stockholders pro rata based on their pre-transaction common stock ownership interest in the company. Effectively, the existing stockholders of Arbios will receive one share of new common stock for each 10 shares held by them prior to the cancellation/re-issuance. The $1,000,000 cash purchase price for its new shares in the company will be paid by AAP: (i) $100,000 was paid to the company as a deposit upon signing of the term sheet, (ii) $100,000 is due upon the later of April 8, 2009, or the filing of the reorganization plan with the Bankruptcy Court, and (iii) $800,000 is due within 10 days of the Bankruptcy Court's confirmation of the plan of reorganization. If AAP fails to comply with paying the purchase price, Arbios may retain the deposit and can withdraw the reorganization plan and move forward with an alternative transaction or proceeding. If Arbios elects to enter into an alternative transaction prior to the confirmation of the reorganization plan by the Bankruptcy Court, AAP is entitled to a return of the funds it has delivered to Arbios, plus a 3% break up fee of amounts AAP has paid to Arbios. In addition, a portion of the deposit(s) may also be returned to AAP if the reorganization plan is not confirmed by the Bankruptcy Court. "The reorganization plan contemplated by this term sheet would allow Arbios to settle outstanding liabilities, emerge from bankruptcy as a publicly traded company, create an opportunity for continued development of SEPET(TM), and potentially enable existing shareholders to participate in the Company's future," commented Shawn Cain, Interim President and CEO. Arbios intends to file a motion to reorganize the Company according to the terms outlined in the term sheet with the Bankruptcy Court. Under the term sheet, the reorganization plan should be confirmed by the Court on or before May 15, 2009. However, there can be no assurances that the submitted reorganization plan will be acceptable to the Bankruptcy Court or all of the Company's relevant classes. Arbios' SEPET Liver Assist Device The SEPET(TM) Liver Assist Device is an extracorporeal (outside the body) liver assist device for blood purification of patients suffering from cirrhosis due to chronic liver disease and who are hospitalized with acute complications due to worsening liver dysfunction and portal hypertension. The SEPET(TM) device is a sterile, disposable cartridge containing microporous hollow fibers with proprietary permeability characteristics. SEPET(TM) is designed for use with standard blood dialysis systems available in hospital intensive care units. About Arbios Systems, Inc. Arbios Systems, Inc. -- http://www.arbios.com-- has been engaged in the development of proprietary medical devices to enhance the survival of millions of patients each year who experience, or are at risk for, life-threatening episodes of liver failure. Arbios' SEPET(TM) Liver Assist Device is a novel blood purification therapy that provides enhanced "liver dialysis". Arbios is a developmental stage company. In its third quarter 2008 report on form 10-Q submitted to the Securities and Exchange Commission, Arbios disclosed $620,564 in assets and total liabilities of $856,828. ARTISTDIRECT INC: Inks Corporate Controller Pact with Rousselet --------------------------------------------------------------- ARTISTdirect Inc. and Rene Rousselet entered into an Employment Agreement effective March 6, 2008, the company said in a filing with the Securities and Exchange Commission. Mr. Rousselet was employed to continue as the Company's Corporate Controller and Principal Accounting Officer. The employment is on an "at will basis." Effective February 1, 2009, Mr. Rousselet will receive a salary of $14,583 per month subject to increases and a bonus as determined by the Board of Directors, in its sole discretion. Mr. Rousselet was granted options to purchase 560,000 shares of the Common Stock of the company at $0.03 per share vesting monthly over 36 months commencing February 1, 2009. If Mr. Rousselet's employment is terminated without cause, he will receive his salary and vesting of options for an additional period of three months from the date of termination. A full-text copy of Mr. Rousselet's employment agreement is available at no charge at: http://ResearchArchives.com/t/s?3a5b Mr. Rousselet filed a Form 4 document with the Commission disclosing the stock options. Meanwhile, ARTISTdirect filed a Post Effective Amendment No. 6 to its registration statement on Form S-1 to terminate the effectiveness of the Registration Statement and to deregister all of the Registered Shares remaining unsold under the Registration Statement. According to the company, 36,277,491 shares remain unsold under the Registration Statement. Post Effective Amendment No. 6 became effective March 12, 2009. ARTISTdirect initially registered for resale from time to time an aggregate of 37,272,252 shares of its Common Stock pursuant to a registration statement initially filed with the Commission on November 10, 2005, and amended by Amendment No. 1 filed on December 6, 2005, Post-Effective Amendment No. 1 filed April 20, 2006, Post-Effective Amendment No. 2 filed on June 29, 2007, Post- Effective Amendment No. 3 filed on April 30, 2008, Post-Effective Amendment No. 4 filed on May 29, 2008 and Post-Effective Amendment No. 5 filed on June 6, 2008. Headquartered in Santa Monica, California, ARTISTdirect Inc. (OTC.BB: ARTD) -- http://artistdirect.com/-- is a digital media entertainment company that is home to an online music network and, through its MediaDefender subsidiary, is a provider of anti-piracy solutions in the Internet-piracy-protection industry. * * * At Sept. 30, 2008, the Company's balance sheet showed total assets of $9.3 million and total liabilities of $48.3 million, resulting in a stockholders' deficit of $39.0 million. For three months ended Sept. 30, 2008, the Company reported net loss of $9.2 million compared with net loss of $183,000 for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $43.9 million compared with net loss of $134,000 for the same period in the previous year. At Sept. 30, 2008, the Company had a working capital deficiency of $41.0 million, because of the classification of senior secured notes payable and subordinated convertible notes payable as current liabilities, the accrual of default interest on the subordinated convertible notes payable of $5.5 million, and liquidated damages payable under registration rights agreements of $1.9 million at the date. ASARCO LLC: Settles Environmental Claims for $1.1 Billion --------------------------------------------------------- ASARCO LLC filed a motion with the U.S. Bankruptcy Court in Corpus Christi, TX on Thursday under Rule 9019 of the Federal Rules of Bankruptcy Procedure seeking the Court's approval to enter into five settlement agreements that will resolve the vast majority of its remaining environmental claims. The federal government has described this as "the most complicated environmental bankruptcy in United States history." As part of the global settlements, the company will allow general unsecured claims in the total amount of approximately $835.7 million and give $275.3 million in cash to federal and state governments to pay its fair share of environmental liability at approximately 54 sites across the country -- making this the largest environmental settlement in history. "The proceeds from these global settlements will infuse much- needed cash into federal and state coffers, allowing governments to clean up some of the largest sites on the Superfund National Priorities List," stated Mr. Joseph Lapinsky, ASARCO's Chief Executive Officer. ASARCO recently announced the signing of a new agreement to sell substantially all of its operating assets to Sterlite (USA), Inc. for $1.1 billion cash plus a senior secured, non-interest bearing promissory note for $600 million, payable over nine years. The proposed sale, which ASARCO will seek to have approved as part of a plan of reorganization and the proceeds of which would fund such plan, coupled with these global settlements, are two major steps towards a successful exit from bankruptcy. U.S. Bankruptcy Court Judge Richard Schmidt will consider approval of the settlements after a two-day hearing in May. Bloomberg News, citing court records, said the government agencies involved in the settlements originally claimed to be owed $3.2 billion in clean-up costs. According to Bloomberg's Steven Church, after the settlements are approved, the agencies would collect as much as $1.1 billion, if creditors in the case are paid in full. The agencies will get less if the Company doesn't raise enough money through its reorganization to completely pay all of its debts. ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company with approximately 2500 employees. The company operates three mines, associated mills and a smelter in Arizona and a refinery complex in Texas, which includes plants that produce copper rod and cake, precious metals and by-products. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Files Motion to Pursue $1-Bil. Asset Sale to Sterlite ----------------------------------------------------------------- ASARCO LLC and its debtor affiliates has formally informed the U.S. Bankruptcy Court for the Southern District of Texas of their modified sale transaction and settlement with Sterlite (USA), Inc., pursuant to Section 363 of the Bankruptcy Code. The New Sterlite PSA, which will be implemented under an amended plan of reorganization, provides for the sale of ASARCO's operating assets to Sterlite for: (a) $1.1 billion in cash; (b) assumption of the liabilities that were to be assumed under the Original Sterlite PSA; and (c) a non-interest bearing, secured $600 million note, payable over nine years. The New Sterlite deal comes at a critical time in ASARCO's three- and-a-half-year-old bankruptcy case, according to Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas. He avers that the ASARCO board of directors and advisors, together with its key creditor constituents, examined various plan alternatives and considered the anticipated assets available to the bankruptcy estates, including (i) an estimated $1.275 billion cash on hand at the end of March 2009, (i) the enterprise value of ASARCO, (iii) the fraudulent transfer litigation against ASARCO's indirect parent, Americas Mining Corporation and Asarco Incorporated, and (iv) a breach of contract claim against ASARCO's former plan sponsor, Sterlite and affiliated parties. The goal of the ASARCO Board, Mr. Kinzie notes, has been to maximize the value of the Debtor's assets under a plan of reorganization and to negotiate a consensual structure of the Plan. Ultimately, after four months of vigorous negotiations with Sterlite, the Board believes that a modified transaction and settlement with Sterlite would yield the highest and best value for the Debtors' estates and creditors. The New Sterlite Deal is memorialized in a new purchase and sale agreement entered into by the Debtors, as sellers; Sterlite USA, as purchaser; and Sterlite Industries (India) Ltd., as guarantor, on March 6, 2009. Nevertheless, ASARCO seeks to subject the New Sterlite PSA to higher and better acquisition proposals. The other salient terms of the New Sterlite PSA are: * Secured $600MM Note. The $600 million face amount of the Secured Note is subject to a post-closing, working capital adjustment based on the difference between the levels of accounts receivable, accounts payable, and market value of inventory at the closing date and $253 million. The principal amount of the Note, as adjusted up or down by working capital items, is the "Maximum Principal Amount." The Note is secured by certain of the Assets being purchased by Sterlite, and provides that if in any year during the Note's term the average copper daily price exceeds $6,000 per metric tonne, Sterlite will make a payment pursuant to a certain formula set forth in the Note. * Sterlite Deposit. Sterlite has agreed to a deposit in the form of three letters of credit to be issued by ABN AMRO Bank N.V., Chicago, in favor of ASARCO for the total amount of $125 million. Letters of credit for $100 million have been delivered, and the remaining $25 million will be delivered if and when Sterlite's disclosure statement is approved. * No-Shop Covenant. The New Sterlite PSA includes a limited non-solicitation covenant or the "No-Shop Covenant," coupled with a "Fiduciary Out" that gives ASARCO termination rights to pursue: (x) a superior proposal, if the Board determines in good faith that such action is necessary to comply with its fiduciary duties under applicable law; or (y) a more favorable stand-alone plan that is supported by ASARCO. For a proposal to be considered "superior," it must provide at least $51 million, which is equal to $25 million plus a $26 million break-up fee, more value than the New Sterlite PSA. The No-Shop Covenant is similar to the covenant the Court approved in connection with the Original Sterlite PSA, except that it is not effective until entry of an order approving the Sterlite Settlement Request. Prior to the approval, Sterlite has agreed to a "Go-Shop Covenant," whereby ASARCO and its advisors may use the New Sterlite PSA to solicit an alternate transaction for the Assets without any restrictions. * Back-up Bid Option. In the event ASARCO terminates the New Sterlite PSA by exercising the Fiduciary Out to pursue a Superior Proposal or a Stand-Alone Plan, but the alternative transaction does not close, Sterlite has a back-up bid option, under which ASARCO must offer Sterlite the right to consummate the transaction on substantially the same terms as the New Sterlite PSA. * Bid Protections. To incentivize Sterlite to enter into the modified transaction while allowing the Board to continue to exercise its duty to maximize the value of the ASARCO Assets through alternative transactions, the New Sterlite PSA provides Sterlite bid protections. (x) Upon the consummation of a superior acquisition proposal that meets the Superior Proposal Threshold or a more favorable stand-alone plan supported by the Board following a termination pursuant to ASARCO's Fiduciary Out, Sterlite will receive a $26 million break-up fee. The Break-up Fee is, depending on the discount rate used to calculate the present value of the Note, is approximately 2% of the total purchase price consideration. (y) The New Sterlite PSA also contains a matching right and provides for an expense reimbursement of up to $10 million in certain circumstances. The Matching Right allows Sterlite to match any subsequent acquisition proposal without having to meet the Superior Proposal Threshold. Sterlite Settlement & Release Request Sterlite has refused to entertain any purchase and sale transaction that does not include a release of the Debtors' claims for breach of the Original Sterlite PSA, according to Mr. Kinzie. After substantial negotiations, the Debtors ultimately agreed to a release as part of a global compromise, but only upon the occurrence of certain limited conditions. The limited conditions are: (1) The closing of the transaction contemplated by the New Sterlite PSA; or (2) The termination of the New Sterlite PSA due to the Court's approval of a bona fide written acquisition proposal that the ASARCO Board determines in good faith (i) is reasonably likely to be consummated in a timely manner, (ii) would result in a transaction more favorable to ASARCO and its stakeholders than the transactions under the New Sterlite PSA, and (iii) provides deemed value to ASARCO and its estate that exceeds by at least the Superior Proposal Threshold the deemed value of the New Sterlite PSA; and the subsequent consummation of that Superior Proposal between ASARCO and a third party; or (3) The termination of the New Sterlite PSA due to the Court's approval of a stand-alone plan, which the Board approves and determines would be more favorable than the New Sterlite PSA and is supported by ASARCO; and the subsequent consummation of that Stand-Alone Plan; or (4) The termination of the New Sterlite PSA due to these reasons: * Failure to meet any of these deadlines: (i) approval of the Sterlite disclosure statement by May 31, 2009, which may be extended through July 1, 2009; (ii) confirmation of the Sterlite Plan by August 31, 2009, which may be extended through September 30, 2009; (iii) closing by November 30, 2009, which may be extended through December 31, 2009; * ASARCO's breach of any representation, warranty or covenant, which would result in a failure of a condition to Sterlite's obligation to close and which is not cured pursuant to the New Sterlite PSA; or * Rejection by asbestos or governmental environmental creditors if the Sterlite Plan is submitted for voting. Subsequent to the termination of the Sterlite PSA, a Superior Proposal between ASARCO and a third party must also be consummated, provided that a definitive agreement with respect to the Superior Proposal is signed within 180 days after termination of the New Sterlite PSA; or (5) The termination of the New Sterlite PSA, after a 60-day notice and cure period, due to an intentional and willful material breach of any of these obligations of the Debtors, as sellers: * The covenant prohibiting any interim sale or other disposition of the Assets, other than inventory and receivables; * ASARCO's obligation to use reasonable best efforts to obtain prompt entry of the plan confirmation order; * ASARCO's obligation to provide Sterlite final drafts of relevant documents and filings, and ASARCO's obligation not to amend certain pleadings to the extent that amendment may be reasonably expected to have a material adverse effect on Sterlite or Sterlite India or on the ability of the parties to close the transactions under the New Sterlite PSA; * ASARCO's covenant to file a motion as necessary to extend exclusivity; * the No-Shop Covenant; or * ASARCO's obligation to provide Sterlite with information needed to exercise its Matching Right. If none of the conditions occurs or if Sterlite materially breaches the New Sterlite PSA, Sterlite does not receive the contemplated Release and the Debtors may pursue all of their claims against Sterlite and Sterlite India under the Original Sterlite PSA. A full-text copy of the New Sterlite Deal is available for free at: http://bankrupt.com/misc/ASARCO_Sterlite_NewPurchaseAgreement.pdf The Settlement Request does not seek approval of the sale transaction contemplated by the New Sterlite PSA, which will instead be evaluated by all stakeholders and the Bankruptcy Court as part of confirmation of an amended Sterlite-sponsored plan of reorganization, Mr. Kinzie clarifies. Rather, by this motion, ASARCO only seeks approval of: (a) the settlement and conditional release contained in the New Sterlite PSA; (b) the back-up bid provisions in the New Sterlite PSA; and (c) the revised bid protections, consisting of the Break-up Fee, No-Shop Covenant with Fiduciary Out, Matching Right, Superior Proposal Threshold, and Expense Reimbursement. ASARCO asserts that the proposed Sterlite Settlement is fair and reasonable, taking into account the uncertainty and likely length and cost of litigating the disputes surrounding the Original Sterlite PSA; the relevant information concerning current and projected copper, financial and credit markets, reorganization alternatives reasonably available to the Debtors; and the views and concerns of the major creditor constituents. Judge Richard Schmidt will convene a hearing on April 9, 2009, to consider approval of the Sterlite Settlement. Objections must be filed no later than April 1. The Court has also set these schedules with respect to the Settlement Request: March 20, 2009 Deadline to serve discovery requests March 24, 2009 Deadline to submit deposition notice requests March 25, 2009 Deadline to serve deposition witness lists March 27, 2009 Deadline for responses to discovery requests March 27, 2009 Completion of the production of documents March 30, 2009 Commencement of depositions April 3, 2009 Last day for depositions April 3, 2009 Deadline for parties to file and serve witness lists and proffers In a separate request, ASARCO sought and obtained the Court's approval on the form, manner, and sufficiency of a notice of hearing on the Settlement Request. To notify potential purchasers of the arrangement with Sterlite and to further expand its marketing and solicitation efforts to the broadest universe of potential plan sponsors, ASARCO will publish the Hearing Notice, which will be modified for publication, once in The Wall Street Journal and once in one or two of the leading trade journals in the mining industry in advance of the hearing to approve the Settlement. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Seeks Approval of Plan-Related Discovery Procedures --------------------------------------------------------------- ASARCO LLC asks the U.S. Bankruptcy Court for the Southern District of Texas to establish objection deadlines and uniform discovery procedures to govern: (a) its request for the approval of a settlement and release with Sterlite (USA), Inc., and certain revised bid protections contained in its new purchase and sale with Sterlite; (b) approval of a disclosure statement in support of the Debtors' third amended joint plan of reorganization; and (c) confirmation of the Debtors' Plan, which will be submitted in the coming months. The Debtors also seek (i) approval of the notice to be sent to creditors of the objection deadline for the approval of an amended Disclosure Statement, and (ii) guidance from the Court on the procedure for conducting the confirmation hearing as it relates to the entry of a channeling injunction under Section 524(g) of the Bankruptcy Code. The Debtors relate that they intend to file a Third Amended Plan and Third Amended Disclosure Statement on March 16, 2009, and propose that the Court set April 17, 2009, as the deadline by which parties can file objections to the Third Amended Disclosure Statement. The Debtors' exclusive plan filing period expires on March 17. Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, elaborates that the Third Amended Disclosure Statement the Debtors have yet to file is an update to the "Disclosure Statement in Support of the Debtors' Second Amended Joint Plan of Reorganization under Chapter 11 of the United States Bankruptcy Code" and the "Disclosure Statement in Support of the Parent's and AMC's Second Amended Plan of Reorganization for ASARCO LLC, Southern Peru Holdings, LLC, AR Sacaton, LLC, and ASARCO Master, Inc. under Chapter 11 of the United Sates Bankruptcy Code," which Judge Richard Schmidt approved on September 25, 2008. Mr. Kinzie assures Judge Schmidt that the Debtors will resolve informal objections submitted by letter or e-mail and formal objections to the Third Amended Disclosure Statement and thus, no discovery will be necessary. The Debtors also propose that the Court establish these deadlines related to the hearings on the Third Amended Disclosure Statement approval and Plan confirmation: April 17, 2009 Deadline to file Disclosure Statement objections April 28, 2009 Disclosure Statement hearing May 4, 2009 Deadline to file Notice of Intent May 5, 2009 Deadline for Debtors to file confirmation service list May 6, 2009 Deadline for parties to serve confirmation discovery requests May 13, 2009 Deadline for parties to serve responses to written discovery May 20, 2009 Deadline for parties to complete production of documents May 25, 2009 Deadline for parties to file and serve confirmation witness lists May 26, 2009 Deadline for parties to serve confirmation deposition witness lists May 28, 2009 Deadline for parties to reach agreement on deposition schedules June 1, 2009 Deadline for parties to commence depositions of fact witnesses June 1, 2009 Deadline for parties to file and serve objections to the Plan June 5, 2009 Deadline for parties to serve expert reports June 10, 2009 Deadline for parties to identify rebuttal experts June 12, 2009 Deadline for parties to serve rebuttal expert reports June 16, 2009 Deadline for parties to commence depositions of expert witnesses June 19, 2009 Confirmation deposition cutoff date June 26, 2009 Pre-Confirmation status conference June 29 to July 2, 2009 Confirmation Hearing July 6-7, 2009 Confirmation Hearing, if necessary The Debtors tell Judge Schmidt that they have been informed by Robert C. Pate, the future claims representative, and the Official Committee of Asbestos Claimants that neither party supports nor objects to the proposed Sterlite sale at this time. The parties, however, reached an agreement in principle to a mediated settlement with ASARCO, which the Debtors continue to support. The settlement was conditioned on the FCR's and the Asbestos Committee's support for the Debtors' Plan. The Debtors remain optimistic that further Plan negotiations will result in the FCR and the Asbestos Committee giving their full support for the Debtors' Plan. Mr. Kinzie notes that absent an asbestos-related settlement, the Court would need to schedule a hearing on the estimation of the Debtors' asbestos liability in advance of the Plan's confirmation. ASARCO also seeks guidance from the Court regarding the most efficient way to conduct the Confirmation Hearing to address the Section 524(g) channeling injunction in light of these three objectives: (i) Elimination of any dispute or uncertainty relating to jurisdiction or authority regarding the requested confirmation order and the channeling injunction provided in the Debtors' Plan; (ii) The appeal process will be expedited by clarifying the appellate procedure; and (iii) Relevant deadlines in the New Sterlite PSA are met to eliminate risk to the bankruptcy estates. To ensure an orderly discovery process in connection with the Confirmation Hearing, the Debtors propose that any party wanting to participate in discovery should serve a notice of intention to participate no later than May 4, 2009. Parties deemed to be "Objectors" for purposes of the Confirmation discovery include: -- The Debtors, -- The Parent, -- The Official Committee of Unsecured Creditors, -- The Asbestos Committee, -- The FCR, -- The U.S. Dept. of Justice -- The U.S. Dept. of Environment & Natural Resources Division, -- The states of Washington, Arizona, Montana, Missouri, and Texas, and -- The United Steelworkers Union. Any party not filing a timely Notice of Intent may still attend, but not participate in, any Confirmation depositions, provided that the party may prosecute its timely objections to confirmation of the Plan during the Confirmation Hearing. To facilitate an organized discovery process, the Debtors will prepare and file by May 5, 2009, a list of the parties entitled to participate in all confirmation discovery. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Won't Name New Consultant in AMC Dispute ---------------------------------------------------- ASARCO LLC seeks permission from Judge Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas to employ a certain professional to provide consulting services to its counsel in connection with its objection to Administrative Claim No. 18571 filed by Americas Mining Corporation and ASARCO Incorporated. ASARCO's Employment Application is being filed on a no-name basis to avoid disclosure of the professional's identity and other details of the retention and scope of work, Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, tells the Court. He notes that the professional is now being retained as a consulting expert to ASARCO's counsel, and a decision as to whether the professional will testify as an expert in connection with the claim objection will be made at a later time. Mr. Kinzie says given that the deadline to designate expert witnesses is not until April 13, 2009, it is unnecessary to require disclosure of a potential testifying expert witness before other parties are required to do the same. Therefore, ASARCO also seeks to file the Consulting Expert's disinterestedness affidavit under seal upon entry of an order on the Application. The Disinterestedness Affidavit will set forth any connections that the Consulting Expert may have with the Debtors, their affiliates, their creditors, and other known parties-in-interest. The Consulting Expert will be paid in an hourly rate of $780, and will be paid "travel time portal to portal and time for any fee applications required." The Consulting Expert will also be reimbursed for its necessary expenses. Given the nature and scope of the issues on which ASARCO has sought the Consulting Expert's expertise and judgment, ASARCO consent that the Consulting Expert may consult with other members of its firm and if it does, the necessary services of those members will be paid for at the firm's customary rates. The Consulting Expert has represented to ASARCO and its counsel that it does not have or represent any interest adverse to the Debtors or their bankruptcy estates on the matters for which it is being retained, and it otherwise meets the "disinterested person" definition as set forth in Section 101(14) of the Bankruptcy Code. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for US$2,600,000,000. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, submitted a reorganization plan to retain its equity interest in ASARCO LLC, by offering full payment to ASARCO's creditors in connection with ASARCO's Chapter 11 case. AMC would provide up to US$2.7 billion in cash as well as a US$440 million guarantee to assure payment of all allowed creditor claims, including payment of liabilities relating to asbestos and environmental claims. AMC's plan is premised on the estimation of the approximate allowed amount of the claims against ASARCO. Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AXCELIS TECHNOLOGIES: Sale Closing Delay to Threaten Going Concern ------------------------------------------------------------------ Axcelis Technologies, Inc., expects the sale of its investment in a joint venture, SEN Corporation, to close on March 31, 2009. The company said management is currently evaluating whether there is substantial doubt about the company's ability to continue as a going concern through December 31, 2009, if it closes this transaction. On February 26, 2009, the company, Sumitomo Heavy Industries, Ltd., and SEN Corporation entered into a Share Purchase Agreement pursuant to which the company will sell to SHI all of the company's common shares in SEN in exchange for a cash payment of JPY13 billion on the later of March 31, 2009 or the date on which certain closing conditions are satisfied. Axcelis and SHI each own 50% of the outstanding common shares of SEN, a Japanese corporation which holds a license from Axcelis to make and sell certain ion implanters in Japan. On March 2, 2009, the company purchased a foreign exchange option to hedge the proceeds from the transaction. The option insures proceeds of roughly $132.7 million before advisor fees and other expenses. A portion of the net proceeds under the Share Purchase Agreement will be used to discharge the company's obligations under its 4.25% Convertible Senior Subordinated Notes. Should this transaction fail to close by March 31, 2009, due to the fact that the company's debt will continue to be in default because the company will not have the ability to repay it, the company said its annual report on Form 10-K will disclose that there is substantial doubt about the company's ability to continue as a going concern through December 31, 2009. No assurances can be given that the closing will occur on March 31, 2009 or at all. Default Under 4.25% Sr. Sub Notes As reported by the Troubled Company Reporter, the company failed to repay the outstanding principal amount of its 4.25% Convertible Senior Subordinated Notes plus a maturity premium and accrued interest -- a total of roughly $85 million -- on January 15, 2009. The company and U.S. Bank National Association, as trustee, are parties to an Indenture dated as of May 2, 2006, relating to the Senior Subordinated Notes. Pursuant to the Indenture and as a result of the company's default, the company is required to pay, upon demand of the trustee, the entire overdue amount, plus interest at a rate of 8.0% per annum, plus certain additional costs and expenses associated with the collection of such amounts. In January 2009, the Trustee filed a complaint in U.S. District Court in New York seeking a judgment for the amount due on the Senior Subordinated Notes. The company acknowledges the debt and has been engaged in various efforts to obtain liquidity to allow repayment to the debt holder. About Axcelis Technologies, Inc. Axcelis Technologies, Inc. -- http://www.axcelis.com-- headquartered in Beverly, Massachusetts, provides innovative, high-productivity solutions for the semiconductor industry. Axcelis is dedicated to developing enabling process applications through the design, manufacture and complete life cycle support of ion implantation and cleaning systems. Axcelis also licenses its 50% owned joint venture, SEN Corporation, an SHI and Axcelis Company, to manufacture and sell certain implant products in Japan. AXCELIS TECHNOLOGIES: To Delay Filing of 2008 Annual Report ----------------------------------------------------------- Axcelis Technologies, Inc., is unable to file its Annual Report on Form 10-K for the period ended December 31, 2008, within the prescribed time period without unreasonable effort and expense because extra time is needed to determine the amount by which the company's long-lived assets and goodwill have been impaired. In connection with the preparation of the financial statements for the fiscal year ended December 31, 2008, and following discussions with its Audit Committee, management concluded that, due to the continuing downturn in the semiconductor industry and the global economy, the company's long-lived assets and goodwill have been impaired. The company has experienced resource limitations that, along with management's focus on the business implications of the default on its debt and the complex calculations required to measure impairment, have delayed completion of the valuations required to determine the extent of the impairment charges and delayed the preparation of its financial statements. The company expects to file the Form 10-K on or before March 31, 2009, the 15th calendar day following the prescribed due date. The company expects to recognize revenue of $250.2 million for the 2008 fiscal year, compared to $404.8 million for the 2007 fiscal year. The company expects operating expenses for the 2008 fiscal year, exclusive of the impairment charge, to be roughly $160.4 million, compared to $173.5 million for the 2007 fiscal year. The company expects to record impairment charges and charges for excess inventory ranging between $99.0 million and $127.0 million for the 2008 fourth quarter and 2008 fiscal year. The company does not anticipate any future cash expenditures in connection with these impairment charges. Inclusive of the charges, the company expects to record a net loss ranging between roughly $129.2 million and $157.2 million for the 2008 fourth quarter compared with a net loss of $10.6 million for the 2007 fourth quarter; and a net loss ranging between approximately $184.5 million and $212.5 million for the 2008 fiscal year compared with a net loss of $11.4 million for the 2007 fiscal year. The company cautioned that the numbers are estimates only and are subject to change following the completion of management's review. Default Under 4.25% Sr. Sub Notes As reported by the Troubled Company Reporter, the company failed to repay the outstanding principal amount of its 4.25% Convertible Senior Subordinated Notes plus a maturity premium and accrued interest -- a total of roughly $85 million -- on January 15, 2009. The company and U.S. Bank National Association, as trustee, are parties to an Indenture dated as of May 2, 2006 relating to the Senior Subordinated Notes. Pursuant to the Indenture and as a result of the company's default, the company is required to pay, upon demand of the trustee, the entire overdue amount, plus interest at a rate of 8.0% per annum, plus certain additional costs and expenses associated with the collection of such amounts. In January 2009, the Trustee filed a complaint in U.S. District Court in New York seeking a judgment for the amount due on the Senior Subordinated Notes. The company acknowledges the debt and has been engaged in various efforts to obtain liquidity to allow repayment to the debt holder. About Axcelis Technologies, Inc. Axcelis Technologies, Inc. -- http://www.axcelis.com-- headquartered in Beverly, Massachusetts, provides innovative, high-productivity solutions for the semiconductor industry. Axcelis is dedicated to developing enabling process applications through the design, manufacture and complete life cycle support of ion implantation and cleaning systems. Axcelis also licenses its 50% owned joint venture, SEN Corporation, an SHI and Axcelis Company, to manufacture and sell certain implant products in Japan. BELL BUSINESS: Legacy Wants to Extend $250,000 to Finance Payroll ----------------------------------------------------------------- Legacy Bank, a secured creditor of Scottsdale Auto Salon, LLC, and Bell Business Associates, LLC, asks the U.S. Bankruptcy Court for the District of Arizona to enter an emergency interim and a final order authorizing: i) Legacy to provide postpetition financing for Debtors' business, long as it is under the control of the Receiver, a Chapter 11 Trustee, or other independent third party acceptable to Legacy, consistent with the arrangement approved in Maricopa County Superior Court receivership proceedings, secured by a superpriority lien on Debtors' real and personal property assets; and ii) the immediate payment of pre-petition payroll and critical expenses. On Dec. 17, 2008, Legacy Bank filed a complaint against Bell and requested for an appointment of a receiver in Maricopa County Superior Court. The state court approved the application and appointed Michael Crook as the receiver for the Debtors' business effective Jan. 26, 2009. Mr. Cook hired Twins Management, Inc. to operate the business. The Debtors are indebted to Legacy Bank by $11,756,400 as of March 5, 2009, secured by a first lien on Debtors' real and personal property, pursuant to a Promissory Note dated Jan. 24, 2007, in the original principal amount of $10,500,000; Change in Terms Agreement dated July 24, 2008; Construction Loan Agreement dated Jan. 24, 2007; Construction Deed of Trust dated Jan. 24, 2007, recorded with the Maricopa County Recorder Jan. 26, 2007; Commercial Security Agreement dated Jan. 24, 2007; UCC-1 Financing Statement dated Jan. 24, 2007, recorded with the Maricopa County Recorder on Jan. 26, 2007; and UCC-1 Financing Statement recorded with the Arizona Secretary of State on July 11, 2008. Payment of the Note was guaranteed by the C. Arnold Curry Trust, the Cara Jean Curry Trust, C. Arnold Curry individually, and Cara Jean Curry. The Note, as extended, matured by its terms on Sept. 24, 2008, has not been paid, and is now in default. Based on a July 2008 appraisal of the Debtors' property at $9,000,000, Legacy believes that its claim exceeds the value of its collateral by more than $2,000,000. Salient Terms of the Loan Legacy proposes to provide the Estate with a revolving line of credit of up to $250,000 on an administrative superpriority basis, secured by a superpriority lien on Debtors' assets. The purpose of the Post-Petition Loan is to provide a means of financing (a) immediate payment of pre-petition payroll and critical expenses, and (b) post-petition expenses of the Business to the extent necessary; in either case, Legacy will have the right to approve, and will fund only approved and reasonable expenses. The Estate will pay down the Post-Petition Loan as cash flow reasonably allows, and any unpaid balance of the Post-Petition Loan will in all events be payable in full on the Effective Date of any confirmed plan of reorganization in these cases. The Post-Petition Loan will only be available so long as the representative of the Estates with authority to operate the Business and incur debt on the Estates' behalf is: a) the Receiver; b) a Chapter 11 Trustee appointed pursuant to the Court's order; or c) an independent third party acceptable to Legacy in its sole discretion. It will be a default under the Post-Petition Loan, terminating the Post-Petition Loan and making the entire balance of the Post- Petition Loan immediately due and payable, if possession or control of the Business is returned to the Debtors, J. Arnold Curry, Cara Jean Curry, Joseph Curry or Mark Curry, or anyone designated by them. The Post-Petition Loan will bear interest at prime plus 2%, will be for a term of 6 months, renewable for an additional 6 months without further Court approval. Legacy and the representative of the Estates authorized to negotiate with Legacy will agree on documentation of the Post-Petition Loan, which will contain reasonable, ordinary and necessary terms. There has been one other offer of financing, the principal of the Debtors, C. Arnold Curry, has offered to loan up to $200,000, conditioned on Debtors regaining control of the Business. Legacy relates that it is a lender in good faith. The post- petition financing does not improve Legacy's position, does not propose Debtors waive any rights or claims against an existing creditor, stipulate to an existing claim amount, nor stipulate to the validity or priority of existing liens. About Bell Business Associates Bell Business Associates, L.L.C., doing business as Scottsdale Auto Salon, holds title to the real estate, and SAS operates a two-lane car wash catering to luxury vehicles, an auto detailing center, fueling stations, food service center and convenience store, located at 9393 E. Bell Road, Scottsdale, Arizona 85260. On Dec. 17, 2008, Legacy Bank, a secured creditor, filed a complaint against Bell and requested for an appointment of a receiver in Maricopa County Superior Court. On Jan. 23, 2009, the state court issued its written order appointing Michael Crook as the receiver for the Business effective Jan. 26, 2009. Mr. Cook hired Twins Management, Inc. to operate the business. Bell Business Associates, L.L.C. and Scottsdale Auto Salon LLC filed for Chapter 11 protection on March 5, 2009, (Bankr. D. Ariz. Lead Case No.: 09-04003) Warren J. Stapleton, Esq. at Osborn Maledon PA respresents the Debtors in their restructuring efforts. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. BELL BUSINESS: Court Okays Osborn Maledon as Bankruptcy Counsel --------------------------------------------------------------- Bell Business Associates, L.L.C., and Scottsdale Auto Salon LLC obtained authority from the U.S. Bankruptcy Court for the District of Arizona to employ Osborn Maledon, P.A. as counsel. Osborn Maledon has agreed to: a. advise the Debtor of its rights, powers and duties in this case; b. assist the Debtor in preparation of the Debtor's voluntary Chapter 11 Petition and Statements and Schedules; c. assist the Debtor in the formulation, preparation and prosecution of a plan of reorganization and related disclosure statement, well as the agreement, if any, as may be necessary or proper to implement the plan; d. assist the Debtor's conduct of litigation; and other matters related to the administration and conduct of Debtor's Chapter 11 case; e. assist and advise the Debtor in its discussions with creditors relating to the administration of this case; f. assist the Debtor in reviewing claims asserted against it and in negotiating with claimants asserting the claims; g. assist the Debtor in examining and investigating potential preferences, fraudulent conveyances, and other causes of action; h. represent the Debtor at all hearings and other proceedings; i. review and analyze all motions, applications, orders and other pleadings and papers filed with the Court, and advise the Debtor with respect thereto; j. advise the Debtor concerning, and prepare on behalf of the Debtor, all motions, applications, complaints, replies, objections, answers, draft orders, other pleadings, notices and other documents that may be necessary and appropriate in furtherance of the Debtor's interests, duties and objectives; and k. perform the other legal services as may be required or appropriate in accordance with the Debtor's powers and duties under the Bankruptcy Code. Osborn Maledon will be paid for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date that services are rendered. The court document did not specify the hourly rates of the firm. To the best of Debtors' knowledge, information and belief, Osborn Maledon is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Bell Business Associates Bell Business Associates, L.L.C., doing business as Scottsdale Auto Salon, holds title to the real estate, and SAS operates a two-lane car wash catering to luxury vehicles, an auto detailing center, fueling stations, food service center and convenience store, located at 9393 E. Bell Road, Scottsdale, Arizona 85260. On Dec. 17, 2008, Legacy Bank, a secured creditor, filed a complaint against Bell and requested for an appointment of a receiver in Maricopa County Superior Court. On Jan. 23, 2009, the state court issued its written order appointing Michael Crook as the receiver for the Business effective Jan. 26, 2009. Mr. Cook hired Twins Management, Inc. to operate the business. Bell Business Associates, L.L.C. and Scottsdale Auto Salon LLC filed for Chapter 11 protection on March 5, 2009, (Bankr. D. Ariz. Lead Case No.: 09-04003) Warren J. Stapleton, Esq. at Osborn Maledon PA respresents the Debtors in their restructuring efforts. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. BERNARD L. MADOFF: Prosecutors to Seek Forfeiture of Assets ----------------------------------------------------------- Court documents say that federal prosecutors said that they will seek forfeiture of Bernard Madoff's millions of dollars in property and cash. Chad Bray and Amir Efrati at The Wall Street Journal report that the prosecutors are eyeing Mr. Madoff's: -- $17 million in cash; -- $45 million in bonds; -- the Madoff's $7 million Upper East Side penthouse apartment; -- a $3 million home in Montauk, N.Y.; -- an $11 million home in Palm Beach, Florida; -- a $1 million villa in Cap d'Antibes, France; -- boats; and -- cars. According to WSJ, prosecutors said that they could seek more than $170 billion in forfeiture, including money and property traceable to the fraud. Much of the $170 billion amount, says WSJ, comes from funds deposited by investors into Mr. Madoff's fraudulent investment operation and later dispersed to other investors. As reported by the Troubled Company Reporter on March 16, 2009, Mr. Madoff disclosed $823 million to $826 million in assets weeks after his Ponzi scheme was disclosed. Most of Mr. Madoff's assets came in the $700 million he valued for Bernard L. Madoff Investment Securities. Many of the assets, except one of four houses, were held in Ruth Madoff's name. WSJ relates that Mrs. Madoff's lawyers would argue that their client is independently wealthy and that not all of her holdings were acquired through the fraud. Ms. Madoff hasn't been charged with any wrongdoing, says WSJ. Mr. Madoff's lawyers said in court documents said that Mrs. Madoff bought the New York apartment, the French villa, and the Palm Beach residence. WSJ states that the Montauk home was jointly acquired by the Madoffs in 1979. Prosecutors, according to WSJ, said that they are seeking forfeiture of $17 million in cash held in a bank account in Mrs. Madoff's name and $45 million in municipal bonds held in her name at Cohmad Securities Corp. WSJ notes that prosecutors hope to grab cars, a Steinway piano, and $65,000 in silverware, that are under Mrs. Madoff's name. Citing a person familiar with the matter, WSJ states that Mrs. Madoff received $10 million from her father several decades ago, plus an inheritance. The sources said that the government is aware that Mrs. Madoff is independently wealthy and wouldn't have accepted the terms of Mr. Madoff's bail if they believed that investors' funds were being used to secure the bail, WSJ relates. The government, after Mr. Madoff is sentenced, would have a relatively easy time getting a federal judge to sign a "preliminary order of forfeiture" for Mrs. Madoff's assets because they could argue the assets were secured using money traced back to Mr. Madoff's fraud, WSJ says, citing former New York federal prosecutor said Dan Ruzumna. "In this environment, it will be difficult for her to prove the entire stock of assets she has now is traceable to legitimate sources," the report quoted Mr. Ruzumna as saying. Court documents say that Irving H. Picard, the court-appointed trustee who is liquidating Bernard L. Madoff Investment and recovering assets for victims, sought to hire lawyers in Gibraltar to confiscate $50 million to $75 million in Madoff assets located there. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC was a market maker in U.S. 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 allegedly at least $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. Mr. Madoff, if found guilty of all counts, would be imprisoned for 150 years, but legal experts expect the actual sentence to be much lower and would still be an effective life sentence for the 70- year-old defendant, WSJ notes. Mr. Madoff, WSJ relates, would also face millions of dollars in possible criminal fines. The report says that Mr. Madoff has been free on bail since his arrest on December 11, 2008. There was no plea agreement with Mr. Madoff in which leniency in sentencing might be recommended, the report states, citing prosecutors. BETHANY GROUP: Robert Mosier Eyed as Receiver for Affiliates ------------------------------------------------------------ Mark Mueller at Orange County Business Journal reports that the U.S. Bankruptcy Court for the Central District of California is expected to appoint Robert Mosier at turnaround management company Mosier & Co. as receiver for Bethany Group's bankrupt affiliates. According to Orange County Business, Bethany hasn't filed for bankruptcy, but published reports say that the properties were put into receivership. Evan Smiley -- a partner with Costa Mesa's Weiland, Golden, Smiley, Wang, Ekvall & Strok LLP, which is representing Bethany -- said that the Company didn't default on any of its payments to its lenders, Orange County Business states. Citing Mr. Smiley, Orange County Business relates that investors including Lehman declared that Bethany's covenants were in default and started directly taking the Company's funds, leaving no money to pay workers and vendors. The bankruptcy filings by the Company's affiliates will let Bethany use its money to pay expenses, the report says, citing Mr. Smiley. The Bethany Group -- http://www.thebethanygroup.ca/-- is a faith- based organization that operates a wide range of homes and services for older, disabled and vulnerable people, with varying levels of health care and hospitality services. The range of services offered by the organization include: continuing care, Rosehaven Provincial Program, designated assisted living, seniors supportive living, seniors lodges, seniors apartments, and a variety of housing programs for affordable family housing. As reported by the Troubled Company Reporter on March 9, 2009, Bethany Group affiliates filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Central District of California. The bankruptcy filings were for several thousand apartments in three portfolios of properties in Maryland and Texas. Bethany Group has a total of seven portfolios of apartments, totaling an estimated 15,000 apartments, but the other four portfolios aren't included in the bankruptcy filing. Bethany Group's lawyers said that secured debt on the three portfolios totaled about $400 million. BLOCKBUSTER INC: Will Dodge Bankruptcy, Analysts Say ---------------------------------------------------- Analysts said that Blockbuster Inc. would reach a credit agreement and would ward off bankruptcy, Emily Steel at The Wall Street Journal reports. Citing Wedbush Morgan Securities analyst Michael Pachter, WSJ relates that Blockbuster had $100 million in free cash flow last year and could have $200 million in free cash flow this year. Mr. Pachter, according to WSJ, said that at those rates, Blockbuster could pay off its debt by 2012. "The only thing that would keep any of this from happening is if the business erodes," the report quoted Mr. Pachter as saying. According to WSJ, Blockbuster will release this week results for its fourth quarter and fiscal year ended January 4, 2009, shedding light on the Company's debt situation. WSJ notes that Blockbuster has been trying to restructure hundreds of millions of dollars in debt, including $135 million borrowed against a revolving credit facility of $350 million and $19 million of a $28 million term loan. Blockbuster, says WSJ, will update investors on Thursday on its efforts to refinance the portions that come due in August. WSJ states that Blockbuster said this month that sales at U.S. stores open at least a year increased 4.4% in the fourth quarter 2008, compared to a year earlier, due to video games, game merchandise, and consumer electronics. Fiscal-year earnings before interest, tax, depreciation, and amortization totaled $315 million, surpassing its guidance of $300 million, WSJ reports, citing Blockbuster. "However, simply put, nobody cares. Only the confirmation that a safety net is in place will move the stock at this point. Once the air is cleared, investors will be able to refocus on business results," WSJ quoted Pali Capital analyst Stacey Widlitz as saying. * * * As reported by the Troubled Company Reporter on March 4, 2009, Blockbuster Inc. said it has no intention of filing for bankruptcy. The Company has hired the law firm of Kirkland & Ellis LLP to advise it with respect to its ongoing financing and capital raising initiatives. Blockbuster made a pitch to acquire Circuit City early last year, but withdrew the offer after completing due diligence. Circuit City has since filed for bankruptcy. The TCR said on March 6, 2009, that Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit rating, on Blockbuster on CreditWatch with negative implications. This action reflects S&P's concern regarding the company's ability to refinance the August 2009 maturity of its revolving credit and term loan A facilities. Fitch meanwhile expects Blockbuster will be able to repay the approximately $19 million outstanding on the term loan A and possibly renew its bank facility, although the terms will likely be more restrictive as Blockbuster is anticipated to report positive EBITDA and free cash flow generation for fiscal 2008. In the event the refinancing is not successful and Blockbuster's liquidity position is weakened, this will prompt Fitch to review the ratings on the company. BRIGHAM EXPLORATION: Moody's Cuts Corporate Rating to 'Caa3' ------------------------------------------------------------ Moody's Investors Service downgraded Brigham Exploration Company's Corporate Family Fating and Probability of Default Rating to Caa3 from Caa1, its senior unsecured note rating to Ca (LGD5-75%) from Caa2 (LGD5-72%), and its Speculative Grade Liquidity rating to SGL-4 from SGL-3. The rating outlook is negative. The downgrade reflects tight liquidity, high leverage, sharply curtailed capital spending that may lead to a significant production decline before funds are arranged to restore sustaining capital spending, uncertainty regarding Brigham's ability to meet leverage tests under its revolving credit covenants, and Brigham's fully drawn position under its revolver in the face of a material risk of a borrowing base reduction during the banks' next re- determination exercise. The Caa3 CFR reflects somewhat more than a 50% chance of a default within the next 12 months. Brigham has fully borrowed its $145 million senior secured revolver. As of March 9, 2009 Brigham reported that it had $33.3 million in balance sheet cash. While it expects to close a $7.2 million asset sale by the end of this month, and it has identified as an option the sale or joint venturing with an industry partner up to 50% of its working interest in its promising Bakken and Williston Basin acreage, it is premature to factor the latter monetization effort into either the SGL or CFR ratings. However, if ultimately completed, certain forms of joint venture could provide proportionally significant liquidity with which to meet cash needs. Furthermore, 70% of anticipated 2009 production (roughly 5 Bcfe) is hedged at $7.22/mcfe, which would likely yield positive unit cash margins during the first quarter. The company also anticipates reduced unit costs over the course of this year and next as well as sustained reduced regional basis price differentials. While Brigham expects its currently budgeted $37 million of 2009 capital spending to be within anticipated cash flow, this is heavily weighted to the first quarter of this year and will be insufficient to sustain current production levels. Assuming Brigham can assemble enough liquidity to cover any borrowing base reductions, it is not clear that it could also mount sustained full replacement capital spending as the year progresses. Moody's last rating action for Brigham dates from May 30, 2008 at which time Moody's assigned an SGL-3 rating. Brigham Exploration Company is headquartered in Austin, Texas. CANNERY CASINOS: S&P Changes Outlook on 'B+' Rating to Negative --------------------------------------------------------------- Standard & Poor's Ratings Services revised the CreditWatch implications for its ratings on Cannery Casinos Resorts LLC (including the 'B+' corporate credit rating) to negative from positive. The CreditWatch revision reflects Cannery's announcement on March 12, 2009, that its agreement to be acquired by Crown Ltd. (BBB/Negative/A-3) was terminated. Instead, Cannery and Crown have entered into a new agreement under which Cannery will receive a $50 million cash termination fee and a $320 million investment into series B nonparticipating units (subject to regulatory approvals) from Crown, which, if converted, would represent a 24.5% equity position in Cannery. If regulatory approvals are not received within a specified time frame, the series B nonparticipating units will not be issued, and Crown will instead pay Cannery an additional $200 million fee and invest $40 million into Cannery for a 4.1% nonvoting stake. The agreement also grants Crown an option to complete its purchase of Cannery on terms consistent with the original agreement over the next two years if Crown successfully completes the licensing process in applicable jurisdictions. "In resolving the CreditWatch listing, S&P will meet with management to get an update on the company's recent operating performance and its strategy going forward, reassess S&P's expectations relative to the company's performance in 2009 and beyond, and assess the terms of the company's new agreement and the terms of the series B nonparticipating units," noted Standard & Poor's credit analyst Melissa Long. CANWEST GLOBAL: Will Be Forced to File By Year End, Says BMO ------------------------------------------------------------ BMO Capital Markets analyst Tim Casey said that he expects that Canwest Global Communications Corp. will be forced to file for bankruptcy before the end of the year, The Canadian Press reports. Citing industry observers, The Canadian Press relates that Canwest Global can't raise enough cash from selling undervalued assets to pacify its bankers and bondholders. The report quoted Mr. Casey as saying, "Sooner or later the banks or bondholders are going to say enough is enough." According to The Canadian Press, Canwest Global is barely worth C$32 million on the stock market, less than one hundredths of its massive C$3.9 billion debt. The Company was once valued at more than C$2 billion by investors, The Canadian Press notes. Canwest Global hasn't been able to sell its five E! television channels, The Canadian Press states. The banks aren't anxious to get their hands on most of Canwest Global's properties, according to the report. "No one is in any hurry to push this thing over because the acceleration of value erosion just cranks up, and who's going to buy a newspaper business?" the report quoted Mr. Casey as saying. The Canadian Press relates that Canwest Global said that it wouldn't make a US$30.4 million interest payment due to bondholders by the deadline on Sunday. The deadline, says the report, was moved to April 14. Canwest Global has started talks with its bondholders, which are owed a total of US$761 million, The Canadian Press states. Published reports say that Canwest Global could either replace old debt with new corporate notes or guarantee bondholders cash from any future asset sales. The Canadian Press relates that once Canwest Global fails to come reach an agreement and doesn't pay up by April 14, the Company will be able to submit to the trustee that the company is in default, after a 30-day grace period. Canwest Global, says the report, would be expected to pay up on the overdue interest payments immediately, which would trigger all $3.9 billion owed to creditors to come due right away. About Canwest Global Communications Corp. Canwest Global Communications Corp. -- http://www.canwest.com/-- (TSX: CGS and CGS.A,) an international media company, is Canada's largest media company. In addition to owning the Global Television Network, Canwest is Canada's largest publisher of English language daily newspapers and owns, operates and/or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States. * * * As reported in the Troubled Company Reporter on Jan. 16, 2009, Canwest Global Communications Corp. warned that based on current revenue and expense projections, it may not be able to comply with its existing quarterly total financial leverage ratio covenants in fiscal 2009. Continuation of negative conditions may affect the Company's ability to meet certain financial covenants in its credit facilities. The company is reviewing and implementing strategies to ensure compliance with its covenants, including strategies intended to improve profitability and reduce debt. The TCR reported on Jan. 19, 2009, that Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Winnipeg, Manitoba-based Canwest Media Inc. to 'CCC+' from 'B'. At the same time, S&P lowered the senior secured debt rating on wholly owned subsidiary Canwest Limited Partnership to 'B-' from 'BB-'. In addition, S&P lowered the senior subordinated debt ratings on Canwest Media and Canwest LP to 'CCC-' from 'CCC+'. S&P removed all ratings from CreditWatch with negative implications, where they were placed Oct. 31, 2008. The outlook is negative. CEDAR FAIR: Retains Merrill Lynch to Assist in Exploring Sale ------------------------------------------------------------- Cedar Fair Entertainment Company, legally known as Cedar Fair LP, has retained the services of Merrill Lynch & Co. to assist the Company in exploring the sale of certain assets and other strategic alternatives. Cedar Fair President, Chairperson and CEO Dick Kinzel stated, "We continue to be focused on our commitment to reducing debt. Exploring the sale of certain assets is a proactive step towards strengthening our financial position over the long term." About Cedar Fair LP Headquartered in Sandusky, Ohio, Cedar Fair LP (NYSE: FUN) -- http://www.cedarfair.com/-- is a publicly traded partnership and one of the largest regional amusement-resort operators in the world. The Partnership owns and operates 12 amusement parks, five outdoor water parks, one indoor water park and six hotels. Cedar Fair is the second-largest regional theme park company in the U.S. in terms of attendance, according to Standard & Poor's Ratings Services. * * * As reported by the Troubled Company Reporter on November 28, 2008, Standard & Poor's Ratings Services revised its outlook on Cedar Fair L.P. to negative from stable. Standard & Poor's affirmed its 'B+' corporate credit rating on the company. In addition, Standard & Poor's lowered its rating on Cedar Fair's $2.1 billion first-lien facilities to 'BB-' (one notch above the corporate credit rating) from 'BB'. The recovery rating is revised to '2' from '1', indicating S&P's expectation of substantial (70%-90%) recovery in the event of a payment default. The downgrade was driven principally by a change in the emergence valuation multiple, taking into account current market conditions, recent transaction multiples, and current trading multiples. Total debt was $1.71 billion as of Sept. 28, 2008. "The outlook revision is based on S&P's expectation that the company's operating performance that could deteriorate in the peak summer 2009 operating season given S&P's forecast of an extended period of difficult economic conditions," explained Standard & Poor's credit analyst Hal Diamond. "This would result in a narrowing margin of compliance with the company's debt leverage covenant, which steps down twice through the end of 2009, especially in light of the company's high distribution payout." CHARTER COMMUNICATIONS: Posts $1.495BB Fourth Quarter Net Loss -------------------------------------------------------------- Charter Communications, Inc., reported financial and operating results for the three and 12 months ended December 31, 2008. Fourth Quarter Results -- Pro forma Fourth quarter pro forma revenues were $1.653 billion, an increase of 7.0%, or $108 million, over pro forma 2007 results. The increase resulted primarily from telephone and HSI revenue growth. Pro forma telephone revenues for the 2008 fourth quarter were $156 million, a 44.4% increase over fourth quarter 2007 pro forma telephone revenues, driven by a larger telephone customer base. Pro forma HSI revenues were $346 million, up 7.1% year-over-year on a pro forma basis, due to an increased number of customers. Pro forma video revenues were $862 million, up 2.1% year-over-year on a pro forma basis, primarily as a result of digital and advanced services revenue growth, partially offset by a decline in basic video customers. Commercial revenues rose to $103 million, a 15.7% increase on a pro forma basis, resulting from increased sales of the Charter Business Bundle(R) primarily to small and medium-size businesses. Pro forma operating expenses for the 2008 fourth quarter, which include programming, service and advertising sales costs, were $702 million, a 6.5% increase year-over-year on a pro forma basis, reflecting annual programming rate increases, increased labor costs to support improved service levels, and growth of the Company's telephone business and advanced services. Pro forma selling, general, and administrative expenses were $332 million, up only 2.5% on a pro forma basis compared to the year-ago quarter, reflecting efficiencies gained in our operations along with continuing efforts to further improve the customer experience and grow and retain customers. Pro forma adjusted EBITDA totaled $619 million for the fourth quarter of 2008, an increase of 10.1% compared to the pro forma results for the year-ago quarter. The pro forma adjusted EBITDA margin increased 100 basis points in the fourth quarter to 37.4%, up from 36.4% in the year-ago quarter on a pro forma basis. Pro forma net cash flows used in operating activities for the fourth quarter of 2008 were $12 million, compared to $3 million for the fourth quarter of 2007 on a pro forma basis. The increase in use of cash in operating activities is primarily the result of an increase in interest on cash pay obligations, partially offset by the increase in HSI and telephone revenues driven by the bundle and improved cost efficiencies. Annual Results -- Pro forma For the 12 months ended December 31, 2008, pro forma revenues were $6.467 billion, an increase of $508 million, or 8.5%, on a pro forma basis, primarily from telephone and HSI revenue growth. Pro forma telephone revenues in 2008 increased to $555 million from pro forma revenues of $345 million a year ago, up 60.9% year- over-year. Pro forma HSI revenues increased to $1.353 billion, up 9.4% year-over-year on a pro forma basis. Pro forma video revenues were $3.455 billion, an increase of 2.7% year-over-year on a pro forma basis. Pro forma commercial revenues increased to $391 million, up 15.7% on a pro forma basis. Pro forma operating expenses for the 12 months ended December 31, 2008 were $2.787 billion, an increase of 7.4% year-over-year on a pro forma basis; and selling, general, and administrative expenses were $1.365 billion, up 7.9% on a pro forma basis. Pro forma adjusted EBITDA totaled $2.315 billion for 2008, a pro forma increase of 10.3% compared to 2007. Pro forma net cash flows provided by operating activities for 2008 were $395 million, compared to $314 million for 2007 on a pro forma basis. The increase in cash flows provided by operating activities is primarily the result of increased sales of our bundled services and improved cost efficiencies, partially offset by an increase in interest on cash pay obligations. Fourth Quarter Results -- Actual Fourth quarter revenues increased 6.6% and operating costs and expenses increased 4.9% compared to year-ago results. Adjusted EBITDA for the fourth quarter of 2008 rose 9.7% compared to the year-ago period. In the fourth quarter, the Company recorded approximately $1.521 billion of impairment of franchises for the year ended December 31, 2008 as a result of its annual impairment analysis, as required by Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." As a result of the impairment charge, Charter reported a $1.257 billion loss from operations in the fourth quarter of 2008, compared to income from operations of $85 million in the fourth quarter of 2007. Net loss for the fourth quarter of 2008 was $1.495 billion, or $3.96 per common share. For the fourth quarter of 2007, Charter reported a net loss of $468 million and a net loss per common share of $1.27. The decrease in income from operations and increase in net loss resulted primarily from the impairment charge, partially offset by the increase in sales of our bundled services and improved cost efficiencies. Expenditures for property, plant, and equipment for the fourth quarter of 2008 were $264 million, compared to fourth quarter 2007 expenditures of $354 million. The decrease in capital expenditures primarily reflects year-over-year decreases in customer premise equipment, support capital and line extensions. Net cash flows used in operating activities for the fourth quarter of 2008 were $11 million, compared to no change in cash flows in 2007. The increase in use of cash in operating activities is primarily the result of an increase in interest on cash pay obligations, partially offset by the increase in HSI and telephone revenues driven by the bundle and improved cost efficiencies. Annual Results -- Actual Revenues for the 12 months ended December 31, 2008 increased 7.9% year-over-year. Operating costs and expenses rose 6.9% compared to year-ago actual results. Adjusted EBITDA for 2008 grew 9.9% compared to the year-ago period. The adjusted EBITDA margin increased 60 basis points to 35.8% for 2008. Despite increased revenues and cost efficiencies, Charter reported a loss from operations in 2008 of $614 million due to the $1.521 billion impairment charge recorded in the fourth quarter of 2008. Charter reported income from operations of $548 million in 2007. Net loss for 2008 was $2.451 billion, or $6.56 per common share. For 2007, Charter reported a net loss of $1.616 billion and a net loss per common share of $4.39. Capital expenditures for property, plant, and equipment for 2008 were $1.202 billion, compared to $1.244 billion in 2007. The decrease in capital expenditures primarily reflects year-over-year decreases in support capital and line extensions. Charter expects that capital expenditures in the year 2009 will total approximately $1.2 billion, with over 75% of that amount directed toward success-based activities. Net cash flows provided by operating activities for 2008 were $399 million, compared to $327 million for 2007. The increase in cash flows provided by operating activities is primarily the result of revenue growth from HSI and telephone driven by the bundle, as well as improved cost efficiencies, partially offset by an increase in interest on cash pay obligations and changes in operating assets and liabilities. Restructuring As of December 31, 2008, Charter had $21.666 billion in total debt. On February 12, 2009, Charter and its subsidiaries announced that they have reached an agreement-in-principle with an ad hoc committee of certain of the Company's debt holders on the terms of a financial restructuring to reduce the Company's debt by approximately $8 billion. Pursuant to the proposed restructuring, holders of Charter's common stock will not receive any amounts on account of their common stock, which will be cancelled. As a part of the reduction of debt, the agreement-in-principle also includes the investment of more than $3 billion by certain of the Company's debt holders in the form of debt refinancing and new equity capital. Under the terms of the agreement, the Company intends to implement its financial restructuring through a Chapter 11 filing to be initiated on or before April 1, 2009. The agreement-in- principle contemplates paying trade creditors in full. Charter expects that cash on hand and cash flows from operating activities will be adequate to fund its projected cash needs as it proceeds with its financial restructuring. The agreement-in-principle is subject to numerous closing conditions and there can be no assurance that the terms of the agreement-in-principle will not change significantly. One of Charter's subsidiaries, CCH II, LLC, will not make its scheduled payment of interest on March 16, 2009 on certain of its outstanding senior notes. The governing indenture for such notes permits a 30-day grace period for such interest payments, and pursuant to its agreement with bondholders, Charter expects to make its voluntary Chapter 11 filing prior to the expiration of the grace period. About Charter Communications Headquartered in St. Louis, Missouri, Charter Communications Inc. (Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband communications company and the third-largest publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides broadband communications solutions to business organizations, the as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. * * * As reported by the Troubled Company Reporter on Nov. 11, 2008, Charter Communications' balance sheet at Sept. 30, 2008, showed total assets of $15.1 billion, total liabilities of $23.9 billion, resulting in a shareholders' deficit of $8.8 billion. In December, Fitch Ratings placed Charter Communications, Inc.'s 'CCC' Issuer Default Rating and the IDRs and individual issue ratings of Charter's subsidiaries on Rating Watch Negative. Approximately $21.1 billion of debt outstanding as of Sept. 30, 2008 is effected by Fitch's action. In addition, Moody's Investors Service lowered the Probability-of-Default Rating for Charter Communications to Ca from Caa2 and placed all ratings (other than the SGL3 Speculative Grade Liquidity Rating) for the company and its subsidiaries under review for possible downgrade. Standard & Poor's Ratings Services also lowered its corporate credit rating on Charter Communications to 'CC' from 'B-'. S&P said that the rating outlook is negative. CHRYSLER LLC: Bankr. Lawyer Matthew Feldman to Join Task Force -------------------------------------------------------------- Linda Sandler and Jeff Green at Bloomberg News report that bankruptcy lawyer Matthew Feldman will join the auto industry team advising the government on the restructuring of General Motors Corp. and Chrysler LLC. According to Bloomberg, Mr. Feldman is a partner at Willkie Farr & Gallagher LLP. Willkie Farr said in a statement that Mr. Feldman will leave the firm by the end of the month to move to Washington. Citing an administration official, Bloomberg states that Mr. Feldman will work on restructuring analysis. Bloomberg quoted GM Chief Financial Officer Ray Young as saying, "We're pleased that the task force is staffing up. They aren't just looking at General Motors. They're looking at the total industry. It shows that they're taking this assignment very seriously." Bloomberg relates that the U.S. Treasury Department hired in February law firms Cadwalader, Wickersham & Taft LLP and Sonnenschein, Nath & Rosenthal, and investment bank Rothschild Inc. Chrysler Won't Have Enough Liquidity Without Aid Bloomberg relates that Chrysler said that it won't have enough liquidity if it the government doesn't provide the Company with additional funds and if the Company fails to restructure liabilities by March 31, 2009, the deadline for GM and Chrysler to submit final turnaround plans. Bloomberg quoted Chrysler spokesperson Lori McTavish as saying, "Chrysler LLC is fully engaged with the Presidential Task Force on the Auto Industry, the U.S. Treasury and the White House during this process of ensuring the industry's viability going forward. We look forward to continuing our dialogue with them as the process continues to evolve." Dow Jones Newswires reports that if Chrysler succeeds in securing $5 billion in low-interest loans by the end of the month, it won't need additional federal funding to run its operations. Dow Jones, citing a Chrysler spokesperson, states that the $5 billion in loans will help Chrysler work through the July shutdown period when U.S. auto makers traditionally idle their plants for up to two weeks to retool factories. Alex P. Kellogg and Joseph B. White at The Wall Street Journal report that Chrysler said it could survive as an independent company with the $5 billion in loans. Citing Chrysler CEO Robert Nardelli, WSJ relates that the Company needs the money to keep paying workers and suppliers. According to WSJ, Mr. Nardelli said that the partnership isn't essential for Chrysler's survival, as the Company can stand on its own without Fiat. Mr. Nardelli admitted that Chrysler would be better off with its Fiat SpA alliance, which would proceed only if the Company gets additional government aid, WSJ states. WSJ, citing Mr. Nardelli, says that the Fiat alliance makes vehicles and engines available to Chrysler. Mr. Nardelli said that Fiat would also pick up "35% of the responsibility to repay the government" loans, WSJ relates. Chrysler indicated that the $5 billion in loans won't end its financial pressures, WSJ notes. Mr. Young, according to the report, said over the weekend that the Company could face another cash crunch when it closes plants in July and August for its annual summer shutdown. Chrysler isn't big enough to survive because its operations are concentrated in North America, WSJ relates, citing Gerald C. Meyers, a former American Motors Corp. CEO and now a business professor at the University of Michigan. "You must be global to be an auto company. They don't have the reach to offset some of the problems here in the United States," the report quoted Mr. Meyers as saying. According to WSJ, Mr. Meyers was skeptical about the value of the Fiat partnership. Chrysler and Fiat appear to be a good fit -- Chrysler is strong in trucks and Jeeps while Fiat is more global and strong in small cars, WSJ says, citing Mr. Meyers. "The problem with these transoceanic partnerships is they break down on culture," the report quoted Mr. Meyers as saying. Mr. Nardelli, WSJ relates, said, "There's a lot of pent-up hostility and frustration with private equity," but because of its agreements with investors, Cerberus Capital Management LP, Chrysler's majority owner, "cannot just cavalierly take money" and invest more in Chrysler. Citing Mr. Nardelli, WSJ reports that the U.S. Treasury is talks with the banks that hold Chrysler's debt. According to WSJ, Mr. Nardelli said that those banks are all recipients of government funds under the Troubled Asset Relief Program. Chrysler, WSJ notes, is also counting on more than $6 billion in loans from a Department of Energy program that will underwrite development of fuel-efficient vehicles. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 3, 2008, Dominion Bond Rating Service downgraded the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC, including Chrysler's Issuer Rating to CC from CCC (high). Chrysler's First Lien Secured Credit Facility and Second Lien Secured Credit Facility have also been downgraded to CCC and CC (low) respectively. All trends are Negative. The ratings action reflects Chrysler's challenge to maintain sufficient liquidity balances amid severe industry conditions that have deteriorated alarmingly over the past few months and are not expected to improve in the near term. With this ratings action, Chrysler is removed from Under Review with Negative Implications, where it was placed on Nov. 7, 2008. CITIGROUPINC: Board Nominates Four New Independent Directors ------------------------------------------------------------ Citigroup Inc.'s Board of Directors has nominated four new independent director candidates to be voted on at Citigroup's annual shareholder meeting on April 21, 2009. As reported by the Troubled Company Reporter on March 16, 2009, federal officials have been pressuring Citigroup Chairperson Richard Parsons to oust some longtime directors and recruit new ones. Citigroup has been trying to attract new directors to its board, but potential candidates have been reluctant. Citigroup has tried to overcome the snags by pitching the director slots as a "national obligation." The candidates are: -- Jerry A. Grundhofer, -- Michael E. O'Neill, -- Anthony M. Santomero Ph.D., and -- William S. Thompson, Jr. Mr. Grundhofer, 64, is Chairman Emeritus and retired Chairman and Chief Executive Officer of the Board of U.S. Bancorp. Previously, Mr. Grundhofer was President and Chief Executive Officer of Firstar Corporation and its predecessor Star Banc; and was Vice Chairman of BankAmerica Corporation (now Bank of America). Currently, Mr. Grundhofer serves on the Board of Directors of Ecolab. Mr. Grundhofer received a B.S. in Finance from Loyola Marymount University. Mr. O'Neill, 62, is the retired Chairman and Chief Executive Officer of the Bank of Hawaii. Under Mr. O'Neill's leadership, Bank of Hawaii refocused its operations on its core businesses in Hawaii, the Western Pacific, and American Samoa, while divesting underperforming operations in Arizona, California, Asia and the South Pacific. Previously, Mr. O'Neill was Vice Chairman and Chief Financial Officer at BankAmerica Corporation (now Bank of America) from 1995-1999. Mr. O'Neill earned an MBA from the Darden Graduate School of Business at the University of Virginia and a B.A. in European Civilization from Princeton University. Mr. O'Neill also served as a Lieutenant in the U.S. Marine Corps from 1969-1971. Dr. Santomero, 62, most recently a Senior Advisor at McKinsey & Company, served as the ninth President of the Federal Reserve Bank of Philadelphia from 2000-2006. While at the Federal Reserve, he was a voting member of the Federal Open Market Committee, served as Chair of the System's Committee on Credit and Risk Management and also as member of the Financial Services Policy Committee and the Payments System Policy Advisory Committee. Previously, Dr. Santomero was the Richard K. Mellon Professor of Finance at the Wharton School of the University of Pennsylvania and Deputy Dean of the School. He received his Ph.D. from Brown University, and his A.B. in Economics from Fordham University. Mr. Thompson, 63, retired in 2008 as CEO of PIMCO, the world's leading fixed income investment management company. Mr. Thompson guided PIMCO to significant growth and profitability during his tenure, expanding the firm from one office and 125 employees and $40 billion in assets under management, to nine offices around the world, over 1000 employees and more than $800 billion of client assets. Mr. Thompson is on the Board of Pacific LifeCorp. Prior to joining PIMCO in April 1993, Mr. Thompson served as Chairman of Salomon Brothers Asia Ltd. in Tokyo. Mr. Thompson received his MBA from Harvard Business School and B.S. in Engineering from the University of Missouri. "This is a solid slate of candidates with extensive banking and financial services experience, a deep understanding of international credit and equity markets, and first-hand knowledge of the governing regulatory system," said Richard Parsons, Chairperson of the Board. "These outstanding individuals will be great stewards for Citigroup as it navigates the ongoing challenges in the present environment and works to restore profitability. As I said earlier this year, we are committed to reconstituting the Board with a majority of new independent directors. The election of these candidates will be a major step toward achieving our goal." Mr. Parsons noted that the Board currently has 15 directors, three of whom previously announced that they will not be standing for election at the April Annual Meeting and two of whom will reach retirement age by the time of the Meeting. The remaining 10 directors are up for re-election. With the election of the four new candidates announced today, the total number of Board members would be 14. The Board will consider future additions as well. About Citigroup Based in New York, Citigroup (NYSE: C) -- http://www.citigroup.com -- is organized into four major segments -- Consumer Banking, Global Cards, Institutional Clients Group, and Global Wealth Management. Citigroup had $2.0 trillion in total assets on $1.9 trillion in total liabilities as of Sept. 30, 2008. As reported in the Troubled Company Reporter on Nov. 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. As part of the agreement, the U.S. Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve will backstop residual risk in the asset pool through a non-recourse loan. COLONIAL REALTY: Fitch Keeps Preferred Stock Rating at 'BB+' ------------------------------------------------------------ Fitch Ratings has affirmed these ratings of Colonial Properties Trust and its operating partnership, Colonial Realty Limited Partnership: Colonial Properties Trust -- Issuer Default Rating at 'BBB-'; -- $100 million preferred stock at 'BB+'. Colonial Realty Limited Partnership -- IDR at 'BBB-'; -- $675 million unsecured line of credit at 'BBB-'; -- $1.3 billion senior unsecured notes at 'BBB-'; -- $45 million senior unsecured medium-term notes affirmed at 'BBB-'; -- $100 million preferred stock at 'BB+'. In addition, Fitch has revised the Rating Outlook on Colonial to Negative from Stable. The rating affirmations revolve around the company's diversified portfolio of 192 multifamily and other properties across the U.S. Sunbelt as well as the company's manageable debt maturity schedule and good liquidity position, which was recently bolstered by a $350 million secured debt transaction with Fannie Mae. The rating affirmation further underscores prudent steps that Colonial has taken to strengthen its balance sheet and improve liquidity, through unsecured debt repurchases, declines in overhead costs and reductions in common stock dividends. Moreover, Colonial's leverage is appropriate for the 'BBB-' rating level, as total debt-to-undepreciated book capital was 52.2% as of Dec. 31, 2008. CLP's risk-adjusted capitalization is also adequate for the 'BBB-' rating, at 1.2 times (x). The Negative Rating Outlook stems from Fitch's view that difficult property fundamentals in CLP's markets including Charleston, Savannah, Austin, and Orlando, will weaken Colonial's earnings power over a longer timeframe. Colonial's same-store net operating income for its multifamily portfolio decreased following the 2001 recession (resulting in multifamily same-store net operating income declines of -6.8% in 2002 and -3.9% in 2003) and similarly, Fitch anticipates that rising unemployment in the current recession will negatively impact same-store NOI in 2009, pressuring CLP's operating performance. The Negative Outlook also takes into account the $117 million in property impairments that Colonial incurred during the fourth quarter of 2008 on its for-sale residential properties, mixed-use and for-sale residential land portfolio and a retail development project. Fitch notes that these charges did not impact CLP's covenant compliance or stabilized property portfolio performance. However, these charges highlight the fact that CLP's residential- for-sale portfolio and overall development pipeline remain exposed to further devaluation risk. That said, Fitch views favorably CLP's reduction in planned development spending in 2009. In addition, the Negative Outlook takes into account that Colonial's opportunistic utilization of secured debt in 2009 will decrease the size of the unencumbered property pool as pricing remains unattractive in the REIT unsecured bond market. Going forward, these factors may result in a downgrade of CLP's ratings: -- If unencumbered assets-to-unsecured debt as defined under CLP's unsecured bond indenture falls below 180% (as of Dec. 31, 2008, unencumbered assets-to-unsecured debt was 205.7%); -- If secured debt-to-total gross assets were to sustain above 30% (as of Dec. 31, 2008 pro forma for the $350 million secured debt transaction with Fannie Mae, secured debt to total gross assets was 12.8%); -- If recurring EBITDA divided by total fixed charges were to sustain below 1.5x for several quarters (in 2008, recurring EBITDA divided by total fixed charges was 1.6x). These factors may result in a revision in the Rating Outlook to Stable at the 'BBB-' level: -- If same-store NOI were to grow by 1%-5% for several consecutive quarters; -- If recurring EBITDA divided by total fixed charges sustains above 1.7x for several consecutive quarters; -- If unencumbered asset coverage were to increase to at least 220%. Colonial Properties is a diversified equity REIT headquartered in Birmingham, Alabama. As of Dec. 31, 2008, CLP had $3.6 billion in undepreciated book assets, $1.4 billion in undepreciated book equity, and a total market capitalization of $2.9 billion. CLP is the direct general partner of, and as of Dec. 31, 2008, held approximately 84.6% of the interests in, Colonial Realty Limited Partnership. As of Dec. 31, 2008, CLP's consolidated real estate portfolio consisted of 112 consolidated operating properties. In addition, the company maintains non-controlling partial interests ranging from 5% to 50% in an additional 80 properties held through unconsolidated joint ventures. These 192 properties, including consolidated and unconsolidated properties, are located in ten states in the Sunbelt region of the United States. DE KALB: S&P Upgrades Ratings on 2005 Revenue Bonds From 'CCC' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on De Kalb County Housing Authority, Georgia's multifamily housing revenue bonds series 2005 (Creekside Vista Apartments) 17 notches to 'AAA' from 'CCC'. "The upgrade follows the successful repayment of the issue's debt service on March 1, 2009," said Standard & Poor's credit analyst Renee Berson. The bonds are secured by a mortgage loan enhanced by an irrevocable standby Fannie Mae credit facility. Funds being held by the trustee are invested in Fidelity Institutional Money Market Funds: Treasury Portfolio money market fund (AAAm). The upgrade reflects Standard & Poor's view that there are sufficient revenues from the mortgage loan and investment earnings from the Money Market Fund to continue to pay full and timely debt service on the bonds until maturity, as well as S&P's opinion of the asset-to- liability ratio of 100.36% as of March 9, 2009. The rating reflects S&P's view of the strong credit quality of the mortgage loan, as enhanced by the Fannie Mae credit facility. The facility provides for interest and principal advances for delinquent mortgage payments, certain mandatory redemptions, acceleration, and funds deemed to be preferential payments or subject to automatic stay under the U. S. Bankruptcy Code following a bankruptcy filing by or against the borrower or mortgage loan servicer. The facility expires five days following bond maturity, or earlier pursuant to its terms. Fannie Mae is 'AAA' eligible under Standard & Poor's rating criteria. If the mortgage prepays, S&P believes that there are sufficient assets to cover the reinvestment risk based on the 15-day minimum notice period required for special redemptions. The bonds are scheduled to mature on September 1, 2038, although they are subject to mandatory tender on September 1, 2026 (the initial remarketing date). DELPHI CORP: Court Limits Retirees Panel to OPEB Dispute -------------------------------------------------------- In light with the entry of a final order on Delphi Corp's termination of retiree benefits of their non-union workers, Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York avers that the responsibilities of the Committee of the Eligible Salaried Retirees have been satisfied and discharged. Nevertheless, the Court allows the continuation of the existence of the Retiree Committee through the later of: (i) a consideration by the Court or any appellate court of any motions to stay the implementation of the Provisional Salaried OPEB Order; and (ii) the date on which the Debtors implement the termination actions set forth in the Final Salaried OPEB Order. The Court limits the scope of the authority of the Retiree Committee to: -- participating in any hearing to stay the implementation of the Provisional OPEB Salaried Order or Final Salaried OPEB Order; and -- meeting and conferring with the Debtors and negotiating any agreements that are mutually agreeable to the Debtors and the Retiree Committee regarding the terms and condition pursuant to which the Debtors implement the authority granted in the Final Salaried OPEB Order, according to which the Retiree Committee would settle and waive any and all appeals with respect to the Provisional Salaried OPEB Order or the Final Order. The Debtors continue to be authorized to reimburse the reasonable costs and expenses of up to $200,000, of the legal counsel retained by the Retiree Committee without further Court order. 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. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: KPMG Puts Ethical Wall Amid GM Engagement ------------------------------------------------------ KMPG LLP, which provides tax advisory services to Delphi Corp., said it is also providing services to Delphi's former parent, General Motors Corporation. KPMG said it has instituted procedures so that professionals who provide services to the Debtors will not provide services to GM, or share information concerning the Debtors with professionals providing services to GM. Gary A. Silberg, a partner at KMPG LLP, informed the U.S. Bankruptcy Court for the Southern District of New York that his firm has identified two professionals for which the ethical screen may be removed: 1. Brian Hogan has provided services to the Debtors in connection with fresh-start accounting, as well as accounting for impairment and discontinued operations. He has billed the Debtors for 895 hours of service and has last provided services to the Debtors in August 2007. 2. Daniel Gary provided accounting services to the Debtors in connection with the impairment of goodwill and long-lived assets, the tax impact of valuation issues and fresh-start accounting. He has billed the Debtors 966 hours of service and has last provided services to the Debtors in April 2008. Mr. Silberg says the Debtors have not objected to the removal of the ethical screen with respect to Messrs. Gary and Hogan and that KMPG will maintain the ethical screen. Mr. Silberg notes that neither Mr. Gary nor Mr. Hogan is currently providing services to the Debtors or is expected to do so in the future. He states that should Messrs. Gary and Hogan provide services to GM, those services will not involve a matter adverse to the Debtors or involve any confidential information of the Debtors. He assures the Court that KMPG continues to not hold or represent an interest adverse to the Debtors' estates that would impair its ability to objectively perform services to the Debtors and is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. GM's common stock was considered the stock market's bellwether for many years, hence the saying "What's good for GM is good for America." * * * 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. DELPHI CORP: Retirees Elevate OPEB Dispute to District Court ------------------------------------------------------------ A Committee of Eligible Salaried Retirees of Delphi Corporation has joined the Delphi Salaried Retirees Association in its appeal from a bankruptcy court order authorizing Delphi and its affiliates to terminate, at their sole discretion, "salaried other post-employment benefits" for non-union retirees effective April 1, 2009. The appeals are filed before the U.S. District Court for the Southern District of New York. Meanwhile, the Delphi Debtors challenged the request by the Delphi Salaried Retirees Association to stay implementation of the Bankruptcy Court's order. Representing the Debtors, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, told the Bankruptcy Court that the DSRA failed to recognize the substantial injury the Debtors would suffer if a stay on the Provisional and Final Salaried OPEB Orders pending the DSRA Appeal is granted. He said a delay in the Debtors' termination of contributions to Salaried Other Post-Employment Benefits for three months at a cost of $20 million would significantly impact the Debtors' liquidity at a time of severe short-term liquidity issues and would threaten the Debtors' efforts to satisfy their emergence capital funding needs. The condition of the global economy and the Debtors' financial situation thus compel the Debtors to terminate salaried OPEB without delay, he said. Mr. Butler also asserted that the DSRA failed to adequately demonstrate that in the absence of a stay, its members will suffer irreparable harm. The DSRA only made speculative allegations regarding harms to unidentifiable retirees, he points out. He added that a stay would require the Debtors to make significant cash outlays and retain a balance sheet liability that would further place their reorganization in jeopardy to the detriment of all stakeholders. Mr. Butler said assuming the DSRA is entitled to a stay, it has the burden of demonstrating why the Court should deviate from the ordinary full security requirement. He said no one, including the Debtors, takes any satisfaction in having obtained the Salaried OPEB Orders and the fact that the DSRA's members comprise a sympathetic class does not provide sufficient legal justification for the elimination of the full security requirement. He said a stay without a bond is equal to the reversal of the Provisional and Final Salaried OPEB Orders because if the DSRA loses on its Appeal, there is no party-in-interest to redress the Debtors' interim losses. Accordingly, the Debtors ask the Court to: (a) deny the DSRA's Motion to Stay pending Appeal; or (b) in the event the Court stays the OPEB Termination Orders for 90 days, direct the DSRA to post a bond for $20 million to cover the Debtors' interim monetary losses. The Court will consider the DSRA's Stay Motion today. Salaried OPEB Termination Order On March 11, 2009, Judge Robert D. Drain gave final authority to Delphi to terminate salaried other post-employment benefits for non-union retirees, amidst strong opposition from a group of Delphi salaried retirees. The Court held that Delphi has made a substantial showing that none of the Salaried OPEB have vested with regard to any Eligible Salaried Retiree or group. The Court-approved Committee of Eligible Salaried Retirees has not presented any competent evidence, consistent with a bench ruling the Court issued on March 10, 2009, and applicable law, to establish otherwise, Judge Drain opined. Accordingly, Judge Drain ruled, Delphi's Salaried OPEB was not vested and Delphi has reserved the right to modify or terminate those benefits. Delphi will continue to provide benefits for claims incurred by each Salaried Retiree through the termination date of the retiree's participation in the applicable welfare program, provided that the retiree (i) has timely paid all requisite contributions for the applicable welfare program, and (ii) will not be required to file proofs of claim with the Court. Delphi is also authorized and directed to make provisions for, and contingent upon occurrence of a triggering event under Section 1341 or 1342 of the Labor Code implement, a Voluntary Employee's Beneficiary Association under Section 501(c)(9) of the Internal Revenue Code for the purpose of qualifying covered employees who have retired or will retire for the tax credit available under Section 35(e)(1)(K) of the Internal Revenue Code; provided that the Debtors: -- will have no obligation to fund or contribute to any VEBA in any respect and the funding or contributions will come solely from participants in the VEBA; and -- the Debtors will be required to maintain the VEBA only through the later of the month ending prior to January 1, 2011 or later date as may be established under Section 35(e)(1)(K). The Debtors will maintain flexibility to implement changes to the VEBA. The Debtors are also authorized and directed to mail a follow-up notice to all Eligible Salaried Retirees who do not elect continuation of coverage prior to March 28, 2009, explaining the consequences of the election and offering a second and final chance for the individuals, until April 15, 2009, to elect for continuation of coverage, in which case the coverage will be reinstated retroactively to April 1, 2009 upon payment of the applicable full cost by the individual retiree. Bench Ruling on Provisional OPEB Order Before the entry of the Final Salaried OPEB Order, Judge Drain issued a modified bench ruling on March 10, 2009, in consideration of the Retiree Committee's report. The Retiree Committee report was submitted March 6, 2009, and supplemented last March 9 with copies of official documents given to the Affected Retirees, including personal benefit summaries, memoranda and life insurance letters. Full-text copies of the OPEB Official Documents is available for free at: http://bankrupt.com/misc/Delphi_RetireeDocuments.pdf Judge Drain explained that the language of Section 1114 of the Bankruptcy Code called for an interpretation, which provides that Section 1114 creates a federal law overriding prepetition contractual rights of debtors that would permit them to modify or terminate retiree health and welfare benefits during the course of a Chapter 11 case. Judge Drain noted he cannot think of another provision of the Bankruptcy Code that would create a federal right, improving on the prepetition contractual rights of a third-party constituent as a result of the filing of a bankruptcy case. Accordingly, Judge Drain averred that the Debtors' interpretation of Section 1114 is correct one and that if, in fact, the Debtors have the unilateral right to modify a health or welfare plan, that modifiable plan is the plan that is to be maintained under Section 1114(e), with the Debtors' pre- bankruptcy rights not being abrogated by the requirements of Section 1114. Judge Drain elaborated that given the interplay of Section 363(b) of the Bankruptcy Code with Section 1114, before a bankruptcy court can permit a debtor to modify or terminate a health or welfare plan under Section 363(b) on the theory that it has the right to do so under applicable non-bankruptcy law, that debtor must make a significant showing that it has a unilateral right and that those benefits are not vested. The Court noted that the Retiree Committee did not present any evidence that would indicate that the Debtors or General Motors Corporation promised to the Affected Retirees that, notwithstanding the language in the OPEB Program documents, those plans are not modified at will. Judge Drain noted that the only evidence that countered the language in the OPEB Program documents pertains to the programs of GM, which documents predated the decision of the U.S. Court of Appeals for the Sixth Circuit in Sprague v. General Motors Corp., 133 F.3d, 388 (6th Cir. 1998) that found GM's plan to be modifiable. For those reasons, the Debtors have made clear showing that they have the right to modify the Salaried OPEB Programs at will, Judge Drain held. To address issue on whether the Court should be bound by the Second Circuit law, Judge Drain said that the general federal law applies to a question under Employment Retirement Income Security Act. Judge Drain related that it would seem that after the issuance of the Sprague en banc opinion in January 1998, any subsequent employee of Delphi who had been covered by a GM program would clearly be on notice of the Sprague decision and how to interpret the language that existed in the GM programs prior to his or her transfer to Delphi, and that the notice would be clear that the types of provisions would not suffice to create a vested benefit right. The employees whose benefit rights were actually determined by Sprague would, moreover, appear to be bound by the decision. Moreover, the law in the Second Circuit although it may differ from the Sixth Circuit, is still very restrictive when considering whether to give beneficiaries of welfare plan rights that are not set forth by a clear affirmative promise in the program documents, or through a theory of promissory estoppel. For those reasons, Judge Drain found that the Debtors have met their factual burden to take the Salaried OPEB Motion outside of the ambit of Section 1114. Accordingly, Judge Drain also directed the appointment of a retiree committee under Section 1114(d) to act as a representative to review documents to determine whether there is any group of beneficiaries of the OPEB Programs would have vested rights. The Court opined that it is crystal clear that at this time and in the near future, the Debtors are well within their business judgment in assuming that they will need to eliminate the OPEB liability projected at $ 1.1 billion from their balance sheet in order to reorganize. Judge Drain acknowledged that given the Debtors' serious need to conserve cash and all the other conservation steps, every dollar counts for the Debtors. He further averred that savings of $1.5 million a week and projected cash savings of $70 million a year for the pre-plan period and the period prior to the effective date of a reorganization plan are also of extreme importance to the Debtors, and that actions taken by the Debtors to save money, including by modifying the Salaried OPEB Programs, are taken in good business judgment in light of the rights of the Affected Retirees. Judge Drain took into consideration that the Debtors did not take the step of modifying the OPEB Programs for almost four years given their assessment of the business realities of their operations, the inducement to employees of having benefit programs in place, and their desire to maintain good relations with their retirees. However, he noted, the Debtors' business, like the auto business in general, has gone through enormous adverse changes that the changed circumstances led them to their decision of modifying the OPEB Programs. A full-text copy of the 23-page OPEB Bench Ruling is available for free at http://bankrupt.com/misc/Delphi_OPEBBenchRuling.pdf Delphi's Take on the Retiree Committee Report Before the Provisional OPEB Order was entered, the Debtors relayed to the Court that the Retiree Committee Report did not proffer any additional evidence that they promised vested benefits to any retiree or group. The Retiree Committee did not contend that there is any ambiguity in Debtors' OPEB Program documents, John Wm. Butler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, added. He stressed that the understanding that benefits are not vested under Delphi's OPEB Programs is further demonstrated by the Debtors' implementation of material changes to their health care program in the past. The Retiree Committee instead presented a motion for reconsideration, which is not procedurally appropriate at this time and should thus be denied by the Court, Mr. Butler asserted. The Retiree Committee also has not come up with any new authority to oppose the Court's bench ruling on the proper interpretation of Section 1114. Given the absence of new evidence, there is no need for additional hearing, Mr. Butler argued. Mr. Butler elaborated that pursuant to the Sprague decision, the Sixth Circuit conclusively established the scope of GM's OPEB liability just prior to the creation of Delphi's OPEB Programs. When the Debtors agreed to establish programs "substantially identical" to GM's and to assume liability for their employees under those programs, the Sprague decision represented the parties' understanding regarding the scope of that contractual obligation between GM and Delphi, he pointed out. He also argued that the Debtors never assumed responsibility for retirees from GM's former Frigidaire division and the Debtors' assumption of GM's obligations to the American Axle retirees is pursuant to the Master Separation Agreement. Furthermore, the Debtors informed the Court that they intend to create a structure for ongoing health insurance for retirees who would qualify for Health Care Tax Credit in the event of termination of the pension plan has a desirable outcome. They are thus engaged in discussions with the Retiree Committee on how to preserve the availability of the HCTC and would also support requests from the Retiree Committee on its obtaining a private letter ruling from the Internal Revenue Service that a retiree- created health care plan for retirees satisfies the requirements for a "qualified plan" under the HCTC. The Debtors added that they have taken steps to inform retirees of their options to prevent lapses or administrative problems in coverage caused by their termination of payment of OPEB Programs. The termination of OPEB Programs will not trigger lifetime Consolidated Omnibus Reconciliation Act coverage under the applicable statute and regulations, Mr. Butler maintained, because the provision for lifetime COBRA coverage is limited to the "substantial elimination of coverage" that occurs within one year before or after the date of commencement of a bankruptcy proceeding. He added that the Debtors have provided COBRA notices to retirees who have retired since November 1, 2007, and are still within the 18-month COBRA period after their retirement. Notwithstanding negotiations on HCTC structure, the Debtors asked the Court to reject as ground for reconsideration of the Provisional Salaried OPEB Order the uncertainty of the outcome of those negotiations or the ability to achieve a HCTC structure. For the period from February 24 to March 10, 2009, Paul J. Dobosz, George Kelch, Cathy L. Wilder, Joan Wyatt, and Donald C. McLaughlin, all Salaried Retirees, filed late objections to the Salaried OPEB Motion. 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. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: To Receive $2MM Fed Funding on Fuel Cell Research -------------------------------------------------------------- Delphi Corporation and the Rochester Institute of Technology will receive $2.4 million in federal funds for solid oxide fuel cell development. U.S. Rep. Louise M. Slaughter, D-N.Y., chairwoman of the House Rules Committee, joined Bill Destler, president of Rochester Institute of Technology (RIT); Steven Shaffer, chief engineer for Fuel Cells at Delphi; and Nabil Nasr, director of RIT's Center for Integrated Manufacturing Studies and Golisano Institute for Sustainability to make the announcement at RIT on Friday, March 13. The funding was secured in the 2009 Department of Defense Appropriations Bill written by Slaughter and New York's U.S. Senate delegation. It goes toward a joint project between Delphi and RIT to accelerate manufacturability and application of solid oxide fuel cells in the armed forces. "I am proud to have secured federal funding to help make Rochester the world center for fuel cell research, fuel cell development, and ultimately fuel cell manufacturing," said Congresswoman Slaughter. "I applaud Delphi and RIT on their successes to advance local fuel cell development, a mission with tremendous potential for our nation's energy security and Rochester's economic future." The project seeks to accelerate the application of solid oxide fuel cells into stationary and mobile power systems within the U.S. Department of Defense. This type of fuel cell is a highly efficient electrochemical generator that produces environmentally friendly electricity directly from currently available fuels. This work builds upon Delphi's fuel cell development efforts and will utilize the CIMS' expertise in manufacturing process development, re-use and re-manufacture and design for life cycle costs. Last year, Delphi and RIT received $2.75 million in federal funding for the project. "Together, Delphi and RIT are addressing major challenges that prevent the increased application of fuel cells to increase soldiers' capabilities, support environmental policies and reduce dependence on foreign energy sources," said Dan Hennessy, Delphi's chief engineer for Divisional Advanced Engineering. "This continued funding is vital to efforts that help the U.S. Armed Services by providing the electrical power required in their various applications." "This important collaborative research program with Delphi further strengthens the region's assets in sustainability and alternative energy, and reinforces RIT's commitment to innovation and our unique approach to corporate partnerships," said RIT President William Destler. "We especially appreciate Congresswoman Slaughter's vision in sponsoring this initiative, and her longstanding efforts on behalf of RIT and the greater community." "Thanks to the support of Congresswoman Slaughter, our research partnership with Delphi will enhance the development and implementation of alternative fuel technologies while also promoting RIT's educational mission in sustainable development," noted Nabil Nasr, director of the Golisano Institute for Sustainability at RIT. "In addition, these efforts will ultimately increase the environmental quality of our transportation sector and advance the new energy economy in the Rochester region." 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. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DHP HOLDINGS: Asks Court to Approve Protocol for Sale of Assets --------------------------------------------------------------- DHP Holdings II Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware to approve procedures for an auction for two business divisions, Lawn & Garden Specialty Tools (Desa Tools) and Indoor and Outdoor Heating (Desa Heating). The assets to be covered by the sale include equipment, dies, blueprints, intellectual property, trademarks, job mapping, and inventory of Desa Tools and/or Desa heating, and to schedule an auction and sale hearing to consider the approval of the sale to the successful bidders. Desa Tools and Desa Heating are not operating on a regular basis. The Debtors have not been able to find a buyer willing to act as stalking horse purchaser of the assets. The deadline for the submission of bids will be on April 10, 2009, at 4:00 p.m. Eastern time. The Auction will commence at 10:00 a.m. (Eastern Time) on April 14, 2009, at the offices of Pachulski, Stang, Ziehl & Jones LLP, 919 N. Market St., 17th Floor, in Wilmington, Delaware. Sale of the assets will be on an "as is, where is" basis. The Debtors ask the Court to schedule a hearing on April 15, 2009, at 3 p.m. to approve the sale. About DHP Holdings Headquartered in Bowling Green, Kentucky, DHP Holdings II Corporation is the parent of DESA Heating, which sells and distributes heating commercial products in Europe and Mexico under brand names including ReddyHeater, Comfort Glow and Master Portable Heaters. The company has manufacturing, storage and distribution facilities in Alabama and California. DHP Holdings II and six of its affiliates filed for Chapter 11 protection on December 29, 2008 (Bankr. D. Del. Lead Case No. 08-13422). The company's international arm, HIG-DHP Barbados, has not filed for bankruptcy. HIG-DHP Barbados holds 100% of the equity of all foreign nondebtor subsidiaries, which manufacture, distribute and sell commercial and consumer goods in Europe, Mexico, and Canada. Bruce Grohsgal, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl Young & Jones LLP, represent the Debtors. The Debtor proposed AEG Partners as restructuring consultants, and Craig S. Dean as chief restructuring officer and Kevin Willis as assistant chief restructuring officer. The Debtora also proposed Epiq Bankruptcy Solutions LLC as claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. According to Reuters, as of Nov. 29, the company, along with its nondebtor subsidiaries and affiliates, had assets of $132.5 million and liabilities of $133.2 million. DESA Holdings Corporation and DESA International LLC filed voluntary petitions on June 8, 2002. HIG-DESA Acquisition nka DESA LLC acquired on Dec. 13, 2002, substantially all assets of the DESA Entities for $198 million comprised of $185 million in cash plus unsecured subordinated notes in the original aggregate amount of $13 million priced at 10% per annum due payable on Dec. 24, 2007. The sale closed on Dec. 24, 2002. The Chapter 11 cases of the form DESA Entities is still active; However, activity occurring in those cases consists of limited claims resolution, and required filing of necessary postconfirmation reports and payment of postconfirmation fees. No claims of ther issues remain open between the Debtors and the former DESA Entities. According to the Troubled Company Reporter on April 22, 2005, the Hon. Walter Shapero of the United States Bankruptcy Court for the District of Delaware confirmed the Second Amended Joint Plan of Liquidation of DESA Holdings Corporation and its debtor- affiliate -- DESA International LLC. The Court confirmed the Plan on April 1, 2005, and Plan took effect the same day. Kirkland & Ellis, LLP, and Pachulski, Stang, Ziehl Young Jones & Weintraub, P.C., represented the DESA entities. DHP HOLDINGS: Committee Wants Challenge Deadline Moved to May 11 ---------------------------------------------------------------- The official committee of unsecured creditors of DHP Holdings II Corporation, et al., asks the U.S. Bankruptcy Court for the District of Delaware to extend the deadline by which the Committee may file a pleading challenging the Prepetition Senior Lien and Claim Perfection Matters ("Prepetition Senior Action Filing Deadline") from March 10, 2009, to May 11, 2009. On February 6, 2009, the Court entered a final order authorizing Debtors to use cash collateral. Paragraph 16 of the final order established March 10, 2009, as the Prepetition Senior Action Filing Deadline. The Committee tells the Court that it needs more time to complete its investigation of potential claims that it may have with respect to the Prepetition Senior Lien and Claim Perfection Matters and and in order to allow it to continue negotiations with the major constituents regarding a global resolution of significant issues in these cases. GE Business Financial Services formerly Merrill Lynch Business Financial services, in its capacity as Prepetition Senior Agent for certain prepetition lenders, has filed a limited objection to the Committee's motion. The Prepetition Senior Agent relates that at no time prior to the filing of the motion did counsel to the Committee request an extension of the Prepetition Senior Action Filing Deadline from the Prepetition Senior Agent or its counsel. Instead, the Committee filed the motion on the expiration date of the Prepetition Senior Action Filing Deadline. The motion is scheduled for hearing on April 15, 2009. A copy of the Prepetition Senior Agent's proof of claim, which was filed January 19, 2009, was provided to the Committee on or about January 27, 2009. Thus, by the time of the hearing, counsel to the Committee will have had 11 weeks to review and analyze the proof of claim in these Chapter 11 cases, the Prepetition Senior Agent discloses. The Prepetition Senior Agent does not object to the Committee's motion to the extent that it relates to the value of the Prepetition Collateral or affirmative causes against the Prepetition Senior Agent or Prepetition Senior Lenders. It merely asks the Court not to extend the Prepetition Senior Action Filing Deadline beyond the hearing date on April 15, 2009. About DHP Holdings Headquartered in Bowling Green, Kentucky, DHP Holdings II Corporation is the parent of DESA Heating, which sells and distributes heating commercial products in Europe and Mexico under brand names including ReddyHeater, Comfort Glow and Master Portable Heaters. The company has manufacturing, storage and distribution facilities in Alabama and California. DHP Holdings II and six of its affiliates filed for Chapter 11 protection on December 29, 2008 (Bankr. D. Del. Lead Case No. 08-13422). The company's international arm, HIG-DHP Barbados, has not filed for bankruptcy. HIG-DHP Barbados holds 100% of the equity of all foreign nondebtor subsidiaries, which manufacture, distribute and sell commercial and consumer goods in Europe, Mexico, and Canada. Bruce Grohsgal, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl Young & Jones LLP, represent the Debtors. The Debtor proposed AEG Partners as restructuring consultants, and Craig S. Dean as chief restructuring officer and Kevin Willis as assistant chief restructuring officer. The Debtora also proposed Epiq Bankruptcy Solutions LLC as claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million to $500 million each. According to Reuters, as of Nov. 29, the company, along with its nondebtor subsidiaries and affiliates, had assets of $132.5 million and liabilities of $133.2 million. DESA Holdings Corporation and DESA International LLC filed voluntary petitions on June 8, 2002. HIG-DESA Acquisition nka DESA LLC acquired on Dec. 13, 2002, substantially all assets of the DESA Entities for $198 million comprised of $185 million in cash plus unsecured subordinated notes in the original aggregate amount of $13 million priced at 10% per annum due payable on Dec. 24, 2007. The sale closed on Dec. 24, 2002. The Chapter 11 cases of the form DESA Entities is still active; However, activity occurring in those cases consists of limited claims resolution, and required filing of necessary postconfirmation reports and payment of postconfirmation fees. No claims of ther issues remain open between the Debtors and the former DESA Entities. According to the Troubled Company Reporter on April 22, 2005, the Hon. Walter Shapero of the United States Bankruptcy Court for the District of Delaware confirmed the Second Amended Joint Plan of Liquidation of DESA Holdings Corporation and its debtor- affiliate -- DESA International LLC. The Court confirmed the Plan on April 1, 2005, and Plan took effect the same day. Kirkland & Ellis, LLP, and Pachulski, Stang, Ziehl Young Jones & Weintraub, P.C., represented the DESA entities. DISCOVERY LAB: Revenues in Late '09; Going Concern Doubt Issued --------------------------------------------------------------- In its annual report on Form 10-K, Discovery Laboratories, Inc., said, "As of December 31, 2008, we have an accumulated deficit of approximately $327.4 million and we expect to continue to incur significant increasing operating losses over the next several years. As a result of our financial position as of December 31, 2008, the audit opinion we received from our independent auditors . . . contained a notation related to our ability to continue as a going concern." The Company has incurred a net loss of $39.11 million on $4.6 million of revenues from collaborative agreements in 2008, following a $40 million loss and zero revenues for 2007. As of December 31, 2008, the Company had cash and marketable securities of $24.8 million and three Committed Equity Financing Facilities (CEFFs) under which it may, at its discretion (subject to certain conditions, including minimum purchase price and volume limitations), to raise in the aggregate up to $114.2 million capital to support its business plans, although the 2006 CEFF, which currently has available up to approximately $34.3 million, will expire in May 2009. In March 2008, the Company restructured its strategic alliance with Philip Morris USA Inc. (PMUSA), d/b/a Chrysalis Technologies (Chrysalis) and assumed full responsibility for the development of the Capillary Aerosolization Technology. As part of the restructuring, Chrysalis completed a technology transfer of the CAT and paid the Company $4.5 million to support further development activities. The Company did not earn revenue during the years ended December 31, 2007 and 2006. However, it expects to record product revenues in the future. "We expect the FDA to complete its review of our NDA in April 2009. If Surfaxin is approved, we expect our first revenues from product sales in late-2009. As Surfaxin is a hospital-based indication, before we can make any sales at a particular hospital, we will need to comply with that hospital's formulary acceptance requirements, which can be a time-consuming process. As a result, we expect our product revenues to build slowly beginning in 2009 and 2010 and become more meaningful in 2011 and beyond." According to Ernst & Young LLP, "the Company has incurred recurring operating losses and has generated negative cash flows from operations since inception and expects such results to continue for the foreseeable future. In addition, there is uncertainty as to the Company's ability to raise additional capital sufficient to meet its obligations on a timely basis. These conditions raise substantial doubt about the Company's ability to continue as a going concern." Discovery Laboratories, Inc. is a biotechnology company developing Surfactant Replacement Therapies (SRT) for respiratory disorders and diseases. The Company's technology produces a precision-engineered surfactant that is designed to closely mimic the essential properties of natural human lung surfactant. Its SRT pipeline is focused initially on the respiratory conditions prevalent in the Neonatal Intensive Care Unit (NICU) and Pediatric Intensive Care Unit (PICU). The Company has filed a new drug application (NDA) with the United States Food and Drug Administration (FDA) for its lead product, Surfaxin (lucinactant) for the prevention of Respiratory Distress Syndrome (RDS) in premature infants. It is also developing Surfaxin for the treatment of Acute Respiratory Failure (ARF) in children up to two years of age suffering and for the prevention and treatment of Bronchopulmonary Dysplasia (BPD) in premature infants. ECLIPSE AVIATION: Client Group Mulls Acquisition of Business ------------------------------------------------------------ The Business Review reports that Eclipse Aviation Corp. owner Mike Press said that 20 clients have expressed interest in acquiring the Company. The Business Review relates that Mr. Press said, "It's good news - good news for the country because the company will hire back employees and get the industry back up and running. We want 100% of shareholders to be customers." According to The Business Review, Mr. Press said that he expects to have the firm commitment from customers to purchase Eclipse Aviation within the next two to three weeks. The Business Review states that Mr. Press and Mason Holland will call the new company Eclipse Jet LLC. About Eclipse Aviation Albuquerque, New Mexico-based Eclipse Aviation Corporation -- http://www.eclipseaviation.com/-- makes six-passenger planes powered by two Pratt & Whitney turbofan engines. The company and Eclipse IRB Sunport, LLC filed separate petitions for Chapter 11 relief on Nov. 25, 2008 (Bankr. D. Delaware Lead Case No. 08-13031). Daniel Guyder, Esq., John Kibler, Esq., and David C. Frauman, Esq., at Allen & Overy LLP, represent the Debtors as counsel. Joseph M. Barry, Esq., and Donald J. Bowman, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors as Delaware counsel. Eclipse Aviation Corporation listed assets of between $100 million and $500 million and debts of more than $1 billion. The Court has issued an order converting the case to Chapter 7 liquidation. FEDERAL FREIGHT: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Texarkana Gazette reports that Federal Freight Systems Inc. has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Texas. According to Texarkana Gazette, Federal Freight said that the bankruptcy filing isn't about a lack of funds. The report quoted Federal Freight President Gerald Ragle as saying, "It's more reorganizing than bankruptcy." Texarkana, Texas-based Federal Freight Systems Inc. is a trucking company, which handles cargo primarily for the Department of Defense. FISHER COMMUNICATIONS: Bond Buyback Won't Move Moody's B2 Rating ---------------------------------------------------------------- Moody's Investors Service commented that the bond buyback announced by Fisher Communications, Inc. does not impact its B2 corporate family rating or stable outlook. During the first quarter of 2009 Fisher repurchased approximately $15 million in aggregate principal of its 8.625% senior notes due 2014 ($150 million outstanding principal prior to buyback) for total consideration of approximately $13 million in cash. Moody's most recent action on Fisher was the affirmation of ratings and change of the outlook to stable from positive on November 17, 2008. Fisher Communications, Inc., headquartered in Seattle, Washington, operates television and radio broadcasting stations in the western United States, as well as Fisher Plaza, a mixed use facility located near downtown Seattle. Its annual revenue is approximately $170 million. FLEETWOOD ENTERPRISES: Can Use Cash Collateral on Interim Basis --------------------------------------------------------------- The Hon. Meredith A. Jury of the United States Bankruptcy Court for the Central District of California authorized Fleetwood Enterprises Inc. and its debtor-affiliates to use, on an interim basis, cash collateral securing repayment of secured loan to their prepetition secured lenders from March 15, 2009 to June 7, 1009. A hearing is set for March 26, 2009, at 3:00 p.m., to consider final approval of the motion. Objections, if any, are due March 20, 2009, by 4:00 p.m. The Debtors are parties to a third amended and restated credit agreement dated Jan. 5, 2007, as modified from time to time, with BofA, Wells Fargo Foothill Inc. fka Foothill Capital Corporation, Textron Financial Corporation, PNC Bank National Association, Wachovia Capital Finance Corporation (Western). The prepetition secured credit facility comprises a revolving line of credit consisting of revolving loans and letters of credit. Under the agreement, the lenders are granted security interest in substantially all of the Debtors' personal property. As of March March 6, 2009, the Debtors owe $61,690,980 in unpaid reimbursement obligations plus interest and additional sums for reasonable costs, reasonable attorneys' fees and other amounts to the lenders. An immediate need exist for the Debtors to continue using the cash collateral in order to continue operations and to administer and preserve the value of their assets, said Craig H. Millet, Esq., at Gibson, Dunn & Crutcher LLP in Irvine, California. The absent of cash collateral would immediately and irreparably harm the Debtors' estate, and their creditors and equity holders, Mr. Millet noted. As adequate protection, the lenders will receive replacement liens to secured any diminution in their interest in the cash collateral. A full-text copy of the Debtors' cash collateral budget is available for free at: http://ResearchArchives.com/t/s?3a52 Headquartered Riverside, California, Fleetwood Enterprises, -- http://www.fleetwood.com-- produces recreational vehicles and manufactured homes. The Debtors have about 9,000 associates working in facilities strategically located throughout the nation. The company and 19 of its affiliates filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., atGibson, Dunn & Crutcher LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. FLEETWOOD ENTERPRISES: Faces Class Action for WARN Act Violations ----------------------------------------------------------------- Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, and Berger & Montague, P.C., have filed a class action lawsuit in the United States Bankruptcy Court for the Central District of California, Justice v. Fleetwood Enterprises, Inc., Civil Action No. 6:09-ap- 01108-BB, on behalf of over 700 employees who were laid off by Fleetwood Enterprises, Inc. on Monday, March 9, 2009, without receiving any notice. Fleetwood filed for Chapter 11 bankruptcy protection on Tuesday, March 10, 2009 in Riverside, California. The lawsuit claims that Fleetwood violated the Worker Adjustment and Retraining Notification Act which provides that employers must give sixty days notice to employers prior to a plant closing or mass layoff. The lawsuit seeks 60 days wages and benefits in lieu of the notice. The lead plaintiffs, Sandra Justice and Alicia Rice, were employed at Fleetwood's plant in Edgerton, Ohio that constructed travel trailers. Fleetwood stated in its bankruptcy filing that it will continue to make motor coaches and manufactured homes but is permanently shutting down at least three manufacturing plants and two service facilities. "Fleetwood appears to have engaged in a blatant violation of the WARN Act by failing to provide its employees sixty days advance notice of these plant closings and mass layoffs, and workers who are terminated without notice do not have time to search for new employment. For those living paycheck to paycheck, such notice is crucial to the ability to find substitute work and to support their families," said Shanon Carson of Berger & Montague, P.C., one of the attorneys for the plaintiffs. Co-counsel for the plaintiffs, Charles A. Ercole of Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, states, "We repeatedly see employers ignoring the WARN Act. The employees are the last ones to know and that is exactly what the WARN Act was meant to prevent." Former employees of Fleetwood who were part of these layoffs can obtain additional information from: Shanon Carson Tel: (215) 875-4656 scarson@bm.net -- or -- Chuck A. Ercole Tel: (215) 568-6060 cercole@klehr.com The cases are being prosecuted by the Philadelphia law firms of Berger & Montague, P.C. -- http://www.bergermontague.com/and Klehr, Harrison, Harvey, Branzburg & Ellers, LLP - http://www.klehr.com/ The law firm of Berger & Montague, P.C., consists of over 60 attorneys who represent plaintiffs in complex litigation. The firm's Employment Law Group has extensive experience in representing employees in class and collective action litigation, and the firm has played lead roles in major cases for almost 40 years resulting in recoveries of billions of dollars for its clients and the classes they represent. The law firm of Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, is a full service law firm with approximately 100 attorneys. It has a reputation for aggressive litigation and has a significant bankruptcy practice as well. Mr. Ercole is the Chair of the firm's Labor and Employment law practice group and has successfully litigated more than a dozen WARN Act class actions. Fleetwood Enterprises, Inc. -- http://www.fleetwood.com-- makes recreational vehicles and manufactured homes. The company has about 9,000 associates working in facilities strategically located throughout the nation. Fleetwood and its affiliates filed for bankruptcy on March 10, 2009 (Bankr. C.D. Calif. Case No. 09-14254). The Hon. Sheri Bluebond presides over the case. Craig Millet, Esq., at Gibson, Dunn & Crutcher LLP, in Irvine, represents the Debtors' as counsel. FTI Consulting Inc. and Greenhill & Co. LLC serve as advisors. The Debtors estimated both assets and debts to total $500 million to $1 billion as of the bankruptcy petition date. FLEETWOOD ENTERPRISES: Seeks Court Nod for KCC as Claims Agent -------------------------------------------------------------- Fleetwood Enterprises Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the Central District of California for permission to employ Kurtzman Carson Consultants LLC as their claims and noticing agent. The firm will: a) prepare and serve required notices in this chapter 11 case, including: -- a notice of the commencement of the case and the initial meeting of creditors under section 341(a) of the Bankruptcy Code; -- a notice of the claims bar date; -- notices of any hearings on a disclosure statement and confirmation of a chapter 11 plan; and -- other miscellaneous notices as the Debtors or the Court may deem necessary or appropriate for an orderly administration of this case. b) Within five business days after the service of a particular notice, file with the Clerk's Office a declaration of service that includes (i) an alphabetical list of persons on whom the firm served the notice, along with their addresses, and (ii) the date and manner of service; c) maintain copies of all proofs of claim and proofs of interest filed in this case at a location other than where the originals are maintained; d) maintain an official claims register in this case by docketing all proofs of claim and proofs of interest in a claims database that includes the following information for each such claim or interest asserted: -- name and address of the claimant or interest holder and any agent thereof, if the proof of claim or proof of interest was filed by an agent; -- date that the proof of claim or proof of interest was received by the firm or the Court; -- claim number assigned to the proof of claim or proof of interest; and -- asserted amount and classification of the claim. e) implement necessary security measures to ensure the completeness and integrity of the claims register as approved by the Clerk of the Court; f) periodically audit the claims information to assure the Clerk's Office that the claims information is being appropriately and accurately recorded in the official claims register; g) allow the Clerk's Office to independently audit the claims information during regular business hours; h) mail a notice of the bar date approved by the Court for the filing of a proof of claim and a form for filing of a proof of claim to each creditor notified of the filing; i) transmit to the Clerk's Office a copy of the claims register on a bi-weekly basis or at such other times as the Clerk's Office may direct; j) maintain an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and make such list available upon request to the Clerk's Office or any party in interest; k) provide the public and the Clerk's Office access to copies of the proofs of claim or proofs of interest filed in this chapter 11 case without charge during regular business hours in a viewing area at the following address: 2335 Alaska Avenue, El Segundo, California 90245; l) allow the Clerk's Office to inspect the firm's premises at anytime during regular business hours; m) record all transfers of claims pursuant to Federal Bankruptcy Rule 3001(e) and provide notice of such transfers as required by Federal Bankruptcy Rule 3001(e); n) comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; o) provide temporary employees to process claims as necessary; p) promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; and q) provide such other claims processing, noticing, and related administrative services as may be requested from time to time by the Debtors. The firm will be paid for services rendered in accordance to the service agreement dated Feb. 20, 2009. A full-text copy of the service agreement is available for free at: http://ResearchArchives.com/t/s?3a54 Michael J. Frishberg, vice president of corporate restructuring services of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered Riverside, California, Fleetwood Enterprises, -- http://www.fleetwood.com-- produces recreational vehicles and manufactured homes. The Debtors have about 9,000 associates working in facilities strategically located throughout the nation. The company and 19 of its affiliates filed for Chapter 11 protection on March 10, 2009 (Bankr. C.D. Calif. Lead Case No. 09-14254). Craig Millet, Esq., atGibson, Dunn & Crutcher LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Ernst & Young LLP as auditor, FTI Consulting Inc. as consultant, and Greenhill & Co. LLC as financial advisor. FOAMEX INT'L: Panel Opposes $95-Mil. DIP Loan, Bonus Program ------------------------------------------------------------ Bloomberg's Bill Rochelle reports that the official creditors' committee for Foamex International Inc. is opposing (i) the proposed $95 million secured financing from MatlinPatterson Global Advisers LLC, and (ii) a bonus program that could pay the top 14 executives a total of more than $1.8 million. According to Bloomberg, the Creditors Committee says the $95 million loan from MatlinPatterson, which is also buying the business, is "illusory." The Committee argues that the new loan is actually a $5 million reduction in the revolving credit in effect before bankruptcy, the report says. The Committee, Bloomberg relates, asserts the loan is "mostly to facilitate" a sale to MatlinPatterson where the lender will buy the assets not with cash but by using secured debt. The Committee also balks at the $2 million in fees the lenders will get for making the new loan and a separate prepayment penalty of $1.8 million if the loan is repaid before its four-month maturity and someone other than MatlinPatterson is the buyer. The Committee, according to the report, says it's too soon for the bankruptcy court to be approving breakup fees in connection with a sale. The Committee, joined by some of the first-lien lenders, also asks the U.S. Bankruptcy Court for the District of Delaware to deny approval of the executives' bonus program where the chief executive officer stands to take down $755,000. According to Mr. Rochelle, the U.S. Trustee has objected, pointing out that no special duties are required from the executives and they become eligible simply by remaining with the company until the vesting date. About Foamex International 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. The company and eight affiliates first filed for chapter 11 protection on September 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). On February 2, 2007, the U.S. Bankruptcy Court for the District of Delaware confirmed the Debtors' Second Amended Joint Plan of Reorganization. The Plan became effective and the company emerged from chapter 11 bankruptcy on February 12, 2007. Foamex missed $7.3 million in interest payments due at the end of the Jan. 21 grace periods on the Company's $325 million first-lien term loan and the $47 million second-lien term loan. On February 18, 2009, Foamex International Inc. and seven affiliates filed separate voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 09-10560). The Hon. Kevin J. Carey presides over the cases. Ira S. Dizengoff, Esq., Phillip M. Abelson, Esq., and Brian D. Geldert, Esq., at Akin Gump Strauss Hauer in New York; and Mark E. Felger, Esq., and Jeffrey R. Waxman, Esq., at Cozen O'Connor, in Wilmington, Delaware, serve as bankruptcy counsel. Investment Banker is Houlihan Lokey; accountant is McGladrey & Pullen LLP, and claims and noticing agent is Epiq Bankruptcy Solutions LLC. As of September 28, 2008, the Debtors had $363,821,000 in total assets, and $379,710,000 in total debts. FORD MOTOR: Cuts Production in Europe Due to Waning Demand ---------------------------------------------------------- Christoph Rauwald at The Wall Street Journal reports that Ford Motor Co.'s European division is cutting production capacity due to weakening demand. WSJ says that the cuts will mainly affect Ford's operations in: -- Spain, wherein Ford's Valencia plant will move to two shifts from three on May 1; -- Germany, wherein the Saarlouis factory will stick to shorter working hours. Ford chose Saarlouis as the lead plant for all derivatives of the next-generation Focus. Ford will end the production of the Kuga and C-MAX models at the facility and won't replace them with other models; and -- Rome, wherein the engine plant in Cologne will share the production of a new, small-displacement EcoBoost gasoline engine with the Craiova manufacturing facility. Ford of Europe CEO John Fleming said in a statement, "We will do whatever it takes to ensure the continuing viability of our business, and further actions can be expected." According to WSJ, Ford Motor could take more steps to lower costs and foster profitability. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported by the Troubled Company Reporter on March 6, 2009, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Ford Motor Co. to 'CC' from 'CCC+'. S&P also lowered the issue-level ratings on the company's senior secured term loan, senior unsecured debt, and subordinated debt, while leaving the issue-level rating on Ford's senior secured revolving credit facility unchanged. In addition, the counterparty credit ratings and issue-level ratings on Ford Motor Credit Co. (Ford Credit) and FCE Bank PLC remain unchanged. The outlooks on Ford and Ford Credit are negative. Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently- approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FORD MOTOR: UAW to Accept Common Stock As VEBA Payout ----------------------------------------------------- Ford Motor Co. and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America have amended the parties' 2007 collective bargaining agreement in a manner that will allow Ford to significantly reduce its hourly labor costs. In addition, Ford agreed in principle to modify a settlement agreement with the UAW by providing Ford the option to use Ford common stock to pay up to 50% of its future payment obligations to a New Voluntary Employee Beneficiary Association trust pursuant to the Settlement Agreement. Ford entered into a settlement agreement dated March 28, 2008, with UAW and class representatives of former UAW-represented Ford employees, relating to retiree health care obligations. The Settlement Agreement provides that upon its implementation date -- anticipated to be December 31, 2009 -- a new retiree health care plan, to be funded by a New Voluntary Employee Beneficiary Association trust, will be permanently responsible for providing retiree health care benefits for covered current and former UAW- represented Ford employees. Under the terms of the Settlement Agreement, Ford is required to fund the New VEBA through a number of sources, including funds that are currently in existing voluntary employee beneficiary association trusts, Ford-issued convertible and term notes, and cash. The parties to the Settlement Agreement have acknowledged that Ford's obligations to pay into the New VEBA are fixed and capped as provided in the Settlement Agreement and that Ford is not responsible for, and does not provide a guarantee of: (1) the payment of future benefits to plan participants, (2) the asset returns on the funds in the New VEBA, or (3) the sufficiency of assets in the New VEBA to fully pay the obligations of the New VEBA or the New Plan. "Given the current economic environment, it is important that we remain competitive with other automobile manufacturers and that we are able to operate profitably at current industry demand and changing model mix," Louis J. Ghilardi, Ford Assistant Secretary, said. "Our principal domestic competitors are being required, under the terms of government-funded restructurings, to seek to reduce public unsecured debt by two-thirds, to reduce by half the cash expense associated with their retiree health care voluntary employee benefit association trusts, and to achieve parity in labor costs with the U.S. operations of non-domestic automobile manufacturers. Although we have not sought government bridge loans, we are committed to remaining competitive and have sought to achieve results similar to those required of these competitors." The modification of the Settlement Agreement, ratified by the UAW membership on March 9, 2009, is subject to final court approval and other conditions, such as obtaining "prohibited transaction" exemptions from the Department of Labor to permit the transactions described, including allowing the New VEBA trust to hold Ford securities that are not "qualifying employer securities." In addition, to have the ability to exercise fully Ford's option to pay up to 50% of its future payment obligations to the New VEBA in Ford common stock, Ford must obtain shareholder approval. Ford agreed with the UAW that both the amendments to the 2007 collective bargaining agreement and the Modification would be conditioned on, among other things, pursuing restructuring actions with all of Ford's stakeholders, including meaningful debt reduction over time consistent with the government requirements applicable to Ford's domestic competitors under their government- funded restructurings. In the event that the Modification is approved by the court and the other conditions to its implementation are met, Ford would issue to the New VEBA two notes, Note A and Note B. These notes would be issued to the New VEBA in lieu of: (i) the notes contemplated to be issued under the Settlement Agreement (i.e., a 5.75% Senior Convertible Note due January 1, 2013 in the principal amount of $3.3 billion, a 9.5% Guaranteed Secured Note due January 1, 2018 in the principal amount of $3 billion, and a 9% Short Term Note due December 31, 2009 in the principal amount of $2.28 billion, which represents the value of the assets at December 31, 2008 in the Temporary Asset Account established under the Settlement Agreement, and (ii) the base amount payments consisting of annual installments of $52.3 million payable through 2022 under the Settlement Agreement. Note A, a non-interest bearing note in the principal amount of $6,630.47 million, would require Ford to make cash payments to the New VEBA according to the schedule set forth below beginning on December 31, 2009, and thereafter on June 30 of each year in the period 2010 through 2022. Note B, a non-interest bearing note in the principal amount of $6,511.85 million, also would require Ford to make payments to the New VEBA starting on December 31, 2009, and thereafter on June 30 of each year in the period 2010 through 2022. Note B, however, gives Ford the option of making each payment in cash, Ford common stock, or a combination of cash and Ford common stock. The aggregate principal amount of Note A and Note B (i.e., $13.1 billion), and the amortization, represents the equivalent value of: (i) the principal amounts of and interest payments on the Old Notes, (ii) the annual $52.3 million base payment amounts, and (iii) an additional $25 million per year during the period 2012 through 2018, which is intended to cover transaction costs the New VEBA incurs in selling any shares of Ford common stock delivered pursuant to the terms of Note B. Note A and Note B do not include or represent amounts constituting assets in the Existing Internal VEBA -- $2.7 billion at December 31, 2008 -- or interest payments on the Old Notes and base amount payments made prior to December 31, 2009 into the TAA. These assets or amounts will be transferred in accordance with the original terms of the Settlement Agreement. The schedule of payments for Note A and Note B: * December 31, 2009: Note A - $1,243.47 million, Note B - $609.95 million * June 30, 2010: Note A - $265 million; Note B - $609.95 million * June 30, 2011: Note A - $265 million; Note B - $609.95 million * June 30, 2012: Note A - $679 million; Note B - $654 million * June 30, 2013: Note A - $679 million; Note B - $654 million * June 30, 2014: Note A - $679 million; Note B - $654 million * June 30, 2015: Note A - $679 million; Note B - $654 million * June 30, 2016: Note A - $679 million; Note B - $654 million * June 30, 2017: Note A - $679 million; Note B - $654 million * June 30, 2018: Note A - $679 million; Note B - $654 million * June 30, 2019: Note A - $26 million; Note B - $26 million * June 30, 2020: Note A - $26 million; Note B - $26 million * June 30, 2021: Note A - $26 million; Note B - $26 million * June 30, 2022: Note A - $26 million; Note B - $26 million In the event Ford elects the stock payment option for any portion of the Note B payments due in 2009, 2010, or 2011, the shares of Ford common stock to be delivered in settlement of such payment will be priced for this purpose at $2.00, $2.10, and $2.20 per share, respectively -- subject to adjustment for any stock split, stock dividend or stock recombination. If the New VEBA sells the shares delivered during this period at a loss (i.e., below those fixed prices), Ford agrees, subject to certain limitations, to pay up to $50 million per year (or $150 million in total) to reimburse the New VEBA for some or all of those losses. With respect to payments after 2011 under Note B, in the event that Ford elects the stock payment option, the number of shares of Ford common stock to be delivered in settlement of such payment shall be priced at the average of the volume-weighted average stock price for each of the 30 trading days ending on the second business day prior to the relevant payment date. Ford's option to settle with Ford common stock all or any portion of the amounts due with respect to Note B will be subject in each instance to the satisfaction of certain conditions on the applicable payment date, including: A. No event of default has occurred under Ford's outstanding public debt securities, bank credit facilities, or notes or other securities issued to the New VEBA, and Ford has paid all amounts due on or prior to such payment date on Note A and Note B (in cash, or through the exercise of the stock payment option with respect to any payment or portion thereof or the deferral of any payment or portion thereof as described below, as applicable); B. No bankruptcy or insolvency proceeding has been commenced by or against Ford; C. Ford has made no assignment for benefit of creditors or admission of general inability to pay debts; D. Ford common stock is listed on the New York Stock Exchange or other national securities exchange on the payment date, and the NYSE (or such other securities exchange) has not commenced or provided notice of the commencement of any delisting proceedings or inquiries on or prior to the payment date; E. No judgment in excess of a specified amount has remained unsatisfied and unstayed for more than 30 days; F. No "termination event" (as defined by the Employee Retirement Income Security Act) has occurred with respect to either of Ford's two major U.S. defined benefit pension plans; G. Ford has received no audit opinion containing a going concern explanatory paragraph for the fiscal year immediately preceding the applicable payment date; and H. The price per share of Ford common stock is greater than $1.00 (subject to adjustment for any stock split, stock dividend or stock recombination). If on any payment date under Note B, all conditions are met, then, subject to certain conditions and limitations, Ford would have the right to not make the relevant payment on such payment date and instead defer the payment by paying it in up to five equal annual installments beginning with the next scheduled payment date. This will allow Ford to make such payment (or installment thereof) in common stock on any deferred installment date if all the conditions for payment in common stock have been met on such date. Notwithstanding Ford's option to make payments pursuant to Note B in shares of Ford common stock in lieu of cash, Ford intends to use its discretion to determine which form of payment makes sense on each payment date, balancing liquidity needs and preservation of shareholder value. In making such a determination, Ford will consider facts and circumstances existing at the time of each required payment, including market and economic conditions, Ford's available liquidity, and the price of Ford common stock. Under the Modification, Ford also will issue to the New VEBA a warrant entitling it to purchase 362 million shares of Ford common stock at an exercise price of $9.20 per share, which is intended to mirror the economic value in the Convertible Note provided for in the Settlement Agreement. In addition, the Modification provides for certain hedging restrictions, certain sales restrictions relating to Note A and Note B as well as the warrant and shares of Ford common stock, and customary registration rights relating to the sale of shares of Ford common stock received by the New VEBA pursuant to Ford's stock payment option in respect of Note B, as well as the warrant and shares issued upon exercise. As disclosed in its Annual Report on Form 10-K for the year ended December 31, 2008, as of February 13, 2009, Ford had outstanding 2,325,468,761 shares of Ford common stock. Using the price of $2.00 per share for the December 31, 2009 Note B payment, the number of shares of Ford common stock that could be issued would be 304,975,000 shares. The issuance to the New VEBA would make the New VEBA an owner of more than 5% of Ford common stock and, thus, an "affiliate" of Ford for purposes of the NYSE Listed Company Manual. Accordingly, any further issuance of Ford common stock in excess of 1% of the then-outstanding amount of shares to the New VEBA in satisfaction of any portion of a Note B payment would require shareholder approval. Furthermore, assuming Ford satisfies all or a substantial portion of its future payment obligations under Note B by issuing Ford common stock, Ford anticipates exceeding the 20% share-issuance limit prescribed in the NYSE Listed Company Manual. Under this limitation, a company whose shares are listed on the NYSE cannot, without shareholder approval, issue shares of its common stock in a transaction or series of related transactions in amounts equal to or in excess of 20% of the number of shares of common stock outstanding. Consequently, Ford will request approval from its shareholders at its annual meeting on May 14, 2009 to allow the automaker to issue Ford common stock to the New VEBA. Ford conducted a conference call on March 11, 2009 to discuss the amendments to its 2007 collective bargaining agreement and the Modification and take questions from media and analysts. Through March 18, 2009, replays of the call will be available by dialing toll free 888-286-8010 (within the United States) or 1-617-801- 6888 (from outside the United States); the passcode for the replay is 29481628. Supporting materials from the call also will be available at: http://www.shareholder.ford.com About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * Moody's Investors Service in December 2008 lowered the Corporate Family Rating and Probability of Default Rating of Ford Motor Company to Caa3 from Caa1 and lowered the company's Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring in order to achieve the same UAW concessions that General Motors and Chrysler are likely to achieve as a result of the recently- approved government bailout loans. Such a balance sheet restructuring would likely entail a loss for bond holders and would be viewed by Moody's as a distressed exchange and consequently treated as a default for analytic purposes. FORUM HEALTH: Case Summary & 50 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Forum Health 8747 Squires Lane NE Warren, OH 44484 Bankruptcy Case No.: 09-40795 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Forum Health Rehabilitative Services Co. 09-40796 Forum Health Diagnostics Co. 09-40797 Forum Health Enterprises Co. 09-40798 Forum Health Outreach Laboratories, Inc. 09-40799 Western Reserve Health Foundation 09-40800 Forum Health Ventures Co. 09-40801 Forum Health Pharmacy Services Co. 09-40802 Forum Health Services Co. 09-40803 Western Reserve Care System 09-40804 Dacas Nursing Support Systems, Inc. 09-40805 Dascas Nuring Systems, Inc. 09-40806 Beeghly Oaks 09-40807 Trumbull Memorial Hospital 09-40808 Trumbull Memorial Hospital Foundation 09-40809 Comprehensive Psychiatry Specialists, Inc. 09-40810 PrideCare, Inc. 09-40811 Visiting Nurse Association and Hospice of 09-40812 Northeast Type of Business: The Debtors offer health care services. The Debtors' primary service area consists of the northeast Ohio counties of Mahoning, Trumbull and Columbiana; and northeast Ohio counties of Ashtabula, Geauga and Portage and the Pennsylvania counties of Mercer and Lawrence See: http://www.forumhealth.org/ Chapter 11 Petition Date: March 16, 2009 Court: Northern District of Ohio (Youngstown) Judge: Kay Woods Debtor's Counsel: Paul W. Linehan, Esq. plinehan@mcdonaldhopkins.com Shawn M Riley, Esq. sriley@mcdonaldhopkins.com McDonald Hopkins LLC 600 Superior Avenue E, Suite 2100 Cleveland, OH 44114-2653 Tel: (216) 348-5400 Fax: (216) 348-5474 Co-Counsel: Michael A. Gallo, Esq. gallo@nnblaw.com Nadler Nadler & Burdman Co., LPA 20 Federal Plaza West, Suite 600 Youngstown, OH 44503-1559 Tel: (330) 744-0247 Fax: (330) 744-8690 Claims, Noticing and Balloting Agent: Kurtzman Carson Consultants LLC Financial Advisors: Huron Consulting Services LLC Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Siemens Healthcare trade debt $1,322,240 Diagnostics Inc 1717 Deerfield Road Deerfield, IL 60015-0778 Tel: (800) 241-0420 Fax: (800) 344-8981 Owens & Minor trade debt $962,031 9120 Lockwood Blvd. Mechanicsville, VA 23116 Attn: Cheryl Osikowicz Tel: (866) 423-9900 Fax: (856) 423-7895 Zimmer US Inc. trade debt $407,430 345 East Main Street Warsaw, IN 46580 Tel: (574) 267-6131 Fax: (574) 372-4988 Boston Scientific Corp. trade debt $398,438 Medtronic Inc. trade debt $380,325 Guidant Sales Corp. trade debt $318,690 Medtronic Sofamor Danek trade debt $300,700 Johnson & Johnson Healthcare trade debt $298,782 Systems Inc. Deptuy Orthopaedics, Inc. trade debt $286,896 Stryker Spine trade debt $232,452 GE Medical Systems trade debt $229,176 Hill-Rom trade debt $224,152 W L gore & associates trade debt $201,050 Philips Medical Systems NA Co. trade debt $175,027 St. Jude Medical Inc trade debt $167,741 Synthes Ltd. USA trade debt $157,785 Reino Linen Service Inc. trade debt $147,664 Stentor Inc. Philips trade debt $143,305 C R Bard Inc trade debt $130,562 Hospira Worldwide Inc trade debt $130,452 Stryker Orthopaedics trade debt $98,813 Merry X-ray (MXR) trade debt $87,792 Standard Textile Company trade debt $85,556 Atc Healthcare Services Inc trade debt $82,447 Bracco Diagnostics Inc. trade debt $80,140 Gamma Med Inc. trade debt $72,853 Independence Business Supply trade debt $71,313 Biotronics Inc trade debt $70,281 Cardinal Health Inc trade debt $68,537 Neo Pet LLC trade debt $66,875 Centers for Dialysis Care trade debt $61,410 Sunquest Information trade debt $61,259 Systems College of American trade debt $59,164 Pathologists KCI USA trade debt $53,810 Arrow International Inc trade debt $53,602 United States Surgical trade debt $50,615 Executive Health Resources trade debt $50,360 Biomet Inc trade debt $49,943 Cook Medical Inc trade debt $48,798 Shiftwise Corporation trade debt $48,699 Service Express Inc trade debt $48,198 Comdoc Inc. trade debt $46,748 Network Services Company trade debt $45,816 Micro Focus Inc trade debt $45,360 OSSI (OSSI, Inc.) trade debt $42,444 Associates in Anesthesiology trade debt $41,666 Return on Investment Systems trade debt $38,983 Arthocare Corp trade debt $37,753 Philips Medical Capital trade debt $36,153 Aspect Medical Systems trade debt $33,943 The petition was signed by Walter J. Pishkur, president and chief executive officer. GENERAL GROWTH: Payment Deadline of $395 Million in Bonds Passes ---------------------------------------------------------------- Kris Hudson at The Wall Street Journal reports that General Growth Properties Inc. has let a Monday due date for $395 million in bonds pass without payment. According to WSJ, General Growth is seeking a nine-month bond payment extension. WSJ relates that General Growth is expecting that holders of the past-due bonds won't file an involuntary bankruptcy petition against the Company and instead allow it to restructure its $27 billion debt load out of court. WSJ states that some investors, including Bill Ackman of Pershing Square Capital Management LLC, believe that a bankruptcy filing is likely. WSJ quoted Mr. Ackman as saying, "We think the company will ultimately have to file for bankruptcy, but we think that it's a wholly solvent company with a liquidity problem. I don't think they'll need to dilute shareholders. All they need to do is extend the maturities [in bankruptcy court] and they can refinance those debts as they come due." Mr. Ackman, says WSJ, purchased 7.5% of General Growth's stock in recent months and put another 18% under swap contracts in a bet that the Company's equity will survive a bankruptcy intact. According to the report, Mr. Ackman expects to soon get a seat on General Growth's board. WSJ reports that General Growth has two sets of bondholders that it is hoping will refrain from demanding payment for their bonds this year: -- holders of $595 million in bonds due this month and in April, and -- holders of almost $1.7 billion in bonds due in 2012 and 2013. General Growth, according to WSJ, had wanted to get 90% of the first group and 75% of the second group to agree to its consent solicitation by Monday, and could extend its deadline if the effort falls short. WSJ says that General Growth didn't yet have results to report after Monday. The postponed deadline might be moot now that some of the bonds are past due, according to WSJ. WSJ relates that the Company has $1.2 billion of debt that is past due and another $4.1 billion that banks could call due if they choose due to cross-default provisions. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. * * * As reported by the Troubled Company Reporter on March 11, 2009, Fitch Ratings downgraded the IDR and outstanding debt ratings of General Growth Properties (GGP) to 'RD' from 'C'. Fitch also removed GGP from Rating Watch Negative. GENERAL GROWTH: Lenders Extend Forbearance Until Year's End ----------------------------------------------------------- General Growth Properties, Inc., on Monday said the administrative agent under the company's 2006 Senior Credit Agreement received consents from the requisite lenders thereunder to waive certain identified events of default under the 2006 Senior Credit Agreement and to forbear from exercising certain of the lenders' default related rights and remedies with respect to such identified events of default until December 31, 2009 -- unless terminated earlier in accordance with the terms of such forbearance agreement -- subject to certain conditions, including final documentation. General Growth's subsidiary, The Rouse Company LP, has extended the expiration date for its consent solicitation to 5:00 p.m., New York City time, on March 20, 2009. In the solicitation, TRCLP is seeking consents from the holders of TRCLP's unsecured notes -- five series with an aggregate outstanding principal amount of approximately $2.25 billion at December 31, 2008 -- to forbear from exercising remedies with respect to various payment and other defaults under the TRCLP Notes through December 31, 2009. The company also noted that it has been informed by the representatives of an ad hoc committee of holders of TRCLP Notes, the members of which hold in the aggregate approximately 41% of TRCLP Notes, that all of the members of the ad hoc committee have committed to consent to the forbearance. As of 5:00 p.m. on March 16, 2009, consents had been validly delivered (and not validly revoked) with respect to these amounts of TRCLP Notes: 3.625% Notes due 2009 $163,897,000 (41.5%) 8% Notes due 2009 $117,591,000 (58.8%) 7.20% Notes due 2012 $329,869,000 (82.5%) 5.375% Notes due 2013 $310,419,000 (69.0%) 6-3/4% Notes due 2013 $593,272,000 (75.4%) The minimum acceptance levels for each series of the TRCLP Notes are: 90% of the 3.625% Notes due 2009 and the 8% Notes due 2009; 75% of the 7.20% Notes due 2012, the 5.375% Notes due 2013 and the 6-3/4% Notes due 2013. Holders of TRCLP Notes who have previously validly delivered consents will continue to have the right to revoke their consents through the extended expiration date. Effectiveness of the forbearance under the 2006 Senior Credit Agreement will be conditioned on and subject to, among other things, the successful completion of the consent solicitation and effectiveness of the forbearance agreement relating to the TRCLP Notes. "We are pleased that we have been able to obtain consents from the requisite lenders under our 2006 Senior Credit Agreement and with the positive reaction to the TRCLP bond consent solicitation," said Adam Metz, chief executive officer. "Given this support, we feel it is appropriate to extend the expiration date for the consent solicitation in order to give bondholders more time to receive and review the consent solicitation materials and to consider this request." As stated in the company's Annual Report on Form 10-K for the year ended December 31, 2008, as of December 31, 2008, GGP had $1.18 billion in past due debt and additional $4.09 billion of debt that could be accelerated by its lenders. This amount does not include the TRCLP notes or an additional approximately $340 million of project-level debt that has become due in March 2009. This debt, combined with credit market conditions and other risks associated with the Company's financial difficulties, pose a significant threat to the Company's liquidity. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. (NYSE:GGP) -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self-administered and self-managed real estate investment trust. General Growth said in a regulatory filing Sept. 30 that its potential inability to address its 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to its ability to continue as a going concern. * * * As reported by the Troubled Company Reporter on Dec. 11, 2008, Fitch Ratings, has downgraded the Issuer Default Ratings and outstanding debt ratings of General Growth Properties to 'C' from 'B'. GENERAL MOTORS: KPMG Puts Ethical Wall Amid Delphi Engagement ------------------------------------------------------------- KMPG LLP, which provides tax advisory services to Delphi Corp., said it is also providing services to Delphi's former parent, General Motors Corporation. KPMG said it has instituted procedures so that professionals who provide services to the Debtors will not provide services to GM, or share information concerning the Debtors with professionals providing services to GM. Gary A. Silberg, a partner at KMPG LLP, informed the U.S. Bankruptcy Court for the Southern District of New York that his firm has identified two professionals for which the ethical screen may be removed: 1. Brian Hogan has provided services to the Debtors in connection with fresh-start accounting, as well as accounting for impairment and discontinued operations. He has billed the Debtors for 895 hours of service and has last provided services to the Debtors in August 2007. 2. Daniel Gary provided accounting services to the Debtors in connection with the impairment of goodwill and long-lived assets, the tax impact of valuation issues and fresh-start accounting. He has billed the Debtors 966 hours of service and has last provided services to the Debtors in April 2008. Mr. Silberg says the Debtors have not objected to the removal of the ethical screen with respect to Messrs. Gary and Hogan and that KMPG will maintain the ethical screen. Mr. Silberg notes that neither Mr. Gary nor Mr. Hogan is currently providing services to the Debtors or is expected to do so in the future. He states that should Messrs. Gary and Hogan provide services to GM, those services will not involve a matter adverse to the Debtors or involve any confidential information of the Debtors. He assures the Court that KMPG continues to not hold or represent an interest adverse to the Debtors' estates that would impair its ability to objectively perform services to the Debtors and is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. Pursuant to the deadline agreed upon with lenders under its $4.35 billion debtor-in-possession financing facility, and General Motors Corp., Delphi is scheduled to seek approval of disclosure materials in connection with a revised Chapter 11 plan April 23. (Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. GM's common stock was considered the stock market's bellwether for many years, hence the saying "What's good for GM is good for America." * * * 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: Renames Asset Management Arm to Promark Global -------------------------------------------------------------- General Motors Asset Management has changed its brand identity to Promark Global Advisors, Inc., in recognition of its growing client diversification. According to American Bankruptcy Institute, GM dropped its name from the company's asset-management arm in another push to market the asset-management services to other companies. New York-based Promark -- http://www.promarkglobal.com-- manages more than $130 billion of assets, representing more than 30 employee benefit plans, foundations and other institutional clients. Along with its predecessor firms, Promark has been managing investments for employee benefit funds for more than 60 years. The Promark group includes Promark Investment Advisors, Inc., an SEC-registered investment adviser, and Promark Trust Bank, N.A., an OCC-chartered bank. "GM remains our largest client and we expect the company to continue to be a vital part of our business," said Nancy Everett, CEO of Promark Global Advisors. "The experience gained through this relationship enables us to bring a unique perspective and commitment to managing the plan assets of other firms, a fact we are highlighting with the new brand." Promark is focused on managing pension plans using asset and liability management solutions and developing customized investment programs for each client, as well as providing investment management for specific mandates, most notably alternative investments such as real estate and absolute-return strategies. The change is a name change only, and does not relate to any ownership or organizational changes with respect to Promark. Promark Global Advisors Fast Facts Senior Management: Nancy Everett, CEO, Tony Kao, Chief Investment Officer, Michael Klehm, President & COO Employees: 140 employees, of which 50 are investment professionals History: GM-affiliated investment groups began managing affiliated institutional assets during the 1940s. General Motors Investment Management Corporation (GMIMCO), now known as Promark Investment Advisors, Inc., was founded in 1990; General Motors Trust Bank, N.A. (GMTB), now known as Promark Trust Bank, N.A., began operations in 2003 as successor trustee to an affiliated bank and these entities have managed the Promark Funds, a family of bank- maintained collective investment funds, since 1999 . The GM Asset Management (GMAM) name was adopted in 2000. Ownership structure: Wholly-owned subsidiary of General Motors Corporation. 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. GM's common stock was considered the stock market's bellwether for many years, hence the saying "What's good for GM is good for America." * * * 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: Bankr. Lawyer Matthew Feldman to Join Task Force ---------------------------------------------------------------- Linda Sandler and Jeff Green at Bloomberg News report that bankruptcy lawyer Matthew Feldman will join the auto industry team advising the government on the restructuring of General Motors Corp. and Chrysler LLC. According to Bloomberg, Mr. Feldman is a partner at Willkie Farr & Gallagher LLP. Willkie Farr said in a statement that Mr. Feldman will leave the firm by the end of the month to move to Washington. Citing an administration official, Bloomberg states that Mr. Feldman will work on restructuring analysis. Mr. Feldman Bloomberg quoted GM Chief Financial Officer Ray Young as saying, "We're pleased that the task force is staffing up. They aren't just looking at General Motors. They're looking at the total industry. It shows that they're taking this assignment very seriously." Bloomberg relates that the U.S. Treasury Department hired in February law firms Cadwalader, Wickersham & Taft LLP and Sonnenschein, Nath & Rosenthal, and investment bank Rothschild Inc. The New York Times relates that Treasury officials and management experts hired by the Obama administration started going through GM's latest downsizing plan last week to assess whether more government aid could make the company viable, or whether the better choice was a managed bankruptcy. As reported by the Troubled Company Reporter on March 13, 2009, GM said that it wouldn't need the $2 billion government infusion it had requested this month. GM has received about $13.4 billion in financial assistance from the U.S. government and has asked for as much as $16.6 billion more. GM said that it has enough cash to keep operating through the end of March. WSJ notes that GM said that its cost-cutting moves and spending deferrals in January and February successfully held off the need for more U.S. funds in March. 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. GM's common stock was considered the stock market's bellwether for many years, hence the saying "What's good for GM is good for America." Going Concern Doubt As reported by the Troubled Company Reporter on March 6, 2009, Deloitte & Touche LLP, which General Motors Corp.'s Audit Committee retained to audit the company's consolidated financial statements and the effectiveness of internal controls, as of and for the year ended December 31, 2008, said that there is substantial doubt about the company's ability to continue as a going concern. Deloitte said the company's recurring losses from operations, stockholders' deficit and failure to generate sufficient cash flow to meet the company's obligations and sustain the its operations raise substantial doubt about the its ability to continue as a going concern. For the year ended December 31, 2008, GM posted a net loss of $30,860,000,000. As of December 31, 2008, GM reported $91,047,000,000 in total assets, $176,387,000,000 in total liabilities, and $86,154,000,000 in stockholders' deficit. * * * 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. GENTA INC: Going Concern Doubt Raised; FDA Rejects Genasense ------------------------------------------------------------ Genta Incorporated on March 6, 2009, said the Food and Drug Administration's Center for Drug Evaluation and Research has decided that available data are not adequate to support approval of the company's Genasense(R) (oblimersen sodium) Injection for treatment of patients with relapsed or refractory chronic lymphocytic leukemia. In a decision issued in response to an appeal filed by Genta in December 2008, CDER concluded that new information submitted by the Company in its amended New Drug Application was insufficient, and the Agency has recommended conducting a confirmatory clinical trial. The decision is a blow for Genta, which has been banking on the approval of the drug to reverse its fortunes. In its annual report for the fiscal year ended December 31, 2008, Genta said it expects to continue losing money at least until its lead product, Genasense(R), receives approval from the FDA or EMEA for commercial sale in one or more indications. Achievement of profitability is currently dependent on the timing of Genasense regulatory approvals, the company said. Genta said in its annual report the company has had recurring annual operating losses since its inception and expects to incur substantial operating losses due to continued requirements for ongoing and planned research and development activities, pre- clinical and clinical testing, manufacturing activities, regulatory activities and establishment of a sales and marketing organization. From inception to December 31, 2008, Genta has incurred a cumulative net deficit of $944.1 million. Genta said its recurring losses from operations and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. Amper, Politziner & Mattia, LLP in Edison, New Jersey, Genta's independent registered public accounting firm, issued the going concern doubt citing recurring losses from operations and negative cash flows from operations. At December 31, 2008, Genta had $12.6 million in total assets, $11.2 million in current liabilities and $6.33 million in total long-term liabilities, resulting in $4.8 million in stockholders' deficit. The company had $505.8 million in net loss in 2008. Genta said substantial doubt about its ability to continue as a going concern may create negative reactions to the price of the common shares of its stock and it may have a more difficult time obtaining financing. A full-text copy of the company's earnings report for 2008 is available at no charge at: http://ResearchArchives.com/t/s?3a5c Genta to Sell Ganite Product Genta said it intend to pursue a 505(b)(2) strategy to establish bioequivalence to its marketed product, Ganite(R), for the initial regulatory approval of G4544. However, it believes this drug may also be useful for treatment of other diseases associated with accelerated bone loss, such as bone metastases, Paget's disease and osteoporosis. While it has no current plans to begin clinical development in the area of infectious disease, Genta intends to support research conducted by certain academic institutions by providing clinical supplies of its gallium-containing drugs. Genta said it intends to seek a buyer for Ganite, its sole marketed product. Genta said its financial constraints have prevented it from investing in adequate commercial support for Ganite, and the intellectual property that provided Genta with an exclusive position in the United States has now expired. About Genta Based in Berkeley Heights, New Jersey, Genta Incorporated is a biopharmaceutical company engaged in pharmaceutical (drug) research and development, its sole reportable segment. The company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. G.I. JOE'S: Files Application to Employ Proskauer Rose as Counsel ----------------------------------------------------------------- G.I. Joe's Holding Corporation and G.I. Joe's Inc. ask the United States Bankruptcy Court for the District of Delaware for authority to employ Proskauer Rose LLP as their counsel. The firm will: a) advise the Debtors of their powers and duties as debtors-in- possession; b) advise the Debtors regarding matters of bankruptcy law; c) represent the Debtors in proceedings and hearings in the Court; d) prepare on behalf of the Debtors any necessary motions, applications, orders and other legal papers; e) provide assistance, advice and representation concerning any potential sale of the Debtors as a going concern or the sale of substantially all or a significant portion of the Debtors' assets; f) provide assistance, advice and representation concerning the continuation of any proposed plan(s) and solicitation of any acceptances or responding to rejections of such plane(s); g) provide assistance, advice and representation concerning any investigation of the assets, liabilities and financial condition of the Debtors that may be required under local, state or federal law; h) prosecute and defend litigation matters and such other matters that might arise during these Chapter II Cases; i) provide counseling and representation with respect to assumption or rejection of executory contracts and leases, sales of assets and other bankruptcy-related matters arising from these cases; j) render advice with respect to general corporate and litigation issues relating to these cases, including, but not limited to, securities, corporate finance, labor, tax and commercial matters; and k) perform such other legal services as may be necessary and appropriate for the efficient and economical administration of these Chapter 11 cases. The firm's compensation rates are: Designation Hourly Rate ----------- ----------- Partner $490-$975 Senior Counsel $350-$725 Associate $180-$650 Paraprofessionals $70-$275 Paul V. Possinger, Esq., member of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About G.I. Joe's Headquartered Wilmington, Delaware, G.I. Joe's Holding Corporation -- http://www.joessports.com-- owns and operates retail stores selling sports apparel, and camping equipment and accessories. G.I Joe has more than 30 locations in Idaho, Oregon, and Washington. The G.I. Joe's Holding Corporation and G.I. Joe's Inc. filed for Chapter 11 protection on March 4, 2009 (Bankr. D. Del. Case Nos.: 09-10713 and 09-10714. The Debtors proposed Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP, as their Delaware counsel and Patrick J. O'Malley, at Development Specialist Inc., chief restructuring officer. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million. GREEN VALLEY: Can Access CapitalOne Cash Collateral for 15 Days --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas has authorized Green Valley Growers, Inc., to access cash collateral in CapitalOne for the next 15 days. The Court will consider the entry of a final order for the use of cash collateral on March 24, 2009, at 1:00 p.m. in Courtroom No. 401 in the Federal Courthouse, 5154 Rusk, Houston, Texas. The Debtor relates that its accounts receivable and inventory are the subject of a first lien held by CapitalOne, its prepetition lender. The Debtor will use Cash Collateral to pay rent, utilities, insurance and other ongoing expenses in the ordinary course of the business. A full-text copy of the interim cash collateral budget is included in the interim order as Exhibit A (page 2) and is available for free at: http://bankrupt.com/misc/greenvalleybudget.pdf CapitalOne will have replacement postpetition liens in inventory. equipment and accounts receivable and the proceeds of the same in the same order and priority. About Green Valley Growers, Inc. Headquartered in Willis, Texas, Green Valley Growers, Inc. -- http://www.greenvalleygrowers.net/-- is a wholesale grower of blooming tropical, palms, perennials, crape myrtles, ferns, grasses, trees, ground covers, topiaries, and ornamental shrubs. The Debtor filed for Chapter 11 protection on March 9, 2009, (Bankr. S.D. Tex. Case No.: 09-31630) Alan D. Bynum, Esq. at Rolston & Bynum represents the Debtor in its restructuring efforts. The Debtor listed total assets of $18,567,174 and total debts of $20,653,605. HARRAH'S ENTERTAINMENT: Investors Buying Debt From Bondholders -------------------------------------------------------------- Ed Bradley at Onlinecasinoadvisory.com reports that Harrah's Entertainment Inc.'s two investors, TPG Incorporated and Apollo Management, are purchasing debt from bondholders. According to Onlinecasinoadvisory.com, TPG and Apollo are ensuring their position in the event that Harrah's Entertainment defaults on payments and file for bankruptcy protection. Onlinecasinoadvisory.com states that TPG and Apollo will still be able to control Harrah's Entertainment if bankruptcy occurs, by buying up existing debt. The report says that the loans being bought would be converted into company equity in a bankruptcy procedure. Onlinecasinoadvisory.com relates that Harrah's Entertainment reported $5.35 billion loss for the fourth quarter 2008. Onlinecasinoadvisory.com states that much of the debt was created in the process of taking Harrah's Entertainment private. According to the report, rapidly declining revenues haven't been enough to meet the obligations. About Harrah's Entertainment Las Vegas, Nevada-based Harrah's Entertainment, Inc. -- http://www.harrahs.com-- operates nearly 40 casinos across the United States, primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker(R). Private equity firms Apollo Global Management and TPG Capital LP acquired Harrah's in January for $31 billion. At Sept. 30, 2008, the company's consolidated condensed balance sheets showed total assets of $37.0 billion, total liabilities of $33.4 billion and stockholders' equity of $3.6 billion. For three months ended Sept. 30, 2008, the company reported net loss of $129.7 million compared with net income of $244.4 million for the same period in the previous year. For nine months ended Sept. 30, 2008, the company posted net loss of $100.9 million compared with net income of $667.2 million for the same period in the previous year. The company's cash and cash equivalents, including funds borrowed during the quarter under its credit facilities, totaled approximately $1.0 billion at Sept. 30, 2008, compared to $654.7 million at Sept. 30, 2007. * * * As reported by the TCR on March 10, 2009, Standard & Poor's Ratings Services lowered its corporate credit rating on Las Vegas- based Harrah's Entertainment Inc. and its wholly owned subsidiary, Harrah's Operating Co. Inc., to 'CC' from 'CCC'. The rating outlook is negative. At the same time, S&P lowered the issue- level rating on each of HOC's outstanding senior secured second- priority and senior unsecured debt issues to 'C', from 'CCC-' and 'CC', respectively. S&P also lowered the issue-level rating on Caesars Entertainment Inc.'s subordinated debt issues to 'C' from 'CC'. In addition, S&P placed the 'B-' issue-level rating for HOC's senior secured first-lien credit facilities on CreditWatch with negative implications. These actions follow Harrah's announcement that it is offering to exchange up to $2.8 billion of new 10% senior secured second- priority notes due 2018 for a portion (or potentially all in some cases) of each of the outstanding senior unsecured and subordinated notes in the company's capital structure. HUMANA INC: Moody's Assigns Ratings on New Shelf Registration ------------------------------------------------------------- Moody's has assigned provisional ratings (senior debt at (P)Baa3) to Humana Inc.'s new shelf registration. This new shelf registration replaces Humana's previously filed shelf registration of March 2006. Humana maintains their shelf for general corporate purposes, including repayment or refinancing of borrowings, working capital, capital expenditures, investments, acquisitions, and the repurchase of its outstanding securities. Moody's has assigned provisional debt ratings to securities that may be issued under Humana's shelf registration: * Humana Inc. -- provisional senior unsecured debt at (P)Baa3; provisional subordinated debt at (P)Ba1; provisional preferred stock at (P)Ba2. The last rating action on Humana was on March 13, 2008, when the outlook was changed to negative from stable as a result of anticipated losses on its Medicare Part D Prescription Drug business. Humana Inc., based in Louisville, Kentucky, is a leading managed care company serving approximately 8.5 million medical members (excluding 3.0 million Medicare Advantage Standalone PDP members) as of December 31, 2008. For full year 2008, the company reported consolidated GAAP revenues of approximately $29 billion with shareholders' equity as of December 31, 2008 of approximately $4.5 billion. INTEGRA HEALTHCARE: Court Converts Case to Chapter 7 Liquidation ---------------------------------------------------------------- The Hon. Robert C. McGuire of the United States Bankruptcy Court for the Eastern District of Texas said that the Chapter 11 cases of Integra Healthcare Holdings Ltd. and its debtor-affiliates is converted to a Chapter 7 liquidation proceedings effective March 19, 2009, unless an objection is presented at that date. The order to convert the Debtors' cases came after the Debtors' counsel Greenberg Traurig LLP made verbal report on the status of the cases since the closing on the sale of substantially all of the Debtors' assets. Rockwall Rehab Hospitals Ltd. purchased the Debtors' assets for $6,780,000, in accordance to the asset purchase agreement dated Feb. 5, 2009. Rockwall Rehab submitted the highest bid for the Debtors' assets during the January 2 auction. On Jan. 19, 2009, Contemporary Healthcare Fund I LP who loaned $6,000,000 to the Debtors asked the Court to convert the Debtors' case to Chapter 7 on ground that the Debtors are suffering substantial and continuing loss, and their financial performance have not improved since November 2008. Contemporary contended that the offer for the Debtors' assets is insufficient to satisfy the Bank of Texas' purported lien on their assets. The bank asserted a first lien against all of the Debtors' assets and that it owed more than $10,000,000, Contemporary Healthcare said. Contemporary Healthcare's conversion request was supported by the Debtors' Official Committee of Unsecured Creditors. The committee said that the cases have become administratively insolvent and that the proposed sale will not benefit the bankruptcy estate. About Integra Hospital Headquartered in Plano, Texas, Integra Hospital Plano, L.L.C. -- http://www.integrahospitalplano.com/-- operated a physical rehabilitation center. Integra Hospital and three affiliates filed for Chapter 11 protection on November 15, 2008 (Bkrtcy, E.D. Tex., Lead Case No. 08-42998). Judge Brenda T. Rhoades handles the case. Carol E. Jendrzey, Esq., and Lindsey Graham, Esq., at Cox Smith Matthews, in San Antonio, Texas, have been tapped as bankruptcy attorneys. The U.S. Trustee for Region 6, appointed creditors to serve on an Official Committee of Unsecured Creditors. William L. Medford, Esq., at Greenberg Traurig LLP, represents the Committee. In their petition, the Debtor estimated assets and debts of $100 million to $500 million. INTERSTATE HOTELS: Bad Lodging Environment Cues S&P's Junk Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit on Arlington, Virginia-based Interstate Hotels & Resorts Inc. to 'CCC+' from 'B'. This rating, along with the issue-level ratings on the company, was removed from CreditWatch, where it was placed with negative implications on November 5, 2008. The rating outlook is negative. At the same time, S&P revised its recovery rating on Interstate's senior secured credit facilities to '4', indicating S&P's expectation of average (30% to 50%) recovery for lenders in the event of a payment default, from '2'. The issue-level rating on the facilities was lowered to 'CCC+' (at the same level as the 'CCC+' corporate credit rating on the company) from 'B+', in accordance with S&P's notching criteria for a recovery rating of '4'. "The corporate credit rating downgrade reflects a worsening lodging environment and the heightened risk around Interstate's near-term refinancing needs related to the company's $200 million credit facility, which matures in March 2010," said Standard & Poor's credit analyst Liz Fairbanks. The company faces this near-term refinancing at a time when credit measures are expected to meaningfully weaken from current levels. In addition, the company must negotiate a waiver and possibly an amendment to cure current covenant violations. Interstate announced that it is in violation of covenants relating to its delisting from the New York Stock Exchange and, consequently, to its receipt of a qualified audit opinion. While S&P is reasonably confident the company will negotiate a waiver relating to these violations, S&P is concerned that it will violate additional covenants, specifically its total leverage and coverage covenants, over the near term. The 'CCC+' rating reflects S&P's expectation that Interstate's EBITDA could decline in the high-20% area in 2009, and that this decline will result in S&P's measure of adjusted debt to EBITDA to increase to about 9.0x. This compares to an adjusted leverage measure of about 7.0x at the end of 2008. (S&P applied 2007 operating lease payments because the company has not yet filed its 10-K.) Given Interstate's high leverage and the worsening lodging environment, S&P is uncertain at this time that the company will successfully negotiate amended terms and an extension to its credit facility. On its earnings call yesterday, the company contemplated that it may be successful in negotiating with lenders for covenant relief and a maturity extension in exchange for reduced revolver capacity, increased pricing, and/or prepayments on the debt with asset sale proceeds. S&P believes that given current credit market conditions and weakness in the lodging environment, the number of potential buyers of hotel properties is limited. Our measure of Interstate's EBITDA does not include termination fees, which were $7 million in 2008, and is adjusted for operating leases and noncash stock compensation. Adjusted EBITDA totaled approximately $37 million in 2008, compared to $32 million in the prior year. The increase is due to full-year EBITDA contributions from the Sheraton Columbia and Westin Atlanta Airport, both acquired in 2007, and due to lower corporate expenses. S&P's measure of EBITDA is lower than the bank's measure, which includes termination fees and allows for some pro forma adjustments, and S&P's measure of debt is higher due to an adjustment for operating leases. Thus, S&P estimates that the bank's measure of leverage for the 12 months ended December 2008 was about 5.50x, versus a covenant maximum of 5.75x. S&P anticipates that the company will remain in compliance with financial maintenance covenants through at least the first half of 2009. JEFFERSON COUNTY: Extends Forbearance with JPMorgan Until June 20 ----------------------------------------------------------------- Martin Z. Braun of Bloomberg reports that Jefferson County, Alabama, voted to extend until June 20 forbearance agreements with JPMorgan Chase & Co. and BayernLB on $105 million of floating-rate general obligation bonds. According to the report, county commissioners voted 4-0, with one abstention to extend the reprieve with the two banks, which agreed to purchase the debt after investors sold the securities. Bloomberg further relates that the county, home to Birmingham, faces insolvency after interest on $3 billion of adjustable-rate debt for its sewer system surged to as high as 10 percent when companies that insured the bonds were stripped of top credit ratings following unrelated losses involving subprime mortgages. County officials next week will vote on a resolution to hire a consultant to advise how much to charge customers for sewer service. Charlotte, North Carolina-based Raftelis Financial Consultants will recommend "appropriate amounts" for monthly sewer service, environmental impact fees and surcharges for companies. The Court scheduled a March 24 hearing on whether to appoint a receiver for the county sewer system. Bloomberg's Martin Z. Baun earlier said a request by the county to postpone the hearing has been approved, the second delay since November, to allow the county to implement the recommendations of court-appointed special masters to resolve the debt crisis. The special masters, according to Bloomberg, said the county should consider raising sewer rates as much as 25% and impose monthly charges on septic-system owners not connected to sewage lines. As reported by the Troubled Company Reporter on September 18, 2008, Syncora Guarantee Inc., a wholly owned subsidiary of Syncora Holdings Ltd., Financial Guaranty Insurance Company, and The Bank of New York Mellon, as Trustee for $3.2 billion of Jefferson County Sewer Revenue Warrants, acting at the direction of the Bond Insurers, filed a suit against Jefferson County Alabama and the County's Commissioners. The Bond Insurers insure approximately $2.8 billion in Jefferson County Sewer Revenue Warrants. The suit, which was filed in the United States District Court for the Northern District of Alabama, includes a request to the Court to appoint an independent and qualified receiver to: manage the Jefferson County Sewer System; consider and implement any appropriate rate modifications and other sources of revenue; ensure compliance with applicable laws; assist in achieving an appropriate financial resolution; and pursue any bona fide claims. Jefferson County's lawyers, according to Reuters, are seeking a "continuance" to delay a decision on whether to appoint a receiver to manage the operation of the county's sewers, according to court documents. Bloomberg News, citing two court appointed special masters, said February 11 that sewer customers may face a 25% percent rate increase as officials seek to renegotiate $3.2 billion debt to avert bankruptcy. According to Bloomberg, Jefferson County faces insolvency after interest on more than $3 billion of adjustable- rate debt for the county's sewer system surged to as high as 10 percent when bond insurers' credit ratings plunged following unrelated losses involving subprime mortgages. Jefferson County has received forbearance agreements from lenders, including JPMorgan Chase, to give officials time to develop a plan. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. The Birmingham firm of Bradley Arant Rose & White, represents Jefferson County. Porter, White & Co. in Birmingham is the county's financial adviser. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion, set by Orange County, California in 1994. * * * As reported by the TCR on Dec. 19, 2008, Standard & Poor's Ratings Services has kept the ratings on Jefferson County, Alabama's series 1997A, 2001A, 2003 B-1-A through series 2003 B-1-E, and series 2003 C-1 through 2003 C-10 sewer system revenue bonds ('C' underlying rating) on CreditWatch negative due to recent draws against the system's cash and surety reserves beginning in September 2008. "Although the system has made two net system revenue payments to the trustee in recent months for debt service, it has depleted its cash reserves and a portion of its surety reserves since September 2008," said Standard & Poor's credit analyst Sussan Corson. The trustee estimates the system currently has $176 million remaining in total combined surety reserves with Financial Guaranty Insurance Co., Syncora Guarantee Inc., and Financial Security Assurance Inc., which can be applied on a prorata basis to any parity debt. KLAMATH FALLS: S&P Cuts Long-Term Rating to 'BB+' From 'BBB' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term rating and underlying rating to 'BB+' from 'BBB' on the Klamath Falls Intercommunity Hospital Authority, Oregon's bonds, issued on behalf of Sky Lakes Medical Center (formerly known as Merle West Medical Center, or MWMC). The outlook is negative. "The lowered rating reflects Sky Lakes' considerable operating losses in the fiscal year ended September 30, 2008, as well as balance sheet erosion from market turbulence," said Standard & Poor's credit analyst Geraldine Poon. "Sky Lakes also suffers from weak cash flow and volume declines. To return to a stable outlook, Sky Lake needs break-even performance for fiscal 2009 and significant improvement in its liquidity metrics." Management notes that its operating losses are largely due to significant volume declines related to local economic troubles. Given the corresponding drop in revenues, management is working on both expense controls and revenue cycle improvements. Sky Lakes, a 75-staffed (176 licensed beds/110 capacity) hospital located at the base of the Cascade Mountains in Klamath Falls, Oregon, services a four-county area in southern Oregon and northern California. Given its location, with the mountains providing a natural geographic barrier and the nearest competitor located roughly 75 miles away, Sky Lakes maintains a very strong business position. The nearest tertiary facility is in Medford, Oregon. LANDAMERICA ASSESSMENT: Court to Consider Assets Sale on March 24 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia has set March 24, 2009, at 10:00 a.m., prevailing Eastern Time to consider LandAmerica Assessment Corporation and its debtor- affiliates' request for authority to sell substantially all of the Debtors assets to Partner Assessment Corporation dba Partner Engineering and Science, Inc. and the related asset purchase agreement. The Debtors' assets for sale include LAC's title and interest in (i) all projects and other work commenced by LAC but not yet completed as of the closing date and all contracts and agreements to which LAC is a party with respect thereto; (ii) all receivables outstanding as of Feb. 28, 2009, or that arise prior to the closing date; and (iii) each of the assets set forth on section 1.1 of the Disclosure Schedule to the APA, in accordance with the terms of the APA, free and clear of all liens and claims against the transferred assets. The total purchase price of the assets is approximately $2,008,175 in cash. The purchase price of the assets also includes a cash deposit of $50,000 paid to LAC on March 6, 2009. A full-text copy of the asset purchase agreement attached to the sale motion as Exhibit A (page 21) and is available for free at: http://bankrupt.com/misc/landamericasaleagreement.pdf The hearing will held at the Spottswood W. Robinson III & Robert Merhidge, Jr., U.S. Courthouse, Fifth Floor, 701 E. Broad Street, Room 5000, Richmond, Virginia. The Court has approved the form and manner of notice of the sale. The sale notice will provide that any party wishing to submit a competing bid should submit such bid on or before the objection deadline for the Motion by delivering a definitive mark-up of the APA showing the changes that the competing bidder proposes. About Partner Assessment Headquartered in El Segundo, California, Partner Assessment Corporation dba Partner Engineering and Science, Inc. -- http://www.partneresi.com/-- provides engineering, environmental site assessment, leed consulting, real estate due diligence, building sciences, construction monitoring, environmental site remediation services. About LandAmerica Assessment Based Glen Allen, Virginia, LandAmerica Assessment Corporation aka National Assessment Corporation provides products and services that facilitate the purchase, sale, transfer, and financing of residential and commercial real estate to a broad-based customer group including: residential and commercial property buyers and sellers, real estate agents and brokers, developers, attorneys, mortgage brokers and lenders, andtitle insurance agents. The Debtor and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. Based on title premium revenue, the Debtor is one of the largest title insurance underwriters in the United States. In addition to their core title insurance business, the Debtor and its affiliates also provides a comprehensive suite of other products and services for residential and commercial real estate transactions, including appraisals, home inspections, warranties, title search, examination, escrow, and closing services. The Debtor and its affiliates filed for Chapter 11 protection on March 6, 2009, (Bankruptcy E.D. Va. Lead Case No.: 09-31453) John H. Maddock III, Esq. at McGuireWoods LLP represents the Debtors in their restructuring efforts. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $500,000 to $1 million. LANDAMERICA ASSESSMENT: Wants Schedules Deadline Moved to April --------------------------------------------------------------- LandAmerica Assessment Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Virginia to extend until April 16, 2009, the deadline by which they must file schedules of assets and liabilities and statement of financial affairs. The Debtors will be unable to complete its Schedules and SOFA by the March 20, 2009, deadline due to: -- their need to focus on the sale of their assets during the first thirty days of its case; -- the substantial burdens already imposed on the Debtor's management by the commencement of these chapter 11 case; -- the limited number of employees available to collect the information required; and -- the competing demands upon the employees. The Debtors relate that the requested extension and waiver will enhance the accuracy of the Debtor's Schedules, and SOFA and avoid the necessity of substantial subsequent amendments. About LandAmerica Assessment Based Glen Allen, Virginia, LandAmerica Assessment Corporation aka National Assessment Corporation provides products and services that facilitate the purchase, sale, transfer, and financing of residential and commercial real estate to a broad-based customer group including: residential and commercial property buyers and sellers, real estate agents and brokers, developers, attorneys, mortgage brokers and lenders, andtitle insurance agents. The Debtor and its affiliates operate through approximately 700 offices and a network of more than 10,000 active agents throughout the world, including Mexico, Canada, the Caribbean, Latin America, Europe, and Asia. Based on title premium revenue, the Debtor is one of the largest title insurance underwriters in the United States. In addition to their core title insurance business, the Debtor and its affiliates also provides a comprehensive suite of other products and services for residential and commercial real estate transactions, including appraisals, home inspections, warranties, title search, examination, escrow, and closing services. The Debtor and its affiliates filed for Chapter 11 protection on March 6, 2009, (Bankruptcy E.D. Va. Lead Case No.: 09-31453) John H. Maddock III, Esq., at McGuireWoods LLP represents the Debtors in their restructuring efforts. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $500,000 to $1 million. LEGENDS GAMING: Plan Confirmation Hearing Scheduled for April 29 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Louisiana has scheduled the confirmation hearing on the Amended Joint Chapter 11 Plan of Reorganization of Louisiana Riverboat Gaming Partnership, et al., for April 29, 2009, at 10:00 a.m. (Central Standard Time). Objections, if any, to the confirmation of the Plan must be filed with the Bankruptcy Court no later than April 17, 2009, at 5:00 p.m. (Central Standard Time). On February 10, 2009, Louisiana Riverboat filed an Amended Joint Chapter 11 Plan of Reorganization and a Joint Disclosure Statement for the Amended Plan. On February 12, 2009, the Court approved the Disclosure Statement as providing adequate information for the holders of various claims and interests to make a decision as to whether to accept or reject the Plan. The Voting Deadline is April 17, 2009, at 5:00 p.m. (Pacific Time Zone). In accordance with the Voting Procedures Order, ballots may be delivered by the Voting Agent by U.S. mail, hand delivery of courier service to: Kurtzman Carson Consultants LLC Attention: Legends Ballot Processing 2335 Alaska Avenue El Segundo, California 90245 Plan Terms Under the Plan, the Debtors will retain ownership and continue to operate the two "DiamondJacks" hotels and casinos in Bossier City, Louisiana, and Vicksburg, Mississippi. The approximately $158.1 million of First Lien Lenders' Claims and the approximately $72.0 million of Second Lien Lenders' Claims will be capitalized and paid in full, with interest, over time. The claims of the General Unsecured Creditors will be paid in two (2) equal payments of principal and accrued interest, calculated at 6% p.a., with the first payment being due on the Plan's Effective Date and the second payment being due one (1) year from the Effective Date. William J. McEnery, chairman and manager of the Debtors, or his designees ("New Investors"), will contribute $15.0 million in additional equity funds to Debtor, Legends Gaming, LLC, in return for common and preferred Interests in Legends, which will be used, along with cash flow from the Debtors' operations, to make Plan payments and to fund the operations of the Debtors. The existing holders of Interests in the Debtors will retain their Interests subject to the new equity Interests being acquired by the New Investors. On the Effective Date, the current officers and managers of the Debtors will continue to hold their respective positions, and continue in their current management positions with the Reorganized Debtors. Classification and Treatment of Claims and Interests Administrative Expense Claims, the total estimate of which is approximately $5.0 million as of the Plan's Effective Date, are unclassified under the Plan. Holders of allowed administrative expense claims will be paid in full. Estimated Allowed Claims ------------------------ Class 1 Priority Tax Claims $0 Class 2 Priority Claims $0 Class 3 Secured Tax Claims $0 Class 4 First Lien Lenders' $158.1 million Secured Claims Class 5 Second Lien Lenders' $72.0 million Secured Claims Class 6 Other Secured Claims $2.6 million Class 7 General Unsecured Claims $3.3 million Class 8 Legends Management $7.3 million Class 9 Interests in Debtor N.A. Subsidiaries Class 10 Preferred Interests in N.A. Legends Parent Class 11 Common Interests in N.A. Legends Parent With the exception of Interests in Debtor Subsidiaries, classified under Class 9, all classes of claims and interests are impaired and entitled to vote under the Plan. "Cramdown" Provisions The Debtors will seek confirmation of the plan pursuant to the "cramdown" proviison under Sec. 1129(b) of the Bankruptcy Code. Under said provision, a plan may still be confirmed notwithstanding the non-acceptance thereof by one or more impaired classes, provided that it does not "discriminate unfairly" and is "fair and equitable" with respect to each non-accepting class, and meets the other legal criteria for confirmation. A full-text copy of the Debtors' Amended Joint Disclosure Statement in support of the Debtors' Amended Joint Plan of Reorganization is available at: http://bankrupt.com/misc/LegendsGaming.AmendedJointDS.pdf About Louisiana Riverboat Headquartered in Bossier City, Louisiana, Louisiana Riverboat Gaming Partnership, which does business as Diamond Jacks Casino & Resort, and its debtor-affiliates -- http://www.islecorp.com/-- operate casinos and hotels. The company and five of its affiliates filed for Chapter 11 protection on March 11, 2008 (Bankr. W.D. La. Lead Case No. 08-10824). William H. Patrick III, Esq., and Tristan E. Manthey, Esq., at Heller, Draper, Hayden Patrick & Horn, represent the Debtors as counsel. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. The U.S. Trustee for Region 5 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. As reported in the Troubled Company Reporter on March 14, 2009, at January 31, 2009, the Debtor's had total assets of $254,193,223, total liabilities of $254,289,418, and stockholders' deficit of $96,195. As reported in the Troubled Company Reporter on May 20, 2008, the Debtors' summary of schedules showed total assets of $250,357,475 and total debts of $220,551,127. LENOX GROUP: Clarion Partners Closes Acquisition of Assets ---------------------------------------------------------- The asset sale of Lenox Group Inc. to a group led by Clarion Capital Partners, LLC, has been completed. The "New Lenox," which includes the Lenox, Dansk, Gorham and Department 56 brands, will now operate outside of Chapter 11 bankruptcy. Marc Utay, the founder and Managing Partner of Clarion Capital Partners, said, "Lenox, Dansk, Gorham and Department 56 have very loyal customer bases. The New Lenox has a clean balance sheet and a significant infusion of new capital to build and strengthen these trusted American brands. Clarion is committed to bringing these iconic American brands to new generations of consumers." As reported by the Troubled Company Reporter, KPS Capital Partners acquired Lenox through a court supervised transaction in February 2009. Gerelyn Terzo at IDDmagazine.com reports that Clarion Capital was a bidder in the process but was outbid by KPS Capital. But according to a Clarion Capital spokesman, Ms. Terzo relates, there was an error in the initial auction and Clarion Capital was successful in nullifying the KPS Capital/Lenox deal and a second auction was scheduled. "On February 11, 2009, the debtors conducted an auction for substantially all of the assets of Lenox Inc. At the conclusion of the auction, the debtors declared that KPS Capital . . . was the successful bidder at the auction. Despite submitting a bid which contemplated a partial credit bid of their secured claim, the debtors ultimately determined that the term loan lenders failed to qualify as bidders at the auction. As a result, the value of their credit bid was not central to the auction process," according to a court filing, Ms. Terzo said. Ms. Terzo relates the Bankruptcy Court reopened the bidding process during a hearing on Feb. 25. Ms. Terzo says Lenox brands Dansk, Gorham and Department 56 -- which Clarion will also aquire -- were not included in the KPS Capital deal. The deal is valued at about $100 million in cash and assumption of some of Lenox's debt, Ms. Terzo relates. A seasoned executive with tremendous credibility in the tabletop industry, former Waterford Wedgwood plc and All-Clad Metalcrafters LLC CEO Peter Cameron assumes the position of Chairman and CEO of New Lenox. Cameron commented, "I look forward to working with the dedicated employees of Lenox as they begin their employment with the New Lenox. Lenox employees have worked hard over the past two years to improve their operations and product development processes. These improvements provide an enormous competitive advantage as we move forward into future development of our great American brands. We are in a position to hit the ground running, and look forward to continuing the Lenox heritage and tradition through this century." Clarion Capital Partners, LLC, is a New-York based private investment firm. The firm invests in consumer products, business services, healthcare services, specialty financial services, retail and niche media and entertainment. Previous and current investments by the professionals of Clarion include All-Clad Metalcrafters (cookware), Hartmann (fine leather and travel goods), Snapple Beverage Company, The Oceanaire, Inc. (fine dining seafood restaurants), Strategic Outsourcing Inc. (business services), Great Northwest Insurance Company, Reliant HealthCare Professionals, Inc. (medical staffing), Crowe Paradis Services Corporation (insurance outsourcing), Imax Corporation (movies) and Cross MediaWorks Inc. (media services). Headquartered in Bristol, Pennsylvania, Lenox Group Inc. -- http://www.department56.com/,http://www.lenox.com/,and http://www.dansk.com/-- including its two main operating subsidiaries, D 56, Inc., and Lenox, Incorporated, is a leading designer, marketer, distributor, wholesaler, manufacturer and retailer of quality tableware, collectibles, and other giftware products under the Lenox, Dansk, Gorham, and Department 56 brand names. These products are sold through department stores, large specialty retailers, general merchandise chains, national chains and clubs, small independent specialty retailers, and other wholesale accounts. The company and six of its affiliates filed for Chapter 11 protetcion on November 23, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-14679). Harvey R. Miller, Esq., and Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, represent the Debtors their restructuring efforts. The Debtors proposed Berenson & Company as financial advisor, Carl Marks Advisory Group LLC as consultants, and The Garden City Group as claims and noticing agent. Debtors have $264,000,000 in total assets and $238,000,000 in total debts as of October 25, 2008. LEHMAN BROTHERS: SunTrust Wants Probe on $3.5M Underwriting Fees ---------------------------------------------------------------- SunTrust Robinson Humphrey Inc., an investment-banking subsidiary of SunTrust Banks Inc., seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to examine, or compel for documents from, Lehman Brothers, Inc., Barclays Capital, Inc. or the trustee appointed in LBI's liquidation proceedings under the Securities Investor Protection Act of 1970. LBI served as lead-underwriter and book-runner for the following offerings on which STRH was also an underwriter and entitled to underwriting fees that were earned at the successful completion of such offerings: a) Chesapeake Energy Corp. (NYSE: "CHK"); fees owed STRH total $1,259,511; settlement checks were due October 15, 2008; b) XTO Energy (NYSE: "XTO"); fees owed STRH total $1,148,545; settlement checks were due October 29, 2008; c) Linn Energy LLC (NASDAQ: "LINE"); fees owed STRH total $63,982; settlement checks were due September 27, 2008; d) PacifiCorp (NYSE: "BRK/A"); fees owed STRH total $70,000; settlement checks were due December 9, 2008; e) CVS Caremark Corp. (NYSE: "CVS"); fees owed STRH total $146,875; settlement checks were due October 15, 2008; f) XTO Energy Inc. (NYSE: XTO); fees owed STRH total $658,120; settlement checks were due November 5, 2008. To date, STRH has not received the fees earned upon the successful completion of the Offerings, relates Darryl S. Laddin, Esq., at Arnall Golden Gregory LLP, in Atlanta, Georgia. Robinson Humphrey seeks (a) an order compelling the Examinees to produce the documents related to the Offerings, specifically any and all documents evidencing the location or disposition of the underwriting fees from the Offerings, and (b) the opportunity to examine the persons within LBI, Barclays and the SIPA Trustee most knowledgeable with regard to the Offerings. Lehman Brothers' Collapse Founded in 1850, Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the fourth largest investment bank in the United States, offering a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. Lehman filed for chapter 11 on Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555) after Barclays PLC and Bank of America Corp. backed out of a deal to acquire the company, and the U.S. Treasury refused to provide financial support that would have eased out a sale. Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several affiliates filed bankruptcy petitions thereafter. On Sept. 19, 2008, Lehman Brothers, Inc., was placed in liquidation pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119). James W. Giddens was appointed trustee for the SIPA liquidation of the business of LBI. Lehman Brothers Finance AG, aka Lehman Brothers Finance SA, filed a petition under Chapter 15 of the U.S. Bankruptcy Code on February 10, 2009. Lehman Brothers Finance, a subsidiary of Lehman Brothers Inc., estimated both its assets and liabilities at more than $1 billion. LBHI's U.S. bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, has been placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to wind down the business of LBI (Europe) on Sept. 15, 2008. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units have combined liabilities of JPY4 trillion -- US$38 billion. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited suspended operations upon the bankruptcy filing of their U.S. counterparts. Asset Sales Barclays Bank Plc has acquired Lehman's North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LOCAL INSIGHT: Growing Risks Cue Moody's Junk Corporate Rating -------------------------------------------------------------- Moody's Investors Service has downgraded Local Insight Regatta Holdings Inc.'s Corporate Family Rating and Probability of Default Rating each to Caa1, from B2, along with ratings for its senior secured bank debt and subordinated debt as outlined below. The downgrades reflect growing financial and business risk related to the severe downturn in market spending on yellow pages advertising and the print-based advertising sector more broadly, and correspondingly higher expected loss considerations which are exacerbated by growing susceptibility to potential non-compliance with tightening financial maintenance covenants over the near-to- intermediate-term rating horizon. Ratings downgraded: * $30 million senior secured revolving credit facility due 2014 -- to B2, LGD3, 30% from Ba3, LGD2, 29% * $335 million senior secured term loan due 2015 -- to B2, LGD3, 30% from Ba3, LGD2, 29% * $210.5 million senior subordinated notes due 2017 -- to Caa3, LGD5, 84% from Caa1, LGD5, 84% * Corporate Family rating -- to Caa1 from B2 * Probability of Default rating -- to Caa1 from B2 The rating outlook is negative. The downgrade of the CFR to Caa1 is prompted by Moody's concern that weakening economic conditions will take a tighter hold on Local Insight Regatta's rural and mid-sized metro served markets, forcing the company's largely small and medium-sized business customers to cut spending on yellow pages advertising substantially below current levels. Although Local Insight Regatta's served markets appear to have thus far been spared the brunt of the recessionary downturn in market spending on print advertising (with recent advertising sales declines of only around 1%), Moody's considers that, over the near-to-intermediate-term, the company will face a decline in advertising sales closer to the 12% reduction reported this week by its larger-sized peers, including R.H. Donnelley (CFR - Caa1) and Idearc (CFR - Caa2), as well as the double-digit declines being suffered by most other companies operating in the broader print-based advertising sector, including newspaper and magazine publishers. The Caa1 incorporates Local Insight Regatta's reliance upon the thin-margined sales and marketing business (which it acquired from Berry Publishing in April 2008), its dependence upon successfully renewing contracts with independently-owned directory publishers upon favorable terms and conditions, and the weak recovery prospects facing debtholders in a distress scenario. Moody's consider that recovery is particularly weak for Local Insight Regatta's sales and marketing business (representing the lion's share of revenues) since the company does not actually own a long- dated exclusive right to publish these directories. In addition, the rating reflects Local Insight Regatta's high leverage (exceeding 5 times total debt-to-LTM adjusted EBITDA at the end of September 2008, according to Moody's calculations), its limited track record operating under current ownership, the integration risk posed by its April 2008 acquisition of the independent line of business of Berry Publishing, the sun-setting profile of the yellow pages publishing sector, and the increasing threat posed by competing directory publishers and web-based local search providers in virtually all of Local Insight Regatta's markets. The negative outlook expresses Moody's concern that weak market spending on yellow pages advertising could materially weaken Local Insight Regatta's cash flow, placing pressure on its covenants over the forward rating horizon. Moody's notes that a large component of Local Insight Regatta's revenues are derived from affiliated companies (primarily resulting from providing sales and marketing services to affiliated yellow pages publishers in Alaska, Cincinnati and Hawaii). The common ownership of these affiliated customers provides Local Insight Regatta with a more dependable pricing environment and greater certainty of contract renewal than its contracts with non-affiliated operators. The last rating action occurred on March 31, 2008, when Moody's downgraded Local Insight Regatta's CFR to B2. Additional research, including the most recent Credit Opinion, can be found on www.moodys.com. Local Insight Regatta's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and the competitive position of the company versus others in its industry, ii) the capital structure and the financial risk of the company, iii) the projected financial and operating performance of the company over the near-to-intermediate term, and iv) management's track record and tolerance of risk. These attributes were compared against other issuers both within and outside of Local Insight Regatta's core industry and Local Insight Regatta's ratings are believed to be comparable to those of other issuers of similar credit risk. Headquartered in Englewood, Colorado, Local Insight Regatta Holdings is a publisher of print and online yellow page directories in the United States. The company reported revenues of approximately $300 million for the nine months ended September 30, 2008. LYONDELL CHEMICAL: Court OKs Protocol for Misc. Asset Sales ----------------------------------------------------------- Lyondell Chemical Co. received approval from the U.S. Bankruptcy Court for the Southern District of New York to sell miscellaneous asset for less than $10 million without making separate motions each time to the judge for approval. Pursuant to the Court approved procedures, Lyondell must give notice of an intended sale to specified creditors. If no one objects, Lyondell may sell the property free of liens. About Lyondell Chemical Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries -- http://www.lyondellbasell.com/-- the world's third largest independent chemical company. Lyondellbasell produces polypropylene and advanced polyolefins products, is a leading supplier of polyethylene, and a global leader in the development and licensing of polypropylene and polyethylene processes and related catalyst sales. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. About a year after completing the merger, LyondellBasell Industries' U.S. operations and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on January 6, 2009, to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities, including Equistar Chemicals, LP, Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt Industries, Inc., filed for Chapter 11. LyondellBasell is not part of the bankruptcy filing. LyondellBasell's non-U.S. operating entities are also not included in the Chapter 11 filing. The Hon. Robert E. Gerber presides over the case. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serves as the Debtors' bankruptcy counsel. Evercore Partners serves as financial advisors, and Alix Partners and its subsidiary AP Services LLC, serves as restructuring advisors. AlixPartners' Kevin M. McShea acts as the Debtors' Chief Restructuring Officer. Clifford Chance LLP serves as restructuring advisors to the European entities. Lyondell Chemical estimated that consolidated assets total US$27.12 billion and debts total US$19.34 billion as of the bankruptcy filing date. Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Lyondell Chemical Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MASONITE INT'L: Files for Bankruptcy to Eliminate $2 Bil. in Debt ----------------------------------------------------------------- Masonite International Inc. and several affiliated companies, including Masonite International Corporation, voluntarily filed to reorganize under the Companies' Creditors Arrangement Act in Canada in the Ontario Superior Court of Justice yesterday. Masonite Corporation and all of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Wilmington, Delaware. Masonite's subsidiaries and affiliates outside of North America have not initiated reorganization cases and are not expected to be adversely impacted by the legal proceedings. The bankruptcy filings were done to implement a restructuring plan the Company entered into with its lenders and bond holders. Masonite International Inc. has received strong support from its bank lender and bondholder constituencies to move forward with its debt restructuring plan. If implemented as proposed, the plan will enable Masonite to reduce its outstanding debt by nearly $2 billion, from $2.2 billion to up to $300 million upon consummation of the plan, and reduce its annual cash interest costs by approximately $145 million. On March 3, 2009, Masonite announced that it had reached an agreement in principle with members of a steering committee representing its senior secured lenders and representatives of an ad-hoc committee representing holders of its senior subordinated notes due 2015 on the terms of a restructuring plan that will create an appropriate capital structure to support the Company's long- term strategic plan and business objectives. Since then, the Company has entered into lock-up agreements supporting the restructuring plan with holders of more than 75 percent in principal amount of its senior secured obligations and more than 80 percent in principal amount of its senior subordinated notes due 2015. The minimum threshold required for effectiveness of these lock-up agreements is 66 percent. "We are very pleased to have received strong support from our lender and bondholder groups for our debt restructuring plan," said Fred Lynch, President and Chief Executive Officer of Masonite. "We are ahead of schedule and intend to proceed quickly and expeditiously to implement the plan, which would reduce Masonite's debt by nearly $2 billion and put our Company in a stronger, financially healthier position for the future. We expect to emerge from this process with an appropriate capital structure to support our long-term business objectives and with increased financial flexibility both to navigate the current industry challenges and to take advantage of future growth opportunities." Masonite plans to continue to operate as usual during the restructuring process. The Company's manufacturing and distribution facilities around the world will continue to serve customers in the normal course. Pre-negotiated cases typically are effectuated in 90 to 120 days. Under the proposed plan, all trade creditors would be "unimpaired," which means that trade suppliers and vendors would be paid in full. To this end, the Company has filed motions seeking authorization from the U.S. and Canadian courts to continue to pay trade creditors under normal terms in the ordinary course of business. As of March 12, 2009, the Company had more than $150 million in cash on hand that will be available to satisfy obligations associated with conducting the Company's business in the ordinary course. Under the terms of the proposed restructuring plan, Masonite's existing Senior Secured Obligations would be converted on a pro rata basis, subject to the election of each existing holder of Senior Secured Obligations, into: (i) a new senior secured term loan of up to $200 million, (ii) a new second-lien PIK Loan of up to $100 million, or (iii) 97.5% of the common equity of a reorganized Masonite subject to dilution for warrants issued to the Senior Subordinated Noteholders and management equity or options. Senior Subordinated Notes would be converted to 2.5% of the common equity in Masonite plus warrants for 17.5% of the common stock of the Company, subject to dilution for management equity or options. The implementation of the plan is subject to court approval and closing conditions. About Masonite International Based in Ontario, Canada, Masonite International Corporation -- http://www.masonite.com/-- (TSE:MHM) is a vertically integrated producer, manufacturing key components of doors, including composite molded and veneer door facings, glass door lites and cut stock. The company provides these products to its customers in more than 70 countries around the world. The company is a wholly owned subsidiary of Masonite International Inc. It offers a range of interior and exterior doors. Masonite Canada operates Masonite International's Canadian subsidiaries, well as certain other non- United States subsidiaries. * * * As reported in the Troubled Company Reporter on Sept. 1, 2008, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Masonite International Inc. (Masonite) and its subsidiaries, Masonite International Corp. and Masonite US Corp., to 'CCC+' from 'B-'. S&P also lowered the senior secured debt rating on Masonite to 'B' from 'B+'. The ratings remain on CreditWatch with negative implications, where they were placed April 18, 2008. As reported by the Troubled Company Reporter, Masonite entered into a further extension, to February 9, 2009, of its forbearance agreements with its bank lenders and with holders of a majority of the senior subordinated notes due 2015 issued by two of the Company's subsidiaries. MASONITE INT'L: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Masonite Corporation One N. Dale Mabry Hwy., Suite 950 Tampa, Florida 33609 Bankruptcy Case No.: 09-10844 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Premdor Finance LLC 09-10845 Eger Properties 09-10846 WMW, Inc. 09-10847 Woodlands Millwork I, Ltd. 09-10848 Masonite Primeboard Inc. 09-10849 Masonite Corporation Foreign Holdings Ltd. 09-10850 Masonite Holding Company Limited 09-10851 Florida Made Door Co. 09-10852 Cutting Edge Tooling, Inc. 09-10853 Pintu Acquisition Company, Inc. 09-10854 Masonite Air LLC 09-10855 Door Installation Specialist Corporation 09-10856 Masonite International Corporation 09-10857 Masonite Holding Corporation 09-10858 Masonite International Inc. 09-10859 Type of Business: The Debtors produce and make key components of doors, including composite molded and veneer door facings, decorative and non-decorative insulated glass door inserts. The Debtors have approximately 8,500 people worldwide, including about 4,450 people in the United States and Canada. See: http://www.masonite.com Chapter 11 Petition Date: March 16, 2009 Court: District of Delaware Judge: Peter J. Walsh Debtors' Counsel: Richard M. Cieri, Esq. Jonathan S. Henes, Esq. Christopher J. Marcus, Esq. Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Tel: (212) 446-4800 Fax: (212) 446-4900 http://www.kirkland.com Local Counsel: Daniel J. DeFranceschi, Esq. Jason M. Madron, Esq. Katisha D. Fortune, Esq. Richards, Layton & Finger, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 http://www.rlf.com Investment Banker and Financial Advisor: Perella Wenberg Partners LLP Restructuring Advisor: Alvarez & Marsal North American LLC Claims Agent: Kurtzman Carson Consultants LLC The Debtors' financial condition as of January 31, 2009: Total Assets: $1,527,495,443 Total Debts: $2,641,590,842 The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Senior Subordinated Unsecured Notes $848,497,983 Unsecured Notes Due 2015 Bank of NewYork, Trustee 101 Barclay Street, 8W Attn: Corporate Trust Division New York, NY 10286 Tel: (212) 815-3191 Fax: (212) 495-2546 Pension Benefit Guaranty Pension Guarantee $3,747,661 Corporation Dept. of Insurance Supervision and Compliance and Compliance 1200 K Street, N.W., Suite 270 Attn: Charles E. F. Millard Washington, DC 20005 Tel: (202) 326-4400 Fax: (202) 326-4112 MJB Wood Group Trade Debt $1,200,604 222 W. Las Colina' Blvd. Attn: Joe Caldwell, CEO 222 W. Las Colinas Blvd. Suite 1300 Irving, TX 75039 Tel: (972) 401-0005 Fax: (972) 409-9949 Duratex North America Trade Debt $945,325 1208 Eastchester Dr., Ste. 202 Attn: Marcelo Carioni High Point, NC 27265 Tel: (336) 885-1500 Fax: (336) 885-1501 PTG Logistics Trade Debt $872,178 11500 Northlake Drive #450 Attn: Cliff Ludwig, President Cincinnati, OH 45249 Tel: (513) 234-7930 Fax: (513) 234-7950 Valspar Corporation Trade Debt $806,086 1101 S. Third Street Attn: William L. Mansfield Chairman and CEO Minneapolis, MN 55415 Tel: (612) 332-7371 Fax: (612) 375-7723 Toyota Tsusho America Inc. Trade Debt $750,423 700 Triport Road Attn: Masanori Yamase President and CEO 700 TriportRoad Georgetown, KY 40324 Tel: (502) 868-3450 Fax: (502) 868-3466 Morrison, James Severance $706,153 7774 Still Lakes Drive Odessa,FL 33556 Tel: (813) 920-2375 MASISA Trade Debt $517,203 Av. Apoquindo 3650, Piso 10 Attn: Enrique Cibie'B., CEO Les Condes Av. Apoquindo 3650 Piso 10, Santiago, Chile Tel: +56-2-707-8800 Fax: +56-2-350-6001 BASP Corporation Trade Debt $514,337 100 Campus Drive Attn: Dr. Kurt Block, Chairman and CEO 100 Campus Drive Florham Park, NJ 07932 Tel: (973) 245-6000 Fax: (973) 245-6714 Bayer Material Science AG Trade Debt $439,796 Communications, Building KI2 Attn: Patrick Thomas, CEO Kaiser-Wilhelm-Allee 51368 Leverkusen Germany Tel: 00800-8476696757 Fax: +49-(0)214/30-96 38810 Bayer MaterialScience LLC Attn: Gregory Babe, CEO 100 Bayer Road Pittsburgh, Pennsylvania Tel: +1 (412) 777-2000 Fax: +1 (412) 777-3899 AKZO Nobel Coatings Trade Debt $431,273 Incorporated Attn: Hans Wijers, CEO Strawinskylaan 2555 1077ZZ Amsterdam Postbus 75730 1070AS Amsterdam Tel: +31205027555 Fax: +31 204676108 AKZO Nobel Coatings Inc Attn: Robert O'Donald 2031 Nelson Miller Parkway Louisville, KY40223 Tel: (502) 254-0470 Fax: (502) 254-0600 AOC, L.L.C Trade Debt $422,499 Marshfield Door Systems Trade Debt $371,920 Dinesol Building Products Ltd. Trade Debt $350,963 Macisaac, Stephen J. Severance $338,252 Del Mar International Trade Debt $338,056 Gardner Trucking Trade Debt $313,793 Transport Couture & Fils Ltee Trade Debt $293,284 Georgia-Pacific Corporation Trade Debt $280,600 The petition was signed by Anthony D. DiLucente, executive vice president and chief financial officer. MGIC INVESTMENT: S&P Junks Counterparty Credit Rating From 'BB+' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its counterparty credit rating on MGIC Investment Corp. to 'CCC' from 'BB+'. S&P also lowered its preferred convertible debt rating on MGIC Investment to 'C' from 'B+'. At the same time, S&P removed these ratings from CreditWatch, where they had been placed with negative implications on December 5, 2008. The outlook is negative. Standard & Poor's also lowered its counterparty credit and financial strength ratings on MGIC Investment's U.S. subsidiaries -- Mortgage Guaranty Insurance Corp. and MGIC Indemnity Co. (collectively referred to as MGIC) -- to 'BB' from 'A-'. The ratings remain on CreditWatch with negative implications. S&P also lowered its counterparty credit and financial strength ratings on MGIC Australia Pty Ltd. to 'BBB-' from 'A-'. S&P removed these ratings from CreditWatch, where they had been placed with negative implications on December 5, 2008. The outlook is negative. The investment-grade ratings on MGIC Australia reflect its good capitalization and the regulatory limitations on its parent's ability to repatriate capital. "These rating actions follow MGIC Investment's recent announcement that it elected to defer interest on its $390 million subordinated convertible debt offering," said Standard & Poor's credit analyst James Brender. "When an issuer elects to exercise its option to defer interest, it is S&P's policy to lower the rating on that obligation to 'C'." "The downgrade of MGIC reflects the company's recent poor operating results and S&P's concern that rising unemployment could delay MGIC's recovery," said Mr. Brender. The group reported net losses of $519 million and $1.7 billion in 2008 and 2007, respectively. The unfavorable results reflect a significant increase in delinquent insured mortgages because of the sharp decline in home prices. MGIC's delinquency rate increased to 12.4% as of December 31, 2008, from 6.1% on December 31, 2006. Under certain stress scenarios for the housing and job markets, S&P believes MGIC could report a net loss in 2011. The ratings on MGIC reflect its recent poor operating results, primarily because of weak underwriting of loans insured in 2006 and 2007, as well as an extremely challenging environment for all mortgage insurers. These negative factors are offset partially by MGIC's significant claims-paying resources and Standard & Poor's belief that the current difficulties will improve the long-term fundamentals of the mortgage insurance industry. MILACRON INC: Receives Interim Approval to Tap $55MM GECC Loan -------------------------------------------------------------- Milacron Inc. received interim authority the day after it submitted its Chapter 11 petition to borrow from the $55 million revolving credit being provided by General Electric Capital Corp. to finance the reorganization, Bloomberg's Bill Rochelle reports. Milacron, the report adds, also was authorized to borrow a portion of a separate $40 million secured loan from Avenue Capital Group and DDJ Capital Management LLC. The U.S. Bankruptcy Court for the Southern District of Ohio will consider final approval of the DIP loan on April 6. About Milacron Inc. Headquartered in Batavia, Ohio, Milacron Inc. supplies plastics- processing technologies and industrial fluids, with major manufacturing facilities in North America, Europe and Asia. First incorporated in 1884, Milacron is also manufactures synthetic water-based industrial fluids used in metalworking applications. The company and six of its affiliates filed for protection on March 10, 2009 (Bankr. S.D. Ohio Lead case No. 09-11235). Kim Martin Lewis, Esq., and Patrick Burns, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. The Debtors proposed Torys LLP as counsel to the CCAA proceeding; Conway Del Genio Gries & Co. LLC as restructuring and financial advisor; Rothschild Inc. as banker and financial advisor; Kurtzman Carson Consultants LLC as claims agent; and RSM Richter Inc. as CCAA monitor. When the Debtors filed for protection from their creditors, they listed assets and debts between $500 million to $1 billion. MODERN CONTINENTAL: Wants Plan Filing Deadline Moved to May 29 -------------------------------------------------------------- Modern Continental Construction Co. asks the U.S. Bankruptcy Court for the District of Massachusetts in Boston to extend until May 29, its exclusive period to file a Chapter 11 plan. This is the Company's second request for an extension. According to Bloomberg's Bill Rochelle, in a case that involves $800 million in liabilities, the Company says it's already made settlements covering $172 million in claims. Modern filed under Chapter 11 in June, three days after being named in a criminal information charging it with making false statements in certifying its work. It was responsible for the portion of a tunnel roof that collapsed, the report relates. Bloomberg further reports that an order giving approval for use of cash recites that Modern owes the lenders $634.6 million on surety credit agreements, not including $261 million in unpaid interest. A prior motion for financing approval says $48.9 million of principal and interest was owing to bank creditors while $19.6 million was owed to noteholders for principal and interest. As reported by the Troubled Company Reporter on Nov. 18, 2008, citing The Boston Globe, U.S. Attorney Michael J. Sullivan brought 49 criminal charges against Modern Continental on June 20, in connection with the collapse of Continental's I-90 connector tunnel on July 10, 2006, that killed Milena Del Valle. The complaint alleges that the firm knew that bolts were coming loose in the ceiling of the tunnel. The report says that Modern Continental, if convicted, could be fined up to $24.5 million, or $500,000 for each of the charges of: -- making false statements, -- submitting phony time and materials slips, and -- wire fraud, or $24.5 million in all. About Modern Continental Modern Continental Construction Co. -- http://www.moderncontinental.com/-- of Cambridge, Massachusetts was established in 1967 when its founders, Lelio "Les" Marino and Kenneth Anderson, earned a small contract for the construction of a sidewalk in the town of Peabody. Since then, the company has blossomed into a multi-faceted organization which is highly respected throughout the construction industry, and is ranked among the top contractors in the country. The company filed for Chapter protection on June 23, 2008 (Bankr. D. Mass. Case No. 08-14558). Harold B. Murphy, Esq., at Hanify & King P.C., represents the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy case. When the debtor filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1 billion. MONACO COACH: Section 341(a) Meeting Scheduled for April 9 ---------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 2, will convene a meeting of creditors of Monaco Coach Corporation on April 9, 2009, at 2:00 p.m., at J. Caleb Boggs Federal Building, 5th Floor, Room 5209 in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Monaco Coach Monaco Coach Corporation (PINKSHEETS: MCOA), a leading national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. Dedicated to quality and service, Monaco Coach is a leader in innovative RVs designed to meet the needs of a broad range of customers with varied interests and offers products that appeal to RVers across generations. Headquartered in Coburg, Oregon, with manufacturing facilities in Oregon and Indiana, the Company offers a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, and R-Vision brand names. The Company operates motorhome-only resorts in California, Florida, Nevada and Michigan. As of September 27, 2008, the Company had $442.1 million in total assets and $208.8 million in total liabilities. Monaco Coach Corporation and its affiliates filed for Chapter 11 on March 5 (Bankr. D. Del., Lead Case No. 09-10750). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, was tapped as counsel. MONACO COACH: Wants Court Nod for Omni Management as Claims Agent ----------------------------------------------------------------- Monaco Coach Corporation and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for permission to employ Omni Management Group LLC as their claims, balloting, noticing and administrative agent. The firm is expected to: a) prepare and serve required notices in this Chapter 11 case, including: notice of the commencement of this Chapter 11 case and the initial meeting of creditors under section 341(a) of the Bankruptcy Code; notice of the claims bar date; notices of objections to claims; notices of any hearings on a disclosure statement; confirmation of a plan of reorganization; and other miscellaneous notices as the Debtor or Court may deem necessary or appropriate for an orderly administration of this Chapter 11 case. b) after the service of a particular notice by Omni, filing with the Clerk's Office a certificate or affidavit of service that includes (i) a copy of the notice served, (ii) an alphabetical list of persons on whom the notice was served, along with corresponding addresses and (iii) the date and manner of service; c) maintaining copies of all proofs of claim and proofs of interest filed in this case; d) maintaining official claims registers in this case by docketing all proofs of claim and proofs of interest in a claims database that includes the following information for each such claim or interest asserted: -- name and address of the claimant or interest holder and any agent thereof, if the proof of claim or proof of interest was filed by an agent; -- the date the proof of claim or proof of interest was received by the firm or the Court; -- claim number assigned to the proof of claim or proof of interest; and -- asserted amount and classification of the claim. e) implement necessary security measures to ensure the completeness and integrity of the claims registers; f) transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; g) maintaining an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and making such list available upon request to the Clerk's Office or any party in interest; h) provide access to the public for examination of the proofs of claim or proofs of interest filed in this case without charge during regular business hours; 1) record all transfers of claims pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure and provide notice of such transfers as required by Bankruptcy Rule 3001(e), if directed to do so by the Court; j) comply with applicable federal, state, municipal and local statues, ordinances, rules, regulations, orders and other requirements in connection with its activities in this case; k) provide temporary employees to process claims, as necessary; 1) promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; m) acting as balloting agent for any plan of reorganization filed by the Debtor; and n) providing such other claims processing, noticing, balloting, and related administrative services as may be requested from time to time by the Debtor. The firm charges for its services at these hourly rates: Designation Hourly Rate ----------- ----------- Senior Consultants $195-$295 Consultants and Project $75-$140 Specialists Programmers $130-$200 Clerical Support $35-$65 Robert L. Berger, member of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Monaco Coach Monaco Coach Corporation (PINKSHEETS: MCOA), a leading national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. Dedicated to quality and service, Monaco Coach is a leader in innovative RVs designed to meet the needs of a broad range of customers with varied interests and offers products that appeal to RVers across generations. Headquartered in Coburg, Oregon, with manufacturing facilities in Oregon and Indiana, the Company offers a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, and R-Vision brand names. The Company operates motorhome-only resorts in California, Florida, Nevada and Michigan. As of September 27, 2008, the Company had $442.1 million in total assets and $208.8 million in total liabilities. Monaco Coach Corporation and its affiliates filed for Chapter 11 on March 5 (Bankr. D. Del., Lead Case No. 09-10750). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, was tapped as counsel. MONACO COACH: Faces Class Action for WARN Act Violations -------------------------------------------------------- Berger & Montague, P.C., has filed a class action lawsuit in the United States Bankruptcy Court for the District of Delaware, Rieke, et al. v. Monaco Coach Corporation, Civil Action No. 09-50444-KJC, on behalf of 2,600 employees who were laid off by Monaco Coach Corporation in December 2008 and thereafter without receiving any notice. Monaco Coach Corporation, the manufacturer of luxury recreational vehicles headquartered in Coburg, Oregon, and traded on the New York Stock Exchange under the symbol MNC until trading was suspended on March 3, 2009, filed for Chapter 11 bankruptcy protection on March 5, 2009. The lawsuit claims that Monaco violated the Worker Adjustment and Retraining Notification Act which provides that employers must give 60 days' notice to employers prior to a plant closing or mass layoff. The lawsuit seeks sixty days wages and benefits in lieu of the notice. The lead plaintiffs, Randy Rieke, Cary Rieke, Gary Betts, Joyce Betts, Michael Dager, Angel Dager, Diana Hensley, and Jenny Ossthun, were all employed by Monaco at its headquarters in Coburg, Oregon. However, the lead plaintiffs filed this lawsuit on behalf of all employees who were part of the layoffs, including those who worked at Monaco's facilities located in Milford, Indiana, Wakarusa, Indiana, and Warsaw, Indiana. "The WARN Act provides for sixty days advance notice of plant closings and mass layoffs to affected employees, and Monaco Coach Corporation has admitted publicly that it did not give such notice," said Shanon Carson of Berger & Montague, P.C., an attorney for the plaintiffs. "We will vigorously seek just compensation for our clients and their co-workers and ask simply that the company comply with the federal laws passed by Congress to protect employees from being abruptly terminated without notice, which substantially impacts their ability to find substitute work and support their families." Mr. Carson also noted that some of the lead plaintiffs and other affected workers are doubly impacted because they are husband and wife. Former employees of Monaco Coach Corporation who were part of these layoffs can obtain additional information by calling Shanon Carson at (215) 875-4656, or by email at scarson@bm.net. The lawsuit is being prosecuted by the Philadelphia law firm of Berger & Montague, P.C. -- http://www.bergermontague.com-- which consists of more than 60 attorneys who represent plaintiffs in complex litigation. The firm's Employment Law Group has extensive experience in representing employees in class and collective action litigation, and the firm has played lead roles in major cases for almost 40 years resulting in recoveries of billions of dollars for its clients and the classes they represent. About Monaco Coach Monaco Coach Corporation (PINKSHEETS: MCOA), a leading national manufacturer of motorized and towable recreational vehicles, is ranked as the number one producer of diesel-powered motorhomes. Dedicated to quality and service, Monaco Coach is a leader in innovative RVs designed to meet the needs of a broad range of customers with varied interests and offers products that appeal to RVers across generations. Headquartered in Coburg, Oregon, with manufacturing facilities in Oregon and Indiana, the Company offers a variety of RVs, from entry-level priced towables to custom-made luxury models under the Monaco, Holiday Rambler, Safari, Beaver, McKenzie, and R-Vision brand names. The Company operates motorhome-only resorts in California, Florida, Nevada and Michigan. As of September 27, 2008, the Company had $442.1 million in total assets and $208.8 million in total liabilities. Monaco Coach Corporation and its affiliates filed for Chapter 11 on March 5 (Bankr. D. Del., Lead Case No. 09-10750). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, was tapped as counsel. MUZAK HOLDINGS: Obtains Final OK to Access $20MM Cash Collateral ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved, on a final basis, Muzak Holdings LLC and its debtor-affiliates' access to more than $20 million cash collateral, the Bankruptcy Law 360 reported. Muzak, according to Bloomberg's Bill Rochelle, received permission to use its lenders' cash collateral until August 15. The Company, the report relates, said at the outset that it doesn't need outside financing. The Court has also authorized the Debtors to grant adequate protection for the secured lenders. On April 15, 2005, Muzak LLC and Musak Holdings LLC are parties to credit agreement with Bear Stearns & Co. Inc. and Bear Stearns Corporate Lending Inc. The obligations of Musak LLC under the senior credit facility are guaranteed by Muzak Holdings and substantially all of Muzak LLC's direct and indirect subsidiaries, except for ElectroSystems Corporation and Muzak heart & Soul Foundation. As of the petition date, approximately $101,325,000 remains outstanding under the senior credit facility. Prior to the petition date, the Debtors engaged in discussions with their prepetition lenders to facilitate the continued use of cash collateral. The Debtors insisted that any payment made to the prepetition lenders in connection with the maturity extension of senior credit facility include an agreement affording the use of cash collateral. The Debtors relate that their business generated positive cash flow from operations and had accumulated $22.4 million in cash as of Feb. 6, 2009. Salient Terms of the Cash Collateral Specified Period: The period of time from the petition date through the date which is the earliest to occur of (a) the expiration of the Remedies Notice period or (b) 11:59 p.m. (Eastern Time) on Aug. 15, 2009. Adequate Protection Liens: The Debtors grant the prepetition agent, to the extent of any diminution in value, additional and replacement continuing, valid, binding, enforceable, non-avoidable and automatically perfected postpetition security interests in and liens on the postpetition collateral, which includes all property of the Debtors existing on the petition date or acquired thereafter, except for the estates' claims and causes of action under Chapter 5 of the Bankruptcy Code, but including any causes of action under section 549 of the Bankruptcy Code. The adequate protection liens are junior only to: (i) the perpetition liens, (ii) permitted encumbrances, which are expressly permitted by the prepetition credit documents and were valid, properly perfected, non-avoidable and senior to the prepetition liens as of the petition date, an (iii) the carve out. Carve Out: The adequate protection liens and the adequate protection superpriority claim are junior to (a) statutory fees payable to the U.S. Trustee and (b) reasonable fees and expenses allowed and payable by order of the Court and any interim compensation procedures order, and payable as set forth in the Budget and up to amounts set forth in a monthly professional fee schedule. The allowed professional fees will be calculated on a rolling, cumulative basis with a 10% variance. The allowed professional fees will be limited after a termination of the use of cash collateral, in an amount up to $1,850,000 for the Debtors' professionals and $490,000 for the professionals of the official committee of unsecured creditors. Adequate Protection Payments: The Debtors will pay the prepetition agent these adequate protection payments: (a) current cash payments of non-default rate interest, plus PIK interest ; (b) current cash payment of the reasonable and documented fees, costs and expenses of primary and local counsel to the prepetition agent, Bingham McCutchen LLP, as counsel to certain of the prepetition lenders, Redd Smith, LLP, as local counsel to certain prepetition lenders and Morgan Joseph & Co., Inc, as financial advisor to certain prepetition lenders; and (c) continued maintenance and insurance on the prepetition collateral that is subject to the adequate protection liens. Indemnity Account: The Debtors will establish an account in the control of the prepaetition agent to secure and reimbursements, indemnification or similar continuing obligations of the Debtors in favor of the prepetition agent or prepetition lenders. The Debtors will deposit $500,000 into the indemnity account upon the first to occur of (a) the expiration of the specified period or (b) the payment in full of the prepetition obligations. The cash collateral order grants the prepetition agent and prepetition lenders a first priority lien on the indemnity account. Challenges to Prepetition Liens: The Committee may use up to $25,000 of its share of the allowed professional fees to investigate the validity, enforceability, perfection, priority or extent of the prepetition liens or any other claims against the prepetition agent of the prepetition lenders within 60 days after the formation of the committee. The agreement contains certain events of default. The Debtors will use the cash collateral to operate their day to day business as pay their vendors for goods and services and fund payroll. About Muzak Holdings LLC Headquartered in Fort Mill, South Carolina, Muzak Holdings LLC -- http://www.muzak.com-- creates a variety of music programming from a catalog of over 2.6 million songs and produces targeted custom in-store and on-hold messaging. Through its national service and support network, Muzak designs and installs professional sound systems, digital signage, drive-thru systems, commercial television and more. The company and 14 affiliates filed for Chapter 11 protection on Feb. 10, 2009 (Bankr. D. Del., Lead Case No. 09-10422). Moelis & Company is serving as financial advisor to the company. Kirkland & Ellis LLP is the Debtor's counsel. Klehr Harrison Harvey Branzburg & Ellers has been tapped as local counsel. In its bankruptcy petition, the company estimated assets and debts of $100 million to $500 million each. N AMERICAN SCIENTIFIC: Receives Notice of Delisting from Nasdaq --------------------------------------------------------------- North American Scientific, Inc., received a notice from The Nasdaq Stock Market dated March 12, 2009 indicating that Nasdaq has determined that the company's securities will be delisted from Nasdaq because the company does not comply with Marketplace Rule 4300 and IM-4300 as a result of the filing by its wholly-owned and operating subsidiary for protection under Chapter 11 of the U.S. Bankruptcy Code. The company does not plan to request an appeal of this determination and trading of the Company's common stock will be suspended at the opening of business on March 23, 2009 and a Form 25-NSE will be filed with the Securities and Exchange Commission which will remove the Company's securities from listing and registration on Nasdaq. The company expects that its common stock will trade on the OTC Bulletin Board or the "Pink Sheets" following the approval of an application by one or more market makers to continue quoting in the Company's common stock. About North American Scientific North American Scientific -- http://www.nasmedical.com/-- operating under the name NAS Medical, is a leader in applying radiation therapy in the fight against cancer. Its innovative products provide physicians with tools for the treatment of various types of cancers. NORTEL NETWORKS: Considering Sales of Business Units ---------------------------------------------------- Nortel Networks Corp. is considering sales of business units rather than reorganizing and emerging from bankruptcy on its own, Bloomberg's Bill Rochelle reported, citing people close to the situation. Nortel Networks has won approval from the U.S. Bankruptcy Court and the Ontario Superior Court to auction part of its data-switch business for at least $17.7 million. According to Serena Saitto and Rochelle Garner of Bloomberg, Ciena Corp. is considering the purchase of a unit from Nortel Networks. Nortel's Metro Ethernet Networks unit may be valued at about $300 million, Bloomberg reported, citing a person familiar with the matter, who asked not to be named because the negotiations are confidential. Lazard Ltd. is handling a possible sale of Nortel's assets, and information about the Company will be made available to prospective buyers next week, according to another person close to the matter, Bloomberg said. According to Financial Times, Nortel Networks Corp.'s CEO said that the Company hopes to emerge from Chapter 11 bankruptcy protection by the middle of the year. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. Nortel Networks Corp., Nortel Networks Inc. and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young has been appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor also sought recognition of the CCAA Proceedings in the Bankruptcy Court under Chapter 15 of the Bankruptcy Code. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138). Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The Chapter 15 case is Bankr. D. Del. Case No. 09-10164. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. Certain of Nortel's European subsidiaries have also made consequential filings for creditor protection. The Nortel Companies related in a press release that Nortel Networks UK Limited and certain subsidiaries of the Nortel group incorporated in the EMEA region have each obtained an administration order from the English High Court of Justice under the Insolvency Act 1986. The applications were made by the EMEA Subsidiaries under the provisions of the European Union's Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings and on the basis that each EMEA Subsidiary's centre of main interests is in England. Under the terms of the orders, representatives of Ernst & Young LLP have been appointed as administrators of each of the EMEA Companies and will continue to manage the EMEA Companies and operate their businesses under the jurisdiction of the English Court and in accordance with the applicable provisions of the Insolvency Act. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of September 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of September 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Bankruptcy Creditors' Service, Inc., publishes Nortel Networks Bankruptcy News. The newsletter tracks the chapter 11 proceeding and ancillary foreign proceedings undertaken by Nortel Networks Corp. and its various affiliates. (http://bankrupt.com/newsstand/ or 215/945-7000) NORTHEAST BIOFUELS: Faces $8-Million Injunction Suit from Lurgi --------------------------------------------------------------- Lurgi Inc. fka Lurgi PSI Inc., Tennessee-based construction services provider, filed a complaint to the United States Bankruptcy Court for the Northern District of New York seeking a preliminary and permanent injunction to enjoin an improper attempt by Northeast Biofuels LP and its debtor-affiliates to draw down $8,111,994 letter of credit issued by BNP Paribas in New York. Lurgi tells the Court that the Debtors' plan to draw down the money is a violation of the engineering, procurement and construction agreement entered between the Debtors and Lurgi on June 29, 2006, because the Debtors failed to follow necessary contractual procedures in the agreement, among other things. Under the agreement, the Debtors' Miller Brewing Company plant at 376 Owens Road in the Town of Volney, Oswego County, will be converted into an ethanol producing facility. The original contract price was about $120 million. The Debtor informed Lurgi that it will draw out the remaining amount after the Court executed a stipulation and order on March 4, 2009, relates Wendy A. Kinsella, Esq., at Harris Beach PLLC, at Syracuse, New York. The order was executed without having any knowledge of the underlying dispute surrounding the Debtors' entitlement to draw the remaining money, Ms. Kinsella says. About Northeast Biofuels Headquartered in Fulton, New York, Northeast Biofuels LP aka Northeast Biofuels LLC -- http://www.northeastbiofuels.com-- Operate as ethanol plants. The company and two of its affiliates filed for Chapter 11 protection on January 14, 2009 (Bankr. N.D. N.Y. Lead Case No. 09-30057). Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C., represents the Debtors in their restructuring efforts. Blank Rome LLP will serve as the Debtors' counsel. The Debtors proposed FTI Consulting Inc. as their financial advisor. When the Debtors filed for protection from their creditors, they listed assets and debt between $100 million to $500 million each. PACIFIC ENERGY: Seeks Omni Management as Claims Agent ----------------------------------------------------- Pacific Energy Resources Ltd. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for authority to employ Omni Management Group LLC as their claims, balloting, noticing and administrative agent. The firm is expected to: a) prepare and serve required notices in this Chapter 11 case, including: notice of the commencement of this Chapter 11 case and the initial meeting of creditors under section 341(a) of the Bankruptcy Code; notice of the claims bar date; notices of objections to claims; notices of any hearings on a disclosure statement; confirmation of a plan of reorganization; and other miscellaneous notices as the Debtor or Court may deem necessary or appropriate for an orderly administration of this Chapter 11 case. b) after the service of a particular notice by Omni, filing with the Clerk's Office a certificate or affidavit of service that includes (i) a copy of the notice served, (ii) an alphabetical list of persons on whom the notice was served, along with corresponding addresses and (iii) the date and manner of service; c) maintaining copies of all proofs of claim and proofs of interest filed in this case; d) maintaining official claims registers in this case by docketing all proofs of claim and proofs of interest in a claims database that includes the following information for each such claim or interest asserted: -- name and address of the claimant or interest holder and any agent thereof, if the proof of claim or proof of interest was filed by an agent; -- the date the proof of claim or proof of interest was received by the firm or the Court; -- claim number assigned to the proof of claim or proof of interest; and -- asserted amount and classification of the claim. e) implement necessary security measures to ensure the completeness and integrity of the claims registers; f) transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; g) maintaining an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and making such list available upon request to the Clerk's Office or any party in interest; h) provide access to the public for examination of the proofs of claim or proofs of interest filed in this case without charge during regular business hours; 1) record all transfers of claims pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure and provide notice of such transfers as required by Bankruptcy Rule 3001(e), if directed to do so by the Court; j) comply with applicable federal, state, municipal and local statues, ordinances, rules, regulations, orders and other requirements in connection with its activities in this case; k) provide temporary employees to process claims, as necessary; 1) promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; m) acting as balloting agent for any plan of reorganization filed by the Debtor; and n) providing such other claims processing, noticing, balloting, and related administrative services as may be requested from time to time by the Debtor. The firm charges for its services at these hourly rates: Designation Hourly Rate ----------- ----------- Senior Consultants $195-$295 Consultants and Project $75-$140 Specialists Programmers $130-$200 Clerical Support $35-$65 Robert L. Berger, member of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Long Beach, California, Pacific Energy Resources Ltd. -- http://www.pacenergy.com-- engage in the acquisition and development of oil and gas properties, primarily in the United States. The company and seven of its affiliates filed for Chapter 11 protection on March 8, 2009 (Bankr. D. Del. Lead Case No. 09- 10785). James E. O'Neill, Esq., Kathleen P. Makowski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Debtors in their restructuring efforts. The Debtors proposed Rutan & Tucker LLP as their corporate counsel; Schully, Roberts, Slattery & Marino as special oil and gas counsel; Devlin Jensen as Canadian counsel; Zolfo Cooper as financial advisor; Lazard Freres & Co. LLC and Albrecht & Associates Inc. as investment bankers; and Omni Management Group LLC as noticing and claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. PATRIOT HOMES: May Use Cash Collateral of Wells Fargo Until April ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Indiana has extended for the fifth consecutive four week period its final order, dated October 16, 2008, granting Patriot Homes, Inc., et al., authority to obtain secured credit, to use cash collateral, and to use advances from Wells Fargo Bank, National Association, beyond its current termination date of March 6, 2009, to and including April 3, 2009, in accordance with a budget. The Debtors told the Court that they have been unable to obtain sufficient unsecured credit allowable under Sec. 503(b)(1) of the Bankruptcy Code as an administrative expense to meet working capital needs. As of the Petition Date, Debtors are obligated to Lender in the aggregate principal amount of $8,673,652, secured by valid, perfected and non-avoidable first priority liens on and security interests in substantially all of the assets and properties of the Debtors. Pursuant to the Court's Fifth Amended Final Order, through the Termination Date, Lender may make postpetition advances to Debtors from the receipts by Lender of proceeds from the sale, collection or other disposition of the Collateral. Debtor will be authorized to use Cash Collateral for the sole purpose of applying receipts and Cash Collateral to pay Lender. As adequate protection for the use of Cash Collateral and as security for the postpetition advances, Lender shall have a superpriority claim and a postpetition prior and paramount security interest in all of the Debtors' (a) existing and future personal property, and (b) real property, subject to a "carve-out" for professional fees. As adequate protection of other creditors that may claim an interest in the Debtors' cash collateral, said other creditors shall be granted replacement liens in Debtors' postpetition assets of the same class of property, and in the same order of priority, any lien said other creditors may have in the prepetition assets of the Debtors. All prepetition collateral shall secure all prepetition and postpetiton debt and obligations of the Debtors to Lender, and all prepetition cash collateral may be applied by Lender, at its sole discretion, to the prepetition or postpetition debts and obligations of Debtors to it. A full-text copy of the Court's Fifth Amended Final Order, dated March 10, 2009, is available at: http://bankrupt.com/misc/PatriotHomes.FifthAmendedFinalOrder.pdf Headquartered in Middlebury, Indiana, Patriot Homes, Inc. -- http://www.patriothomes.com/-- makes modular houses. The Debtor and 7 of its debtor-affiliates filed separate motions for Chapter 11 relief on Sept. 28, 2008 (Bankr. N.D. Ind. Lead Case No. 08-33347). Bell Boyd & Lloyd, LLP, is the Debtors' bankruptcy counsel. Rebecca Hoyt Fisher, Esq., at Laderer & Fischer, represents the Official Committee of Unsecured Creditors as counsel. In its schedules, Patriot Homes disclosed total assets of $1,715,900 and total debts of $17,918,377. PEACH HOLDINGS: Moody's Junks Rating; Loan Matures in April ----------------------------------------------------------- Moody's Investors Service downgraded the corporate family and senior secured bank credit facility ratings of Peach Holdings Inc. to Caa2 from B2. The ratings remain on review for possible downgrade. The rating downgrade reflects the extremely difficult funding environment Peach is encountering and the resulting pressure on the company's business model. Peach has historically relied on securitization to permanently finance its receivables, but the credit market dislocation has affected the firm's ability to fund new volumes at previous levels. Additionally, Peach currently has limited availability under its remaining warehouse lines of credit. Given the environment, Peach's ability to secure alternative funding and to renew its current facilities is also highly uncertain. Moody's noted that difficult funding and operating conditions are also likely to affect Peach's profitability and capital levels, which could further constrain its financial flexibility. Peach is not subject to margin calls on its warehouse facilities. However, Moody's believes that Peach's default potential is elevated as a result of its limited financial resources. Furthermore, were Peach to default, the loss severity for the rated debt could be high. Moody's said that its review for further possible downgrade of Peach's ratings reflects concerns regarding the company's ability to renew its warehouse lines of credit, to restore the long-term viability of its business model, and to improve the asset coverage of its rated bank debt. During its review, Moody's will evaluate the company's progress in renewing its warehouse facility maturing in April 2009 and re- establishing its funding flexibility. Moody's will also examine Peach's long-term business plan in terms of its profit and return dynamics. The last rating action on Peach was on November 19, 2008, when Moody's affirmed the ratings of Peach and changed the rating outlook to negative from stable. Peach Holdings, Inc., is located in Boynton Beach, Florida, and reported assets of approximately $1.15 billion at September 30, 2008 PRIME TRAVEL: State Prohibits Sale of Travel Insurance ------------------------------------------------------ Florida Chief Financial Officer Alex Sink has notified three travel agencies to stop selling insurance on behalf of Prime Travel Protection Services Inc. and any other unlicensed travel insurer, Laura Ruane at The News-Press reports, citing the Department of Financial Services. According to The News-Press, Mr. Sink is investigating Prime Travel for selling insurance without a license. The News-Press relates that Mr. Sink issued legal notices to these companies, charging them of breaching state law by selling Prime Travel insurance: -- Palm Coast Travel; -- Vacation Superstore Network Inc., DBA Best Price Cruises; and -- Legendary Journeys Inc. Legendary Journeys Vice President Al Ferguson, The News-Press states, said that his company hasn't sold Prime Travel Protection policies in six months. The report quoted him as saying, "We were getting complaints regarding their repayment schedule for valid claims." Mr. Ferguson said that state regulators were informed, according to the report. Arvada, Colorado-based Prime Travel Protection, Inc. -- http://www.ptprotection.us/-- was incorporated to offer Travel Protection services to the general public through retail and wholesale travel agencies, travel organizations, tour operators, vacation ownership and property management companies in the United States. Prime Travel initiated a liquidation of services, effective January 26, 2009. PRIMUS TELECOM: Canadian Units Obtain Waiver of Covenant Default ---------------------------------------------------------------- Primus Telecommunications Group, Incorporated, said its indirect wholly-owned Canadian subsidiary, Primus Telecommunications Canada Inc., 3082833 Nova Scotia Company and certain affiliate guarantors on Monday entered into a Waiver and Amendment Agreement to their $35 million Senior Secured Credit Agreement, as amended with Guggenheim Corporate Funding, LLC, as Administrative Agent and Collateral Agent. The Waiver and Amendment became effective as of March 10, 2009. The Lenders under the Waiver and Amendment waived events constituting Events of Default and potential Events of Default under the Credit Agreement, specifically: -- the failure of Primus Canada to maintain certain Hedging Agreements, Lehman Unsecured Hedging Agreements or Unsecured Hedging Agreements reasonably satisfactory to the Administrative Agent to hedge the full amount of its currency rate exposures with respect to the aggregate principal amount outstanding under the Credit Agreement; and -- Primus Telecommunications Group and certain of its affiliates' bankruptcy filing. The Waiver and Amendment permits Primus Canada to incur certain second-lien secured term loans that do not exceed $5 million and guarantees by the Credit Parties. The Credit Agreement, as amended, obligates Primus Canada to prepay loan amounts under the Credit Agreement on the dates and in the amounts set forth: Monthly Principal Payment Date Payment Amount ------------ ------------------ March 31, 2009 $500,000 April 30, 2009 $500,000 May 31, 2009 $500,000 June 30, 2009 $2,250,000 The last day of each calendar $500,000 month from and including July 2009 to and including April 2011 In connection with the Waiver and Amendment, the Applicable Margin under the Credit Agreement was increased to LIBOR +3.750% for the Term A Loans and LIBOR +6.375% for Term B Loans, with a 2.50% LIBOR floor and the Maturity Date was changed to May 21, 2011. Additionally, a principal prepayment of $1,750,000 was due and paid upon execution of the Waiver and Amendment. The Waiver and Amendment established certain additional Events of Default under the Credit Agreement to include: -- the Bankruptcy Court will enter an order denying confirmation of the Debtors' bankruptcy plan or the Proceedings will be converted to a case under Chapter 7 of the Bankruptcy Code; -- the Plan will not have been confirmed by the Bankruptcy Court and become effective on or before August 31, 2010; -- the Plan will be confirmed or become effective without the reinstatement after effectiveness of each Guarantee on terms identical to such Guarantee existing on the date hereof as a valid, unsubordinated obligation of the applicable Guarantor, or the Plan is confirmed without any Guarantor holding, directly or indirectly, substantially all of its current assets and businesses; -- the Bankruptcy Court will enter any order that impairs the enforceability of the Waiver and Amendment or any Loan Document, as reasonably determined by the Administrative Agent; -- any representation or warranty made by a Credit Party in the Agreement will prove to be untrue in any material respect; -- any Credit Party will default in the performance of any obligation under the Agreement that is not cured within 10 business Days following notice from the Administrative Agent; and -- the Guarantee or any other Loan Document executed by a Guarantor will cease to be valid and binding on or enforceable against any Guarantor. A full-text copy of the Waiver and Amendment Agreement, dated March 10, 2009, to Senior Secured Credit Agreement dated as of March 27, 2007, as amended among Primus Telecommunications Canada, Inc., as Borrower, 3082833 Nova Scotia Company, as an Obligor, Guggenheim Corporate Funding, LLC, as administrative agent and collateral agent, and the Lenders from time to time parties thereto, is available at no charge at: http://researcharchives.com/t/s?3a61 Primus Telecom also disclosed that its bankruptcy filing constituted an event of default that triggered repayment obligations under a number of debt instruments of the Debtors. As a result of the event of default, all obligations under the Debt Documents became automatically and immediately due and payable. The Debtors believe that any efforts to enforce the payment obligations under the Debt Documents against the Debtors are stayed as a result of the filing of such Chapter 11 cases in the Bankruptcy Court and will take such action as appropriate to stay any efforts to enforce the payment obligations against non-Debtor guarantors. The Debt Documents and the approximate principal amount of debt currently outstanding thereunder are: 1. $96 million Senior Secured Term Loan Facility of Group due February 2011. 2. $173 million 14-1/4% Senior Secured Notes of IHC due May 2011. 3. $23 million 5% Exchangeable Senior Notes of Holding due June 2010. 4. $186 million 8% Senior Notes of Holding due January 2014. 5. $34 million 3-3/4% Senior Notes of Group due September 2010. 6. $14 million 12-3/4% Senior Notes of Group due October 2009. 7. $9 million Step Up Convertible Subordinated Debentures of Group due August 2009. About Primus Telecom PRIMUS Telecommunications Group, Incorporated (OTCBB: PRTL) is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and Western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. PRIMUS TELECOM: Dec. 31 Balance Sheet Upside-Down by $461.5MM ------------------------------------------------------------- PRIMUS Telecommunications Group, Incorporated, on Monday announced its financial results for the quarter and year ended December 31, 2008. "Fourth quarter 2008 net revenue was $203 million, down $28 million from $231 million in the prior quarter and down $18 million from the year-ago quarter. The sequential quarter to quarter revenue decrease is attributable to the strengthening of the United States dollar against the currencies in our major foreign operations. The $28 million revenue decrease as compared to the prior quarter was comprised of a $35 million decrease from the strengthening of the United States dollar, partially offset by a $4 million increase in retail services revenue, and a $3 million increase in wholesale services revenue," said Thomas R. Kloster, Chief Financial Officer. "We were pleased to report sequential retail revenue growth as a result of stability in our primary operating units and growth in our European operating unit. Additionally, each of the last four quarters' results have had increases in wholesale revenue as we continue to experience strong demand for our wholesale services because of our expanded routing and pricing capabilities." Net loss was $35 million in the fourth quarter 2008 -- including a $34 million loss on foreign currency transactions primarily from intercompany debt agreements -- as compared to a net loss of $33 million in the third quarter 2008 -- including a $23 million loss on foreign currency transactions -- and net income of $2 million in the fourth quarter 2007 -- including a $2 million gain on foreign currency transactions. Full year 2008 net revenue was $896 million, in line with 2007. Full year 2008 net loss was $25 million as compared to net income of $16 million in 2007. As of December 31, 2008, the company had $330.4 million in total assets and $791.9 million in total liabilities, resulting in $461.5 million in stockholders' deficit. PRIMUS ended the fourth quarter 2008 with an unrestricted cash balance of $37 million, down $11 million from $48 million as of the end of the third quarter 2008. Cash uses were comprised of $5 million for capital expenditures, $18 million on debt coupon and other interest payments, $1 million for income tax payments, $1 million for scheduled debt principal reductions, and a $4 million effect from foreign currency exchange rates. These declines were offset by $15 million of Adjusted EBITDA, and $3 million from changes in working capital. Free Cash Flow for the fourth quarter 2008 was negative $1 million -- with $4 million provided by operating activities and $5 million utilized for capital expenditures -- as compared to negative $7 million in the prior quarter and negative $12 million in the year-ago quarter. The principal amount of PRIMUS's long-term debt obligations as of December 31, 2008, was $578 million. The company filed for bankruptcy Monday. Its plan of reorganization is intended to provide relief with respect to the debt maturities that come due in 2009, subject to the uncertainties that come with the plan. About Primus Telecom PRIMUS Telecommunications Group, Incorporated (OTCBB: PRTL) is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and Western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. PRIMUS TELECOM: Files for Bankruptcy to Shed Off 50% in Debt ------------------------------------------------------------ Primus Telecommunications Group, Incorporated, and three of its subsidiaries and affiliates, Primus Telecommunications Holding, Inc., Primus Telecommunications International, Inc., and Primus Telecommunications IHC, Inc., each filed a voluntary petition yesterday in the United States Bankruptcy Court for the District of Delaware to reorganize under chapter 11 of the United States Bankruptcy Code. A creditors' committee has not yet been appointed in these cases by the United States Trustee. The Debtors will continue to operate their businesses and manage their properties as debtors in possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Debtors have received the requisite support of the impaired noteholders entitled to a distribution under the Plan as well as providing for a recovery to subordinated security holders upon the achievement of certain threshold enterprise values of the reorganized holding companies. If consummated, the financial restructuring would materially improve the Holding Companies' liquidity by reducing principal debt obligations by roughly $315 million, or over 50%, reduce interest payments by over 50% and extend certain debt maturities. The lenders under the $100 million senior secured term loan among Holding and Group (as obligors) and certain affiliated subsidiary guarantors, to date, have not consented to the plan although the plan contemplates the reinstatement of the Term Loan debt. The company is in continuing discussions with the senior secured Term Loan lenders for a potential resolution of their claims. In addition, the Debtors have obtained waivers of certain secured lenders under a Canadian Credit Facility with regard to the Reorganization. The Reorganization remains subject to Bankruptcy Court confirmation. Plan Support Agreement On March 16, 2009, the Debtors entered into a Plan Support Agreement with the holders of more than the majority of the outstanding principal amount of IHC's 14-1/4% Senior Secured Notes due May 2011 and of the outstanding principal amount of Holding's 5% Exchangeable Senior Notes due June 2010 and 8% Senior Notes due January 2014. The parties to the Plan Support Agreement have agreed to support a plan of reorganization of the Debtors on the terms and conditions set forth in the Plan Term Sheet and not to support, directly or indirectly, any other plan, in exchange for the Debtors' agreement to implement all steps necessary to solicit the requisite acceptances of the Plan and obtain from the Bankruptcy Court an order confirming the Plan in accordance with the terms of the Plan Support Agreement. The Plan Support Agreement may be terminated under certain circumstances, including in the event that the Plan and related disclosure statement are not approved by certain deadlines, the Plan is not consummated within a certain period of time after its filing with the Bankruptcy Court, a party materially breaches the Plan Support Agreement, a trustee or examiner with enlarged powers relating to the Debtors' business is appointed in the chapter 11 cases, the chapter 11 cases are converted to cases under chapter 7 of the Bankruptcy Code or the Bankruptcy Court grants relief that is inconsistent with the Plan Support Agreement or the Plan Term Sheet. Specifically, the Plan Support Agreement requires that the Debtors obtain approval of a Disclosure Statement within two months from the bankruptcy filing; and obtained confirmation of a bankruptcy plan within three months of the petition date. Under the proposed plan of reorganization contemplated by the Plan Term Sheet: * Reinstate $96 million in outstanding variable rate Term Loan debt due 2011; * Exchange $173.2 million of outstanding 14-1/4 % Senior Secured Notes for a pro rata share of $123.4 million of 14-1/4 % Senior Secured Notes to be issued by Primus Telecommunications IHC, Inc., subject to certain modifications, and for a pro rata share of 50% of the equity of the reorganized company distributed to creditors of the Holding Companies; * Exchange the 8% Senior Notes and 5% Exchangeable Notes for 50% of the equity of the reorganized company distributed to creditors of the Holding Companies and warrants exchangeable into additional equity in the reorganized company at predetermined levels of enterprise value; * Exchange the 12-3/4% Senior Notes, 3-3/4% Convertible Senior Notes and 8% Step Up Convertible Subordinated Debentures for warrants exchangeable into equity in the reorganized company at predetermined levels of enterprise value; * Cancel all of the existing equity interests in the parent Holding Company and issue contingent value rights exchangeable into up to 15% of the fully diluted value of the reorganized company after a predetermined level of enterprise value is reached; * Key employees can attain up to 4% of the equity of the reorganized company through a combination of shares vesting upon attaining performance benchmarks and warrants for up to 6% exchangeable into equity in the reorganized company based upon achieving predetermined levels of enterprise value. * Suppliers to be paid in full in the ordinary course. A full-text copy of the Plan Support Agreement dated March 16, 2009, is available at no charge at: http://ResearchArchives.com/t/s?3a5f A full-text copy of a Supplemental Indenture Exhibit to Exhibit C of the Plan Support Agreement dated March 16, 2009, is available at no charge at: http://researcharchives.com/t/s?3a60 The Consenting Noteholders are represented by Stroock & Stroock & Lavan LLP, and Andrews Kurth LLP. Primus Won't Seek DIP Financing The Holding Companies stated that, because this plan represents a balance sheet restructuring, it did not create a need to seek debtor-in-possession financing due to the fact that all business expenses are handled at the operating level and should not be affected by today's filing. They stated further that the Holding Companies have adequate cash available to support operations during this "fast-track," consensual restructuring. "This is a relatively straight-forward balance sheet restructuring at the Holding Company level. Our operating units are strong and have adequate cash resources to meet the needs of their businesses throughout this process," said K. Paul Singh, Chairman and Chief Executive Officer. "Confirmation of the plan of reorganization will put PRIMUS in a stronger position to weather current global economic conditions and should enable us to take advantage of opportunities that may arise. After emergence, the Holding Companies will have a stronger balance sheet and should have improved free cash flow." "The proposed plan is the result of extensive negotiations with most of our major stakeholders, and we believe that it provides the highest and fairest recovery for all of our stakeholders," said Mr. Singh. None of PRIMUS's operating companies in the United States, Australia, Canada, India, Europe and Brazil are included in the filing. All operating units are expected to continue to manage and to operate their businesses without interruption as a result of the filing. Employees, customers, suppliers and partners of these operating business units will be unaffected during what is anticipated to be an expedited financial restructuring of the Holding Companies. "All operations are expected to continue in the ordinary course without interruption. Employees worldwide will continue to be paid in the normal manner, and benefits will continue without interruption. Vendors of all the foreign and domestic operating entities will continue to be paid in full, in accordance with normal terms and conditions, for all goods furnished and services provided to date and in the future. In summary, the plan of reorganization has been carefully crafted to minimize any impact on our employees, our customers or our vendors," Mr. Singh concluded. "The non-disruptive outcome was also an objective of our consenting noteholders and certain senior lenders who, through their cooperation, have demonstrated faith in our operating businesses and the enterprise value that a restructured PRIMUS is capable of generating." About Primus Telecom PRIMUS Telecommunications Group, Incorporated (OTCBB: PRTL) is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and Western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. PRIMUS TELECOM: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Primus Telecommunications Group, Inc. 7901 Jones Branch Drive, Suite 900 McLean, VA 22102 Bankruptcy Case No.: 09-10867 Debtor-affiliates filing subject to Chapter 11 petitions: Entity Case No. ------ -------- Primus Telecommunications Group, Inc. 09-10867 Primus Telecommunications Holding, Inc. 09-10868 Primus Telecommunications IHC, Inc. 09-10869 Primus Telecommunications International, Inc. 09-10870 Type of Business: The Debtors (OTCBB: PRTL) provide an array of telecommunication services including domestic voice, voice-over-internet protocol, internet, wireless, data and hosting services. Moreover, the Debtors provide services over its global network of owned and leased transmission facilities, including approximately 500 points-of-presence throughout the world, ownership interests in undersea fiber optic cable systems, 18 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia. See: http://www.primustel.com Chapter 11 Petition Date: March 16, 2009 Court: District of Delaware (Delaware) Judge: Kevin Gross Debtors' Counsel: Davis L. Wright, Esq. dlwright@skadden.com Eric M. Davis, Esq. emdavis@skadden.com Skadden Arps Slate Meagher & Flom LLP One Rodney Square P.O. Box 636 Wilmington, DE 19899 Tel: (302) 651-3000 Fax: (302) 651-3001 Financial Adviser and Investment Banker: CRT Investment Banking LLC Estimated Assets: $100 million to $500 million Estimated Debts: $500 million to $1 billion The Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 8.00% Senior Notes notes $186,000,000 US Bank Trust National Association Attn: William Keenan Vice President 100 Wall Street, Suite 1600 New York, NY 10005 Tel: (212) 361-6187 3.75% Senior Conv. Notes notes $34,200,000 US Bank Trust National Association Attn: William Keenan Vice President 100 Wall Street, Suite 1600 New York, NY 10005 Tel: (212) 361-6187 5.00% Exchangeable Notes notes $23,369,000 US Bank Trust National Association Attn: William Keenan Vice President 100 Wall Street, Suite 1600 New York, NY 10005 Tel: (212) 361-6187 12.75% Senior Notes notes $14,186,000 US Bank Trust National Association Attn: William Keenan Vice President 100 Wall Street, Suite 1600 New York, NY 10005 Tel: (212) 361-6187 8% Step-Up Debentures notes $14,186,000 US Bank Trust National Association Attn: William Keenan Vice President 100 Wall Street, Suite 1600 New York, NY 10005 Tel: (212) 361-6187 Deloitte & Touche (GA) professional $140,246 services PricewaterhouseCoopers professional $65,554 services Deloitte Tax professional $24,796 services Deloitte & Touche professional $13,759 services Southpaw Asset Management LP bonds unknown Wilfrid Aubrey LLC bonds unknown Grant Peck bonds unknown Quattro Global Capital, LLC bonds unknown Highbridge Capital bonds unknown Management LLC J.P. Morgan Securities Inc. bonds unknown Remus Holdings, LLC & bonds unknown Affiliates Archer Capital Master Fund bonds unknown L.P. Catalyst Credit Opportunity bonds unknown Master Fund Ltd. Catalyst Fund L.P. bonds unknown Phoenix Investment Adviser bonds unknown The petition was signed by John F. DePodesta, executive vice president and secretary. QIMONDA NA: To Seek $40 Million DIP Financing from Gordon Brothers ------------------------------------------------------------------ Qimonda North America Corp. said it has received four proposals for financing the reorganization case where the business will be either sold plant-by-plant or as a group, Bloomberg's Bill Rochelle said. Qimonda, according to the report, decided that an affiliate of Gordon Brother Group LLC is the most likely candidate to be a so-called DIP lender for the Chapter 11 case. GB Merchant Partners LLC is making the best offer to provide $40 million in DIP financing, Bill Rochelle said. According Bloomberg, Qimonda will be required to pay upfront fees and reimburse the DIP lender's expenses. The fee is the equivalent of a commitment fee, Qimonda says, although no commitment is yet in hand. The amount of the fees is being kept secret, according to the report. About Qimonda NA Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading global memory supplier with a diversified DRAM product portfolio. The company generated net sales of EUR1.79 billion in financial year 2008 and had -- prior to its announcement of a repositioning of its business -- approximately 12,200 employees worldwide, of which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond (Virginia, USA). The company provides DRAM products with a focus on infrastructure and graphics applications, using its power saving technologies and designs. Qimonda is an active innovator and brings high performance, low power consumption and small chip sizes to the market based on its breakthrough Buried Wordline technology. Qimonda AG, filed an application with the local court in Munich, Germany, on January 23, 2009, to open insolvency proceedings. QAG's U.S. units, Qimonda North America Corp. and Qimonda Richmond LLC, filed for Chapter 11 before the Delaware bankruptcy court on February 20 (Bankr. D. Del., Lead Case No. 09-10589). Mark D. Collins, Esq., at Richards Layton & Finger PA, has been tapped as counsel. In its bankruptcy petition, Qimonda estimated assets and debts of more than S$1 billion. QTC MANAGEMENT: Moody's Reviews 'B2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service placed the ratings of QTC Management, Inc, including the B2 Corporate Family Rating, under review for downgrade. The review for downgrade is prompted by Moody's concern about QTC's ability to comply with its financial covenants for the quarter ending March 31, 2009. While QTC has generated good free cash flow and reduced leverage in 2008, Moody's believes the company is nonetheless at risk of breaching its net leverage covenant in the first quarter of 2009 due to a significant step- down in the requirement. The ratings review will primarily focus on the company's ability to comply with or amend the credit agreement or receive capital support from the sponsor, Spectrum Equity Investors. Moody's will likely confirm the ratings once the company has evidenced successful management of the covenant issue. The B2 Corporate Family Rating reflects QTC's small size, significant revenue concentration with the Department of Veterans Affairs, its heavy reliance on funding from government programs and minimal diversity of its overall client base. The ratings are supported by the company's leading market position and long-term relationships with government agencies. The ratings are also supported by QTC's financial metrics and cash flow generation, which are strong for the B2 rating category. Ratings placed under review for downgrade: -- Corporate Family Rating, B2 -- Probability of Default Rating, B3 -- $134 million ($140 million face value) first lien term loan, B2, LGD3, 33% -- $15 million first lien revolver, B2, LGD3, 33% The last rating action was on April 27, 2007, when Moody's affirmed the B2 Corporate Family Rating. QTC, based in Diamond Bar, California, is the leading provider of disability evaluations and medical evidence development services. The company provides disability exams under contracts with the Department of Veterans Affairs and other governmental agencies through its national network of over 12,000 independent physicians. QTC was acquired by Spectrum Equity Investors in 2005. The company reported approximately $135 million in total revenues for the twelve months ended September 30, 2008. RED SHIELD: Wants Plan Filing Period Extended to March 25, 2009 --------------------------------------------------------------- Red Shield Environmental, LLC, and RSE Pulp & Chemical, LLC, ask the U.S. Bankruptcy Court for the District of Maine to extend their exclusive period to file a plan to March 25, 2009, and their exclusive period to solicit a plan to May 22, 2009. This is the third extension of the Debtors' exclusive periods. As last extended, the Debtors' exclusive period to file a plan expired on February 23, 2009. The Debtors tell the Court that they used the first two extensions to engage in productive settlement discussions with respect to a number of disputed claims, including the settlement with Preti, Flaherty, Beliveau & Pachios, LP, which was approved by the Court last February 23, 2009. This third extension will be used to finalize the agreement in principle reached with respect to the Union claim and to obtain the Official Committee of Unsecured Creditors' and the U.S. Trustee Office's consent to the Debtors' proposed plan. Headquartered in Old Town, Maine, Red Shield Environmental, LLC -- http://www.redshieldenv.com/-- provides renewable energy for on- site consumption. The company and its affiliate, RSE Pulp & Chemical, LLC, filed for chapter 11 protection on June 27, 2008 (Bankr. D. Maine Lead Case Nos. 08-10633), blaming increases in material and fuel costs. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, represents the Debtors in their restructuring efforts. Anthony J. Manhart, Esq., Fred W. Bopp III, Esq., and Randy J. Creswell, Esq., at Perkins Thompson Hinckley & Keddy, P.A., represent the Official Committee of Unsecured Creditors as counsel. When the Debtors filed for protection from their reditors, they listed assets of between $50 million and $100 million, and debts of between $1 million and $10 million. REUNION INDUSTRIES: Plan Confirmation Hearing Today in Wilmington ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will hold a hearing today, March 17, to consider confirmation of Reunion Industries Inc.'s Chapter 11 plan. The indenture trustee for the notes issued by Reunion has filed an objection to the Plan. Pursuant to the Plan, existing shareholders will retain ownership and unsecured creditors will be paid 70% of their $3 million in claims in three installments by June 1. Reunion sold its pressure-cylinder manufacturing business for $66.5 million in April 2008 to Everest Kanto Cylinder Ltd. According to Bloomberg's Bill Rochelle, although the senior secured noteholders were paid $39.7 million when the cylinder business was sold, the indenture trustee claims several million more is owing. The indenture trustee, according to the report, says funds aren't being held aside to assure full payment to the noteholders after the Court decides how much more, if anything, is owing. Reunion has another division, Hanna Cylinders, making hydraulic and pneumatic cylinders. 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. RH DONNELLEY: Fitch Downgrades Issuer Default Rating to 'C' ----------------------------------------------------------- Fitch Ratings has taken these rating actions on R.H. Donnelley Corp and subsidiaries: RHD (Holding Company): -- Issuer Default Rating downgraded to 'C' from 'CC'; -- Senior unsecured notes affirmed at 'C/RR6'. R.H. Donnelley, Inc. (RHDI; Operating Company; Subsidiary of RHD): -- IDR downgraded to 'C' from 'CCC'; -- Bank facility downgraded to 'CC/RR3' from 'B-/RR3'; -- Senior unsecured notes affirmed at 'C/RR6'. Dex Media, Inc. (DXI; HoldCo; Subsidiary of RHD): -- IDR downgraded to 'C' from 'CC'; -- Senior unsecured notes affirmed at 'C/RR6'. Dex Media West (DXW; Operating Company; Subsidiary of DXI): -- IDR downgraded to 'C' from 'CCC'; -- Bank facility downgraded to 'B-/RR1' from 'B+/RR1'; -- Senior unsecured downgraded to 'CC'/RR3' from 'B/RR2'; -- Senior subordinated affirmed at 'C/RR6'. Dex Media East (DXE; Operating Company; Subsidiary of DXI): -- IDR downgraded to 'CC' from 'CCC'; -- Bank facility downgraded to 'CCC/RR3' from 'B-/RR3'. IDRs of 'CC' reflect that default of some kind appears probable, while IDRs of 'C' reflect that default is imminent or inevitable. There are no Rating Outlooks assigned to the entities as the potential direction of the credit profiles is implied by the definition of the rating categories. These rating actions affect approximately $9.6 billion in total debt as of Dec. 31, 2008. On March 12, 2009, RHD announced that it had engaged a financial advisor to assist in the evaluation of its capital structure, including various balance sheet restructuring alternatives. While substantive consolidation could be challenging for the HoldCo stakeholders to successfully claim, the ratings for the OpCos reflect the meaningful probability that all entities could default simultaneously (pre-packaged bankruptcy, etc.). Fitch distinguishes RHDI and DXW from DXE as RHDI faces heavy bank loan amortization starting in March 2010 and DXW faces a $395 million senior note maturity in August 2010 while DXE has a more manageable capital structure in the intermediate term. Fitch is cautious regarding RHD's prospects to refinance its debt maturities due to its weakening operating profile, high leverage and uncertainty related to market appetite. These factors contribute to Fitch's view that a default at RHDI and DXW (in addition to RHDC and RHDI) is inevitable. The notching for DXE reflects Fitch's belief that DXE is the healthiest of the OpCos. It has a more manageable maturity schedule, covenant flexibility and only one class of debt (which could make negotiations less complicated than at other OpCos). Although it appears to have the capacity to manage its capital structure organically, the 'CC' IDR reflects the expectation of continued operating deterioration and the risk that it may continue to distribute dividends to the HoldCos. Also, weakness at other entities, chance of a pre-packaged bankruptcy and actions that the HoldCo's may take (e.g. forcing all OpCos into bankruptcy) make full de-linkage unrealistic and make default at DXE probable in Fitch's view. RHD reported that revenues were down 2% for the year; however, ad sales were down 8% for the year and 12% for the fourth quarter. The company has fully drawn from its OpCo bank credit facilities and reported that it has more than $500 million of cash on hand as of February 28th. While not as drastically affected by cyclical and secular issues as newspapers, Fitch expects operating trends for the directories business to continue to weaken materially in 2009 and 2010, with revenue down in the low- to mid-teens and EBITDA down in excess of any revenue decline. SCOTT LAKE: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------ Court documents say that trainer Scott Lake has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of New York. According to court documents, Mr. Lake listed $500,001 to $1 million in assets and $1,000,001 to $10,000,000 in debts as of March 4, 2009. The court documents say that Mr. Lake's largest 20 unsecured creditors have a combined $1,177,479 in claims, including those with a feed company and veterinary groups. The court documents state that there are 50 to 99 creditors. More than $750,000 of the largest secured debts is listed as mortgages with three financial institutions, while more than $300,000 is listed as trade debt, according to court documents. Ken Reynolds, Mr. Lake's lawyer, said that his client's financial troubles were related to an unidentified friend who served as the Debtor's accountant, Ryan Conley at Bloodhorse.com reports. Mr. Lake, according to the report, said that his friend allegedly stole $1.2 million from his operation over a five-year period and failed to file federal tax returns on his behalf. The report quoted Mr. Reynolds as saying, "There is a component to his financial situation that does derive from that. You have lost funds and tax consequences, so that is part of why he is in the situation." The alleged actions of the accountant had nothing to do with Mr. Lake's business dealings as a trainer and that trade debt does not make up the bulk of claims, Bloodhorse.com states, citing Mr. Reynolds. SCOTTISH ANNUITY: S&P Upgrades Counterparty Rating to 'CCC-' ------------------------------------------------------------ Standard & Poor's Ratings Services said that it raised its counterparty credit rating on Scottish Annuity & Life Insurance Co. (Cayman) Ltd. to 'CCC-' from 'SD'. Standard & Poor's also said that it raised its financial strength rating on SALIC to 'CCC-' from 'CC'. The outlook on SALIC is negative. In addition, Standard & Poor's withdrew its 'D' rating on the $100 million of Premium Asset Trust Certificates 2004-4 due March 12, 2009, for which SALIC was the GIC provider, because these securities are no longer outstanding. These rating actions follow the company's statement yesterday that it successfully satisfied its obligations relating to the PATs. Previously, the 'SD' counterparty credit rating, which S&P assigned to SALIC on January 30, 2009, reflected its selective default on and distressed exchange of at least a portion of its PATs issue. "The current ratings on SALIC reflect the incremental improvement in SALIC's credit profile that resulted from the defeasement of its obligations related to the PATs securities," noted Standard & Poor's credit analyst Robert A. Hafner. The negative outlook reflects the risk that the company's assets could decline even further in value, which would increasingly jeopardize its near-term solvency. In addition, the outlook reflects S&P's opinion that SALIC remains at risk of not being able to satisfy its remaining long-term obligations unless the value of its invested assets recovers materially. SEMGROUP LP: Court Approves Energy Partners Settlement ------------------------------------------------------ SemGroup L.P. received approval from the U.S. Bankruptcy Court for the District of Delaware of its settlement with its publicly traded affiliate SemGroup Energy Partners LP. The Company, according to Bloomberg's Bill Rochelle, said that the settlement alleviates the need for selling the remaining businesses and will enable an emergence from Chapter 11 as a public company. According to Bill Rochelle, since SemGroup L.P. was unable to find a buyer for its liquid asphalt business, it will be turned over to SemGroup Energy along with 355,000 barrels of crude. He added that in return, the public company will transfer crude oil storage assets in Kansas to SemGroup LP. In total, SemGroup Energy and an affiliate will have $55 million in unsecured claims against SemGroup LP. Each party will release claims against one another. Tulsa World reported that SemGroup LP CEO Terry Ronan told employees March 9 that the company could emerge from bankruptcy later this year as a publicly traded entity focused on its crude oil storage and distribution unit. SemGroup, according to the report, said it plans to separate its assets and operations now connected to the public subsidiary SGLP and continue the sell-off of assets that began with the SemMaterials asphalt unit. As reported by the TCR on March 2, SemMaterials, L.P. sought approval from the U.S. Bankruptcy Court for the District of Delaware of (i) a February 23 auction and sale of all or substantially all of its assets, or in the alternative, (ii) a winding-down of SemMaterials and the rejection of a terminalling agreement with non-debtor affiliate SemGroup Energy Partners, L.P. Bloomberg reported that lawyers of SemGroup and New York investor John A. Catsimatidis confirmed that Mr. Catsimatidis submitted a bid for the asphalt products business, but failed to arrange financing on time. Mr. Catsimatidis owns five of nine seats on SemGroup's management committee, but has feuded with SemGroup's managers and lawyers over his effort to take charge of the company's restructuring. Relationship with SGLP SemGroup and its affiliates said that prior to their bankruptcy filing, they entered into four complex transactions with SemGroup Energy Partners ("SGLP") whereby the Debtors sold various assets to SGLP and certain of its affiliates. In connection with these asset sales, the parties also entered into several services agreements. These transactions culminated in a situation where operations of the physical assets of the Debtors and SGLP became inextricably intertwined. Since the bankruptcy filing, several disputes have arisen with respect to the asset sales and the services agreements, including, but not limited to, the ownership of various assets, the amounts of prepetition claims owed under the services agreements, and the amounts of potential rejection damages associated with the services agreements. In addition, these issues have hampered the Debtors' efforts to sell their assets, including the SemMaterials assets, which SGLP filed an objection to. In an effort to resolve the disputes between the parties -- including SGLP's objection to sell SemMaterials or, absent a buyer, terminate their terminalling agreement -- the parties engaged in arms' length negotiations and reached the compromise and settlement A copy of the Term Sheet reached by the parties is available for free at: http://bankrupt.com/misc/SemGroup_SGLP_TermSheet.pdf About SemGroup LP SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. Bankruptcy Creditors' Service, Inc., publishes SemGroup Bankruptcy News. The newsletter tracks the chapter 11 proceedings undertaken by SemGroup L.P. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-700) SIX FLAGS: CEO Says One Debt Holder Refuses to Negotiate -------------------------------------------------------- Six Flags Inc. CEO Mark Shapiro said in a conference call yesterday that one of the company's principal noteholders that holds "a significant amount" of Six Flags senior notes has resisted a consensual restructuring, Jeff Clabaugh at The Business Review (Albany) reports. "In fact, the portfolio manager of that principal has refused to even meet with me in person," Mr. Shapiro said, according to Business Review. "The auto companies have an easier time getting a meeting with the United Auto Workers than I do getting a meeting with this particular portfolio fund manager. It makes no sense." Mr. Shapiro did not identify the investor, Business Review says. Bankruptcy Law360 says that debt holder is delaying progress on the company's restructuring plan, increasing the likelihood that Six Flags will seek Chapter 11 protection by August. "I want to ensure all of our partners -- vendors, guests and employees -- that no matter what route we choose, our guests will not see a difference in our product offering this summer," Mr. Shapiro said, according to Business Review. Headquartered in New York City, Six Flags Inc. (NYSE: SIX) -- http://www.sixflags.com/-- is the world's largest regional theme park company with 21 parks across the United States, Mexico and Canada. Founded in 1961, Six Flags has provided world class entertainment for millions of families with cutting edge, record- shattering roller coasters and appointment programming with events like the popular Thursday and Sunday Night Concert Series. Now 47 years strong, Six Flags is recognized as the preeminent thrill innovator while reaching to all demographics -- families, teens, tweens and thrill seekers alike -- with themed attractions based on the Looney Tunes characters, the Justice League of America, skateboarding legend Tony Hawk, The Wiggles and Thomas the Tank Engine. * * * According to the Troubled Company Reporter on March 13, 2009, Six Flags said it does not have sufficient cash to redeem $287.5 million in Preferred Income Equity Redeemable Shares on August 15, 2009. As of December 31, 2008, Six Flags had $3.03 billion in total assets, including $210.3 million in cash and cash equivalents; $2.11 billion in total long-term debt, and $2.36 billion in total debt, excluding $123.1 million in debt at December 31, 2004, which had been called for prepayment; and $443.8 million in stockholders' deficit. Given the current negative conditions in the economy generally and the credit markets in particular, Six Flags said there is substantial uncertainty that it will be able to effect a refinancing of its debt on or prior to maturity or the PIERS prior to their mandatory redemption date on August 15, 2009. "As a result of these factors, there is substantial doubt about our ability to continue as a going concern unless a successful restructuring occurs," Six Flags said. Six Flags Inc., has reportedly hired Paul Hastings Janofsky & Walker as bankruptcy counsel and investment bank Houlihan Lokey Howard & Zukin to negotiate with creditors, including its banks, bondholders, and preferred shareholders. As reported by the Troubled Company Reporter on March 3, 2009, Fitch Ratings has downgraded Six Flags, Inc. and its subsidiaries -- Six Flags (Issuer Default Rating to 'CC' from 'CCC'; and Senior unsecured notes, including the 4.5% convertible notes, to 'C/RR6' from 'CC/RR6'); Six Flags Operations Inc. (IDR to 'CC' from 'CCC'; and Senior unsecured notes to 'C/RR6' from 'CCC-/RR5'); and Six Flags Theme Park Inc. (IDR to 'CC' from 'CCC'; and Secured bank credit facility to 'B-/RR2' from 'B/RR1'). In addition, Fitch affirms Six Flags' preferred stock at 'C/RR6'. SIX FLAGS: Moody's Downgrades Corporate Family Rating to 'Ca' ------------------------------------------------------------- Moody's Investors Service downgraded Six Flags, Inc.'s Corporate Family Rating and Probability of Default Rating each to Ca from Caa2, and lowered associated instrument ratings as detailed below. The downgrades reflect the high probability that Six Flags will restructure its highly leveraged balance sheet as it seeks to address the August 2009 mandatory redemption of its Preferred Income Redeemable Securities. An inability to fund the approximate $310 million PIERS redemption would constitute a default under Six Flags Theme Park Inc.'s credit agreement and an acceleration of the credit agreement would in turn trigger a default on the bonds issued by Six Flags and Six Flags Operations Inc. The company has indicated it is in comprehensive discussions with its lenders regarding its balance sheet and Moody's believes an out-of-court restructuring or bankruptcy filing is likely in the near term. The rating outlook is negative. Moody's has taken these rating actions: Downgrades: Issuer: Six Flags Inc. -- Corporate Family Rating, Downgraded to Ca from Caa2 -- Probability of Default Rating, Downgraded to Ca from Caa2 -- Senior Unsecured Notes, Downgraded to C from Caa3 (LGD 5 - 85% unchanged) -- PEIRS Preferred Stock, Downgraded to C from Ca (LGD6 - 98% unchanged) Issuer: Six Flags Operations Inc. -- Senior Unsecured Notes, Downgraded to Ca from Caa2 (LGD4 - 60% unchanged) Issuer: Six Flags Theme Parks Inc. -- Senior Secured Bank Credit Facility, Downgraded to Caa1 from B2 (LGD2 - 20% unchanged) Six Flags gained traction in 2008 with its strategy to improve earnings, but the company continued to generate negative free cash flow ($28.5 million). In Moody's opinion, weakness in discretionary consumer spending will pressure revenue and cash flow in 2009, which coupled with the highly levered balance sheet (9.1x debt-to-EBITDA on a reported basis excluding the PIERS and approximately 10x for FY 2008 incorporating the PIERS and Moody's standard adjustments) is likely to lead to a family recovery in the 50% range on the debt (excluding the PIERS). Moody's believes applying a 5.0x-to-5.5x distress multiple to projected EBITDA of $220-$230 million for 2009 would support an approximate 50% family recovery range in bankruptcy, with modest upside to that range in an out-of-court restructuring as a bankruptcy would potentially have a more negative effect on the business. The last rating action was on September 26, 2008 when Moody's downgraded Six Flags' CFR and PDR each to Caa2 from Caa1. Six Flags' ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (iii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Six Flags' core industry and believes Six Flags' ratings are comparable to those of other issuers with similar credit risk. Six Flags, Inc., headquartered in New York City, is a regional theme park company that operates 20 parks spread across North America. The park portfolio includes 16 wholly-owned facilities (including parks near New York City, Chicago and Los Angeles) as well as four parks -- Six Flags over Texas, Six Flags over Georgia, White Water (Atlanta), and the Six Flags Great Escape Lodge -- in which Six Flags owns partial interests (currently less than 50%) and three of which it consolidates due to significant operational control and residual economic interest (the exception being the Six Flags Great Escape Lodge). Annual revenue exceeds $1 billion (fully consolidating the partnership parks). SPORTS MUSEUM: Files for Chapter 7 Liquidation ---------------------------------------------- Richard Sandomir at The New York Times reports that The Sports Museum of America has filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Southern District of New York. According to NY Times, Sports Museum cited $55.5 million in assets and $177.1 million in liabilities. NY Times relates that Sports Museum's unsecured creditors include: -- the Pro Football Hall of Fame, which is owed $750,000; -- the Women's Sports Foundation, which is owed $500,000; -- Bob Cousy, which is owed $487,500; and -- the United States Olympic Committee, which is owed $300,000. Sports Museum's founder Philip Schwalb said that he was still hoping for a sale, NY Times states. NY Times quoted Mr. Schwalb as saying, "I'm extremely convinced, based on all the telephone calls I've had, that a good, able, credible buyer will buy it. Sports Museum's assets could be purchased for $5 million or less, the report says, citing Mr. Schwalb. NY Times reports that Sports Museum's assets -- which included display cases, films, computers, and plasma screens -- will be sold to pay creditors, with priority given to holders of $57 million in tax-exempt Liberty Bonds. The Sports Museum of America opened in lower Manhattan in May 2008. It shut down in February 2009. STANFORD GROUP: Court Unfreezes 85% of Brokerage Accounts --------------------------------------------------------- At the behest of Ralph Janvey, the receiver of Stanford Group, Judge David Godbey of the U.S. District Court for the Northern District of Texas in Dallas on March 5 and March 12, issued orders that, taken together, permit the transfer of all Stanford Group Company customer brokerage accounts at Pershing LLC and J.P. Morgan Clearing Corp., except those accounts that: 1. are owned by an individual Defendant or by any person who, based on records available to the Receiver, had any of the following relationships to any Defendant -- Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, R. Allen Stanford, James M. Davis and Laura Pendergest-Holt -- or to any entity owned or controlled by the Defendants: shareholder, member of the board of directors, member of senior management (as determined by the Receiver in his sole discretion) or registered representative or financial advisor who earned commissions or fees based on certificates of deposit or owed loans to Stanford Group Company; 2. are owned for the benefit of the individual Defendants or Stanford companies; 3. have at least $250,000 in assets as of Feb. 27, 2009, and with respect to which the Receiver has determined, by utilizing electronic data reasonably available to him through his investigation, may contain proceeds from the allegedly fraudulent products or activities; 4. secure unpaid balances owed by customers or non-purpose loans made to customers; or 5. are related to accounts in categories 1 through 4 by social security number or tax identification number, when available. As a result of the March 5 and March 12 orders, all Stanford Group Company customer brokerage accounts, other than those in the five categories, are eligible for transfer via Automated Customer Account Transfer Service. Over 85% of the Stanford Group Company customer brokerage accounts, representing approximately 28,600 accounts, are now eligible for transfer. Bloomberg notes that accounts linked to the alleged fraud by R. Allen Stanford and certain Stanford executives or employees are still frozen by the Court. On February 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, issued an order appointing Mr. Janvey as receiver. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. In addition, the Amended Receivership Order restrains and enjoins, without prior approval of the Court, creditors and all other persons from: * any act to obtain possession of the Receivership Estate assets; * any act to create, perfect, or enforce any lien against the property of the Receiver, or the Receivership Estate; * any act to collect, assess, or recover a claim against the Receiver or that would attach to or encumber the Receivership Estate; * the set off of any debt owed by the Receivership Estate or secured by the Receivership Estate assets based on any claim against the Receiver or the Receivership Estate; and * the filing of any case, complaint, petition, or motion under the Bankruptcy Code (including, without limitation, the filing of an involuntary bankruptcy petition under chapter 7 or chapter 11 of the Bankruptcy Code, or a petition for recognition of foreign proceeding under chapter 15 of the Bankruptcy Code). About Stanford Group Stanford Financial Group was a privately held global network of independent, affiliated financial services companies led by Chairman and CEO Sir Allen Stanford. The first Stanford company was founded by his grandfather, Lodis B. Stanford in 1932. Stanford's core businesses are private wealth management and investment banking for institutions and emerging growth companies. Stanford had over $50 billion in assets under management or advisement. The U.S. Securities and Exchange Commission, on February 17, 2009. charged R. Allen Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an US$8 billion Certificate of Deposit program. Mr. Stanford's companies include Stanford International Bank, Stanford Group Company (SGC), and investment adviser Stanford Capital Management. The U.S. District Court for the Northern District of Texas (Dallas) appointed Ralph Janvey as receiver for Stanford Group. SUPERIOR OFFSHORE: CRO Lovett Wants Ex-VP to Disgorge $9 Million ---------------------------------------------------------------- Bankruptcy Law360 reports that Superior Offshore International Inc.'s chief restructuring officer, H. Malcolm Lovett Jr., on Friday filed a fraudulent transfer lawsuit against one of the bankrupt oil company's former executives in connection with millions of dollars in cash and stock paid out prior to the company's Chapter 11 filing. The report says the lawsuit seeks to reclaim $9 million from a former executive vice president. The adversary complaint was filed before the U.S. Bankruptcy Court for the Southern District of Texas. The lawsuit also seeks to eliminate claims made by the former executive vice president, the report says. According to the Troubled Company Reporter on February 16, 2009, Superior Offshore's First Amended Joint Chapter 11 Plan of Liquidation submitted by Superior Offshore International, Inc., and the Official Committee of Unsecured Creditors became effective on February 11, 2009. Holders of Allowed General Unsecured Claims will receive a Pro Rata share of Distributions from Available Cash and any Plan Agent Recovery up to the Allowed Amount of the Claim. Each holder of an Allowed Subordinated Securities Claim will look first to the proceeds of the Debtor's available insurance policies for satisfaction of its Claim to the extent that such Claim is covered by insurance. All equity interests are cancelled. The Troubled Company Reporter reported on January 30, 2009, that Judge Wesley Steen of the U.S. Bankruptcy Court for the Southern District of Texas confirmed on January 28, 2009, the First Amended Plan. The Disclosure Statement was approved on January 9. Headquartered in Houston Texas, Superior Offshore International Inc. (Nasdaq: DEEP) -- http://www.superioroffshore.com/-- provides subsea construction and commercial diving services to the offshore oil and gas industry. The company's construction services include installation, upgrading and decommissioning of pipelines and production infrastructure. The company operates a fleet of seven service vessels and provides remotely operated vehicles and saturation diving systems for deepwater and harsh environment operations. Superior Offshore International, Inc., filed for bankruptcy protection on April 24, 2008 (Bankr. S.D. Tex. Case No. 08-32590). The Debtors listed total assets of $67,587,927 and total liabilities of $54,359,884 in its schedules. David Ronald Jones, Esq., and Joshua Walton Wolfshohl, Esq., at Porter & Hedges LLP, represented the Debtor as counsel. The U.S. Trustee for Region 7 appointed five creditors to serve on an Official Committee of Unsecured Creditors. Douglas S. Draper, Esq., at Heller Draper Hayden Patrick & Horn LLC, and Michael D. Rubenstein, Esq., at Liskow Lewis, represented the Committee as counsel. SYNCORA HOLDINGS: Management Has Going Concern Doubt ---------------------------------------------------- Syncora Holdings Ltd. says its management expects to conclude that as of December 31, 2008, there was substantial doubt about the ability of the Company to continue as a going concern. In connection with the filing of its wholly owned subsidiary Syncora Guarantee's SAP financial statements, management concluded that as of December 31, 2008 there was substantial doubt about the ability of Syncora Guarantee to continue as a going concern. The Company's business is all directly or indirectly conducted through Syncora Guarantee Inc. Effective March 5, 2009, Syncora Guarantee entered into a non-binding letter of intent with certain counterparties contemplating the entry into a master transaction agreement and related transactions. On March 5, 2009, Syncora Guarantee, a wholly-owned insurance subsidiary of Syncora Holdings, entered into the RMBS Transaction Agreement. Pursuant to the Transaction Agreement, a fund will acquire certain residential mortgage backed securities that are insured by Syncora Guarantee. Upon consent of Syncora Guarantee, the Fund will commence a tender offer to acquire the RMBS Securities either in consideration for cash or for a certificate representing the uninsured cash flows of the tendered RMBS Securities and a cash payout. Effective as of March 5, 2009, Syncora Guarantee also entered into a non-binding letter of intent with certain of the Counterparties (whereby the parties agreed to negotiate in good faith to seek to promptly agree on mutually agreeable definitive documentation, in the form of the 2009 MTA and related agreements, which, together with the Transaction Agreement, represent the second phase of the Company's strategic plan. The non-binding terms and conditions in the Letter of Intent provide that Syncora Guarantee and the Counterparties will commute or transfer to an affiliate of the Company, or cause certain of their respective affiliates to commute or transfer, their respective CDS contracts and financial guarantee insurance contracts and in exchange Syncora Guarantee will pay to the Counterparties certain consideration to include (i) approximately $1.2 billion in cash consideration, (ii) common shares of the Company, such shares to represent approximately 40% of the outstanding common shares following the transaction and to be transferred from Syncora Private Trust Company Limited as trustee for the CCRA Purpose Trust, (iii) a $150 million short term surplus note and a $475 million long term Policyholders' Deficit of $2.4 Billion As an entity regulated by the New York Insurance Department, Syncora Guarantee is required to prepare its financial statements in accordance with statutory accounting principles ("SAP") prescribed or permitted by the NYID, which represents a basis of accounting which may differ materially from accounting principles generally accepted in the United States of America. In addition, under New York State law, Syncora Guarantee is required to maintain minimum policyholders' surplus, determined in accordance with SAP, of at least $65 million. On March 5, 2009, Syncora Guarantee filed its 2008 Annual Statement, which included its unaudited SAP financial statements, with the NYID and reported therein a policyholders' deficit, determined in accordance with SAP, of approximately $2.4 billion at December 31, 2008. This failure to maintain positive statutory policyholders' surplus and non-compliance with the statutory minimum policyholders' surplus requirement permits the NYID to intervene in Syncora Guarantee's operations and seek court appointment as rehabilitator or liquidator of Syncora Guarantee. As of Dec. 31, 2008, Syncora Guarantee has $3.52 billion in assets, and debts of $5.92 billion. Syncora Holdings Ltd., formerly Security Capital Assurance Limited, is a holding company whose operating subsidiaries provide financial guarantee insurance, reinsurance, and other credit enhancement products to the public finance and structured finance markets throughout the United States and internationally. The Company's businesses consists of Syncora Guarantee Inc. (formerly XL Capital Assurance Inc.) and its wholly owned subsidiary, XL Capital Assurance (U.K.) Limited (XLCA-UK) and Syncora Guarantee Re Ltd. (formerly XL Financial Assurance Ltd.). The segments of the Company are financial guarantee insurance and financial guarantee reinsurance. The financial guarantee insurance segment offers financial guarantee insurance policies and credit-default swaps (CDS) contracts. The financial guarantee reinsurance segment reinsures financial guarantee policies and CDS contracts issued by other monoline financial guarantee insurance companies. SYNCORA HOLDINGS: Fund Launches Offer for 56 Unit-Insured RMBS -------------------------------------------------------------- The BCP Voyager Master Funds SPC, Ltd., acting on behalf of and for the account of the Distressed Opportunities Master Segregated Portfolio, launched an offer today to acquire 56 different classes of residential mortgage backed securities insured by Syncora Guarantee Inc. with an aggregate notional value of $5.9 billion. The Fund is acquiring the RMBS in consideration for either cash or a combination of cash and a certificate generally representing economics of the RMBS securities without the benefit of the Syncora Guarantee insurance policy. If the offer is completed, it would significantly reduce Syncora Guarantee's statutory loss reserves for RMBS. The Fund has arranged financing of up to $385 million for the offer. The offer will expire, unless extended by the Fund, at 12:00 midnight, Eastern Daylight Time, on April 7, 2009, and may be subject to early settlement. Holders of the RMBS securities that participate in the offer before 5:00 p.m., Eastern Daylight Time, on March 24, 2009 will be eligible to receive a premium for their early participation in the offer. The closing of the offer and related financing are conditioned upon approval of the New York State Department of Insurance, the execution and consummation of a Master Transaction Agreement among Syncora Guarantee and certain financial institutions to restructure and commute certain obligations of Syncora Guarantee (the "2009 MTA"), and the tender of a minimum amount of RMBS, among other conditions. Upon completion of the offer, Syncora Guarantee will receive shares in the Fund and certificates representing the insurance cash flows on the RMBS acquired by the Fund in return for the financing provided by Syncora Guarantee for the offer. Syncora Holdings Ltd., formerly Security Capital Assurance Limited, is a holding company whose operating subsidiaries provide financial guarantee insurance, reinsurance, and other credit enhancement products to the public finance and structured finance markets throughout the United States and internationally. The Company's businesses consists of Syncora Guarantee Inc. (formerly XL Capital Assurance Inc.) and its wholly owned subsidiary, XL Capital Assurance (U.K.) Limited (XLCA-UK) and Syncora Guarantee Re Ltd. (formerly XL Financial Assurance Ltd.). The segments of the Company are financial guarantee insurance and financial guarantee reinsurance. The financial guarantee insurance segment offers financial guarantee insurance policies and credit-default swaps (CDS) contracts. The financial guarantee reinsurance segment reinsures financial guarantee policies and CDS contracts issued by other monoline financial guarantee insurance companies. TD AMERITRADE: Fitch Upgrades Issuer Default Rating from 'BB+' -------------------------------------------------------------- Fitch Ratings has upgraded TD AMERITRADE Holding Corporation's ratings: -- Long-term Issuer Default Rating to 'BBB' from 'BB+'; -- Senior debt to 'BBB' from 'BB+'; The Rating Outlook remains Stable. At Dec. 31, 2008, debt outstanding was $1.43 billion. Fitch's upgrade reflects improved financial leverage metrics from higher pre-tax earnings coverage of interest, lower debt to equity and reduced reliance on transaction based revenues. The successful integration of TD Waterhouse's advisory and branch network and products has reduced the firm's earnings variability increasing fee based revenues. The pending acquisition of discount broker 'thinkorswim' complements AMTD's business model and is expected to benefit debt service coverage metrics and overall profitability. Management has successfully integrated prior acquisitions, adding to overall scale and profitability. AMTD has experienced strong growth in the past several quarters as traditional brokers' financial performance has deteriorated. Fitch believes AMTD will continue to expand its client base. Cash needs are minimal as the core operating platform is strong with sufficient expansion capacity. Debt service ability is consistent with those of other companies at the new rating level. Leverage is considered moderate. Upcoming debt maturities are easily funded by cash flow and parent cash resources. The bulk of AMTD's debt does not mature until 2012. Fitch expects AMTD's earnings to come under pressure during the current fiscal year ending Sept. 30, 2009. However, under Fitch's stress scenarios, AMTD maintains a sufficient margin of safety to result in a Rating Outlook of Stable. Average daily trading volumes are expected to decline along with a decline in margin lending which will lower revenues and compress the net interest margin. Stock market declines will also likely reduce the level of asset management fees based on the value of client assets. TEKOIL & GAS: Files Joint Chapter 11 Plan of Reorganization ----------------------------------------------------------- Tekoil & Gas Corporation and Tekoil and Gas Gulf Coast, LLC, has has filed with the U.S. Bankruptcy Court for the Southern District of Texas a Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code. Plan Summary The Plan, although proposed jointly, constitutes a separate plan for each Debtor. With the exception of General Unsecured Claims, classified under Class 6, which is treated as a single class for voting and distribution purposes, the Plan separately treats claims based on the individual Debtor that is obligated for said claims. Thus, ballots will be tabulated separately for each of the Debtors with respect to each Debtor's Plan. Prior to the Confirmation Date, the Debtors will conduct an auction of all assets of the estate of Gulf Coast except for Causes of Action, accounts receivable, and Cash. On the Plan's Effective Date, all property of the Debtors and their estates and all proceeds of the auction will be paid, delivered and/or transferred to the Creditor Trust and shall constitute Trust Property. The Creditor Trust and the Creditor Trustee will assume liability for and the obligations to make the Distributions required to be made under the Plan and the Creditor Trust Agreement. Holders of claims against the Debtors in Classes 7 and 8 and Interests in Class 9 will not receive any Distribution under Plan. General Unsecured Claims under Class 6 will receive a pro rata share of the Distributions from the Creditor Trust, after all Allowed Administrative Claims, all Allowed Priority Tax Claims, and Allowed Claims in Classes 1 through 5 have been paid or otherwise satisfied in full as provided in the Plan. After the Plan's Effective Date, the Creditor Trustee will sell the Collateral securing the CIBC Secured Claim, subject to the right of CIBC to bid for said Collateral. In case of a sale to any party other that CIBC, the Creditor Trustee shall pay the net proceeds of said sale to CIBC in full satisfaction of its claim. If the sale fails to close on or before July 31, 2009, CIBC shall receive said Collateral from the Creditor Trust on or before August 14, 2009. Secured Tax Claims under Class 2 and Other Secured Claims under Class 5 will receive from the Creditor Trust in full settlement of its Allowed Claim (a) Cash equal to the value of its claim plus interest, (b) the Collateral, or (c) such other treatment as may be agreed upon. Class 5 shall contain separate subclasses for each Other Secured Claim. The holder of the J. Aron Secured Claim under Class 3 will receive (a) Cash equal to the value of its allowed claim, or (b) such other treatment as may be agreed upon. Other Priority Claims under Class 1 will receive full payment in Cash. Classification of Claims Against or Interests in Tekoil and Gulf Coast Class 1 Other Priority Claims Class 2 Secured Tax Claims Class 3 J. Aron Secured Claim Class 4 CIBC Secured Claim Class 5 Other Secured Claim Class 6 General Unsecured Claims Class 7 Subordinated Claims Class 8 Intercompany Claims Class 9 Interests Who are Entitled To Vote Claims against the Debtors in Class 1 are not impaired under the Plan, and the holders of those claims are conclusively presumed to have accepted the Plan and are not entitled to vote to accept or reject the Plan. Claims against the Debtors in Classes 2, 3, 4, 5 and 6 are impaired under Plan and the holders of claims in those classes are entitled to vote to accept or reject the Plan. Holders of claims against the Debtors in Classes 7 and 8 and Interests in Class 9 are conclusively deemed to reject the Plan and are not entitled to vote or reject the Plan. "Cramdown" Provisions If any impaired class of claims fails to accept the Plan in accordance with Sec. 1129(a) of the Bankruptcy Code, the Debtors intend to request the Bankruptcy Court to confirm the Plan under the cramdown provisions of the Bankruptcy Code. Under Sec. 1129(b) of the Bankruptcy Code, a plan may still be confirmed notwithstanding the non-acceptance thereof by one or more impaired classes, provided that it does not "discriminate unfairly" and is "fair and equitable" with respect to each non- accepting class. A full-text copy of the Debtors' Joint Chapter 11 Plan of Reorganization is available at: http://bankrupt.com/misc/Tekoil&Gas.JointChapter11Plan.pdf About Tekoil & Gas Based in Houston, Tekoil & Gas Corporation and its subsidiaries -- http://www.tekoil.com/-- owns interests in four oil and gas properties, including the Trinity Bay, Redfish Reef, Fishers Reef, and North Point Bolivar fields located in Galveston Bay, Texas. The company was incorporated in Florida in 2004. Edward L. Rothberg, Esq., at Weycer Kaplan Pulaski & Zuber, Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represent the Debtors as counsel. David Ronald Jones, Esq., John F. Higgins, Esq., and Joshua Nielson Eppich, Esq., at Porter & Hedges, LLP, represent the Official Committee of Unsecured Creditors of Tekoil & Gas Corp. as counsel. When Tekoil & Gas Corp. filed for protection from its creditors, it listed assets of $10 million to $50 million, and liabilities of $10 million to $50 million. Based in Spring, Texas, Tekoil and Gas Gulf Coast, LLC is an acquisition subsidiary of Tekoil & Gas Corp. Tekoil & Gas Corporation filed for Chapter 11 protection on June 10, 2008 (Bankr. S.D. Tex. Case No. 08-80270). Tekoil and Gas Gulf Coast filed a separate petition for Chapter 11 relief on Aug. 29, 2008 (Bankr. S.D. Tex. Case No. 08-80405). Nancy Lee Ribaudo, Esq., and Patrick J. Neligan, Jr. at Neligan Foley LLP, represent Tekoil and Gas Gulf Coast as counsel. On Oct. 1, 2008, the Court ordered the joint administration of the Debtors' bankruptcy cases. TRONOX INC: Protocol Crafted to Govern Anadarko Discovery --------------------------------------------------------- Tronox Incorporated and its affiliates, the Official Committee of Unsecured Creditors appointed in the Debtors' bankruptcy cases, and Anadarko Petroleum Corporation presented to the U.S. Bankruptcy Court for the Southern District of New York a stipulation setting forth agreed procedures that will govern all discovery, including the production, exchange, and use of all documents, testimony, interrogatories, written discovery, and other information produced, given, provided, or exchanged in any dispute or exchange of Discovery Materials among them in the Debtors' cases and any adversary proceeding. Anadarko bought Ker-McGee Corporation in August 2006 five months after Kerr-McGee successfully spun off Tronox. The Debtors have indicated that they may be pursuing litigation against Kerr-McGee or Anadarko with respect to the legacy environmental liabilities left by Kerr-McGee to Tronox during the spin-off. The Stipulation provides that: (1) Counsel for any party, person, or entity subject to or participating in discovery in any action may designate any Discovery Materials as "confidential" to the extent that they constitute, or reveal: -- proprietary, commercial or otherwise confidential or commercially-sensitive information; -- non-public financial information of any kind; -- personal identifying information including Social Security Numbers; -- non-public information related to pricing, compensation of any of the parties or their employees; -- non-public studies or analyses by internal or outside consultants or experts, or communications and information; and -- trade secrets. (2) Any Designating Party may designate any Discovery Materials as "Confidential Outside Counsel's Eyes Only" for Materials that, when disclosed, will likely cause financial damage to the Designating Party. (3) Discovery Materials will be used by any Receiving Party solely for the purpose of preparing for and conducting the litigation of any action and any appellate proceedings in the Action. (4) Any Discovery Materials will be designated as Confidential Discovery Materials by (i) marking them prior to production, as "Confidential" or "Confidential Outside Counsel's Eyes Only," (ii) identifying or designating by Bates range the specific Confidential Discovery Materials. Inadvertent failure to designate the Confidential Discovery Materials at the time of production will not waive the Designating Party's right to designate the Discovery Materials at a later time. It may be also be remedied the Designating Party's supplemental written notice and the provision of copies of properly stamped documents. Inadvertent designation of documents as Confidential Discovery Materials will be remedied by the Designating Party upon request if the parties agree that the designation was inadvertent. (5) Discovery Materials produced in electronic format will be designated as Confidential by application of an electronic "Confidential" or "Confidential Outside Counsel's Eyes Only" by "petrifying to tiff" or similar process or by identifying or designating by Bates range. (6) Inadvertent disclosure or production of Discovery Materials that are subject to the attorney-client privilege, the work-product doctrine, the joint-defense or common-interest privilege, or any other privilege or immunity from discovery will not constitute a waiver of, or an estoppel as to any claim of, the privilege, immunity, or protection. Any party who has received the Discovery Materials will immediately return the Discovery Materials to the party who produced them no later than 10 days from receipt of a written request for the return of the Discovery Materials. The Receiving Party will not retain or keep any copy of the Discovery Materials. (7) Any deposition or other testimony may be designated as Confidential Information by stating orally on the record of a deposition or by advising opposing counsel in writing within 15 days after receipt of a rough or final transcript. The entire content, transcript and exhibits to each deposition will be treated as if it had been designated as Confidential until fifteen 15 days after all parties have received the Transcript and Exhibits. (8) Any Receiving Party that objects to the designation of any Discovery Materials as Confidential Discovery Materials must state the objection in writing to counsel for the Designating Party. The parties will attempt to resolve the dispute; otherwise, the Objecting Party may seek a Court's order on the challenged Discovery Materials, after providing the Designating Party a 15-day written notice. The Discovery Materials will be deemed and treated as "Confidential" until (i) the Court rules otherwise, or (ii) the Designating Party agrees in writing to withdraw the confidentiality designation. (9) Discovery Materials designated "Confidential" will only be disclosed to these "Qualified Persons," in connection with the litigation or appeal of any action: * the named parties to the Action; * experts or consultants in the Action; * any Court reporter or typist rendering services for recording or transcribing of testimony in the Action; * persons or entities providing litigation support services; * any person called as a witness in any deposition; * persons who authored, or received the Confidential Discovery Materials in the ordinary course of business; * anyone to whom the Designating Party will consent in writing; * the Court and its personnel; and * counsel, including members of the counsel's staff, paralegals, secretaries, and law clerks. (10) Discovery Materials designated "Confidential Outside Counsel's Eyes Only" may also be shown, disseminated or disclosed only to the Qualified Persons, including outside or in-house counsel representing the parties or the Committee in the Action. Any Qualified Person that proposes to disclose any Information will first cause the receiving party to execute a non-disclosure certificate. In the event that a Qualified Person or Receiving Party authorized to access the Confidential Discovery Materials is served with a request, subpoena, demand, or other legal process that seeks production of Confidential Discovery Materials, the Requested Person will give written notice to the Designating Party a copy of the subpoena or other process or order. The Requested Person will not produce the Confidential Discovery Materials until the earlier of (i) receipt of prior written consent from the Designating Party, (ii) the return date of the subpoena or other process, or (iii) five days after a decision on any request for a protective order has been entered. Any Confidential Discovery Materials are used in any Court proceeding in the Action will not lose their Confidential status. All copies of the Materials will be either destroyed, which destruction will be certified, or returned to counsel for the Designating Party within 30 days after the final conclusion of the Action. About Tronox Inc. The company is the world's third largest maker of titanium dioxide behind DuPont Co. and Saudi-owned National Titanium Dioxide Co., known a Cristal, according to Bloomberg. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D. N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRONOX INC: U.S. Trustee Appoints Equity Security Committee ----------------------------------------------------------- Diana G. Adams, United States Trustee for Region 2, appoints seven members to the Official Committee of Equity Security Holders in the Chapter 11 cases of Tronox Inc., and its debtor- affiliates. The Equity Committee members are: (1) Ahar Capital Management Inc. 299 Park Avenue, 17th Floor New York, New York 10171 ATTN: Rebwar Berzinji, Senior Analyst Telephone No. (212) 653-1045 Fax No. (212) 653-1099 (2) Charles E. Cheever 65 Comstock Hill Avenue Norwalk, CT 06850 (3) RLR Capital Partners, LP 152 West 57th Street, 21st Floor New York, New York 10019 ATTN: Robert L. Rosen Telephone No. (212) 903-2700 Fax No. (212) 903-2727 (4) Mark D. Todd 119 Runner Road Savannah, GA 31410 Telephone No. (912) 897-5336 (5) Sandra Kay Grasso 2874 Seine Avenue Highland, CA 92346 Telephone No. (909) 864-6321 (6) Sam L. Decker and Myra A. Decker 10816 West Country Drive Oklahoma City, OK 73170 Telephone No. (405) 692-7751 (7) Douglas Graham 254 E 68th Street, Apt. 8C New York, New York 10065 Telephone No. (646) 824-8833 Fax No. (646) 330-5398 About Tronox Inc. The company is the world's third largest maker of titanium dioxide behind DuPont Co. and Saudi-owned National Titanium Dioxide Co., known a Cristal, according to Bloomberg. Tronox has $1.6 billion in total assets, including $646.9 million in current assets, as at September 30, 2008. The company has $881.6 million in current debts and $355.9 million in total noncurrent debts. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection on January 13, 2009 (Bankr. S.D. N.Y. Case No. 09-10156). The case is before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represent the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants serves as notice and claims agent. Until September 30, 2008, Tronox Inc. was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox Inc. has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox Inc. had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. Bankruptcy Creditors' Service, Inc., publishes Tronox Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tronox Inc. and its 14 affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) VIRGIN MOBILE: Has Cash to Fund Operations for Next 12-18 Months ---------------------------------------------------------------- "Although it is difficult for us to predict our future liquidity requirements with certainty, we believe that based on our current level of operations, together with cash generated from operations and our borrowing capacity under our Revolving Credit Facility, we will be able to finance our projected operating, investing and financing requirements for our existing operations and planned customer growth for at least the next 12-18 months," Virgin Mobile USA Inc. disclosed in a Form 10-K filing with the Securities and Exchange Commission last week. According to the company, it has incurred substantial cumulative net losses and cumulative negative cash flows from operations since inception, and has a stockholders' deficit of $355.6 million, negative working capital of $183.9 million and outstanding non-current debt of $240.8 million as of December 31, 2008. Virgin Mobile USA makes significant initial cash outlays to acquire new customers in the form of handset and other subsidies. Additionally, Virgin Mobile USA has been incurring increasing costs to maintain current customers through the sale of replacement handsets at a loss. Virgin Mobile USA expects the costs to be funded primarily through service revenue generated from existing customer base, the sale of handsets to customers, and when required borrowings under its Revolving Credit Facility with affiliates of the Virgin Group and Sprint Nextel, under which such affiliates agreed to provide up to $100 million in revolving credit loans. Virgin Mobile USA said that, as of February 28, 2009, if necessary, it could borrow an additional $45 million under its Revolving Credit Facility. Virgin Mobile USA has a scheduled principal payment this year of $26.3 million under its 2006 Senior Secured Credit Agreement with various financial institutions, and another scheduled payment of $170.7 million in 2010. The Senior Credit Agreement has a maturity date of December 14, 2010. Virgin Mobile USA has $12.03 million in cash and cash equivalents as of December 31, 2008. The company's balance sheet at December 31, 2008, showed total assets of $367,068,000 and total liabilities of $670,951,000. The company reported $355,630,000 in total stockholders' deficit. Moreover, the company's balance sheet showed $243.8 million in total current assets to satisfy $427.8 million in total current liabilities. The company noted that its ability to make scheduled payments of principal, to pay interest on or to refinance, indebtedness and to satisfy other obligations, including obligations under the PCS Services Agreement with Sprint Nextel, as well as its ability to meet long-term liquidity needs, will depend upon future operating performance, as well as general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control. Any obligations under the tax receivable agreements are expected to be funded from available cash flow generated by the company's taxable earnings. Virgin Mobile USA does not anticipate issuing debt specifically to fund any obligations that may arise under the tax receivables agreements with the Virgin Group and Sprint Nextel. Virgin Mobile USA also believe that its obligations under all other related party agreements will be required to be satisfied in cash from operations or financed through its Revolving Credit Facility. If it materially underachieves its operating plan and its Revolving Credit Facility and cash flow from operations become insufficient to allow the company to meet obligations, Virgin Mobile USA said it is committed to taking certain alternative actions that could include reducing customer acquisitions, reducing inventory purchases, reducing planned capital expenditures, extending the payment for certain liabilities within contractual terms with vendors, curtailing marketing costs and reducing other variable costs. "If our operations do not generate sufficient positive operating cash flows, we may require additional capital to fund our operations or growth, to take advantage of expansion or acquisition opportunities, and to develop new products to compete effectively in the marketplace," Virgin Mobile USA said. As of December 31, 2008, the company was in compliance with all financial covenants under its credit facilities. A full-text copy of Virgin Mobile USA's 2008 annual report filed on Form 10-K is available at no charge at: http://ResearchArchives.com/t/s?3a58 About Virgin Mobile USA Inc. Headquartered in Warren, New Jersey, Virgin Mobile USA Inc. (NYSE: VM) -- http://www.virginmobileusa.com/-- provides wireless, pay- as-you-go communications services without annual contracts. The company was founded as Virgin Mobile USA, LLC, a joint venture between Sprint Nextel and the Virgin Group, and launched its service nationally in July 2002. In October 2007, it completed its initial public offering and a related reorganization. * * * On November 13, 2008, Virgin Mobile USA received written notice from the NYSE notifying that the company was not in compliance with certain of the listing criteria. Virgin Mobile USA is below the applicable standards because the average market capitalization of its Class A common stock and substantial equivalents, over a period of 30 trading days, is less than $100 million. On November 19, 2008, Virgin Mobile USA received a second written notice from the NYSE notifying that it was not in compliance with the stock price listing criteria because the average price of one share of its Class A common stock, over 30 trading days, was less than $1.00. In December 2008, Virgin Mobile USA filed its business plan with the NYSE and in January 2009, the NYSE notified that it had accepted the plan of compliance and Virgin Mobile USA has until May 2009 to comply with the share price standard and until May 2010 to comply with the market capitalization standard. Virgin Mobile USA is subject to periodic review by the NYSE during this period. VIRGIN MOBILE: Files Revised Copies of Amendments to Sprint Deal ---------------------------------------------------------------- Virgin Mobile USA, Inc., filed a Current Report on Form 8-K on December 23, 2008, describing a Sixth Amendment and Seventh Amendment to its Amended and Restated PCS Services Agreement dated October 16, 2007, with Sprint Spectrum, L.P., an affiliate of Sprint Nextel Corporation. On Friday, Virgin Mobile filed with the Securities and Exchange Commission revised versions of the Amendments. The attached versions of the Amendments, the company said, have been revised to disclose additional information previously omitted in accordance with a request for confidential treatment submitted to the Commission. Certain portions of the Amendments remain omitted in accordance with a request for confidential treatment that the Company has submitted to the Commission. Omitted information has been filed separately with the Commission. In connection with its initial public offering, the company amended its agreement with Sprint Nextel, under which Sprint Nextel provides the company with access to its wireless voice and data services operating on the nationwide Sprint PCS network at contracted rates, to extend the expiration date to December 31, 2027. During 2008, the company and Sprint Nextel entered into six amendments to the PCS Services Agreement. On March 12, 2008, the company entered into the Second Amendment to the PCS Services Agreement with Sprint Nextel to provide that the company would not be subject to any true-up process and the related payment obligations with respect to the fiscal year ended December 31, 2007. On May 12, 2008, Virgin Mobile USA entered into the Third Amendment to the PCS Services Agreement with Sprint Nextel to provide that the Company would pay Sprint Nextel at least $298 million for wireless network services, including voice, messaging and data traffic, according to a monthly payment schedule during the year ending December 31, 2008, and would receive off-peak rates for a two-hour period each weekday until the closing of the acquisition of Helio. The amendment was contingent upon the company obtaining approval from Virgin Group to increase the lending commitment under the Revolving Credit Facility from $75 million to $100 million by June 30, 2008. On June 27, 2008, in connection with the agreement to acquire Helio, the company entered into the Fourth and Fifth Amendments to the PCS Services Agreement with Sprint Nextel. The Fourth Amendment eliminated the requirement for the company to secure an increase in the Virgin Group's lending commitment under the Revolving Credit Facility from $75 million to $100 million. The Fifth Amendment eliminated the annual true-up process and related payment obligations, and the company would pay Sprint Nextel a minimum of $320 million, $370 million and $420 million during the years ending December 31, 2008, 2009 and 2010, respectively, for wireless network services, including voice, messaging and data traffic. Under the Fifth Amendment there will be no minimum annual commitment for 2011 and beyond and the pricing will be based on the pricing schedule for 2010. Additionally, effective July 1, 2008, Sprint Nextel is providing the company with a $2.50 network usage credit for each gross addition through December 31, 2009, up to a maximum of $10 million. The company is eligible to receive this credit provided that no undisputed amounts invoiced to the company under the PCS Services Agreement are past due. Under the terms of the Sixth Amendment, the company's required minimum payment for the year ended December 31, 2008 decreased from $320 million to $318 million, and Sprint Nextel provided the company with an additional network usage credit of $2.00 for each gross addition between October 1, 2008, and December 31, 2008, which was accretive to the credit of $2.50 and not subject to the $10 million limit discussed above. During the year ended December 31, 2008, the company recorded a credit of $7.1 million in cost of service for both network usage credits. There were no network usage credits recorded during the years ended December 31, 2007 and 2006. Under the Seventh Amendment, beginning in 2009 the company will no longer be subject to minimum annual payments and will pay fixed rates for voice, messaging and data traffic that are lower than rates applicable in 2008. The company may benefit from additional discounts to these rates in 2010, with the degree of discount based upon the total payments made for 2009. The company will negotiate rates with Sprint Nextel for 2011 and beyond, but if no agreement is reached, the rates for 2010 will apply. On February 25, 2009, the company entered into the Eighth Amendment with Sprint Nextel. Under the terms of the Eighth Amendment, the Company's required minimum payment for the year ended December 31, 2008, decreased from $318 million to $317.2 million. Additionally, in connection with the IPO, the company amended its Trademark License Agreement with Sprint Nextel to extend the expiration date to December 31, 2027. The license grants to the company the right to use the Sprint name and logo in connection with the provision of mobile voice and data communications in the United States, the U.S. Virgin Islands and Puerto Rico, in consideration for royalties based on a percentage of gross sales, up to an annual maximum. Sprint Nextel agreed to temporarily waive its right to royalty payments for 2006. This waiver, totaling $1.3 million, was recorded as a capital contribution by the Company. A full-text copy of the Sixth Amendment to Amended and Restated PCS Services Agreement (as amended, supplemented or otherwise modified from time to time), dated December 22, 2008 by and between Virgin Mobile USA, Inc. and Sprint Spectrum L.P., is available at no charge at: http://ResearchArchives.com/t/s?3a59 A full-text copy of the Seventh Amendment to Amended and Restated PCS Services Agreement (as amended, supplemented or otherwise modified from time to time), dated December 22, 2008, by and between Virgin Mobile USA, Inc., and Sprint Spectrum L.P., is available at no charge at: http://ResearchArchives.com/t/s?3a5a About Virgin Mobile USA Inc. Headquartered in Warren, New Jersey, Virgin Mobile USA Inc. (NYSE: VM) -- http://www.virginmobileusa.com/-- provides wireless, pay- as-you-go communications services without annual contracts. The company was founded as Virgin Mobile USA, LLC, a joint venture between Sprint Nextel and the Virgin Group, and launched its service nationally in July 2002. In October 2007, it completed its initial public offering and a related reorganization. * * * Virgin Mobile USA has a scheduled principal payment in 2009 of $26.3 million under its 2006 Senior Secured Credit Agreement with various financial institutions, and another scheduled payment of $170.7 million in 2010. The Senior Credit Agreement has a maturity date of December 14, 2010. The company has $12.03 million in cash and cash equivalents as of December 31, 2008. The company's balance sheet at December 31, 2008, showed total assets of $367,068,000 and total liabilities of $670,951,000. The company reported $355,630,000 in total stockholders' deficit. Moreover, the company's balance sheet showed $243.8 million in total current assets to satisfy $427.8 million in total current liabilities. On November 13, 2008, Virgin Mobile USA received written notice from the NYSE notifying that the company was not in compliance with certain of the listing criteria. Virgin Mobile USA is below the applicable standards because the average market capitalization of its Class A common stock and substantial equivalents, over a period of 30 trading days, is less than $100 million. On November 19, 2008, Virgin Mobile USA received a second written notice from the NYSE notifying that it was not in compliance with the stock price listing criteria because the average price of one share of its Class A common stock, over 30 trading days, was less than $1.00. In December 2008, Virgin Mobile USA filed its business plan with the NYSE and in January 2009, the NYSE notified that it had accepted the plan of compliance and Virgin Mobile USA has until May 2009 to comply with the share price standard and until May 2010 to comply with the market capitalization standard. Virgin Mobile USA is subject to periodic review by the NYSE during this period. VISTEON CORP: Delays Annual Report; In Talks with Lender Groups --------------------------------------------------------------- Visteon Corporation failed to file its Annual Report on Form 10-K for the year ended December 31, 2008, with the Securities and Exchange Commission by yesterday's deadline. In a Form 12b-25 filed with the Commission, Visteon explained that due to the impact of adverse economic and industry conditions on its current liquidity outlook, management anticipates that the report of the company's independent registered public accounting firm on the company's 2008 consolidated financial statements likely will contain an explanatory paragraph indicating substantial doubt about the company's ability to continue as a going concern. The inclusion of the substantial doubt language would result in defaults under certain indebtedness of the company, which defaults, if not cured or waived prior to the expiration of the applicable grace period, would result in an event of default under the company's principal U.S. senior secured credit facilities. The events of default, if they occur, provide the lenders the right to demand all amounts due under the respective agreements immediately due and payable, which may result in a cross-default under other indebtedness of the company. The company has commenced discussions with the Administrative Agents of its senior secured credit facilities, as well as with an ad hoc committee of lenders under its senior secured term loan to obtain a waiver or amendment relating to the potential noncompliance; however, the company can provide no assurances that a waiver or amendment can be obtained. "Because of management's time devoted to these discussions, as well as the uncertainty and range of potential outcomes of these and other discussions, the company is unable to complete the financial statements and other disclosures required to be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2008 within the prescribed time period without unreasonable effort and expense," said William G. Quigley III, Visteon Executive Vice President and Chief Financial Officer. Visteon is also assessing its ability to implement additional restructuring and other actions in response to current and projected market conditions, overall automotive sector instability and the company's history of operating losses and cash usage, including discussions that have been commenced with the Ad Hoc Committee regarding the company's capital structure and potential liquidity needs. However, Visteon can provide no assurances that it will be able to implement any actions in a manner or on terms that would be satisfactory to the company. 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 has corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Kerpen, Germany. It has facilities in 27 countries and employs roughly 35,500 people. * * * As reported by the Troubled Company Reporter on February 27, 2009, Visteon, for fourth quarter 2008, posted a net loss of $328 million on sales from continuing operations of $1.7 billion. For fourth quarter 2007, Visteon reported a net loss of $43 million on sales of $2.9 billion. For the full year 2008, Visteon reported a net loss of $663 million on sales of $9.5 billion compared with a net loss of $372 million on sales of $11.3 billion for full year 2007. As of Dec. 31, 2008, Visteon had $5.26 billion in total assets, $1.71 billion in current liabilities, $2.61 billion in long-term debt. Visteon also had $627 million in employee benefit obligations, including pension obligations; $404 million in postretirement benefits other than pensions; $139 million in deferred income tax obligations; $365 million in other non-current liabilities; and $264 million in minority interests in consolidated subsidiaries. Visteon has an $869 million shareholders' deficit. As reported by the Troubled Company Reporter on March 11, 2009, Fitch Ratings downgraded the Issuer Default Rating of Visteon Corporation to 'C' from 'CC', indicating that a default was imminent or inevitable. The ratings were removed from Rating Watch Negative, where they were placed on Dec. 11, 2008. The TCR 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. The 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. WILSON N JONES: Moody's Affirms 'Ba3' Rating on $78 Mil. Debt ------------------------------------------------------------- Moody's Investors Service has affirmed the Ba3 rating assigned to Wilson N. Jones Memorial Hospital's $78 million of total debt outstanding and issued by the Metro Health Facilities Development Corporation (Sherman, Texas). The outlook remains stable. Legal Security: The bonds are secured by a gross revenue pledge and a mortgage on the hospitals. Interest Rate Derivatives: None Strengths * Second year of operating profit in fiscal year (FY) 2008 to help generate near comparable operating cash flow with the prior year for operating cash flow margin of 7.4% on unaudited FY 2008 results * Conservative investment policy for unrestricted cash; 100% fixed rate debt * Successful recruitment of physicians to increase the medical staff by a net 23 doctors Challenges * Expectations for increasingly competitive health care market with Universal Health's January 2007 acquisition of the only other local competitor, Texoma Medical Center, with Universal's construction of a replacement hospital five miles from WNJ and expected to open in 2010 * Low to modest capital spending over the last five years that has resulted in increasing and high average age of plant of over 18 years, potentially requiring sizable capital spending in the future and access to capital may be limited * Weak debt measures on FY 2008 operating performance, with cash- to-debt of 28% and debt-to-cash flow of 17 times * Decline in volumes in FY 2008 in all key categories Recent Developments/Results Operating profit in FY 2008 (unaudited) was comparable to FY 2007 performance, yet absolute operating cash flow declined slightly. In FY 2008, WNJ reported a $291,000 operating profit (0.2% margin) compared to the audited $297,000 operating profit (0.2% margin) in FY 2007. Operating cash flow, however, declined by $900,000 to $10.3 million from $11.2 million to drive a decrease in the operating cash flow margin to 7.4% from 8.2%. The operating cash flow decline was impacted by an $800,000 decrease in interest and depreciation expenses offset by a $3.6 million increase in bad debt expense. Total operating profit increased less than 5% with WNJ experiencing sizable decreases in volume measures, including a 4.7% decline in admissions, 9.9% decline in outpatient visits, and 9.2% decline in newborn admissions. Management states that the entire market has experienced volume declines with the poorer economy, with patients deferring elective procedures; and that some market share loss has occurred. It is expected that volumes may be pressured further when the other local competitor - TMC owned by for-profit Universal Health - opens its new facility that is currently under construction. Management has undertaken increased physician recruitment efforts that include enhancing its cardiology program, utilizing some income guaranty structures. A net 23 physicians were added to the staff in FY 2008. To address revenue concerns, the reclassification to the Dallas MSA was renewed for three years, providing approximately $1 million in funding (per annum or over the 3 years?). Additionally, the leasing of the north campus to a third party will add about $500,000 to revenues in FY 2009. Cost control initiatives will focus on improvement in productivity with continued growth in the use of a new system implemented in October 2008, supplies standardization, and the use of newly operational information technology. Liquidity declined in FY 2008 to $23.6 million by fiscal year end 2008 from $27.1 million at FYE 2007 due to a $2.5 million decrease in net revenue available for debt service and $1.7 million increase in capital spending over the prior year. As a result, cash on hand declined to 64 days from its peak of 76 days at FYE 2007. Correspondingly, the cash-to-debt ratio declined to a weaker 28% from 31% despite the $2.6 million decline in outstanding debt. Management has no plans at this time to issue additional debt, but has stated a desire to refinance existing outstanding bonds should the market allow. Moody's note that unrestricted cash is conservatively invested in money market funds and government securities, and that the bonds are all fixed rate. In compliance with a prior technical default under the debt documents, management has entered into discussions with a consultant and will evaluate responses to an RFP for a potential affiliation. Outlook The stable outlook reflects Moody's belief that current cash flow generation is adequate to meet debt service needs. Moody's remain cautious, however, about future volume trends given changes in the economy and competitive pressures from new TMC hospital under construction and owned by a larger for-profit parent and WNJ's ability to fund necessary capital needs over the longer term. What could change the rating -- UP Improvement in volumes and stabilization in market share with consistency in stable to improving operating performance that strengthens balance sheet profile What could change the rating -- DOWN Reversal in improvement in operating performance; further weakening of the balance sheet; increase in debt without commensurate increase in cash flow; inability to keep up with capital demands and remain competitive Key Indicators Assumptions & Adjustments: -- Based on financial statements for The Wilson N. Jones Memorial Hospital d/b/a Wilson N. Jones Medical Center and Affiliates -- First number reflects audit year ended December 31, 2007 -- Second number reflects internal financial statements for year ended December 31, 2008 -- Investment returns normalized at 6% * Inpatient admissions: 9,807; 9,348 * Total operating revenues: $136.3 million; $139.1 million * Moody's-adjusted net revenue available for debt service: $12.7 million; $10.7 million * Total debt outstanding: $87.9 million; $84.1 million * Maximum annual debt service: $10.7 million; $10.7 million * MADS Coverage with reported investment income: 1.24 times; 1.04 times * Moody's-adjusted MADS Coverage with normalized investment income: 1.19 times; 1.16 times * Debt-to-cash flow: 12.3 times; 15.3 times * Days cash on hand: 76 days; 62 days * Cash-to-debt: 31%; 27% * Operating margin: 0.2%; 0.2% * Operating cash flow margin: 8.2%; 7.4% Rated Debt (debt outstanding as of December 31, 2008): -- Series 1993 ($33.9 million outstanding) rated Ba3, insured by Connie Lee but insurance agreement not rated by Moody's -- Series 2001 Hospital Revenue Bonds ($44.0 million outstanding) rated Ba3 The last rating action was on December 20, 2007, when the rating of Wilson N. Jones Memorial Hospital was upgraded to Ba3 from B1 and the outlook was revised to stable from negative. * Computershare Buying Kurtzman Carson for $98 Million ------------------------------------------------------ Kurtzman Carson Consultants, a leading claims and noticing agent serving companies undergoing Chapter 11 restructuring, has agreed to be acquired by Computershare Limited (ASX: CPU), a global provider of transfer agency, employee equity plans, proxy solicitation and other specialized financial, governance and stakeholder communication services, pending regulatory approval. As a wholly-owned subsidiary of Computershare, KCC will continue to serve clients as the market leader for claims and noticing services. Computershare disclosed to its shareholders that the initial consideration is USD 85 million and 2.45 million fully paid ordinary CPU shares payable on closing. Those 2.45 million shares are valued at about $12.8 million based on Monday's closing price and exchange rate, valuing the initial consideration at nearly $98 million. Additional consideration totalling up to USD 24 million in cash and 2.9 million CPU shares (or cash equivalent) may be payable, subject to earnings uplift targets being met over the next 3 years. Computershare reports that KCC generated operating EBITDA of approximately USD 19 million in calendar year 2008. "This marks a significant turning point at KCC. It represents the culmination of our vision to bring higher standards to the claims and noticing market and diversify KCC into a BPO (business process outsourcing) provider to the broader legal and financial services market," said Eric Kurtzman, KCC's Co-Founder and CEO. "Computershare offers significant resources and experience that will enable KCC to maximize its opportunities and provide significant contribution to Computershare for years to come." KCC says its clients will continue to experience exceptional service during the integration process. Computershare enables KCC to offer its clients solutions such as global call center support, expanded document production services, proxy solicitation solutions through Georgeson, and claims administration services for corporate insolvencies in Europe and Asia. "This acquisition is quite significant for Computershare and the marketplace. KCC's corporate culture, technology-based service offering and unique position in an expanding area of the market offer a strategic complement to our business. Computershare will also realize synergies with the addition of production facilities in Los Angeles and Memphis, and we will further expand our market in such areas as bankruptcy, proxy, class actions and escrow," said Steve Rothbloom, President and CEO of Computershare US. In announcing the acquisition, Computershare CEO Stuart Crosby said "we are thrilled to be able to join forces with KCC, which has built an enviable position in the bankruptcy administration sector. Obviously, the counter-cyclical nature of the business is attractive, but the client base and the quality of KCC's management and processes are the things that really excite us." Upon regulatory approval by U.S. officials, Jon Orr, who currently serves as KCC's CFO will be promoted to President of the company to ensure a seamless acquisition integration, maximize synergies and identify strategic growth initiatives for the future. Computershare will seat its current US Financial Controller, Gerry Mullins, as KCC's Chief Financial Officer. "We foresee great harmonies between KCC and Computershare that will fulfill our vision to diversify and create a sustainable, high-growth, high-value business," said Jonathan Carson, KCC's Co- Founder and President. "Today, legal and financial professionals in the corporate-restructuring market expect a higher standard of service, world-class technology and relevant industry expertise from their claims agent because of KCC. We will continue to build upon this model to realize the business's true market potential." About KCC Kurtzman Carson Consultants LLC (KCC) -- http://www.kccllc.com/-- is a leading claims and noticing agent providing administrative- support services and technology solutions to companies undergoing corporate restructuring. With offices in Los Angeles, New York and Memphis, KCC has established a reputation for industry expertise, highly responsive client service and industry-leading technologies. Corporate America's industry leaders have relied on KCC for their business-critical data management needs. A pioneer of web-based technology for the legal and financial markets, KCC has been recognized as one of the fastest-growing companies in the United States. About Computershare Computershare (ASX: CPU) -- http://www.computershare.com/-- is a global leader in transfer agency, employee equity plans, proxy solicitation and other specialized financial and communication services. Many of the world's largest companies employ our innovative solutions to maximize the value of their relationships with investors, employees, customers and members. Computershare has approximately 11,000 employees across the world and serves 17,000 corporations and 100 million shareholders and employee accounts in 17 countries across five continents. * 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 (7) 24 ARBITRON INC ARB US 200 (14) (39) AUTOZONE INC AZO US 5,235 (187) 112 BLOUNT INTL BLT US 500 (44) 128 BOEING CO BA US 53,779 (1,294) (4,961) BOEING CO BAB BB 53,779 (1,294) (4,961) CABLEVISION SYS CVC US 9,383 (5,354) (438) CENTENNIAL COMM CYCL US 1,432 (1,021) 101 CHENIERE ENERGY CQP US 1,979 (352) 139 CHENIERE ENERGY LNG US 2,922 (354) 510 CHOICE HOTELS CHH US 328 (138) (15) CLOROX CO CLX US 4,398 (403) (389) COCA-COLA ENTER CCE US 15,589 (31) (491) CV THERAPEUTICS CVTX US 364 (222) 246 DELTEK INC PROJ US 193 (54) 35 DISH NETWORK-A DISH US 6,460 (1,949) (882) DOMINO'S PIZZA DPZ US 464 (1,425) 105 DUN & BRADSTREET DNB US 1,586 (851) (213) EMBARQ CORP EQ US 8,371 (608) (6) ENERGY SAV INCOM SIF-U CN 552 (423) (162) EXELIXIS INC EXEL US 255 (23) (1) EXTENDICARE REAL EXE-U CN 1,806 (30) 95 FERRELLGAS-LP FGP US 1,510 (12) (114) GARTNER INC IT US 1,093 (21) (238) HEALTHSOUTH CORP HLS US 1,998 (700) (64) IMAX CORP IMX CN 238 (91) 41 IMAX CORP IMAX US 238 (91) 41 IMS HEALTH INC RX US 2,087 (153) 231 INDEVUS PHARMACE IDEV US 256 (136) 8 INTERMUNE INC ITMN US 172 (125) 114 ION MEDIA NETWOR IION US 1,137 (1,621) 96 LINEAR TECH CORP LLTC US 1,494 (310) 992 MEAD JOHNSON-A MJN US 1,372 (1,346) (1,870) MEDIACOM COMM-A MCCC US 3,719 (347) (274) MOODY'S CORP MCO US 1,773 (994) (584) 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) N.A. OSIRIS THERAPEUT OSIR US 137 (5) 71 OVERSTOCK.COM OSTK US 172 (3) 40 PALM INC PALM US 661 (151) (40) QWEST COMMUNICAT Q US 20,182 (1,449) (883) REGAL ENTERTAI-A RGC US 2,600 (242) (93) RENAISSANCE LEA RLRN US 57 (5) (15) SALLY BEAUTY HOL SBH US 1,489 (720) 365 SONIC CORP SONC US 818 (55) (9) SUCCESSFACTORS I SFSF US 170 (5) 3 TAUBMAN CENTERS TCO US 3,072 (163) N.A. THERAVANCE THRX US 236 (135) 166 UAL CORP UAUA US 19,461 (2,465) (2,420) UNITED RENTALS URI US 4,191 (29) 276 VERIFONE HOLDING PAY US 840 (38) 308 VERIFONE HOLDING VF2 GR 840 (38) 308 VERIFONE HOLDING PAY IT 840 (38) 308 WEIGHT WATCHERS WTW US 1,107 (888) (270) WESTERN UNION WU US 5,578 (8) 528 WR GRACE & CO GRA US 3,876 (354) 965 YUM! BRANDS INC YUM US 6,527 (108) (771) ********* 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, 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 ***